India - Madras Port Project : Loan 0199 - Loan Agreement - Conformed

LOAN NUMBER 199 IN Loan Agreement (Madras Port Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND THE TRUSTEES OF THE PORT OF MADRAS DATED JUNE 25, 1958 LOAN NUMBER 199 IN Loan Agreement (Madras Port Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND THE TRUSTEES OF THE PORT OF MADRAS DATED JUNE 25, 1958 Kwa ?$ian Ag3reement AGREEMENT, dated June 25, 1958, between INTER- NATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and THE TRUSTEES OF THE PORT OF MADRAS (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 June 15, 1956, 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 Borrower, on the terms and conditions in this Agreement set forth or referred to, an amount in various currencies equivalent to fourteen million dollars ($14,000,000). 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 The amount of the Loan may be withdrawn from the Loan Account as pro- vided in, and subject tu the rights of cancellation and suspension set forth in, the Loan Regulations. SECTION 2.03. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1c) per annum on the principal amount of the Loan not so withdrawn from time to time. Such commit- ment charge shall accrue from a date sixty days after the date of this Agreement to the respective dates on which 4 amounts shall be withdrawn by the Borrower from the Loan Account as provided in Article IV of the Loan Regu- lations or shall be cancelled pursuant to Article V of the Loan Regulations. SECTION 2.04. The Borrower shall pay interest at the rate of five and one-half per cent (5%) per annum on the principal amount of the Loan so withdrawn and outstand- ing from time to time.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%) 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 April 1 and October 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 1 to this Agreement. ARTICLE 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 required to carry out the Project described in Schedule 2 to this Agreement. The specific goods to be financed out of the proceeds of the Loan and the methods and procedures for procurement of such goods shall be determined by agreement between the Bank and the Borrower, subject to modification by further agreement between them. SECTION 3.02. Except as shall be otherwise agreed be- tween the Bank and the Borrower, the Borrower shall cause all goods financed out of the proceeds of the Loan 5 to be imported into the territories of the Guarantor and there to be used exclusively in the carrying out of the Project. 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 Chairman and two other Trustees of the Borrower are designated as authorized representatives of the Borrower for the purposes of Section 6.12 (a) of the Loan Regulations. ARTICLE V Particular Covenants SECTION 5.01. (a) The Borrower shall carry out the Project, and conduct its operations with due diligence and efficiency and in conformity with sound engineering, finan- cial and business practices. (b) The Borrower shall furnish to the Bank, promptly upon their preparation, the plans and specifications and the construction schedule for the Project and any material modifications subsequently made therein, in such detail as the Bank shall from time to time reasonably request. (c) The Borrower shall maintain records adequate to identify the goods financed out of the proceeds of the Loan, to disclose the use thereof in the Project, to record the progress of the Project (including the cost thereof) and to reflect in accordance with consistently maintained sound accounting practices the operations and financial condition of the Borrower; shall enable the Bank's representatives to inspect its properties and operations including the sites, works and construction included in the Project, the goods and any relevant records and documents; and shall furnish to the Bank all such information as the Bank shall reason- W 6 ably request concerning the expenditure of the proceeds of the Loan, the Project, the goods, and the operations and financial condition 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 fur- nish to the other all such information as it shall reasonably 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. 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 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 creation of any such lien express provision will be made to that effect; provided, however, that the foregoing provisions of this Section shall not apply to: (i) any lien created on property at the time of purchase thereof, solely as security for the payment of the purchase price of such property; (ii) any lien on commercial goods to secure a debt maturing not more than one year after the date on which it is originally incurred 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 and securing a debt matur- ing not more than one year after its date. SECTION 5.04. 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, 7 delivery or registration of this Agreement, the Guarantee Agreement or the Bonds, or the payment of principal, interest or other charges thereunder; provided, however, that the provisions of this Section shall not apply to taxa- tion of, or feej upon, payments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual or corporate resident of the Guarantor. SECTION 5.05. 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 Agreement, the Guarantee Agreement or the Bonds. 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 is specified as an additional matter, within the meaning of Section 9.02(e) of the Loan Regulations, to be included in the opinion or opinions to 8 be furnished to the Bank: that the Borrower has full power and authority to construct and operate the Project and that, except as stated in such opinion, all acts, consents, sanctions and approvals necessary therefor, have been duly and validly performed or given. SECTION 7.02. A date ninety days after the date of this Agreement is hereby specified for the purposes of Sec- tion 9.04 of the Loan Regulations. ARTICLE VIII Miscellaneous SECTION 8.01. The Closing Date shall be June 30, 1962. SECTION 8.02. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: For the Borrower: The Trustees of the Port of Madras Madras India Alternative address for cablegrams and radiograms: Portrust Madras For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington 25, D. C. United States of America Alternative address for cablegrams and radiograms: Intbafrad Washington, D. C. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Loan Agreement to be executed in their respec- 9 tive names, and to be delivered in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By DAVIDSON SOMMERS Vice President THE TRUSTEES OF THE PORT OF MADRAS By K. N. SRINIVASAN Chairman M. V. ARUNACHALAM Trustee Seal P. LAKSHMIPATHY NAIDU Trustee I 10 SCHEDULE 1 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* April 1, 1963 $292,000 October 1, 1963 300,000 April 1, 1964 308,000 October 1, 1964 317,000 April 1, 1965 325,000 October 1, 1965 334,000 April 1, 1966 344,000 October 1, 1966 353,000 April 1, 1967 363,000 October 1, 1967 373,000 April 1, 1968 383,000 October 1, 1968 394,000 April 1, 1969 404,000 October 1, 1969 415,000 April 1, 1970 427,000 October 1, 1970 439,000 April 1, 1971 451,000 October 1, 1971 463,000 April 1, 1972 476,000 October 1, 1972 489,000 April 1, 1973 502,000 October 1, 1973 516,000 April 1, 1974 530,000 October 1, 1974 545,000 April 1, 1975 560,000 October 1, 1975 575,000 April 1, 1976 591,000 October 1, 1976 607,000 April 1, 1977 624,000 October 1, 1977 641,000 April 1, 1978 659,000 * To the extent that any part of the Loan is repayable in a currency other than dollars (see Loan Regulations, Section 3.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. 11 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 3 years before maturity. . of 1% More than 3 years but not more than 6 years before maturity . . . .1 . . - More than 6 years but not more than 11 years before maturity........... 2/2% More than 11 years but not more than 16 years before maturity............ 3 /% More than 16 years but not more than 18 years before maturity .......... 41/2% More than 18 years before maturity 5/% 12 SCHEDULE 2 Description of Project The Project consists of a program for the improvement, modernization and expansion of the facilities of the Port of Madras, as part of India's Second Five Year Plan. It is estimated to involve expenditures in Indian currency and foreign exchange, after April 1, 1957, amounting to the equivalent of about $32.5 million and, comprises the following main items: 1. Improvement of existing general cargo berths The berth at the North Quay will be widened and strengthened and a combined passenger station and transit shed will be built thereon. Two deteriorated jetty berths at the South Quay will be reconstructed, with railway con- nections and a new transit shed. Mechanical cargo-handling gear will be provided for use at these and other existing general cargo berths. 2. Construction of a new coal berth and a new ore berth and ancillary works and equipment Two new berths will be constructed in the southeast part of the harbor basin, one for unloading coal and one for loading ores. They will be connected by railway lines with new coal and ore yards along the south foreshore, and modern mechanical equipment for handling the coal and ores will be provided. 3. Wet dock scheme a) A new wet dock will be constructed south of the har- bor basin. The work to be done will include necessary excavation, quay walls of concrete caisson construe- tion for six berths with provisions for water, electric and fire-fighting services, and a temporary steel- sheetpile bulkhead across the southern end of the dock. 13 b) Transit sheds will be constructed at two berths, and adequate cranes and mechanical handling equipment will be provided for the efficient working of the two berths and their sheds. c) A movable bridge will be constructed across the en- trance to the wet dock. d) An existing warehouse will be reconstructed to a new alignment made necessary by the wet dock construc- tion. 4. Remodeling boat basin The existing boat basin will be enlarged and partly realigned, and a movable footbridge will be provided across its entrance. 5. New marshalling yard and railway equipment A new marshalling yard for both broad-gauge and meter- gauge wagons will be constructed with protective storage facilities for railway equipment and lights for night work- ing. Additional shunting locomotives, wagons, and other miscellaneous railway equipment will be provided. 6. Improvements to workshops Existing shops for the maintenance and repair of the Borrower's mechanical equipment, railway equipment and floating craft will be extended and additional plant and machinery installed. 7. Improved electricity supply The present 5 kv system will be converted to an 11 kv system, and improvements will be made to the lighting systems at existing berths and yards. 8. Miscellaneous buildings a) A new administrative office building will be con- structed and a transit shed will be erected at the site of the present offices. Aw 14 b) A new warehouse, housing for lower-paid employees, a new hospital for port workers, and miscellaneous minor buildings, will be erected. 9. Floating craft The following additional floating equipment will be acquired: a) One suction hopper dredger with a hopper capacity of about 1,500 tons. b) Two tugs, one fitted with fire-fighting equipment. c) One floating crane. d) Six small barges. e) One water barge. f) One small dredger. 15 SCHEDULE 3 Modifications of Loan Regulations No. 4 For the purposes of this Agreement the provisions of Loan Regulations No. 4 of the Bznk, dated June 15, 1956, shall -be deemed to be modified as follows: (a) by the deletion of Section 2.02. (b) Paragraph 6 of Section 10.01 is amended to read as follows: "6. The term 'Borrower' means the party to the Loan Agreement to which the Loan is made; and the term 'Guarantor' means India, acting by its Presi- dent." (c) The second sentence of Section 7.02 is amended to read as follows: "Such obligations shall not be subject to any prior notice to, demand upon or action against the Bor- rower or to any prior notice to or demand upon the Guarantor with regard to any default by the Bor- rower, and shall not be impaired by any of the fol- lowing: any extension of time, forbearance or concession given to the Borrower; any assertion of, or failure to assert, or delay in asserting, any right, power or remedy against the Borrower or in respect of any security for the Loan; any modification or amplification of the provisions of the Loan Agree- ment contemplated by the terms thereof; any modi- fication or amplification of any other document related to the Loan or related to any security there- for; any failure of the Borrower to comply with any requirement of any law, rcgulation or order of the Guarantor or of any political subdivision or agency of the Guarantor."