Honduras - Western Highway Extension Project : Credit 0001 - Credit Agreement - Conformed

CREDIT NUMBER 1 HO Development Credit Agreement (Western Highway Extension Project) BETWEEN REPUBLIC OF HONURAS AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED MAY 12, 1961 CREDIT NUMBER 1 HO Development Credit Agreement (Western Highway Extension Project) BETWEEN REPUBLIC OF HONDURAS AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED MAY 12, 1961 AGREEMENT, dated May 12, 1961, between REPUBLIC or HONDURAs and INTERNATIONAL DEVELOPMENT ASsOCIATION. ARTICLE I Definitions; Headings SECTION 1.01. Wherever used in this Agreement or any schedule or any agreement supplemental to this Agree- ment, unless the context shall otherwise require, the fol- lowing terms shall have the following meanings: 1. The term "Borrower" means Republic of Honduras. 2. The term "Association" means International Devel- opment Association. 3. The term "Bank" means International Bank for Re- construction and Development. 4. The term "Credit" means the development credit provided for in this Agreement. . 5. The term "currency" means such coin or currency as at the time referred to is legal tender for the payment of public and private debts in the territories of the govern- ment referred to. Whenever reference is made to the cur- rency of the Borrower, the term "currency" includes the currencies of all territories on whose behalf at the time referred to the Borrower has accepted membership in the Association. 6. The term "dollars" and the sign "$" means dollars in currency of the United States of America. 7. The term "Credit Account" means the account on the books of the Association to which the amount of the Credit is to be credited as provided in Section 2.02. 4 8. The term "Project" means the project or projects or program or programs for which the Credit is granted, as described in Schedule 2 to this Agreement and as the de- scription thereof shall be amended from time to time by agreement between the Association and the Borrower. 9. The term "goods" means equipment, supplies and services 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 Borrower. 10. The term "Effective Date" means the date on which this Development Credit Agreement shall come into force and effect as provided in Section 9.03. .11. The term "tax" and "taxes" shall include imposts, levies, fees and duties of any nature, whether in effect at the date of this Agreement or the.,eafter imposed. 12. The term "Highway Maintenance Loan Agreement" means the loan agreement dated December 22, 1955 between the Borrower and the Bank, as amended by further agree- ment between them. 13. The term "Highway Construction Loan Agreement" means the loan agreement dated May 9, 1958 between the Borrower and the Bank. ARTICLE II The Credit SECTION 2.01. The Association agrees to make available to the Borrower, on the terms and conditions in this Agree- ment set forth, a development credit in various currencies equivalent to nine million dollars ($9,000,000). SECTION 2.02. The Association shall open a Credit Ac- count on its books in the name of the Borrower and shall credit to such account the amount of the Credit. The 5 amount of the Credit may be withdrawn from the Credit Account as provided in this Agreement. SECTION 2.03. (a) The Borrower shall be entitled to withdraw from the Credit Account (i) amounts expended for the reasonable cost of goods to be financed under this Agreement, and (ii), if the Association shall so agree, amounts required to meet payments to be made for the reasonable cost of such goods. (b) Except as the Borrower and the Association shall otherwise agree, no withdrawals shall be made on account of (i) expenditures prior to the date of this Agreement or (ii) 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. (c) Withdrawals shall be made either in the respec- tive currencies in which the cost of goods has been paid or is payable, or in any currency or currencies which the Association reasonably determines to be freely convertible at the time of withdrawal, as the Association shall from time to time elect. SECTION 2.04. Upon the Borrower's request and upon such terms and conditions as shall be agreed upon between the Association and the Borrower, the Association may enter into special commitments in writing to pay amounts to the Borrower or others in respect of the cost of goods notwithstanding any-subsequent suspension or cancellation. SECTION 2.05. When the Borrower shall desire to with- draw any amount from the Credit Account or to request the Association to enter into a special commitment pur- suant to Section 2.04, the Borrower shall deliver to the Association a written application in such form, and con- taining such statements and agreements, as the Associa- tion shall reasonably request. Applications for withdrawal, 6 with the necessary documentation as hereinafter in this Article provided, shall, except as the Association and the Borrower shall otherwise agree, be made promptly in re- lation to expenditures for the Project. SECTION 2.06. The