Tanzania - Morogoro Textile Project : Loan 1607 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1607 TA Loan Agreement (Morogoro Textile Project) between UNITED REPUBLIC OF TANZANIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated July 28, 1978 LOAN NUMBER 1607 TA LOAN AGREEMENT AGREEMENT, dated July 28, 1978, between UNITED REPUBLIC OF TANZANIA (hereinafter called t e Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPhNT (hereinafter called the Bank). WHEREAS (A) the Borrower has requested the Bank and the INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association) to assist in the financing of the Project described in Schedule 2 to the Development Credit Agreement of even date herewith between the Borrower and the Association; (B) the Borrower has requested other sources to assist in the financing of the Project; (C) the Project will be carried out by Morogoro Polyester Textiles Limited (hereinafter called the Company) and the National Textile Corporation with the Borrower's assistance and, as part of such assistance, the Borrower will make available to the Company pursuant to the provisions of a subsidiary loan agreement the proceeds of the Loan as hereinafter provided and part of the proceeds of the credit to be provided under the Development Credit Agreement referred to above; and (D) the Bank has agreed, on the basis inter alia of the foregoing, to make the Loan available to the Borrower upon the terms and conditions set forth hereinafter and in a project agreement of even date herewith among the Bank, the Association, the Company and the National Textile Corporation; 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 Guarantee Agreements of the Bank, dated March 15, 1974, with the aame force and effect as if they were fully set forth herein provided, however, that paragraph 11 of Section 2.01 is modified to read as follows: "The term "Project" means the project for which the loan is granted, as described in Schedule 2 to the Development Credit Agreement as the description thereof may -2- be amended from time to time by agreement among the Borrower the Bank and the Association." (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank, 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 and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Development Credit Agreement" means the agreement of even date herewith between the Borrower and the Association for the purpose of the Project, as such agreement may be amended from time to time; and such term includes the General Conditions Applicable to Development Credit Agreements of the Association, dated March 15, 1974, as made applicable to such agreement, all agreements supplemental to the Development Credit Agreement and all schedules to the Development Credit Agreement; and (b) "Project Agreement" and "Subsidiary Loan Agreement" have the respective meanings set forth in Section 1.02 (a) and (b) of the Development Credit Agreement. 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 twenty-five million dollars ($25,000,000). Section 2.02. (a) The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to the Development Credit Agreement, as such Schedule may be amended from time to time, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reason- able cost of goods and services required for the Project and to be financed out of the proceeds of the Loan and in respect of interest and other charges on the Loan. (b) On each of the semiannual 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 -3- to itself the amounts required to pay, on such date, interest and other charges on the Loan accrued and payable on or before the date set forth, and up to the amount allocated, in Schedule 1 to the Development Credit Agreement, as such Schedule may be amended from time to time. Section 2.03. Except as the Bank shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Loan, shall be governed by the provisions set forth or referred to in Section 2.05 of the Project Agreement. Section 2.04. The Closing Date shall be June 30, 1985, or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.05. The Borrower shall pay to the Bank a commit- ment 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 seven and one-half per cent (7.50%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semiannually on April 1 and October 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Loan in accordance with the Amortization Schedule to this Agreement. ARTICLE III Execution of the Project Section 3.01. The provisions of Article III of the Develop- ment Credit Agreement are hereby incorporated into this Agreement with the same force and effect as if fully set forth herein; provided that, (a) except in Section 3.01 (b) of the Development Credit Agreement, all references to the Association therein shall be deemed references to the Bank, (b) the reference in Section 3.01 (a) to the Development Credit Agreement shall be deemed a reference to th-is Agreement and (c) the reference in Section 3.01 (c) to the Credit shall be deemed a reference to the Loan. 4 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 distri- bution 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. (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; 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. 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, namely, the events specified in Section 4.01 of the Development Credit Agreement. -5- Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following event is specified pursuant to paragraph (h) thereof, namely, any event specified or referred to in Section 4.02 of the Development Credit Agreement, including the con- tinuance of the events specified or referred to in paragraph (a) of such Section for the period provided therein after notice thereof shall have been given by the Bank to the Borrower. ARTICLE VI Effective Date; Termination Section 6.01. The following event is specified as an addi- tional condition to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions, namely, that all conditions precedent to the effectiveness of the Development Credit Agreement have been fulfilled except for the effectiveness of this Agreement. Section 6.02. The date November 28, 1978, is he:eby speci- fied for the purposes of Section 12.04 of the General Conditions. ARTICLE VII Representatives of the Borrover; Addresses Section 7.01. The Minister of the Borrower at the time responsible for Finance is designated as representative of the Borrower for the purposes of Section 11.03 of the General Con- ditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministry of Finance and Planning P.O. Box 9111 Dar es Salaam Tanzania Cable address: TREASURY Dar es Salaam -6- 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 of Columbia, United States of America, as of the day and year first above written. UNITED REPUBLIC OF TANZANIA By /s/ Paul Bomani Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Hans A. Adler Acting Regional Vice President Eastern Africa -7- SCHEDULE Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each April 1 and October 1 beginning October 1, 1983 through October 1, 1997 835,000 On April 1, 1998 785,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. - 8 - Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 1.15% More than three years but not more than six years before maturity 2.25% More than six years but not more than eleven years before maturity 4.15% More than eleven years but not more than sixteen years before maturity 6.00% More than sixteen years but not more than eighteen years before maturity 6.75% More than eighteen years before maturity 7.50%