Conformed Copy - L2806 - Industrial Export Finance Project - Guarantee Agreement 1

 CONFORMED COPY LOAN NUMBER 2806-1 MOR (Industrial Export Finance Project) between KINGDOM OF MOROCCO and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated July 27, 1987 LOAN NUMBER 2806-1 MOR GUARANTEE AGREEMENT AGREEMENT, dated July 27, 1987, between KINGDOM OF MOROCCO (the Guarantor) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank). WHEREAS (A) the Guarantor and Banque Centrale Populaire (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 three million dollars ($3,000,000), 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 and to undertake such other obligations as provided in this Agreement; 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 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 5 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 the Preamble to and Section 1.02 of the Loan Agreement have the respective meanings therein set forth. ARTICLE II Guarantee 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. ARTICLE III Other Covenants Section 3.01. In order to encourage the export of goods manufactured in the Guarantor’s territory, the Guarantor shall carry out with due diligence and efficiency, and provide or cause to be provided promptly as needed, the funds, services and other resources required for: (a) a program of actions, agreed between the Guarantor and the Bank designed to: (i) improve the systems of (A) taxation of goods used in the manufacture of exports and (B) export financing and guarantees; and (ii) improve the organization, management and operations of the Guarantor’s agencies responsible for export promotion and international trade matters; and (b) (i) studies, under terms of reference agreed between the Guarantor and the Bank, to identify, evaluate and recommend measures for improving export performance in the industrial sector; and (ii) action plans, agreed between the Guarantor and the Bank, for the implementation of the recommendations based on said studies. Section 3.02. The Guarantor shall conclude and thereafter at all times maintain with the Borrower arrangements, satisfactory to the Bank, to protect the Borrower against the risk of 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 under the Project. Section 3.03. Further to and without limitation upon the provisions of Section 2.01 of this Agreement, the Guarantor shall take all action necessary to enable:  (a) the Borrower to open and maintain accounts in such foreign currencies and on such terms and conditions as shall be necessary for the Borrower to comply with the provisions of the Loan Agreement; and (b) each Exporter to obtain such foreign currencies as shall be necessary for it to comply with its obligations referred to in Part B (6) of Schedule 4 to the Loan Agreement. ARTICLE IV Representative of the Guarantor; Address 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, Morocco 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 By /s/ M. Bargach Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ K. Dervis Acting Regional Vice President Europe, Middle East and North Africa