Borrower shall furnish to the As- sociation such documents and other evidence in support of the application as the Association shall reasonably request, whether before or after the Association shall have per- mitted any withdrawal requested in the application. SECTION 2.07. Each application and r.he accompanying documents and other evidence must be sufficient in form and substance to satisfy the Association that the Borrower is entitled to withdraw from the Credit Account the amount applied for and that the amount to be withdrawn from the Credit Account is to be used only for the purposes specified in this Agreement. SECTION 2.08. Payment by the Association of amounts which the Borrower is entitled to withdraw from the Credit Account shall be made to or on the order of the Borrower. SECTION 2.09. The Borrower shall pay in dollars to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. The Borrower shall also pay in dollars to the Association a service charge at the same rate on the principal amount of any special commitment entered into by the Association pursuant to Section 2.04 and outstand- ing from time to time. SECTION 2.10. (a) Service charges shall be computed on the basis of a 360-day year of twelve 30-day months. 7 (b) Service charges shall be verable semi-annually on March 1 and September 1 in each ye. SECTION 2.11. (a) The Borrower shall repay Le prin- cipal of the Credit in accordance with the amortization schedule set forth in Schedule 1 to this Agreement. (b) The Borrower shall have the right to repay in ad- vance of maturity.all or any part of the principal amount of one or more outstanding maturities of the Credit spe- cified by the Borrower. (c) The principal of the Credit shall be repaid in dollars and the amount so repayable shall be the equivalent in dollars of the currency or currencies withdrawn from the Credit Account, determined as of the respective dates of withdrawal. SEO' ION 2.12. The principal of, and service charges on, the Credit shall be paid at such place or places as the Association shall reasonably request. SECTION 2.13. Whenever it shall be neceessary for the purposes of this Agreement to determine the value of one currency in terms of another, such value shall be as reason- ably determined by the Association. SECTION 2.14. If, at any time after the date of this Agree- ment and before December 31, 1961, the Association shall adopt terms and conditions of withdrawal and repayment generally applicable to development credits made by the Association to its members which would be more favorable to the Borrower than the terms and conditions of with- drawal and repayment set forth in this Agreement, then, if the Borrower shall so request the Association within one year from the date of such adoption, such more favorable terms and conditions shall be made applicable to the Credit * as of the date of such request or such other date as shall be agreed between the Borrower and the Association. 8 ARTICLE III Use of Proceeds of the Credit SECTION 3.01. The Borrower shall cause the proceeds of the Credit to be applied exclusively to financing the cost of goods required to carry out the Project described in Sched- ule 2 to this Agreement. The specific goods to be financed out of the proceeds of the Credit and the methods and procedures for procurement of such goods shall be deter- mined by agreement between the Borrower and the Asso- ciation, subject to modification by further agreement be- tween them. SECTION 3.02. The Borrower shall cause all goods fi- nanced out of the proceeds of the Credit to be used in the territories of the Borrower exclusively in the carrying out of the Project. ARTICLE IV Particular Covenants SECTION 4.01. (a) The Borrower shall cause the Project to be carried out with due diligence and efficiency and in conformity with sound engineering and'financial practices. (b) In the carrying out of parts I, II and III of the Project the Borrower shall employ competent and experi- enced engineering consultants satisfactory to the Borrower and the Association upon terms and conditions satisfactory to the Borrower and the Association. (c) Except as the Association shall otherwise agree, the roads and structures included in parts I and III of the Project shall be constructed by contractors satisfactory to the Borrower and the Association, employed under con- tracts satisfactory to the Borrower and the Association awarded on the basis of international competitive bidding and the Borrower shall, before inviting bids for any such 9 contract, secure the rights of way required for the road or structure to be constructed under such contract. (d) The general design standards to be used for the roads and structures the construction of which is included in the Project shall be determined by agreement between the Borrower and the AsSociation, subject to modification by further agreement between them. (e) The timing and the terms of reference of the survey described in part IV of the Project shall be determined by agreement between the Borrower and the Association, sub- ject