LOAN AGREEMENT. (Petite C8te Tourism Project) REPUBLIC OF SENEGAL. and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

CONFORMED COPY Public Disclosure Authorized LOAN NUMBER 1412-T-SE LOAN AGREEMENT (Petite C8te Tourism Project) between REPUBLIC OF SENEGAL and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Dated June 7, 1977

LOAN AGREEMENT AGREEMENT, dated June 7, 1977, between REPUBLIC OF SENEGAL (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RE- CONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS (A) by an agreement (hereinafter called the First Loan Agreement) of even date herewith between the Borrower and the Bank, the Bank is agreeing to assist in the financing of the foreign exchange cost of the Project described in Schedule 2 to this Agreement by making a loan (hereinafter called the First Loan) in an amount in various currencies equivalent to five million six hundred thousand dollars ($5,600,000); (B) the Borrower has also requested the Bank to provide additional financial assistance towards the financing of the foreign exchange cost of the Project by making the present Loan (hereinafter called the Loan) as hereinafter provided; (C) the Bank has determined that the Borrower is eligible to receive the Loan as an intermediate term loan, as that term is defined in Resolution No. 75-111 of the Executive Directors of the Bank establishing an Interest Subsidy Fund for the Third Window (hereinafter c& 1.led the Fund) and upon the terms and conditions set forth in such Resolution; (D) the Administrator of the Fund (hereinafter called the Administrator), subject to the terms and conditions set forth in the Resolution referred to in (C) above, is obligated to pay to

-2- the Bank semi-annually from the resources of the Fund an amount equal to four per cent (4%) per annum of the outstanding amounts of principal on intermediate term loans, of which the Loan is one; (E) the Borrower and the Bank intend that the proceeds of the First Loan and of this Loan be disbursed pro rata on the basis of a 4:6 ratio; (F) Parts J and K (ii) through (vi) of the Project will be carried out by the Borrower through DUH and DGT, respectively (as those terms are hereinafter defined) and Part C (i) and (ii) of the Project will be carried out by the Borrower; (G) Parts A, B, C (iii), D, E, F, G, H, K (i) and L of the Project will be carried out by SAPCO (as this term is hereinafter defined), with the Borrower's assistance and, as part of such assistance, the Borrower will make available to SAPCO, a portion of the proceeds of the Loan and of the First Loan as hereinafter provided; (H) Part I of the Project will be carried out by OPT (as this term is hereinafter defined) with the Borrover's assistance and, as part of such assistance, the Borrower will make available to OPT a portion of the proceeds of the Loan and of the First Loan as hereinafter provided;

- 3 - (I) the Bank is willing to make a portion of the Loan and of the First Loan available upon the terms and conditions set forth hereinafter and in the Project Agreement of even date herewith between the Bank, party of the first part, and SAPCO and OPT, parties of the second part (all such parties of the second part hereinafter sometimes collectively called the Beneficiaries); WHEREAS the Bank has agreed, on the basis inter alia of the foregoing, to make the Loan and the First Loan to the Borrower upon the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows:

14 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 Guarantee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank 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 the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Project Agreement" means the agreement between the Bank, on the one hand, and SAPCO and OPT on the other hand, of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supplemental to the Project Agreement; (b) "SAPCO Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and SAPCO pursuant to paragraph (b) of Section 3.02 of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the SAPCO Subsidiary Loan Agreement;

-5- (c) "OPT Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower, on the one hand, and OPT, on the other hand, pursuant to paragraph (b) of Section 3.02 of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the OPT Subsidiary Loan Agreement; (d) "CFAF" means the currency of the Borrower; (e) "SONEES" means Societe Nationale d'exploitation des Eaux du Sgnegal, a Societe Anonyme established and operating under the laws and regulations of the Borrower pursuant to its Statuts dated May 26, 1973; (f) "OPT" means Office des Postes et Telecommunications du Sgn4gal established and operating under the laws and regulations of the Borrower pursuant to the Borrower's Ordonnance No. 66-22 MTT of October 3, 1960, Decree No. 671327 of December 1, 1967, Law No. 72-48 of June 12, 1972, and Decree No. 72842 of July 13, 1972; (g) "SAPCO" means "Societe d'am9nagement de la Petite C6te," a Societe Anone established and operating under the laws of the Borrower pursuant to its Statuts approved on November 6, 1975; (h) "Interministerial Investment Committee" means the committee established pursuant to the Decree dated July 13, 1972; (i) "DUH" means the Direction de l'urbanisme et de l'habitat a directorate established with the Borrower's Ministry of Public Works, Urbanism and Transports;

