Rhodesia - Southern Rhodesia African Agricultural Project : Loan 0253 - Loan Agreement - Conformed

LOAN NUMBER 253 RN Loan Agreement (Southern Rhodesia African Agricultural Project) BETWEEN * THE FEDERATION OF RHODESIA AND NYASALAND AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED APRIL 1, 1960 LOAN NUMBER 253 RN Loan Agreement (Southern Rhodesia African Agricultural Project) BETWEEN 0 THE FEDERATION OF RHODESIA AND NYASALAND AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED APRIL 1, 1960 ?ihan Agreement AGREEMENT, dated April 1, 1960, between THE FED- ERATION OF RHODESIA AND NYASALAND (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUC- TION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS Southern Rhodesia is carrying out a program for the development of African agriculture and for that purpose requires certain financial assistance; WHEREAS the Borrower and Southern Rhodesia have re- quested the Bank to grant a loan to the Borrower, the proceeds of which are to be re-lent by the Borrower to Southern Rhodesia to assist Southern Rhodesia in financ- ing its aforesaid program; WHEREAS the Bank has agreed to make a loan to the Borrower upon the terms and conditions hereinafter set forth, but only on condition that the United Kingdom agree to guarantee such loan as provided in the Guaran- tee Agreement and that Southern Rhodesia agree to under- take certain obligations to the Bank as set forth in the Project Agreement; Now THEREFORE it is hereby agreed as follows: ARTICLE I Loan Regulations; Special Definitions SEcTIoN 1.01. The parties to this Loan Agreement accept all the provisions of Loan Regulations No. 4 of the Bank dated June 15, 1956, subject, however, to the modifica- tions thereof set forth in Schedule 3 to this Agreement (said Loan Regulations No. 4 as so modified being here- inafter called the Loan Regulations), with the same force and effect as if they were fully set forth herein. 4 SECTION 1.02. Except where the context otherwise re- quires, the following terms have the following meanings wherever used in this Loan Agreement: The term "Southern Rhodesia" means the Colony of Southern Rhodesia. The term "Project Agreement" means the Project Agreement of even date herewith between Southern Rho- desia and the Bank and shall include any amendments thereto made by agreement between Southern Rhodesia and the Bank. 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 five million six hundred thousand dollars ($5,600,000). 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 Borrower shall be entitled, subject to the provisions of this Agreement and the Loan Regulations, to withdraw from the Loan Account in such convertible currencies as the Bank shall reasonably select, amounts equivalent (as reasonably de- termined by the Bank) to 18% of such amounts as shall have been expended for the reasonable cost of goods re- quired to carry out the Project; provided, however, that except as shall be otherwise agreed between the Bank and the Borrower, no withdrawals shall be made on account of (a) expenditures prior to July 1, 1959 or (b) expenditures in the territories of any country (other than Switzerland) which is not a member of the Bank or for goods produced in (including services supplied from) such territories. 5 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 1%/o) per annum on the principal amount of the Loan not so withdrawn from time to time. Such com- mitment charge shall accrue from a date sixty days after the date of this Agreement to the respective dates on which amounts shall be withdrawn by the Borrower from the Loan Account as provided herein and in Article IV of the Loan Regulations or shall be cancelled pursuant to Article V of the Loan Regulations. SECTION 2.04. The Borrower shall pay interest at the rate of six per cent (6%) per annum on the principal amount of the Loan so withdrawn and outstanding from time to time. SECTION 2.05. Interest and other charges shall be pay- able semi-annually on June 1 and December 1 in each year. SECTION 2.06. 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 cause the proceeds of the Loan to be applied in accordance with the provisions of this Agreement to expenditures for the reasonable cost of goods required to carry out the Project described in Schedule 2 to this Agreement. 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. Ad 6 SECTION 4.02. The Minister of Finance of the Borrower and such person or persons as he 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 enter into a sub- sidiary loan agreement with Southern Rhodesia, satis- factory to the Bank, providing for the re-lending of the proceeds of the Loan by the Borrower to Southern Rho- desia and containing appropriate provisions with respect to the financing and carrying out of the Project and of the other obligations of the Borrower and Southern Rho- desia under this Agreement and the Project Agreement. Such subsidiary loan agreement shall not be amended, assigned or abrogated, nor shall any material waiver of any provision thereof be given, without the consent of the Bank. (b) The Borrower shall cause the Project to be carried out with due diligence and