to modification by further agreement between them. (f) The survey described in part IV of the Project shall be carried out by consultants or advisors satisfactory to the Borrower and the Association employed on terms and conditions satisfactory to the Borrower and the Asso- ciation. (g) The Borrower shall cause to be furnished to the Association, promptly upon their preparation, the plans and specifications and work program for each part of the Project and any material modifications subsequently made therein, in such detail as the Association shall from time to time request. , SECTION 4.02. (a) The Borrower shall maintain or cause to be maintained recQrds adequate to show the application of the proceeds of the Credit, to identify the imported goods financed out of the proceeds of the Credit, to disclose the use thereof in the Proj.et, to record the progress of the Project (including the cost thereof) ancl to reflect in accordance with consistently maintained sound accounting practices the operations and financial condition of the agency or agencies of the Borrower responsible for the construction or operation of the Project or any part there- of; shall enable the Association's representatives to in- spect the Project, the imported goods and any relevant 10 records and documents; and shall furnish to the Association all such information as the Association shall reasonably request concerning the expenditure of the proceeds of the Credit, the Project, the imported goods and the operations and financial condition of the agency or agencies of the Borrower responsible for the construction or operation of the Project or any part thereof. (b) The Borrower shall at all times make available promptly as needed all sums which shall be required for the carrying out of the Project. SECTION 4.03. (a) The Borrower and the Association shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, each of them shall furnish to the other all such information as it shall reasonably request with regard to the general status of the Credit. On the part of the Borrower, such information shall include information with respect to financial and economic conditions in the territories of the Borrower and the international balance of payments position of the Borrower. (b) The Borrower and the Association shall from time to time exchange views through their representatives with regard to matters relating to the purposes of the Credit and the maintenance of the service thereof. The Borrower shall promptly inform the Association of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Credit or the iain- tenance of the service thereof. (c) The Borrower shall afford all reasonable oppor- tunity for accredited representatives of the Association to visit any part of the territories of the Borrower for pur- poses related to the Credit. SECTION 4.04. The principal of, and service charges on, the Credit shall be paid without deduction for, and free 11 from, any taxes or fees imposed under the laws of the Borrower or laws in effect in its territories. SECTION 4.05. This Development Credit Agreement 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 registration thereof. SECTION 4.06. The principal of, and service charges on, the Credit shall be paid free from all restrictions imposed under the laws of the Borrower or laws in effect in its territories. SECTION 4.07. The Borrower shall satisfy the Associa- tion that adequate arrangements have been made to insure the goods financed out of the proceeds of the Credit against risks incident to their purchase and importation into the territories of the Borrower. SECTION 4.08. The Borrower shall cause the roads con- structed with the proceeds of the Credit to be adequately maintained and shall cause all necessary repairs thereof to be made, all in accordance with - sound engineering practices. SECTION 4.09. (a) -The Borrower shall cause all mainte- nance equipment, materials and spare parts financed out of the proceeds of the Credit to be used exclusively in the carrying out of part II of the Project and thereafter shall cause all such equipment, materials and spare parts to be used exclusively for the purposes of road maintenance. (b) The Borrower shall cause all its machinery and equipment for highway construction and maintenance to be adequately maintained and repaired, and shall cause suitable workshops to be maintained in suitable places for that purpose. 