Jordan - Cydb Project : Loan 1826 - Loan Agreement - Conformed

OFFICIAL LOAN NUMBER 1826 JO DOCUMTS Loan Agreement (CVDB Project) between THE HASHEMITE KINGDOM OF JORDAN and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated , 1980 LOAN NUMBER 1826 JO LOAN AGREEMENT AGREEMENT, dated y1980, between THE HASHEMITE KINGDOM OF JORDAN (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (herein- after called the Bank). WHEREAS (A) The Borrower has requested the Bank to assist in the financing of the Project described in Section 3.01 of this Agreement by making the Loan as hereinafter provided; (B) The Project will be carried out by The Cities and Villages Development Bank (hereinafter called CVDB) with the Borrower's assistance, and as part of such assistance, the Bor- rower will make available to CVDB the proceeds of the Loan as hereinafter provided; and (C) The Bank is willing to make the Loan available upon the terms and conditions set forth hereinafter and in the Project Agreement of even date herewith between the Bank and CVDB; 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 same force and effect as if they were fully set forth herein, subject, however, to the following modifications thereof (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank, as so modified, being hereinafter called the General Conditions): (a) Section 6.03 is deleted and replaced by the following new Section: "Section 6.03. Cancellation by the Bank. If (a) the right of the Borrower to make withdrawals from the Loan Account shall have been suspended with respect to any amount of the Loan for a continuous period of thirty days or (b) by the date specified in Section 2.02 (f) of the Project Agree- ment no applications for approval or requests for authoriza- tion to withdraw from the Loan Account in respect of any -2- portion of the Loan shall have been received by the Bank, or having been so received, shall have been denied or (c) after the Closing Date an amount of the Loan shall remain unwith- drawn from the Loan Account, the Bank may, by notice to the Borrower, terminate the right of the Borrower to request such approvals and authorizations or to make withdrawals from the Loan Account, as the case may be, with respect to such amount or portion of the Loan. Upon the giving of such notice such amount or portion of the Loan shall be cancelled." (b) The words "the Project Agreement" are added after the words " the Loan Agreement" in Section 6.06; and (c) The words "the Project Agreement" are added aftEr the words "the Loan Agreement" in Section 10.03. 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 hereto have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Project Agreement" means the agreement of even date herewith between the Bank and CVDB, as such agreement may be amended from time to time. (b) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and CVDB pursuant to Section 3.01 (b) of this Agreement. (c) "Sub-loan" means any loan made or proposed to be made by CVDB to an Investment Entity for an Investment Project out of the equivalent of the proceeds of the Loan relent to CVDB under the Subsidiary Loan Agreement, and "free-limit Sub-loan" means a Sub-loan, as so defined, which qualifies as a free-limit Sub-loan pursuant to the provisions of Section 2.02 (c) of this Agreement. (d) "Investment" means an investment other than a Sub-loan, made or proposed -o be made by CVDB in an Investment Entity for an Investment Project out of the equivalent of the proceeds of the Loan relent to CVDB under the Subsidiary Loan Agreement. (e) "Investment Entity" means an entity to which CVDB proposes to make or has made a Sub-loan or in which it proposes to make or has made an Investment. -3- (f) "Investment Project" means a specific development project which is included in Part A of the Project and to be carried out by an Investment Entity utilizing the proceeds of a Sub-loan or investment. (g) "Jordanian Dinar" and "JD" mean the currency of the Borrower. (h) "foreign currency" means any currency other than the currency of the Borrower. (i) "CVDB Law" means the Borrower's Law No. 38 of 1979, as amended from t1me to time. (j) "CVDB Executive Re-- lations" means the CVDB's executive regulations to be prepared a,- .ssued by CVD-s pursuant to Section 2.08 (a) of the Project Agreement, as amended from time to time. (k) "Statement of Policy" means the statement of lending and investment policy of CVDB as adopted and approved by its Board of Directors, as amended from time to time with the agreement of the Borrower and the Bank. (1) "Subsidiary" means any company of which a majority of the outstanding voting stock or other proprietary interest is owned or effectively controlled by CVDB or by any one or more Subsidiaries of CVDB or by CVDB and one or more of its Sub- sidiaries. 