Iceland - Second Agricultural Project : Loan 0079 - Loan Agreement - Conformed

LOAN NUMBER 79 IC Loan Agreement (Second AgriculturaliProject) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AM FRAMKVAMDABANKI ISLANDS (Iceland Bank of Development) DATED SEPTEMBER 4, 1953 PRESS OF BYRON S. ADAMS. WASHINGTON loan 2greement AGREEVENT, dated September 4, 1953, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOP- MENT (hereinafter called the Bank) and FRAMKV.EMDA- BANKI ISLANDS (Iceland Bank of Development) (hereinafter called the Borrower). ARTICLE I Loan Regulations SECTION 1.01. The parties to this Loan Agreement ac- cept all the provisions of Loan Regulations No. 4 of the Bank dated October 15, 1952, subject, however, to the modi- fications thereof set forth in Schedule 3 to this Agreement (said Loan Regulations No. 4 as so modified being herein- after called the Loan Regulations), with the same force and effect as if they were fully set forth herein. ARTICLE II The Loan SECTION 2.01. The Bank agrees to lend to the Bor- rower, on the terms and conditions in this Agreement set forth or referred to, an amount in various currencies equivalent to one million three hundred fifty thousand dollars ($1,350,000). SECTION 2.02. The Bank shall open a Loan Account on its books in the name of the Borrower and shall credit to such Account the amount of the Loan. The amount of the Loan may be withdrawn from the Loan Account as pro- vided in, and subject to the rights of cancellation and sus- pension set forth in, the Loan Regulations. 4 SECTION 2.03. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (4 of 1/o) per annum on the principal amount of the Loan not so withdrawn from time to time. The date specified for the purposes of Section 2.02 of the Loan Regulations is November 1, 1953, or the Effec- tive Date, whichever shall be the earlier. SECTION 2.04. The Borrower shall pay interest at the rate of five per cenL (5%) per annum on the principal amount of the Loan so withdrawn and outstanding from time to time. SECTION 2.05. Except as the Bank and the Borrower shall otherwise agree, the charge payable for special com- mitments entered into by the Bank at the request of the Borrower pursuant to Section 4.02 of the Loan Regula- tions shall be at the rate of one-half of one per cent (/> of 1/o) per annum on the principal amount of any such special commitments outstanding from time to time. SECTION 2.06. Interest and other charges shall be pay- able semi-annually on March 1 and September 1 in each year. SECTION 2.07. The Borrower shall repay the principal of the Loan in accordance with the amortization schedule set forth in Schedule I to this Agreement. ARTMICLE III Use of Proceeds of the Loan SECTION 3.01. The Borrower shall apply the proceeds of the Loan exclusively to financing the cost of goods re- quired to carry out the Project described in Schedule 2 to this Agreement. The goods to be financed out of the pro- ceeds of the Loan shall be determined by agreement be- 5 tween the Bank and the Borrower, subject to modification by further agreement between them. ARTICLE IV Bonds SECTION 4.01. The Borrower shall execute and deliver Bonds representing the principal amount of the Loan as provided in the Loan Regulations. SECTIoN 4.02. The General Manager of the Borrower and such person or persons as lie shall appoint in writing are designated as authorized representatives of the Bor- rower for the purposes of Section 6.12 (a) of the Loan Regulations. ARTICLE V Particular Covenants SECTION 5.01. (a) The Borrower shall cause the Project to be carried out with due diligence and efficiency and shall ensure that goods are available for the Project as required. (b) The Borrower shall maintain or cause to be main- tained records adequate to record the progress of the Project and to reflect in accordance with consistently main- tained sound accounting practices the financial condition and operations of the Borrower; shall enable the Bank's representatives to inspect the Project, the goods and any relevant records and documents; and shall furnish to the Bank all such information as the Bank shall reasonably request concerning the expenditure of the proceeds of the Loan, the Project, the goods, and the financial condition and operations of the Borrower. SECTION 5.02. (a) The Bank and the Borrower shall cooperate fully to assure that the purposes of the Loan will be accomplished. To that end, each of them shall 0 6 furnish to the other all such information as it shall reason- ably request with regard to the general status of the Loan. (b) The Bank and the Borrower shall from time to time exchange views through their representatives with regard to matters relating to the purposes of the Loan