12 SECTION 4.10. In order to carry out efficiently the Project and the projects provided for under the Highway Main- tenance Loan Agreement and the Highway Construction Loan Agreement, until the Project shall have been com- pleted, the Borrower shall give priority in the allocation of highway funds and resources to the construction or reconstruction of roads included in the Project and in the projects provided for under said loan agreements. ARTICLE V Cancellation and Suspension SECTION 5.01. The Borrower may by notice to the As- sociation cancel all or any part of the Credit which the Borrower shall not have withdrawn prior to the giving of such notice, except that the Borrower may not so cancel any amount of the Credit in respect of which the Associa- tion shall have entered into a special commitment pursuant to Section 2.04. SECTION 5.02. If any of the following events shall have happened and be continuing, the Association may by notice to the Borrower suspend in whole or in part the right of the Borrower to make withdrawals from the Credit Account: (a) A default shall have occurred in the payment of principal or service charges or any other payment re- quired under this Agreement or any other development credit agreement or any guarantee agreement between the Borrower and the Association. (b) A default shall have occurred in the performance of any other covenant or agreement on the part of the Bor- rower under this Agreement or any other development credit agreement or any guarantee agreement between the Borrower and the Association. (c) A default shall have occurred in the payment of principal or interest or any other payment required under 13 any loan agreement or guarantee agreement between the Borrower and the Bank or any bonds issued thereunder. (d) The Bank (i) shall have suspended in whole or in part the right of the Borrower to make withdrawals under any loan agreement between the Borrower and the Bank because of a default on the part of the Borrower, or (ii) shall have suspended in whole or in part the right of the borrower to make withdrawals under any loan agreement with the Bank guaranteed by the Borrower because of a default on the part of the Borrower. (e) An extraordinary situation shall have arisen which shall make it improbable that the Borrower will be able to perform its obligations under this Agreement. I (f) The Borrower shall have been suspended from mem- bership in or ceased to be a member of the Asi3ociation. (g) The Borrower shall have ceased to be a member of the International Monetary Fund or shall ha% become ineligible to use the resources of said Fund under Sectioi 6 of Article IV of the Articles of Agreement of said Fund or shall have been declared ineligible to use said resources under Section 5 of Article V, Section 1 of Article VI or Section 2 (a) of Article XV of the Articles of Agreement of said Fund. (h) After the date of this Agreement and prior to the Effective Date any event shall have occurred which wozld have entitled the Association to suspend the Borrower's right to make withdrawals from the Credit Account if this Agreement had been effective on the date such event occurred. The right of the Borrower to make withdrawals from the Credit Account shall continue to be suspended in whole or in part, as the case may be, until the event or events which gave rise to such suspension shall have ceased to exist or until the Association shall have notified the Borrower that 14 the right to make withdrawals has been restored, which- ever is the earlier; provided, however, that in the case of any such notice of restoration, the right to make with- drawals shall be restored only to the extent and subject to the conditions specified in such notice, and no such notice shall impair any right, power or remedy of the Association in respect of any other or subsequent event described in this Section. SECTION 5.03. If (a) the right of the Borrower to make withdrawals from the Credit Account shall have been suspended with respect to any amount of the Credit for a continuous period of thirty days or (b) by September 30, 1965, or such other date as shall be agreed between the Borrower and the Association, an amount of the Credit shall remain unwithdrawn from the Credit Account, the Association may by notice to the Borrower terminate the right of the Borrower to make withdrawals with respect to such amount. Upon the giving of such notice such amount of the Credit shall be cancelled. SECTION 5.04. No cancellation or suspension pursuant to this Article shall apply to amounts subject to any special commitment entered into by the Association pursuant to Section 2.04 except as expressly provided in such com- mitment. SECTION 5.05. Except as otherwise agreed between the Association and the Borrower, any cancellation shall be applied pro rata to the several maturities of the principal amount of the Credit as set forth in the Schedule 1 to this Agreement. SECTION 5.06. Notwithstanding any cancellation or sus- pension all the provisions of this Agreement shall continue in full force and efft.2t except as in this Article specifically provided. 