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 ten million dollars ($10,000,000), for use by CVDB. Section 2.02. (a) Subject to the provisions of paragraphs (b), (c) and (d) of this Section, CVDB, on behalf of the Borrower pursuant to Section 2.03 of this Agreement, may withdraw from the Loan Account: (i) In respect of a Sub-loan or an Investment, the equivalent of 50% of amounts paid (or, if the Bank shall so agree, amounts to be paid) by CVDB on account of withdrawals made by an Investment Entity to meet the reasonable cost of goods and services required for the Investment Project in respect of which the withdrawal from the Loan Account is requested; and (ii) the equivalent of amounts paid (or, if the Bank shall so agree, to be paid) in respect of the reasonable foreign currency cost of services required for Part B of the Project; provided, however, that (A) no withdrawal shall be made in respect of a Sub-loan or Investment unless (1) the Sub-loan or Investment shall have been approved by the Bank, or (2) the Sub-loan shall be a free-limit Sub-loan for which the Bank shall have authorized withdrawals from the Loan Account and (B) the amount of the Loan withdrawn from the Loan Account for Part B of the Project shall not exceed $500,000 equivalent (or such other amount as the Borrower and the Bank may agree). (b) The first two requests for withdrawal on account of Sub-loans in respect to Investment Projects in a given sector shall be accompanied by the appraisal reports of such Investment Projects; thereafter, any request for withdrawal on account of a Sub-loan in respect to an Investment Project in the same sector shall be accompanied by the appraisal report of such Investment Project if no appraisal report relating to such sector was submit- ted by CVDB to the Bank during the six-month period immediately preceding such request. (c) A free-limit Sub-loan shall be a Sub-loan for an Invest- ment Project in an amount to be financed under the Loan Agreement which shall not exceed in the aggregate the equivalent of $50,000 in the water and road sectors and of $85,000 in all other sec- tors; the foregoing amounts being subject to change from time to time as may be agreed betweenx the Borrower and the Bank. (d) Except as the Bank shall otherwise agree, no withdrawals shall be made on account of (i) expenditures made by CVDB or an Investment Entity, as the case may be, prior to the date of this Agreement or (ii) expenditures made by an Investment Entity in respect of a Sub-loan subject to the Bank's approval, or of an Investment, more than ninety days prior to the date on which the Bank shall have received the application and information required -5- under Section 2.02 (b) of the Project Agreement or (iii) expendi- tures made by an Investment Entity in respect of a free-limit Sub-loan more than ninety days prior to the date on which Lhe Bank shall have received the request and information required by Section 2.02 (c) of the Project Agreement. Section 2.03. CVDB is designated as representative of the Borrower for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. Section 2.04. The Closing Date shall be December 31, 1984 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower and CVDB of such later date. Section 2.05. The Borrower shall pay to the Bank a commitment 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 eight and twenty-five hundredths per cent (8.25%) per annum on the principal amount of the Loan withdrawn and ouistanding from time to time. Section 2.07. Interest and other charges shall be payable semi-annually on May 15 and November 15 in each year. Section 2.08. (a) The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 1 to this Agreement. (b) The amortization schedule applicable to each Sub-loan and the schedule of repayment to the Porrower in respect of each Investment shall provide for an appropriate period of grace, and, unless the Bank and the Borrower shall otherwise agree (i) shall not extend beyond ten years for commercially viable Invest- ment Projects, and fifteen years for other Investment Projects, from the date of approval by the Bank of such Sub-loan or Invest- ment, or in the case of a free-limit Sub-loan, of authorization by the Bank to make withdrawals from the Loan Account in respect thereof, and (ii) shall provide for approximately equal semi- annual, or more frequent, aggregate payments of principal and interest or approximately equal semi-annual, or more frequent, payments of principal. -6- ARTICLE III The Project; Use of Proceeds of the Loan; Provision of Funds Section 3.01. (a) The purpose of the Project for which the Loan is made is to assist CVDB in financing such productive facilities and resources in Jordan as will contribute to its economic and social development and to strengthen CVDB's opera- tional capability. The Project consists in: (i) the financing of specific development projects through loans to, and investments in public entities in Jordan, in furtherance of the corporate purposes of CVDB (Part A of the Project); and (ii) the training of CVDB's personnel, the strengthening of CVDB's management and the execution of a study on the ways and means to identify productive pro,"cts for subsequent financing by CVDB, with the assistance of an advisor and of consultants in adequate numbers (Part B of the Project). (b) The Borrower shall relend the equivalent of the proceeds of the Loan to CVDB uider a Subsidiary Loan Agreement to be entered into between the Borrower and CVDB containing terms and conditions acceptable to the Bank. (c) The Borrower shall exercise its rights under the Sub- sidiary Loan Agreement in such manner as to accomplish the pur- poses of the Loan, and except as the Borrower and the Bank shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. Section 3.02. The Borrower shall not take, or permit any of its political subdivisions, or any of its agencies or instru- mentalities, or any agency or instrumentality of any political subdivision, to take, any action which would prevent or materially interfere with the carrying out of the Project or the performance by CVDB of any of its other obligations under the Project Agree- ment or the Subsidiary Loan Agreement, and shall take or cause to be taken all reasonable action which shall be required on its part in order to enable CVDB to carry on the Project and to perform such other obligations. -7- Section 3.03. The Borrower shall subscribe, and pay in, an additional porton of CVDB's authorized share capital, and cause all concerned municipalities to take similar action, according to a timetable and in amounts agreed upon among the Borrower, the Bank and CVDB. Section 3.04. The Borrower shall take all action required on its part to ensure the availability to CVDB, under reasonable terms, of all funds required for the carrying out of the Project. ARTICLE IV Remedies of the Bank Section 4.