-6- (j) "DGT" means the D616gation Gnerale au Tourisme, a directorate within the Borrower's Prime Minister's Office; (k) "EAPU" means the Economic Analysis and Planning Unit to be established within the Directorate of Planning and Studies (Direction des Etudes et de la Planification) of DGT as provided in Section 4.02 of the Loan Agreement; (1) "Project Area" means the area where Parts A through H of the Project are to be carried out on the site of Sali Portudal, the development of which is regulated by the Decree referred to in paragraph (i) of Section 6.01 of this Agreement; (m) "Convention G4ngrale" means the agreement referred to in paragraph (c) of Section 6.01 of the Loan Agreement; (n) "Protocols" means the protocols referred to in paragraph (d) of Section 6.01 of the Loan Agreement; (o) "Plan d'am6nagement" means the schema directeur d'amnagement de la Petite C6te approved, pursuant to the Borrower's Decree No. 76840 of July 24, 1976, and the plan d'am6nagement approved pursuant to the Borrower's Decree referred to in paragraph (i) of Section 6.01 of this Agreement; (p) "Cahiers des Chargs" means the terms and conditions referred to in paragraph (f) of Section 6.01 of this Loan Agreement under which SAPCO will make land in the Project area available to investors in tourism facilities;

-7- (q) "SENELEC" means the SociSt4 S4n9galaise de Distribution d'energie Electrique, a Soci9t9 d'economie mixte established and operating pursuant to the Borrower's laws and regulations; (r) "Petite C-te" means the area referred to in Article One of the Borrower's Decree No. 76840 of July 24, 1976; (s) "Statuts" means the articles of incorporation of SAPCO adopted on November 6, to time; and 1975, as the same may be amended from time (t) "Investments in Tourism Facilities" means investments in hotels, vacation villages and other recreational facilities.

-8- ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to eight million dollars ($8,000,000). Section 2.02. (a) The amount of the Loan may be withdrawn ftrom the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Bank, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Loan and in interest and other charges on the Loan. respect of (b) On each of the semi-annual interest payment dates specified in Section 2.07 of this Agreement, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and pay to itself such amounts as the Borrower shall be required to pay to the Bank on such date pursuant to Section 2.06 of this Agreement on account of interest and other charges on the Loan accrued and payable on the date set forth, and up to the amount allocated, in Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Bank. Section 2.03. Except as the Bank shall otherwise agree, contracts for the purchase of goods or for civil works to be

-9- 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 this Loan Agreement. Section 2.04. The Closing Date shall be June 30, 1981, or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.05. The Borrover shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.06. The Borrower shall pay interest at the rate of four and two-tenths per cent (4.20%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time; provided, however, that if the Administrator shall at any time determine that the resources of the Fund shall not be sufficient to pay to the Bank at the next succeeding semi-annual interest payment date of the Loan the amount scheduled to be paid by the Administrator at that interest payment date as specified in paragraph (D) of the Preamble to this Agreement, the Borrower shall, upon notification by the Administrator of such determination and the amount of the resulting shortfall, pay additional interest on such principal amount of the Loan equal to such shortfall. Section 2.07. Interest and other charges shall be payable semi-annually on January 15 and July 15 in each year.

- 10 - Section 2.08. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement.

- 11 - ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out Parts J and K (ii) through (vi) of the Project through its DUH and DGT, respectively, and Part C (i) and (ii), with due diligence and efficiency and in conformity with appropriate engineering, financial, tourism and administrative practices, and shall provide, or cause to be provided, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Without any limitation or restriction upon anyn of its other obligations under the Loan Agreement, the Borrower shall cause SAPCO and OPT to perform in accordance with the provisions of the Project Agreement all their respective obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable SAPCO and OPT to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (c) Without limitation or restriction to the generality of the provision of paragraph (a) of this Section 3.01 of this Agreement, the Borrower undertakes: (i) to submit to the Bank by December 31, 1977, or such other date as the Bank may agree, proposed terms of reference for studies to be carried out under Part K (iii) and (iv) of the Project, and to submit by June 30, 1979, or such other date as the Bank may agree, proposed terms of reference for the study to be carried out under Part K (v) of the