15 ARTICLE VI Remedies of the Association SECTION 6.01. (i) If any event specified in paragraph (a) or paragraph (c) of Section 5.02 shall occur and shall con- tinue for a period of 30 days, or (ii) if any event specified in paragraph (b) of Section 5.02 shall occur and shall con- tinue for a period of 60 days after notice thereof shall have been given by the Association to the Borrower, then at any subsequent time thereafter the Association, at its option, may declare the principal of the Credit 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 to the contrary notwithstanding. ARTICLE VII Enforceability of Development Credit Agreement; Failure to Exercise Rights; Arbitration SECTION 7.01. The rights and obligations of the Associa- tion and the Borrower under this Agreement shall be valid and enforceable in accordance with their terms notwith- standing the law of any state, or political subdivision thereof, to the contrary. Neither the Association nor the Borrower shall be entitled in any proceedings under this Article to assert akny claim that any provision of this Agreement is invalid or unenforceable because of any pro- vision of the Articles of Agreement of the Association or for any other reason. SECTION 7.02. No delay in exercising, or omission to exercise, any right, power or remedy accruing to either party under this Agreement upon any default shall im- pair any such right, power or remedy or be construed to be a waiver thereof or an acquiescence in such default; nor shall the action of such party in respect of any default, 16 or any acquiescence in any default, affect or impair any right, power or remedy of such party in respect of any other or subsequent default. SECTION 7.03. (a) Any controversy between the parties to this Agreement and any claim by either such party against the other arising under this Agreement which shall not be determined by agreement of the parties shall be sub- mitted to arbitration by an Arbitral Tribunal as herein- after provided. (b) The parties to such arbitration shall be the Associa- tion and the Borrower. (c) The Arbitral Tribunal shall consist of three arbi- trators appointed as follows: one arbitrator shall be ap- pointed by the Association; a second arbitrator shall be appointed by the Borrower; and the third arbitrator (here- inafter sometimes called the Umpire) shall be appointed by agreement of the parties or, if they shall not agree, by the President of the International Court of Justice or, failing appointment by him, by the Secretary-General of the United Nations. If either of the parties shall fail to appoint an arbitrator, such arbitrator shall be appointed by the Umpire. In case any arbitrator appointed in ac- cordance with this Section shall resign, die or become un- able to act, a successor arbitrator shall be appointed in the same manner as-herein prescribed for the appointment of the original arbitrator and such successor shall have all the powers and duties of such original arbitrator. (d) An arbitration proceeding may be instituted under this Section urjri notice by the party instituting such pro- ceeding to the other party. Such notice shall contain a statement setting forth the nature of the controversy or claim to be submitted to arbitration, the nature of the re- lief sought, and the name of the arbitrator appointed by the party instituting such proceeding. Within 30 days after the giving of such notice, the adverse party shall notify the 17 party instituting the proceeding of the name of the arbi- trator appointed by such adverse party. (e) If, within 60 days after the giving of such notice instituting the arbitration proceeding, the parties shall not have agreed upon an Umpire, either party may request the appointment of an Umpire as provided in paragraph (c) of this Section. (f) The Arbitral Tribunal shall convene at such time and place as shall be fized by the Umpire. Thereafter, the Arbitral Tribunal shall determine where and when it shall sit. (g) Subject to the provisions of this Section and except as the parties shall otherwise agree, the Arbitral Tribunal shall decide all questions relating to its competence and shall determine its procedure. All decisions of the Arbitral Tribunal shall be by majority vote. (h) The Arbitral Tribunal shall afford to all parties a fair hearing and shall render its award in writing. Such award may be rendered by default. An award signed by a majority of the Arbitral Tribunal shall constitute the award of such Tribunal. A signed counterpart of the award shall be transmitted to each party. Any such award ren- dered in accordance with the provisions of this Section shall be final and binding upon the parties to this Develop- ment Credit Agreement. Each party shall abide by and comply with any such award rendered by the Arbitral Tribunal in accordance with the provisions of this Section. (i) The parties shall fix the amount of the remuneration of the arbitrators and such other persons as shall be re- quired for the conduct of the arbitration proceedings. If the parties shall not agree on such amount before the Arbitral Tribunal shall convene, the Arbitral Tribunal shall fix such amount as shall be reasonable under the circumstances. Each party shall defray its own expenses in the arbitration proceedings. The costs of the Arbitral 18 Tribunal shall be divided and borne equally by the parties. Any question concerning the division of the costs of the Arbitral Tribunal or the procedure for payment of such costs shall be determined by the Arbitral Tribunal. (j) The provisions for arbitration set forth in this Section shall be in lieu of any other procedure for the de- termination of