Iraq - Wadi-Tharthar Flood Control Project : Loan 0026 - Indenture of Assignment - Conformed

Indenture of Assignment BETWEEN THE GOVERNMENT OF IRAQ AND * INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED JUNE 15, 1950 PREss or BYRON S. ADAMS, WASHINGTON, D. C. Indenture of Assignment BETWEEN THE GOVERNMENT OF IRAQ AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED JUNE 15, 1950 PRESS OF BYRON S. ADAMs, WASHINGTON, D. C. Jnbtnturt of eignmnt INDENTURE dated June 15, 1950, between THE GOVERNMENT OF IRAQ, party of the first part, and INTERNA- TIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT, party of the second part. WHEREAS Iraq represents and warrants that it is now en- titled and will continue to be entitled to receive payments of 'substantial oil royalties deriving from the exploitation of oil in its territories; and WHEREAS by an agreement dated June 15, 1950 be- tween Iraq and the Bank (which agreement and the sched- ules therein referred to are hereinafter called the Loan Agreement) the Bank has agreed to make a loan to Iraq in the aggregate principal amount of twelve million eight hundred thousand dollars ($12,800,000) or the equivalent thereof in other currencies, on the terms and conditions set forth in the Loan Agreement, and WHEREAS Iraq has agreed to provide security for the pay- ment of such Loan by making certain assignments of such oil royalties and for that purpose has agreed to execute this Indenture of Assignment with the Bank. Now THEREFORE the parties hereto hereby agree as fol- lows: ARTICLE I Wherever used in this Indenture of Assignment, unless the context shall otherwise require, the following terms shall have the respective meanings hereinafter in this Ar- ticle set forth: (1) the term Iraq means the Kingdom of Iraq, the party of the first part hereto; 2 (2) the term Bank means International Bank for Recon- struction and Development, the party of the second part hereto; (3) the term Loan Agreement means the loan agreement dated June 15, 1950 between Iraq and the Bank re- ferred to in the second clause of the preamble to this Inden- ture of Assignment and all the schedules referred to in such loan agreement; (4) the term Loan means the loan provided for in the Loan Agreement; (5) the term Bond means a bond executed and delivered as provided in Article VI of the Loan Agreement; (6) the term IPC means Iraq Petroleum Company Lim- ited, a company organized and existing under the laws of the United Kingdom of Great Britain and Northern Ire- land, and any successor thereof; (7) the term BPC means Basrah Petroleum Company Limited, a company organized and existing under the laws of the United Kingdom of Great Britain and Northern Ire- land, and any successor thereof; (8) the term MPC means Mosul Petroleum Company Limited, a company organized and existing under the laws of the United Kingdom of Great Britain and Northern Ireland, and any successor thereof; (9) the term IPC Concession means the convention signed on March 14, 1925 between Iraq and Turkish Petroleum Company Limited (the name of which was sub- sequently altered to Iraq Petroleum Company Limited) pursuant to which Iraq is entitled to receive payments of certain oil royalties, and shall include all amendments and supplements thereto and all novations thereof; (10) the term BPC Concession means the convention signed on July 29, 1938 between Iraq and BPC pursuant to which Iraq is entitled to receive payments of certain oil 3 royalties, and shall include all amendments and supplc- ments thereto and all novations thereof; (11) the term MPC Concession means the convention signed on April 20, 1932 between Iraq and B.O.D. Company Limited (the name of which was subsequently altered to Mosul Petroleum Company Limited) pursuant to which Iraq is entitled to receive payments of certain oil royalties, and shall include all amendments and supplements thereto and all novations thereof. (12) the term Concessions means the IPC Concession, the BPC Concession and the MPC Concession; (13) the term oil royalties means all payments, taxes, fees, charges and other considerations in whatever form and however and whenever payable, which Iraq or any of its political subdivisions or agencies shall receive or shall be or shall become entitled to receive for or on account of the production, transportation, storage or sale of petroleum or for or on account of the sale, lease or licensing of any land or interest in land used or to be used for the produc- tion, transportation, storage or sale of petroleum, or on account of the income derived from any of the foregoing; provided, however, that so long as Iraq shall receive under the Concessions a royalty per ton on the substances (other than natural gas) comprised in Article 1 of each of the Concessions won and saved of four shillings gold plus or minus any increase or decrease in such royalty effected by an increase or decrease in such rate of four shillings gold provided for in Article 10 of the IPC Concession and in Article 11 of the BPC Concession and in Article 11 of the MPC Concession and the amounts of such roy- alty shall in the aggregate be, after having been converted into currencies required for payments on account of the Loan and the Bonds, not less than the totals of all amounts then due and payable, the term oil royalties shall mean such royalty payable