- 12 - Project; and (ii) to complete and to submit to the Bank by December 31, 1978, or such other date as the Bank may agree, the study to be carried out under Part K (iii) of the Project together with a proposed plan of action to implement the recommendation of the said study, thereafter to exchange views on such study and on such plan of action with the Bank by January 31, 1979, or such other date as the Bank may agree and thereafter to implement said plan of action with such modifications as the Bank may reasonably request and to provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. Section 3.02. (a) The Borrower shall: (i) relend, and lend, under a subsidiary loan agreement to be entered into between the Borrower and SAPCO under terms and conditions which shall have been approved by the Bank, to SAPCO (A) the portion of the proceeds of the Loan and of the First Loan required for the carrying out of Parts A, B, C (iii), D, E, F, G, H, K (i) and L of the Project and allocated from time to time to Categories (1) through (3) and Category (10) of the Table of Allocation of the Proceeds of the Loan and of the First Loan set forth in paragraph 1 of Schedule 1 to this Agreement, as such Schedule may be modified from time to time by agreement between the Bank and the Borrower, (B) an amount of at least CFAF six hundred million equivalent in the form of a subordinated loan to be made available in an amount of not less than CFAF seventy-five million before October 31, 1977, CFAF two hundred twelve million and five hundred thousand before October 31 of each of the years 1978 and 1979, and in an amount of CFAF one hundred million before October 31, 1980, and (C) such additional amounts as may be required to meet the expenditures required for the carrying out of Parts A, B, C (iii), D, E, F, G, H, K (i) and L of the Project; and

- 13 - (ii) relend, and lend, under a subsidiary loan agreement to be entered into between the Borrower and OPT under terms and conditions which shall have been approved by the Bank, to OPT (A) the portion of the proceeds of the Loan and of the First Loan required for the carrying out of Part H of the Project and allocated from time to time to Categories (4), (5) and (6) of the Table of Allocation of the Proceeds of the Loan set forth in paragraph 1 of Schedule 1 to the Loan Agreement, as such Schedule may be modified from time to time by agreement between the Bank and the Borrower, and (B) such additional amounts as may be required to meet the expenditures required for the carrying out of Part I of the Project. (b) Without limitation or restriction to the provision of paragraph (a) of Section 3.02 of this Agreement the portion of the proceeds of the Loan and of the First Loan to be made available to SAPCO and OPT, respectively, pursuant to the provision of paragraph (a) of this Section 3.02 of this Agreement shall be relent for a term of twenty (20) years including four and one-half (4-1/2) years of grace, at an annual rate of interest of eight and two-tenths per cent on the principal amount withdrawn and outstanding from time to time. (c) The Borrower shall exercise its rights under the SAPCO Subsidiary Loan Agreement and the OPT Subsidiary Loan Agreement, in such manner as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan and of the First Loan, and except as the Bank shall otherwise agree, the Borrower

shall not assign, amend, abrogate or waive the SAPCO Subsidiary Loan Agreement or the OPT Subsidiary Loan Agreement or any provision thereof. Section 3.03. (a) The Borrower undertakes that adequate provision shall be made for the insurance of the imported goods to be financed out of the proceeds of the Loan and of the First Loan against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and that for such insurance any indemnity shall be payable in a currency freely usable by the Borrower, SAPCO or OPT, as the case shall require, to replace or repair such goods. (b) Except as the Bank shall otherwise agree, the Borrower shall cause all goods and services financed out of the proceeds of the Loan and of the First Loan to be used exclusively for the Project. Section 3.04. (a) The Borrower shall furnish to the Bank, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for Parts C (i) and (ii), J and K (ii) through (vi) of the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) The Borrower: (i) shall maintain records adequate to record the progress of Parts C (i) and (ii), J and K (ii) through (vi) 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, and to disclose the use thereof in Parts C (i) and

- 15 - (ii), J and K (ii) through (vi) of the Project; (ii) shall enable the Bank's accredited representatives to visit the facilities and construction sites included in Parts C (i) and (ii), J and K (ii) through (vi) of the Project and to examine the goods financed out of the proceeds of the Loan and of the First Loan and any relevant records and documents; and (iii) shall furnish to the Bank all such information as the Bank shall reasonably request concerning Parts C (i) and (ii), J and K (ii) through (vi) of the Project, the expenditure of the proceeds of the Loan and of the First Loan and the goods and services financed out of such proceeds. Section 3.05. The Borrower shall take or cause to be taken all such action as shall be necessary to acquire 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 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 available for purposes related to the Project. Section 3.06. In order to assist DGT in the carrying out of Part K (iii) through (vi) of the Project, the Borrower shall employ: (i) no later than March 31, 1978, for the carrying out of Parts K (iii), (iv) and (vi) of the Project; and (ii) no later than October 31, 1979, for the carrying out of Part K (v) of the Project, or such other dates as the Bank may agree, consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank.