and the maintenance of the service thereof. The Borrower shall promptly inform the Bank of any condition which inter- feres with, or threatens to interfere with, the accomplish- ment of the purposes of the Loan or the maintenance of the service thereof. SECTION 5.03. If the Borrower shall propose to incur any external debt, the Borrower shall inform the Bank of such proposal and, before the proposed action is taken, shall afford the Bank all opportunity which is reasonably practicable in the circumstances to exchange views with the Borrower with respect thereto; provided, however, that the foregoing provisions shall not apply to: (i) the incur- ring of additional external debt through utilization, in accordance with the terms of any credit established prior to the date of this Agreement, of any unused amounts available under such credit; or (ii) the incurring by the Borrower in the ordinary course of its business of any external indebtedness maturing not more than one year after the date on which it is originally incurred. SECTION 5.04. The Borrower undertakes that, except as the Bank shall otherwise agree, if any lien shall be created on any assets of the Borrower as security for any external debt, such lien will ipso facto equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan and the Bonds, and that in the cre- ation of any such lien express provision will be made to that effect; provided, however, that the foregoing provi- sions of this Section shall not apply to: (i) any lien cre- ated on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such 7 property; (ii) any pledge of commercial goods or of the proceeds of sale thereof to secure a debt maturing not more than one year after the date on which it is originally in- curred and to be paid out of the proceeds of sale of such commercial goods; or (iii) any lien arising in the ordinary course of banking transactions to secure a debt maturing not more than one year after the date on which it is orig- inally incurred. SECTION 5.05. The Borrower shall pay or cause to be paid all taxes or fees, if any, imposed under the laws of the Guarantor or laws in effect in the territories of the Guarantor on or in connection with the execution, issue, delivery or registration of this Agreement, the Guarantee Agreement or the Bonds, or the payment of principal, in- terest or other charges thereunder; provided, however, that the provisions of this Section shall not apply to taxa- tion of, or fees upon, payments under any Bond to a holder thereof other than the Bank when such bond is benefi- cially owned by an individual or corporate resident of the Guarantor. SECTION 5.06. The Borrower shall pay or cause to be paid all taxes and fees, if any, imposed under the laws of the country or countries in whose currency the Loan and the Bonds are payable or laws in effect in the territories of such country or countries on or in connection with the execution, issue, delivery or registration of this Agree- ment, the Guarantee Agreement or the Bonds. SECTION 5.07. The Borrower will, upon a withdrawal from the Loan Account pursuant to Section 2.02 of this Agreement, pay into a special fund to be established by Binadarbanki Islands (hereinafter called the Agricultural Bank) an amount in currency of the Guarantor equivalent to the amount of such withdrawal. Except as the Borrower and the Bank shall otherwise agree, the Borrower will 8 cause the Agricultural Bank to use such fund only in loans made after July 1, 1953, to farmers and others engaged in agricultural pursuits to finance the costs of the program described in Schedule 2 to this Agreement. ARTICLE VI Remedies of the Bank SECTION 6.01. (i) If any event specified in paragraph (a), paragraph (b), paragraph (e) or paragraph (f) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of thirty days, or (ii) if any event specified in paragraph (c) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower, then at any subsequent time during the continuance thereof, the Bank, at its option, may declare the principal of the Loan and of all the Bonds then outstanding to be due and payable immediately, and upon any such declaration such principal shall become due and payable immediately, anything in this Agreement or in the Bonds to the contrary notwithstanding. ARTICLE VII Effective Date; Termination SECTION 7.01. The following event is specified as an additional condition to the effectiveness of this Agreement within the meaning of Section 9.01 (c) of the Loan Regu- lations: that the Borrower shall have obtained the agree- ment of the Agricultural Bank to use funds made avail- able to it pursuant to Section 5.07 of this Agreement only as specified in that Section. SECTION 7.02. The following is specified as an addi- tional matter, within the meaning of Section 9.02 (d) of the Loan Regulations, to be included in the opinion or 9 opinions to be furnished to the Bank: that the agreement between the Borrower and the Agricultural Bank referred to in Section 7.01 of this Agreement is valid and binding upon the Agricultural Bank in accordance with its terms. SECTION 7.03. A date 60 days after the date of this A_g reement is hereby specified for the purposes of Section 9.04 of the Loan Regulations. ARTICLE VIII Miscellaneous SECTION 8.01. The Closing Date shall be March 31, 1955. SECTION 8.02. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: For the Borrower: Framkvemndabanki Islands (Iceland Bank of Development) Lvekjartorgi 1 Reykjavik Iceland For the Bank: International Bank for Reconstruction and Development 1818 H Street, N. W. Washington 25, D. C. United States of America IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Loan Agreement to be signed in their respec- tive names and delivered in the District of Columbia, 」． SCHEDULE 1 Amortization Schedule Principal Amount Payment of Outstanding After Principal Each Payment (expressed in (expressed in Date Payment Due dollars) dollars) * Mar. 1, 1958 $1,350,000 Sept. 1, 1958 $26,000 12324)000 Mar. 1, 1959 267000 1)298YO00 Sept.1,1959 27,000 1)271)000 Mar. 1, 1960 28 000 1)243,000 Sept.1,1960 28A0 11215P00 Mar. 1, 1961 29,000 171862000 Sept.1,1961 30;000 111567000 Mar. 1, 1962 31)000 17125,000 Sept.1,1962 31P0 1)094,000 Mar. 1, 1963 321000 110622000 Sept.1,1963 32)000 1)030)000 Mar. 1, 1964 341000 996,000 Sept.1,1964 35Y000 961,000 Mar. 1, 1965 35,000 926 000 Sept. 1, 1965 36)000 890,000 Mar. 1, 1966 37,000 853,000 Sept.1,1966 38)000 815,000 Mar. 1, 1967 39 000 776P0 Sept.1,1967 40,000 7362000 Mar. 1, 1968 412000 695Y600 Sept.1,1968 42)000 653,000 Mar. 1, 1969 432000 6101000 Sept.1,1969 441000 566,000 Mar. 1, 1970 45,000 5211000 Sept.1,1970 467000 475)000 Mar. 1, 1971 48,000 427)000 Sept.1,1971 49,000 378,000 Mar. 1, 1972 50,000 328Y000 Sept.1,1972 512000 277,000 Mar. 1, 1973 53)000 224,000 Sept.1,1973 54Y000 170 000 Mar. 1, 1974 55.000 1151000 Sept.1,1974 57,000 58,000 Mar. 1, 1975 581000 * To the extent that any part of the Loan is repayable in a currency otiner than dollars (see Loan Regulations, Section 3.02), the figures in these columns represent dollar equivalents determined as for purposes of withdrawal. 12 Premiums on Prepayment and Redemption The following percentages are specified as the premiums payable on repayment in advance of maturity of any part of the principal amount of the Loan pursuant to Section 2.05 (b) of the Loan Regulations or on the redemption of any Bond. prior to its maturity pursuant to Section 6.16 of the Loan Regulations: Time of Prepayment or Redemption Premium Not more than 5 years before maturity ......... ./2 % More than 5 years but not more than 10 years before maturity ............................... 1% More than 10 years but not more than 15 years before maturity ........................... 1/4% More than 15 years before maturity ............. 21/2% 13 SCHEDULE 2 Description of the Project The general program of the Icelandic Government for increasing agricultural production in Iceland, principally that of animal products, includes the following goals for each of the years 1953 and 1954: 1. The seeding, fertilizing, fencing and cultivation of approximately 3,500 hectares of grassland. 2. The increased mechanization of agriculture, through importation of equipment such as plows, harrows, mowing machines and other implements. 3. The construction of farm structures (with provision for fodder storage and manure pits) to house approxi- mately 1,000 cattle and 20,000 sheep. 4. The building of approximately 150 farm houses with an aggregate capacity of about 35,000 cubic meters. The Project is that portion of the program to be carried out during the second half of 1953 and during 1954. 14 SCHEDULE 3 Modifications of Loan Regulations No. 4 For purposes of this Agreement, Loan Regulations No. 4 of the Bank, dated October 15, 1952, shall be deemed to be modified as follows: (a) Section 3.04 shall read, "The commitment charge shall be payable in pounds sterling." (b) Paragraph 13 of Section 10.01 shall read as\follows: "13. The term 'goods' means equipment, supplies and services of types which are required for the Project. Wherever reference is made to the cost of, any goods, such cost shall be deemed to include the cost of importing such goods into the territories of the Guarantor." (c) A new paragraph 21 shall be added to Section 10.01, as follows: "21. The term 'pounds sterling' means pounds sterling in currency of the United Kingdom of Great Britain and Northern Ireland."