at the rate of four shil- lings gold per ton plus or minus any such increase or decrease plus any increase in such royalty effected by an 4 increase in such rate whether such increase shall be effected by amendment to such Articles of the Concessions or other Articles of the Concessions or otherwise. For the purpose of this Paragraph 13 any references to particular Articles of the Concessions or to Articles of the Concessions shall mean such Articles of the Concessions in their form on the date of this Indenture of Assignment. (14) the term amounts due and payable as applied to any specific date means all amounts due and payable on account of interest and commitment charge and service charge on the Loan and the Bonds and on account of principal thereof in accordance with *the schedule of payments set forth in Schedule 1 to the Loan Agreement, at the time specified; provided, however, that if (a) default shall be made in the payment of any instalment of interest on the Loan or on any of the Bonds or any instalment of service charge or commitment charge on the Loan when and as the same shall become payable, or (b) default shall be made in the payment of the principal of the Loan or of the principal of any of the Bonds in accordance with such schedule of pay- ments or in payment of the redemption price of any of the Bonds, and if by reason of any such default the principal of the Loan and of all the Bonds then outstanding shall have been declared by the Bank to be due and payable im- mediately, then the term amounts due and payable shall also include such principal of, and accrued interest, com- mitment charge and service charge on the Loan and the Bonds and the premium, if any, on the redemption of the Loan and the Bonds. ARTICLE II SECTION 1. As security for the due payment of the prin- cipal of, and interest and other charges on, the Loan and the Bonds, Iraq hereby grants, conveys, assigns and trans- fers unto the Bank any and all rights which it now has or may hereafter acquire to receive oil royalties under the Concessions. 5 SECTON 2. Iraq will make arrangements, satisfactory to the Bank, for the direct payment to or on the order of the Bank, on demand, of the oil royalties assigned in Section 1 of this Article by the person or persons from whom such oil royalties are due and will take any action which, in the opinion of legal counsel acceptable to the Bank, is neces- sary to make this Section enforceable against such person or persons. SECTION 3. No demand shall be made by the Bank, pur- suant to the arrangements provided for in Section 2 of this Article so long as all amounts then due and payable shall have been duly paid by or on behalf of Iraq. No such de- mand shall be made by the Bank for amounts in excess of the amounts which, after having been converted into cur- rencies required for payments on account of the Loan and the Bonds, shall be equivalent to the totals of all amounts then due and payable. SECTION 4. The exchange of currencies received pursuant to this Article II for currencies required for payments of amounts due and payable shall constitute a first charge on all resources of the currencies required for payiments on account of the Loan and the Bonds and on the rights to receive such currencies from any source which are or shall be available to Iraq from time to time. Iraq will make arrangements satisfactory to the Bank to make effective the charge created in this Section. SECTION 5. The charge on the royalties reserved and made payable by IPC to be executed by Iraq pursuant to the agreement dated December 2, 1949 between the Govern- ment of Iraq and the Export Credits Guarantee Depart- ment shall rank pari passu with the security created by the assignment provided for in this Indenture of Assignment. SECTION 6. Notwithstanding anything in this Indenture of Assignment contained, amounts which have been or may 6 hereafter be advanced to Iraq by IPC and BPC and MPC may be recovered by them by deduction from the aggregate of payments due by way of royalty -under the relevant Con- cessions as and when and insofar as such payments exceed £800,000 (gold) in any year. ARTICLE III SECTION 1. The oil royalties received by the Bank under Article II of this Indenture or the proceeds thereof shall be applied toward the payment of all amounts then due and payable. SECTION 2. If any oil royalties shall be received in any currency or currencies in excess of amounts needed for pay- ments of amounts due and payable in such currency or cur- rencies, the Bank may exchange such currency or curren- cies so received for the currency or currencies needed for such payments at an official rate or rates based on the par values for such currencies as determined by the Interna- tional Monetary Fund or, if no such par value shall at that time be determined, then on the basis of the reasonable for- eign exchange value of such currencies in terms of dollars as determined by the Bank, but the Bank shall be under no obligation to make any such exchange. SECTION 3. The obligations of Iraq to make payments of principal, interest and other charges on the Loan and prin- cipal, interest and premium on redemption, if any, on the Bonds in accordance with the provisions of the Loan Agree- ment and the Bonds shall not be limited or diminished in any way by any provision of this Indenture of