efficiency and in conformity with sound agricultural, engineering and financial practices. (c) The Borrower shall cause Southern Rhodesia punc- tually to perform all the covenants and agreements on its part to be performed as set forth in the Project Agree- ment, and shall take or cause to be taken all action which shall be necessary on the part of the Borrower to enable Southern Rhodesia so to perform such covenants and agreements. (d) The Borrower shall maintain or cause to be main- tained records adequate to show the expenditure of the proceeds of the Loan and to record the progress of the Project (including the cost thereof); shall enable the Bank's representatives to inspect the Project and any relevant records and documents; and shall furnish or cause 7 to be furnished to the Bank all such information as the Bank shall reasonably request concerning the expenditure of the proceeds of the Loan and concerning the Project. (e) The Borrower shall cause Southern Rhodesia to keep or cause to be kept all records and accounts in respect of the Project separate and independent from any other records and accounts of Southern Rhodesia or of the agency or agencies responsible for the carrying out of the Project, or any part thereof. SECTION 5.02. (a) The Borrower and the Bank shall cooperate fully to assure that the purposes of the Loan will be accomplished. To that end, each of them shall furnish to the other all such information as it shall reason- ably request with regard to the general status of the Loan. On the part of the Borrower, such information shall in- clude information with respect to financial and economic conditions in the territories of the Borrower and the in- ternational balance of payments position of the Borrower. (b) The Borrower and the Bank 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. (c) The Borrower shall afford all reasonable oppor- tunity for accredited representatives of the Bank to visit any part of the territories of the Borrower for purposes related to the Loan. SECTION 5.03. It is the mutual intention of the Bor- rower and the Bank that no other external debt shall enjoy any priority over the Loan by way of a lien on governmental assets. To that end, the Borrower under- takes that, except as the Bank shall otherwise agree, if any lien shall be created on any assets of the Borrower as 8 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 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 maturing not more than one year after its date. As used in this Section, the term "assets of the Bor- rower" includes assets of the Borrower or of any of its political subdivisions or of any agency of the Borrower or of any such political subdivision, including the Bank of Rhodesia and Nyasaland; and the term "external debt" means any debt payable in any medium other than currency of the Borrower, whether such debt is or may become pay- able absolutely or at the option of the creditor in such other medium. SECTION 5.04. The Loan Agreement, Project Agreement, Guarantee Agreement and the Bonds shall be free from any taxes or fees that shall be imposed under the laws of the Borrower or laws in effect in its territories on or in connection with the execution, issue, delivery or registra- tion thereof and the Borrower shall pay or cause to be paid all such 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. 9 SECTION 5.05. The principal of, and interest and other charges on, the Loan and the Bonds shall be paid without deduction for, and free from, any taxes or fees imposed under the laws of the Borrower or laws in effect in its territories; provided, however, that the provisions of this Section shall not apply to taxation of, or fees upon, pay- ments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an indi- vidual or corporate resident of the Borrower. SECTION 5.06. The principal of, and interest and other charges on, the Loan and the Bonds shall be paid free from all restrictions imposed under the laws of the Bor- rower or laws in effect in its territories. SECTION 5.07. Without limitation or restriction upon any other provision of this Agreement, the Borrower spe- cifically undertakes that, whenever there is reasonable cause to believe that the funds available to Southern Rho- desia will be inadequate to meet the estimated expenditures required for carrying out the Project, the Borrower will make arrangements, satisfactory to the Bank, promptly to provide Southern Rhodesia or cause Southern Rhodesia to be provided with such funds as are needed to meet such expenditures. SECTION 5.08. Unless otherwise agreed between the Bor- rower and the Bank, if Southern Rhodesia shall (whether voluntarily or otherwise) repay in advance of maturity all or any part of its indebtedness under the subsidiary loan agreement referred to in Section 5.01(a) of this Agreement, the Borrower shall thereupon repay, in advance of maturity, all or an equivalent part, as the case may be, of the Loan; provided that this Section shall not apply to any prepayment by Southern Rhodesia to the extent that such prepayment is of indebtedness on account of amounts 10 and maturities of the Loan theretofore prepaid by the Borrower. To