- 16 - Section 3.07. The Borrower undertakes to take all action as may be required to cause SENELEC to complete in accordance with a timetable acceptable to the Bank by no later than December 31, 1978, or such other date as the Bank may agree, the construction of a 30 kv power transmission line, including without limitation the construction and installation of the related ancillary facilities, connecting SENELEC's main power transmission line in the Dakar area to M'Bour, and thereafter to connect the tourism developments to be made, and the facilities constructed, in the Project Area with such transmission line, to maintain such transmission line in accordance with appropriate technical, engineering and public utility practices and to provide the said developments and facilities with adequate supplies of power in order to enable the said developments and facilities to be operated efficiently, all under arrangements satisfactory to the Bank and to provide SENELEC, or cause SENELEC to be provided promptly as needed, with the funds, facilities, services and other resources required for the purpose. Section 3.08. (a) The Borrower shall promptly take all such measures as may be required to: (i) complete by October 31, 1977, or such other date as the Bank may agree, the registration in its own name of the land referred to in paragraph (h) of Section 6.01 of the Loan Agreement; and (ii) lease such land to SAPCO under a long-term lease (bail emphyteotique) to be under terms and conditions satisfactory to the Bank, by December 31, 1977, or such other date as the Bank may agree; such terms and conditions shall specifically include, inter alia, the right for SAPCO to assign such lease in whole or in part to developers of Tourism Investments. The Borrower shall not amend, abrogate or waive such lease or any of the terms thereof without the prior approval of the Bank.

- 17 - (b) Until December 31, 1977, the Borrower shall make available to SAPCO and shall through SAPCO make available under terms and conditions satisfactory to the Bank to developers of Tourism Investments, all such land referred to in sub-paragraph (ii) of paragraph (a) of this Section as SAPCO shall request; such transfer shall include the right for such developers to carry out all such Tourism Investments on such land as shall have been approved by the Borrower and SAPCO. After December 31, 1977, the Borrower shall cause SAPCO to assign to such developers such part of the lease referred to in subparagraph (ii) of paragraph (a) of this Section as shall relate to such land made available to such developers.

- 18 - ARTICLE IV Other Covenants Section 4.01. (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, special 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 Borrower, 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, the Borrower 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

- 19 - as security for payment of the purchase price of such property; and (ii) any lien arising 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 Borrower, of any political or administrative subdivision thereof and of any entity owned or controlled by, or operating for the account or benefit of, the Borrower 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 Borrower. Section 4.02. (a) The Borrower shall maintain at all times its DGT and DUH adequately staffed with qualified and competent personnel in adequate numbers, including without limitation, a tourism planning expert and a financial analyst whose qualifications and experience shall be satisfactory to the Bank. (b) Without limitation to the generality of the provisions of paragraph (a) of this Section 4.02 of this Agreement, the Borrower shall by March 31, 1978, or such other date as the Bank may agree, establish and thereafter maintain within the Department of Planning and Studies (Direction des Etudes et de la Planification) of DGT an economic analysis and planning unit (EAPU) with such functions, powers and responsibilities as shall be acceptable to the Bank, and at all times staffed with qualified and competent personnel in adequate numbers, including, without limitation, a tourism planning expert, a financial analyst and an architect,

- 20 - under the supervision of a competent and experienced economist, all to be appointed no later than June 30, 1978, or such other date as the Bank may agree, and shall provide at all times promptly as needed, DGT, including without limitation EAPU, with the funds, facilities, services and other resources required for the purpose and for their efficient operation. (c) Before making any new appointment to the position of tourism planning expert, financial analyst or architect within, and of chief of, EAPU, the Borrower shall inform the Bank of the names, qualifications and experience of the person or persons considered for such appointment and shall afford the Bank a reasonable opportunity to exchange views with the Borrower on the qualifications and experience of such person or persons. (d) Starting on October 1, 1978, or such other date as the Bank may agree, the Borrower shall by October 1 of each year, exchange views with the Bank on the work program of EAPU for such year, on the staffing requirements of EAPU, and on the Borrower's plans to meet such staffing requirements of EAPU. (e) Unless the Bank shall otherwise agree the Borrower undertakes: (i) to cause the Interministerial Investment Committee to provide the benefits provided in the Borrower's Law No. 72-43, dated June 12, 1972, only to those Tourism Investors which have prevented investment projects recommended by its Direction Ggngrale au Tourisme (EAPU) as being economically, financially and technically viable; (ii) until facilities sufficient to accommodate not less than 2,500 hotel guest beds have been constructed in the Project Area and