controversies between the parties to this Agreement and any claim by either party against the other party arising thereunder. (k) The Association shall not be entitled to enter judg- ment against the Borrower upon the award, to enforce the award against the Borrower by execution or to pursue any other remedy against the Borrower for the enforce- ment of the award, except as such procedure may be avail- tble against the Borrower otherwise than by reason of the provisions of this Section. If, within 30 days after counter- parts of the award shall be delivered to the parties, the award shall not be complied with by the Association, the Borrower may take any such action for the enforcement of the award against the Association. (1) Service of any notice or process in connection with any proceeding under this Section or (to the extent that such remedy shall be available) in connection with any proceeding to enforce any award rendered pursuant to this Section may be made in the manner provided in Section 8.01. The parties to this Agreement waive any and all other requirements for the service of any such notice or process. ARTICLE VIII Miscellaneous Provisions SECTION 8.01. Any notice or request required or per- mitted to be given or made under this Agreement and any agreement between the parties contemplated by this Agree- ment shall be in writing. Except as otherwise provided in 19 Section 9.03 such notice or request shall be deemed to have been duly given or made when it shall be delivered by hand or by mail, telegram, cable or radiogram to the party to which it is required or permitted to be given or made at such party's address specified hereinafter, or at such other address as such party shall have designated by notice to the pzrty giving such notice or making such request: Address of the Borrower: Secretario de Economia y Hacienda Falacio de Hacienda Tegucigalpa, D. C. Honduras Alternative address for cablegrams and radiograms: Hacienda Tegucigalpa Address of the Association: International Development Association 1818 H Street, N.W. Washington 25, D. C. United States of America Alternative address for cablegrams and radiograms: Indevas Washington, D. C. SECTION 8.02. The Borrower shall furnish to the Asso- ciation sufficient evidence of the authority of the person or persons who will sign the applications provided for in Article II or who will, on behalf of the Borrower, take any other action or execute any other documents required or permitted to be taken or executed by the Borrower under this Agreement, and the authenticated specimen signature of each such person. 20 SECTION 8.03. Any action required or permitted to be taken, and any documents required or permitted to be executed, under this Agreement on behalf of the Borrower may be taken or executed by the Secretario de Estado en el Despacho de Economia y Hacienda of the Borrower or any person thereunto authorized in writing by him. Any modi- fication or amplification of the provisions of this Agree- ment may be agreed to on behalf of the Borrower by writ- ten instrument executed on behalf of the Borrower by said Secretario de Estado or any person thereunto authorized in writing by him; provided that, in the opinion of said Secre- tario de Estado, such modification or amplification is rea- sonable in the circumstances and will not substantially increase the obligations of the Borrower under this Agree- ment. The Association may accept the execution by said Secretario de Estado or any person thereunto authorized in writing by him of any such instrument as conclusive evi- dence that in the opinion of said Secretario de Estado any modification or amplification of the provisions of this Agreement effected by such instrument is reasonable in the circumstances and will not substantially increase the obligations of the Borrower thereunder. SECTION 8.04. This Agreement may be executed in sev- eral counterparts, each of which shall be an original. All such counterparts shall collectively be but one instrument, ARTICLE IX Effective Date; Termination SECTION 9.01. This Agreement shall not become effective until evidence satisfactory to the Association shall have been furnished to the Association that the execution and delivery of this Agreement on behalf of the Borrower have been duly authorized or ratified by all necessary govern- mental action. 21 SECTION 9.02. As part of the evidence to be furnished pursuant to Section 9.01, the Borrower shall furnish to the Association an opinion or opinions satisfactory to the Association of counsel acceptable to the Association show- ing that this Agreement has been duly authorized or rati- fied by, and executed and delivered on behalf of, the Bor- rower and constitutes a valid and binding obligation of the Borrower in accordance with its terms. SECTION 9.03. Except as shall be otherwise agreed by the Association and the Borrower, this Agreement t.,hall come into force and effect on the date upon which the Associa- tion dispatches to the Borrower notice of its acceptance of the evidence required by Section 9.01. SECTION 9.04. If all acts required to be performed pur- suant to Section 9.01 shall not have been performed before a date ninety days after the date of this Agreement or such other date as shall be agreed upon by the Association and the Borrower, the Association may at any time there- after at its option terminate this Agreement by notice to the Borrower. Upon the giving of such notice this Agree- ment and all obligations of the parties thereunder shall forthwith terminate. SECTION 9.05. If and when the entire principal amount of the Credit and all charges which shall have accrued on the Credit shall have been paid, this Agreement and all obligations of the parties thereunder shall forthwith termi- nate. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Development Credit Agreement to be signed in their respective names and delivered in the District of 22 Columbia, United States of America, as of the day and year first above written. REPUlLIC OF HONrTRAS By CELEO DAVILA Authorized Representative INTERNATIONAL DEVELOPMENT AssOCIATION By W. A. B. ILIFF Vice President 23 SOHEDULE 1 Amortisation Schedule Payment of Principal Payment of Fri ncipal Date Payment Due (expressed in dollare) Date Payment Due (expresed In dollarw) September 1, 1971 $ 45,000 September 1, 1991 135,000 March 1, 1972 45,000 March 1, 1992 135,000 September 1, 1972 45,000 September 1, 1992 135,000 March 1, 1973 45,000 March 1, 1993 135,000 September 1, 1973 45,000 September 1, 1993 135,000 March 1, 1974 45,000 March 1, 1994 135,000 September 1, 1974 45,000 September 1, 1994 135,000 March 1, 1975 45,000 March 1, 1995 135,000 September 1, 1975 45,000 September 1, 1995 135,000 March 1, 1976 45,000 March 1, 1996 135,000 September 1, 1976 45,000 September 1, 1996 135,000 March 1, 1977 45,000 March 1, 1997 135,000 September 1, 1977 45,000 September 1, 1997 135,000 March 1, 1978 45,000 March 1, 1998 135,000 September 1, 1978 45,000 September 1, 1998 135,000 March 1, 1979 45,000 March 1, 1999 135,000 September 1, 1979 45,000 September 1, 1999 135,000 March 1, 1980 45,000 March 1, 2000 135,000 September 1, 1980 45,000 September 1, 2000 135,000 March 1, 1981 45,000 March 1, 2001 135,000 September 1, 1981 135,000 September 1, 2001 135,000 March 1, 1982 135,000 March 1, 2002 135,000 September 1, 1982 135,000 September 1, 2002 135,000 March 1, 1983 135,000 March 1, 2003 135,000 September 1, 1983 135,000 September 1, 2003 135,000 March 1, 1984 135,000 March 1, 2004 135,000 September 1, 1984 135,000 September 1, 2004 135,000 March 1, 1985 135,000 March 1, 2005 135,000 September 1, 1985 135,000 September 1, 2005 185,000 March 1, 1986 135,000 March 1, 2006 135,000 September 1, 1986 135,000 September 1, 2006 135,000 March 1, 1987 135,000 March 1, 2007 135,000 September 1, 1987 135,000 September 1, 2007 135,000 March 1, 1988 135,000 March 1, 2008 135,000 September 1, 1988 135,000 September 1, 2008 135,000 March 1, 1989 135,000 March 1, 2009 135,000 September 1, 1989 135,000 September 1, 2009 135,000 March 1, 1990 135,000 March 1, 2010 135,000 September 1, 1990 135,000 September 1, 2010 135,000 March 1, 1991 135,000 March 1, 2011 135,000 24 SHEDULE 2 Description of Project The Project consists of: Part I. The engineering and construction of an all- weather unpaved highway, approximately 100 kilometers long, as an Extension of the Western Highway from its terminus at Santa Rosa de Copan to Nueva Ocotepeque, and of a connection with the Northern Highway of El Salvador at the border between Honduras and El Salvador, a few kilometers south of Nueva Ocotepeque. The location of the Extension will be determined by agreement between the Borrower and the Association. Part II. The continuation for a period of two years fr.om September 1, 1961, or for such longer period as shall be agreed between the Borrower and the Association, of the improvement of the Borrower's highway organization and of the program of highway repair and maintenance described in paragraphs 1 and 2 of Schedule 2 to the High- way Maintenance Loan Agreement. Part III. The engineering and construction of feeder roads to connect with the Western Highway and its Exten- sion and for the development of the Western Region. The program for, and the general location of, these roads will be determined by agreement between the Borrower and the Association. Part IV. A highway survey to provide the Borrower with a long-term guide for development of a balanced highway system in Honduras. The scope of the survey will include, but will not necessarily be limited to: (i) studies of the priority of investment in expanding and improving the highway network (primary, sec- ondary, feeder and penetration roads), the cost and benefits; 25 (ii) studies of the need of a planning office and the basis on which it should be established in the Highway Department of the Borrower; (iii) studies of the need of, and the proper basis for, the regulation of road transport in Honduras; and (iv) preliminary engineering studies for high-priority roads to be selected from time to time by agreement between the Borrower and the Association.