any repayment by the Borrower in accord- ance with this Section, all the provisions of the Loan Regu- lations relating to repayment in advance of maturity shall be applicable. ARTICLE VI Remedies of the Bank SECTION 6.01. (i) If any event specified in paragraph (a) or paragraph (b) of Section 5.02 of the Loan Regula- tions shall occur and shall continue for a period of thirty days, or (ii) if the event specified in Section 6.02 of this Agreement for the purposes of Section 5.02(j) of the Loan Regulations shall occur and shall continue for a period of thirty days, or (iii) 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 Bor- rower, 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 declara- tion such principal shall become due and payable im- mediF,ly, anything in this Agreement or in the Bonds to the contrary notwithstanding. SECTION 6.02. For the purposes of Section 5.02(j) of the Loan Regulations the following additional event is specified, namely: a default shall have occurred in the performance of any covenant or agreement to be performed by Southern Rhodesia pursuant to the Project Agreement. ARTICLE VII Effective Date; Termination SECTION 7.01. The following events are specified as additional conditions to the effectiveness of this Agree- 11 ment within the meaning of Section 9.01(a) (ii) of the Loan Regulations, namely: (a) That the subsidiary loan agreement referred to in Section 5.01(a) of this Agreement, in form and substance satisfactory to the Bank, shall have been duly executed and delivered by the Borrower and Southern Rhodesia and shall have become effective in accordance with its terms. (b) That the execution and delivery of the Project Agreement on behalf of Southern I'hodesia shall have been duly authorizcd or ratified by all necessary governmental action. SECTION 7.02. The following are specified as additional matters, within the meaning of Section 9.02(e) of the Loan Regulations, to be included in the opinion or opinions to be furnished to the Bank, namely: (a) That the subsidiary loan agreement referred to in Section 5.01(a) of this Agreement has been duly author- ized or ratified by, and executed and delivered on behalf of, the Borrower and Southern Rhodesia and has become effective and is a valid and binding obligation of the parties thereto in accordance with its terms. (b) That the Project Agreement has been duly author- ized or ratified by, and executed and delivered on behalf of, Southern Rhodesia and constitutes a valid and binding obligation of Southern Rhodesia in accordance with its terms. SECTION 7.03. A date 100 days after the date of this Agreement is hereby specified for the purposes of Section 9.04 of the Loan Regulations. 12 ARTICLE VIII Miscellaneous SECTION 8.01. The Closing Date shall be June 30, 1963. SECTION 8.02. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: For the Borrower: Federal Treasury P.O. Box 8137, Causeway Salisbury Southern Rhodesia Alternative address for cablegrams and radiograms: Fedfinance Salisbury, Southern Rhodesia 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. SECTIf'N 8.03. The Governor-General in Council of the Borrower is designated for the purposes of Section 8.03 (A) of the Loan Regulations. 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, 13 United States of America, as of the day and year first above written. THE FEDERATION OF RHODESIA AND NYASALAND By R. B. N. WETMORE Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By EUGENE R. BLACK President 14 SCHEDULE 1 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* December 1, 1962 $301,000 June 1, 1963 310,000 December 1, 1963 319,000 June 1, 1964 329,000 December 1, 1964 339,000 June 1, 1965 349,000 December 1, 1965 360,000 June 1, 1966 370,000 December 1, 1966 381,000 June 1, 1967 393,000 December 1, 1967 405,000 June 1, 1968 417,000 December 1, 1968 429,000 June 1, 1969 442,000 December 1, 1969 456,000 * 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 pur- poses of withdrawal. 15 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 2 years before maturity . 1. '/% More than 2 years but not more than 4 years before maturity .............. 2% More than 4 years but not more than 6 years before maturity .............. 31/ More than 6 years but not more than 8 years before maturity .............. 5% More than 8 years before maturity ...... 6% 16 SCHEDULE 2 Description of Project The Project consists of the second half of the seven- year plan of Southern Rhodesia for the development of its African agriculture. The second half of the seven-year plan is to be carried out during the period from July 1, 1959 through December 31, 1962. This plan has as major objec- tives the arresting of soil deterioration, the establishment of settled communities of African farmers with individually allocated arable land holdings and grazing rights, and the use of improved farming methods. The Project includes: (i) the surveying of about 7 million acres of land; the assessment of the quality as arable or grazing land of about 10 million acres; and the allocation of individual plots and settlement areas, and regis- tration of land rights, in respect of about 24 mil- lion acres; (ii) the development of water supplies; construction and improvement of about 4,000 miles of simple farm- to-market roads, including building of bridges; soil conservation measures; and the rehabilitation of an area which has been cleared of the tsetse fly; (iii) the improvement and expansion of auxiliary serv- ices, including agricultural credit and marketing facilities and livestock dipping services; (iv) the improvement and expansion of agricultural re- search, demonstration and ex- 'nsion services, in- cluding recruiting, training and employing addi- tional personnel and providing personnel with hous- ing and with transportation required for field work. It is expected that the total cost of the Project will be the equivalent of about $32.7 million. 