- 21 - are operational to approve new Investments in Tourism Facilities, new or expanded, to be made on the Petite C6te, only if such investments are to be made in the Project Area; (iii) to approve Investments in Tourism Facilities to be made in the territory of the Borrower only if such investments would, to the satisfaction of the Bank and the Borrower, not materially and adversely affect the financial and economic viability of the facilities constructed under the Project; and (iv) not to grant to developers of Investments in Tourism Facilities outside the Project Area incentives (including inter alia the terms of sale and lease of land) more favorable than those provided to developers of Investments in in the Project Area. Toursim Facilities Section 4.03. Before making any modifications in the organizational structure of SAPCO, the Borrower shall submit the proposed modifications to the Bank and shall afford the Bank a reasonable opportunity to exchange views with the Borrower and SAPCO on such proposed modifications. Section 4.04. Except as the Bank shall otherwise agree, the Borrower undertakes to pay, or cause to be paid, to SAPCO the unpaid portion of SAPCO's capital in an amount of not less than CFAF eighty-seven million five hundred thousand, by October 31, in each of the years 1977 through 1979, including the year 1979. Section 4.05. The Borrower shall make available or cause to be made available to investors in new or expanded Tourism Facilities in the Project Area, credit facilities to finance investment in such facilities, on terms appropriate to the nature and estimated financial prospects of the investments to be made.

- 22 - Section 4.06. The Borrower undertakes to use its best efforts to permit, subject to its obligations under international agreements on air transport by June 30, 1980, or such other date as the Bank may agree, foreign charter airline carriers to provide charter airline services to the Dakar International Airport, to the extent needed by full scale tourist operations in the Sali Portudal region and to the extent needed to supplement airline charter operations of airlines then operating in Senegal, and thereafter to take all reasonable action necessary or appropriate to maintain or to increase charter airlines services to the extent needed to meet the above purposes. Section 4.07. Except as the Bank shall otherwise agree, the Borrower shall take or cause to be taken all such action as shall be necessary to ensure that not less than 1,500 guest beds in hotels, vacation villages or other recreational facilities will be available to tourists in the Project Area in accordance with a timetable satisfactory to the Bank, provided, however, that the Bank and the Borrower are satisfied that there is demand for such facilities in the Project Area. adequate tourist Section 4.08. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consistently maintained appropriate accounting practices, the operations, resources and expenditures, in respect of the Project, of the departmen-cs or agencies of the Borrower responsible for carrying out any part of the Project.

- 23 - Section 4.09. Except as the Bank shall otherwise agree, the Borrower shall not sell, assign, transfer or otherwise dispose of, or permit any such disposal of, any shares of the capital stock of SAPCO so as to reduce the Borrower's shareholder interest in SAPCO below 51% of SAPCO's subscribed capital. Section 4.10. The Borrower shall ensure that SAPCO be operated at all times in accordance with appropriate administrative and financial principles and practices under qualified and experienced management and staff. Section 4.11. When making any new appointment to the position of Pr4sident Directeur Ggneral of SAPCO, the Borrower shall, inform the Bank of the names, qualifications and experience of the person or persons considered for such appointment before proceeding with such appointment; the Bank shall be afforded a reasonable opportunity to exchange views with the Borrower and SAPCO on the qualifications and experience of such person or persons. Section 4.12. Without limitation to the generality of the provisions of paragraph (b) of Section 3.01 of this Agreement, the Borrower: (i) undertakes to take all such action as may be required to enable SAPCO, SONEES and OPT, respectively, to manage, operate and maintain the facilities constructed under Parts A, B, C (iii), D, E, F and G of the Project, under Part C (i) and (ii) of the Project and under Part I of the Project, and shall thereafter cause SAPCO, SONEES and OPT, respectively, to manage, operate, maintain, renew and repair such facilities, all in accordance with appropriate tourism, business, financial, administrative and engineering practices; and (ii) shall provide, or cause to be provided, promptly as needed the funds, facilities, services and other resources required for the purpose.