Assignment. ARTICLE IV SECTION 1. If at any time Iraq shall propose to grant, convey, assign, transfer, mortgage, pledge, charge or other- wise dispose of any of its oil royalties, it shall notify the Bank thereof, and, prior to taking the proposed action, shall 7 afford to the Bank a reasonable opportunity to express its views with regard thereto. SECTION 2. No holder of any Bond, other than the Bank, shall by virtue of being the holder thereof be entitled to exercise any of the rights conferred upon the Bank in this Indenture. SECTION 3. Nothing expressed in or to be implied from this Indenture, is intended or shall be considered to give to any person, firm or corporation other than the parties hereto any legal or equitable right, remedy or claim here- under or under any covenant or provision hereof, this In- denture and all the covenants and provisions hereof being intended to be and being for the sole and exclusive benefit of the parties hereto as herein provided. SECTION 4. The Bank shall be entitled to reimburse itself, out of any oil royalties received or the proceeds thereof, for the reasonable cost incurred in the collection thereof, in- cluding the cost of any conversion thereof into the currency or currencies required for payments of amounts due and payable, prior to applying any thereof to the payment of amounts due and payable. ARTICLE V SECTION 1. The respective rights and obligations of the parties hereto under this Indenture of Assignment shall be valid and enforce ible in accordance with their terms any- thing in any statute, law or regulation of any nation or state or political subdivision thereof to the contrary notwith- standing. Neither of such parties shall be entitled in any proceeding to assert any claim that any provision of this Indenture of Assignment is invalid or unenforceable be- cause of any provision of the Articles of Agreement of the Bank or for any other reason. 8 SECTION 2. The provisions of this Indenture of Assign- ment shall be interpreted in accordance with the law of the State of New York, United States, as at the time in effect. ARTICLE VI SECTION 1. Any notice, demand or request required or permitted to be given under this Indenture of Assignment shall be in writing and shall be deemed to have been duly given when it shall be delivered in writing or by telegram, cable or radiogram, to the party to which such notice, de- mand or request is required or permitted to be given at its address hereinafter specified, or at such other address as such party shall have designated by notice in writing to the party giving or making such notice, demand or request. The addresses so specified are: For Iraq: Minister of Finance, Ministry of Finance, Baghdad, Iraq. For the Bank: International Bank for Reconstruction and Develop- ment, 1818 H Street, N. W., Washington 25, Dis- trict of Columbia, United States of America. SECTION 2. This Indenture of Assig-nment may be execu- ted in several counterparts, each of which shall be an origi- nal and all collectively but one instrument. SECTION 3. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Indenture of Assignment on behalf of Iraq may be taken or executed by the Minister of Finance of Iraq or any person thereunto authorized in writing by him. Any modification or amplification of the provisions of this In- denture of Assignment may be agreed to on behalf of Iraq 9 by written instrument executed on behalf of Iraq by its Minister of Finance or any person thereunto authorized in writing by him. SECTION 4. Iraq shall furnish to the Bank sufficient evi- dence of the authority of the person or persons who will, on behalf of Iraq, take any action or execute any documents required or permitted to be taken or executed by Iraq pur- suant to any of the provisions of this Indenture of Assign- ment and the authenticated specimen signature of each such person. SEcTION 5. The Bank shall furnish to Iraq sufficient evi- dence of the authority of the person or persons who will, on behalf of the Bank, take any action or execute any docu- ments required or permitted to be taken or executed by the Bank pursuant to any of the provisions of this Indenture of Assignment and the authenticated specimen signature of each such person. ARTICLE VII Section 1. This Indenture of Assignment shall come into force and effect on the day and year first above written. If pursuant to Section 3 of Article XII of the Loan Agree- ment, the Bank shall terminate the Loan Agreement, this Indenture of Assignment and all obligations of the parties hereunder shall forthwith cease and determine. SECTION 2. If and when the entire principal amount of the Loan shall have been paid (or shall have been can- celled), together with the redemption premium, if any, on the redemption of all Bonds which shall have been called for redemption and all interest and other charges which shall have accrued on the Loan and the Bonds, this Inden- ture of Assignment and all obligations of the parties here- under shall forthwith cease and determine. 10 IN WITNESS WHEREOF the parties hereto have caused this Indenture of Assignment to be signed in their respective names by their representatives thereunto duly authorized as of the day and year first above written. THE GOVERNMENT OF IRAQ by S. HAIDER Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT by W. A. B. ITAFF Loan Director