17 SCHEDULE 3 Modifications of Loan Regulations No. 4 For the purposes of this Agreement the provisions of Loan Regulations No. 4 of the Bank, dated June 15, 1956, shall be deemed to be modified as follows: (i) By the deletion of the following: Section 2.02; the first three sentences of Section 3.01 and the words "for the purposes of this Article" in the last sentence of such Sec- tion; Sections 4.01 and 4.02; paragraphs (e) and (f) of Section 5.02; Section 5.04; and the second sentence of para- graph 8, and paragraph 14, of Section 10.01. (ii) By the deletion of Section 4.03 and the substitution therefor of the following new Section: "Section 4.03. Applications for Withdrawal. When the Borrower shall desire to withdraw any amount from the Loan Account, the Borrower shall deliver to the Bank a written application in such form, and containing such statements and agreements, as the Bank shall reasonably request. Since the rate at which Loan proceeds are with- drawn affects the cost to the Bank of holding funds at the Borrower's disposal, applications for withdrawal, with the necessary documentation as hereinafter in this Article provided, shall, except as the Bank and the Bor- rower shall otherwise agree, be made promptly in rela- tion to expenditures for the Project." (iii) By the deletion of paragraphs (b) and (d) of Sec- tion 5.02 and the substitution therefor respectively of the following new paragraphs: "(b) A default shall have occurred in the payment of principal or interest or any other payment re- quired under any other loan agreement or under any guarantee agreement between the Borrower and the Bank or under any loan agreement or un- der any guarantee agreement between the Guar- antor and the Bank." 18 "(d) An extraordinary situation shall have arisen which shall make it improbable that the Borrower or Southern Rhodesia or the Guarantor will be able to perform its obligations under the Loan Agree- ment, the Project Agreement or the Guarantee Agreement, or there shall occur any such change in the nature and constitution of the Borrower or of Southern Rhodesia as shall make it improbable that the Borrower or Southern Rhodesia will be able to carry out its obligations under the Loan Agreement or the Project Agreement." (iv) By the deletion of Section 5.03 and the substitution therefor of the following new Section: "Section 5.03. Cancellation by the Bank. If the right of the Borrower to make withdrawals from the Loan Account shall have been suspended for a continuous period of thirty days, or if the Borrower shall not at the Closing Date have withdrawn from the Loan Account the full amount of the Loan, the Bank may by notice to the Borrower terminate the right of the Borrower to make withdrawals from the Loan Account. Upon the giving of such notice the unwithdrawn amount of the Loan shall be cancelled." (v) By the insertion in Section 5.06, after the words "the Loan Agreement", of the words ", the Project Agree- ment". (vi) By the insertion in Section 6.17, after the words "the Loan Agreement", of the words "or the Project Agreement ". (vii) By the deletion of Section 7.01 and Section 7.02 and the substitution therefor respectively of the follow- ing new Sections: " Section 7.01. Enforceability. The rights and obliga- tions of the Bank, the Borrower, Southern Rhodesia and the Guarantor under the Loan Agreement, the Proj- ect Agreement, the Guarantee Agreement and the Bonds 19 shall be valid and enforceable in accordance with their terms notwithstanding the law of any state, or political subdivision thereof, to the contrary. Neither the Bank nor the Borrower nor the Guarantor shall be entitled in any proceeding under this Article to assert any claim that any provision of these Regulations, or of the Loan Agreement, the Project Agreement, the Guarantee Agree- ment or the Bonds is invalid or unenforceable because of any provision of the Articles of Agreement of the Bank or for any other reason." "Section 7.02. Obligations of Guarantor. The obliga- tions of the Guarantor under the Guarantee Agreement shall not be discharged except by performance and then only to the extent of such performance. Such obligations shall not be subject to any prior notice to, demand upon or action against the Borrower or Southern Rhodesia or to any prior notice to or demand upon the Guarantor with regard to any default by the Borrower or Southern Rhodesia, and shall not be