-24 - Section 4.13. The Borrower shall take all such action as may be required to ensure that the terms and conditions of long-term leases for sites for hotels, vacation villages or other recreational facilities in its territory which shall not be substantially more favorable to the lessee than the terms and conditions of long-term leases made by SAPCO to investors in the Project Area. Section 4.14. (a) The Borrower shall cause SONEES to establish by June 30, 1978, or such other date as the Bank may agree and thereafter to maintain a separate commercial accounting system for the water supply and sewerage services in the Project Area. (b) The Borrower shall cause SONEES: (i) to have its separate commercial accounts referred to in paragraph (a) of this Section for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) to 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 such audited accounts, 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) to furnish to the Bank such other information concerning such accounts and the audit thereof as the Bank shall from time to time reasonably request. Section 4.15. (a) Except as the Bank shall otherwise agree, the Borrower shall take promptly as needed all such action (including without limitation adjustments of tariffs or charges for water and sewerage services provided in the Project Area) as shall be required to provide in any fiscal year an annual return on the average of the current net value of the fixed assets related to

- 25 - the provision of water and sewerage services in the Project Area in service at the beginning and end of such fiscl year at a rate of not less than eight per cent (8%), commencing with the fiscal year starting January 1, 1986. (b) The Borrower undertakes: (i) to prepare and to submit starting on December 31, 1978, or such other date as the Bank may agree to the Bank by December 31 in each year, a provisional forecast of operating revenues, operating expenses, and rate of return, all related to the provisions of water and sewerage services in the Project Area for the current year and the next following year, a statement of the tariffs and assumptions underlying the forecasts, and a statement of the measures proposed, if any, including changes in tariffs, to produce the annual return provided for in paragraph (a) of this Section; and (ii) to furnish to the Bank all such other information relevant to the said forecasts in such detail as the Bank may reasonably request. (c) For the purposes of this Section: (i) the annual return specified in paragraph (a) of this Section shall be calculated in respect of each fiscal year, by using as the denominator the average current net value of the fixed assets of the Borrower related to water and sewerage services in the Project Area in service at the beginning and at the end of each such year, and as numerator the net operating income related thereto for the same year;

- 26 - (ii) the term "current net value of the fixed assets of the Borrower related to the water and sewerage services in the Project Area in service" means the gross value of the Borrower's fixed assets related to water and sewerage services in the Project Area 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 revenues from all sources related to water and sewerage services in the Project Area less all expenditures related thereto, including expenses of administration, adequate maintenance and taxes or any payment in lieu of taxes and adequate provision for depreciation but excluding interest and other charges on debt.

- 27 - ARTICLE V Remedies of the Bank Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) SAPCO or OPT shall have failed to perform any of the respective covenants, agreements or obligations of SAPCO and OPT under the Project Agreement; (b) SAPCO or OPT shall have failed to perform any of the covenants, agreements or obligations of SAPCO or OPT under the SAPCO Subsidiary Loan Agreement or under the OPT Subsidiary Loan Agreement, respectively; (c) an extraordinary situation shall have arisen which shall make it improbable that SAPCO or OPT will be able to perform any of its respective obligations under the Project Agreement; make it (d) an extraordinary situation shall have arisen which shall improbable that SAPCO or OPT will be able to perform any of its obligations under the SAPCO Subsidiary Loan Agreement or under the OPT Subsidiary Loan Agreement, respectively; (e) any of the Borrower's Laws, Ordonnances, or Decrees referred to in paragraph (f) of Section 1.02 of this Agreement or the Statuts referred to in paragraph (e) of Section 1.02 of this Agreement, or any other legal provision governing the organization,

- 28 - or operations of, OPT or SONEES shall have been amended, suspended, abrogated, repealed or waived in such a way as to materially and adversely affect the ability of SAPCO, OPT or SONEES to carry out any of its respective covenants, agreements and obligations set forth in the Project Agreement; (f) any of the parties to the Convention Ggngrale or to any of the Protocols shall have failed to perform any of its respective covenants, agreements or obligations under the Convention G6nerale or the Protocols; (g) the Convention Gfn9rale, any of the Protocols, the cahier des charges or the Plan d'amnagement or any provision thereof has been amended, abrogated or waived without the prior consent of the Bank; (h) Decree No. 73-165 dated February 19, 1973, and No. 76-840 dated July 24, 1976, as well as the Decree referred to in paragraph (i) of Section 6.01 of this Agreement shall have been amended, suspended, abrogated, repealed or waived, without the prior approval of the Bank in such a way so as materially and adversly to affect the ability of the Borrower and of SAPCO to carry out their respective covenants, agreements and obligations set forth in this Agreement and in the Project Agreement; (i) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of SAPCO or of OPT for the supervision of its operations;