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) a default shall occur in the performance of any obliga- tion of CVDB under the Project Agreement; (b) the CVDB Law or the CVDB Executive Regulations shall have been amended so as to affect materially and adversely the operations or financial condition of CVDB, or the Borrower shall have taken any action which would result in a decrease of the capital of CVDB; (c) CVDB shall be unable to pay its debts as they mature or any action or proceeding shall have been undertaken whereby any of the property of CVDB shall or may be distributed among its credi- tors; (d) without prejudice to the provisions of Section 3.05 of the Project Agreement, any part of the priripal amount of any loan to CVDB having an original maturity of one year or more shall, in accordance with its terms, have become due and payable in advance of maturity, as provided in the relative contractual instruments, or any security for any such loan shall have become enforceable; (e) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of CVDB or for the suspension of its operations; (f) a Subsidiary or any other entity shall have been created or acquired or taken over by CVDB, if such creation, acquisition -8- or taking over would adversely affect the conduct of CVDB's business, its financial situation, the efficiency of its manage- ment and personnel or the carrying out of the Project; and (g) an extraordinary situation shall have arisen which shall make it improbable that CVDB will be able to perform its obligations under the Project Agreement. Section 4.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (d) thereof: (a) the event specified in paragraph (a) of Section 4.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower and CVDB; and (b) any event specified in paragraphs (b), (c), (d), (e) or (f) of Section 4.01 of this Agreement shall occur. ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as addi- tional conditions to the effectiveness of the Loan Agreement within the meaning of Section 12.01 of the General Conditions, namely, that: (a) the Subsidiary Loan Agreement shall have been entered into by the Borrower and CVDB, respectively; and (b) CVDB shall have issued its Executive Regulations, as provided in Section 2.08 (a) of the Project Agreement. Section 5.02. The following are specified as additional matters, within the meaning of Section 12.02 of the General Conditions, to be included in the opinion or opinions to be furnished to the Bank, namely, that: (a) the Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, CVDB, and constitutes a valid and binding obligation of CVDB in accord- ance with its terms; -9- (b) the Subsidiary Loan Agreement has been duly author- ized or ratifie by, and executed and delivered on behalf of, the Borrower and CVDB, and constitutes a valid and binding obliga- tion of the Borrower and CVDB in accordance with its terms; and (c) the CVDB Executive Regulations have come into full force and effect. Section 5.03. The date o pe, )2 s hereby specified for the purposes of SectIon 12.04 of'the General Conditions. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. Subject to the provisions of Section 2.03 of this Agreement, the President of the National Planning Council of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: National Planning Council P.O. Box 555 Amman Jordan Cable address: Telex: NPC 1319 JO Amman For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America - 10 - 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. THE HASHEMITE KINGDOM OF JORDAN By S -F rO&? A-- Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT 0 ~ By f AU Regional Vice President Europe, Midle East and North Africa - 11 - SCHEDULE 1 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* November 15, 1984 125,000 May 15, 1985 255,000 November 15, 1985 255,000 May 15, 1986 435,000 November 15, 1986 435,000 May 15, 1987 495,000 November 15, 1987 495,000 May 15, 1988 505,000 November 15, 1988 505,000 May 15, 1989 505,000 Novemb'rer 15, 1989 505,000 May 15, 1990 505,000 November 15, 1990 505,000 May 15, 1991 505,000 November 15, 1991 505,000 May 15, 1992 505,000 November 15, 1992 505,000 May 15, 1993 475,000 November 15, 1993 470,000 May 15, 1994 335,000 November 15, 1994 330,000 May 15, 1995 175,000 November 15, 1995 175,000 May 15, 1996 170,000 November 15, 1996 165,000 May 15, 1997 160,000 * 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. - 12 - 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 maturiy 1.45% More than three years but not more than six years before maturity 2.90% More than six years but not more than eleven years before maturity 5.35% More than eleven years but not more than fifteen years before maturity 7.30% More than fifteen years before maturity 8.25% INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Bank for Reconstruction and Develop- ment. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Bank thereunto this 8tL4 day of ., 198 . FOR SECRETARY