impaired by any of the follow- ing: any extension of time, forbearance or concession given to the Borrower or Southern Rhodesia; any as- sertion of, or failure to assert, or delay in asserting, any right, power or remedy against the Borrower or South- ern Rhodesia or in respect of any security for the Loan; any modification or amplification of the provisions of the Loan Agreement or of the Project Agreement contem- plated by the terms thereof; any failure of the Bor- rower or Southern Rhodesia to comply with any require- ment of any law, regulation or order of the Guarantor or of any political subdivision or agency of the Guarantor." (viii) By the insertion in Section 7.03, after the words "Guarantee Agreement", of the words "or the Project Agreement "1. (ix) By the deletion of the last sentence of Section 7.04(k) and the substitution therefor of the following sentence: 20 "Notwithstanding the foregoing, this Section shall not authorize any entry of judgment or enforcement of the award against the Borrower or the Guarantor (as the case may be) except as such procedure may be available against the Borrower or the Guarantor (as the case may be) otherwise than by reason of the provisions of this Section." (x) By the deletion of the first sentence of Section 7.04(1) and the substitution therefor of the following sentence: "(1) Service of any notice or process in connection with any proceeding under this Section or in connection with any proceeding to enforce any award rendered pur- suant to this Section may be made upon the Bank and (to the extent that such proceeding is available against the Borrower or the Guarantor) upon the Borrower or the Guarantor in the manner provided in Section 8.01." (xi) By the insertion, after Section 8.03, of the follow- ing new Section: " Section 8.03(A). Action on Behalf of Borrower. Any action required or permitted to be taken, and any docu- ments required or permitted to be executed, under the Loan Agreement on behalf of the Borrower may be taken or executed by the representative of the Borrower des- ignated in the Loan Agreement for the purposes of this Section or any person thereunto authorized in writing by him. Any modification or amplification of the provi- sions of the Loan Agreement may be agreed. to on be- half of the Borrower by written instrument executed on behalf of the Borrower by the representative so desig- nated or any person thereunto authorized in writing by him; provided that, in the opinion of such representative, such modification or amplification is reasonable in the circumstances and will not substantially increase the obli- gations of the Borrower under the Loan Agreement. The Bank may accept the execution by such representative or 21 other person of any such instrument as conclusive evi- dence that in the opinion of such representative any modification or amplification of the provisions of the Loan Agreement effected by such instrument is reason- able in the circumstances and will not substantially in- crease the obligations of the Borrower thereunder." (xii) By the deletion of Section 9.03 and the substitution therefor of the following new Section: "Section 9.03. Efective Date. Notwithstanding the provisions of Section 8.01, except as shall be otherwise agreed by the Borrower and the Bank, the Loan Agree- ment and Guarantee Agreement shall come into force and effect on the date upon which the Bank dispatches to the Borrower and to the Guarantor notice of its ac- ceptance of the evidence required by Section 9.01." (xiii) By the deletion of paragraph 6 of Section 10.01 and the substitution therefor of the following new paragraph: "6. The term 'Borrower' means The Federation of Rhodesia and Nyasaland, the party to the Loan Agree- ment to which the Loan is made; the term 'Guarantor' means the United Kingdom of Great Britain and North- ern Ireland; and the terms 'Southern Rhodesia' and 'Project Agreement' shall have the respective meanings set forth in the Loan Agreement." (xiv) By the deletion, in paragraph 13 of Section 10.01, of the word "Guarantor" and the substitution therefor of the word "Borrower' . (xv) By the deletion of the eighth paragraph of the Form of Bond set forth in Schedule 1 and the seventh para- graph of the Form of Bond set forth in Schedule 2 and the substitution therefor, in each such Schedule, of the fol- lowing paragraph: " The principal of the Bonds, the interest accruing thereon and the premium, if any, on the redemption thereof shall be paid without deduction for and free from any taxes, 22 imposts, levies or duties of any nature or any restric- tions now or at any time hereafter imposed under the laws of [name of Guarantor], or of [the Borrower] or laws in effect in the territories of [the Borrower] ; pro- vided, however, that the provisions of this paragraph shall not apply to taxation imposed (a) under the laws of [name of Guarantor] on or in connection with pay- ments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual or corporate resident of [name of Guarantor] or (b) under the laws of [the Borrower] or laws in ef- fect in its territories on or in connection with 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 Borrower]."