- 29 - (j) SAPCO or OPT shall have become unable to pay its respective debts as they mature or any action or proceeding shall have been taken by SAPCO or OPT or by others whereby any of the respective assets of SAPCO or of OPT shall or may be distributed among its respective creditors; (k) a representation made by SAPCO or OPT in or pursuant to the Project Agreement, or any statement furnished in connection therewith, and intended to be relied upon by the Bank in making the Loan, shall have been incorrect in any material respect; and (1) the Statuts or any provision thereof have been amended without the prior approval of the Bank in such a way so as materially and adversly to affect the ability of SAPCO to carry out the covenants, agreements and obligations set forth in the Project Agreement. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) the events specified in paragraphs (a), (b), (f) or (1) of Section 5.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Bank to the Borrower; and (b) the events specified in paragraphs (e), (g), (h), (i) and (j) of Section 5.01 of this Agreement shall occur.

- 30 - ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as additional conditions to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions: (a) the execution of the Project Agreement on behalf of SAPCO and OPT, respectively, has been duly authorized or ratified by all necessary corporate and governmental action; (b) the execution of the SAPCO Subsidiary Loan Agreement on behalf of the Borrower and SAPCO, respectively, has been duly authorized or ratified by all necessary corporate and governmental action; (c) the execution and delivery of a Convention Ggngrale on behalf of the Borrower and SAPCO, in form and substance satisfactory to the Bank, defining the terms and conditions under which not less than 580 ha of land suitable for the development of sufficient hotels, vacation villages or other recreational activities in the Project Area will be made available to SAPCO have been duly authorized or ratified by all necessary corporate and governmental action; (d) the execution and delivery of a protocol on behalf of SAPCO on the one hand, and SONEES, SENELEC and OPT on the other hand, in form and substance satisfactory to the Bank, defining

- 31 - SAPCO's, SONEES', SENELEC's and OPT's responsibilities in the carrying out of the Project, have been duly authorized or ratified by all necessary corporate and governmental action; (e) SAPCO's share capital has been increased to at least CFAF five hundred million under terms and conditions satisfactory to the Bank, and an amount of CFAF two hundred thirty-seven million at least of SAPCO's share capital has been paid in; (f) SAPCO's Board of Directors has adopted a cahier des charges in form and substance satisfactory to the Bank setting forth the terms and conditions under which SAPCO shall make available land to developers of Investments in Tourism Facilities and such cahier 6.es charges are in full force and effect; (g) the Borrower has selected a manager for the pilot hotel referred to in Part F of the Project, with qualifications, experience and terms and conditions of employment satisfactory to the Bank; (h) the Borrower has issued and promulgated a Decret. satisfactory to the Bank initiating, pursuant to its laws and regulations, land registration procedures for at least 580 ha of land belonging presently to its Domaine National in the Project Area, such land to be made available to developers of tourism investment; Ci) the Borrower has issued and promulgated a Decree satisfactory to the Bank approving the detailed land use plan (Plan d'am4nagement) for the area where the Project is to be carried out; and

- 32 - (j) all conditions precedent to the effectiveness of the First Loan Agreement have been fulfilled subject only to the effectiveness of this Agreement. Section 6.02. The following are specified as additional matters, within the meaning of Section 12.02 (c) of the General Conditions, to be included in the opinion or opinions to be furnished to the Bank: (a) that the Project Agreement has been duly authorized or ratified by SAPCO and OPT, respectively, and is legally binding upon SAPCO and OPT, respectively, in accordance with its terms; (b) that the SAPCO Subsidiary Loan Agreement has been duly authorized or ratified by the Borrower and SAPCO, respectively, and is legally binding upon the Borrower and SAPCO, respectively, in accordance with its terms; (c) that the Convention Ggngrale, each of the Protocols and the Cahiers des Charges have been duly authorized or ratified by each of the parties thereto, and are legally binding upon each one of these parties in accordance with their terms; and (d) all action required under the laws and regulations of the Borrower to increase the share capital of SAPCO as provided in paragraph (e) of Section 6.01 of the Loan Agreement has been taken; such increase of SAPCO's share capital is in full force and effect, and the shareholders of SAPCO are obligated to pay such amounts of the increase of the equity capital of SAPCO as and when SAPCO's Board of Directors shall so request by notice to SAPCO's shareholders.

- 33 - Section 6.03. The date October 5, 1977, is hereby specified for the purposes of Section 12.04 of the General Conditions.

-34 - ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Minister of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: binistere des Finances et des Affaires Economiques Rue Charles Laine B.P. 4017 Dakar, Sgnegal Cable address: For the Bank: MINIFINANCES Dakar 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)

- 35 - 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 of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF SENEGAL By /s/ Andrg Coulbary Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Roger Chaufournier Regional Vice President Western Africa

- 36 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan and of the First Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan and of the First Loan, the allocation of the amounts of the Loan and of the First Loan to each Category and the percentage of expenditures for items so to be financed in each Category:. Amount of the Loan and of the First Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed Sali Portudal resort area (Parts A, B, C (iii), D, E, F, G, H, K (i) and L of the Project) (1) Civil works under Parts A, B, C (iii), 3,067,000 65% D, E, F, G and H of the Project (2) Equipment and 1,457,000 100% of foreign materials under expenditures and Parts A, B, C (iii) 100% of ex-factory D, E, F, G, H, K (i) cost of locally and L of the Project manufactured items, and 75% of local expenditures of other locally procured items (3) Consulting services 943,000 100% of foreign under Parts A, B, expenditures C (iii), D, E, F, G, H, K (i) and L of the Project

- 37 - Amount of the Loan and of the First Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed M'Bour telephone exchange (Part I of the Project) (4) Civil works under 62,000 65% Part I of the Project (5) Equipment under 150,000 100% of foreign Part I of the expenditures and Project 100% of ex-factory cost of locally manufactured items, and 75% of local expenditures of other locally procured items (6) Consulting services 26,000 100% of foreign under Part I of the expenditures Project Goree renovation (Part J of the Project) (7) Civil works under 655,000 65% Part J of the Project (8) Equipment and materials 147,000 100% of foreign under Part J of the expenditures and Project 100% of ex-factory cost of locally manufactured items, and 75% of local expenditures of other locally procured items

- 38 - Amount of the Loan and of the First Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (9) Consulting services 132,000 100% of foreign under Part J of the expenditures Project Sali Portudal Water and Sewerage Infrastructure (10) Civil works under 890,000 63% Part C (i) and (ii) of the Project (11) Equipment under 254,000 100% of foreign Part C (i) and (ii) expenditures; of the Project 100% of ex-factory cost of locally manufactured items, and 75% of local expenditures of other locally procured items (12) Consulting services 157,000 100% of foreign under Part C (i) expenditures and (ii) of the Project Project Administration, Technical Assistance and Studies (Part K (ii) through (vi) and Part L of the Project) (13) Consulting and pro- 1,160,000 100% of foreign fessional services expenditures under Part K (ii) through (vi) of the Project

- 39 - Amount of the Loan and of the First Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (14) (a) Interest and 560,000 Amounts due other charges on the Loan accrued on or before July 15, 1982 (b) Interest and 740,000 Amounts due other charges on the First Loan accrued on or before October 15, 1981 (15) Unallocated 3,200,000 TOTAL 13,600,000

-40-2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower; provided, however, that if the currency of the Borrower is also that of another country from the territory of which goods or services are supplied, expenditures in such currency for such goods or services shall be deemed to be "foreign expenditures"; and (b) the term "local expenditures" means expenditures in the currency of the Borrower and for goods or services supplied from the territory of the Borrower. 3. The disbursement percentages have been calculated in compliance with the policy of the Bank that no proceeds of the Loan and of the First Loan shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Loan and of the First Loan decreases or increases, the Bank may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Bank. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made:

- - 41 - (i) for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of $300,000, may be made in respect of Categories (3) and (13) on account of payments made for such expenditures with respect to Parts A through H and Part L of the Project, respectively, before that date but after February 1, 1976; (ii) for expenditures under Categories (7), (8) and (9) with respect to Part J (i) and (ii) of the Project until the Borrower has employed an architect - engineer to be responsible within DUH for the carrying out of said Parts of the Project, whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank; (iii) for expenditures under Categories (7) and (8) with respect to Part J (iii) of the Project until the Borrower has adopted a marketing program satisfactory to the Bank for the Relais de 1'Espadon, which shall include, inter alia, a timetable of steps for improving its management; and (iv) for expenditures under Categories (4), (5) and (6) until the OPT Subsidiary Loan Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, the Borrower