Jordan - Second Agricultural Credit Project : Credit 0103 - Credit Agreement - Conformed

CREDIT NUMBER 103 JO Development Credit Agreement (Second Agricultural Credit Project) BETWEEN THE HASHEMITE KINGDOM OF JORDAN AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED MAY 9, 1967 CREDIT NUMBER 103 JO Development Credit Agreement (Second Agricultural Credit Project) BETWEEN THE HASHEMITE KINGDOM OF JORDAN AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED MAY 9, 1967 AGREEMENT, dated May 9, 1967, between THE HASHEMITE KINGDOM OF JORDAN (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT AssocIATION (herein.fter called the Association). WHEREAS the Borrower and the Agricultural Credit Corporation, a statutory corporation of the Borrower (hereinafter called the Corporation), have requested the Association to assist in the financing of a lending program for agricultural development; AVHEREAs by a development credit agreement, dated December 12, 1963, between the Borrower and the Associ- ation (hereinafter called the First Development Credit Agreement), the Association made a development credit to the Borrower in an aggregate principal amount in various currencies equivalent to $3,000,000 to assist in the financing of the first part of such program; and WHEREAS the Association is willing to make a develop- ment credit available on the terms and conditions provided herein and in a project agreement of even date herewith between the Association and the Corporation; Now TiiEREFORE the parties hereto hereby agree as follows: ARTICLE I Credit Regulations; Definitions SECTION 1.01. The parties to this Agreement accept all the provisions of Development Credit Regulations No. 1 of the Association dated June 1, 1961, as amended February 9, 4 1967, with the same force and effect as if they were fully set forth herein subject, however, to the following modifi- cations thereof (said Development Credit Regulations No. I as so modified being hereinafter called the Regulations): (a) Sections 6.01, 6.02 and 6.03 are amended by inserting the words "or the Project Agreement" after the words "the Development Credit Agreement"; and the words "or the Corporation" after the word "Borrower". (b) For the purposes of this Agreement, the term "goods" as defined in paragraph 10 of Section 9.01, shall include any easements or rights of way for irrigation projects financed under the Credit. SECTION 1.02. Unless the context otherwise requires, the following terms, wherever used in this Agreement or in the Regulations, shall have the following meanings: 1. "Project Agreement" means the project agreement of even date herewith between the Association and the Corporation and shall include any amendments thereof made by agreement among the Borrower, the Corpora- tion and the Association. 2. "Dinars" means dinars in the currency of the Borrower. 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 or referred to, a development credit in an amount in various currencies equivalent to three million dollars ($3,000,000). SECTION 2.02. The Association shall open a Credit Account on its books in the name of the Borrower and shall credit to such Credit Account the amount of the Credit. 5 The amount of the Credit may be withdrawn from the Credit Account as provided in, and subject to the rights of cancellation and suspension set forth in, this Agreement and the Regulations. SECTION 2.03. Except as the Association shall otherwise agree, the Borrower shall be entitled, subject to the pro- visions of this Agreement and of the Regulations, to withdraw from the Credit Account: (a) such amounts as shall have been expended for the reasonable foreigin ..:.rrency cost of goods and services required for carrying out the Project; (b) the equivalent of a percentage or percentages to be established from time to time by agreement between the Borrower and the Association of such amounts as shall have been expended for the reasonable cost of goods and services required for carrying out the Project and nUot included in the foregoing; and (c) if the Association shall so agree, such amounts as shall be required by the Borrower to meet payments under each of the foregoing paragraphs; provided, however, that no withdrawals shall be made on account of expenditures prior to the date of this Agreement. SECTION 2.04. The Borrower shall pay 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. SECTION 2.05. Service charges shall be payable semi- annually on February 1 and August 1 in each year. SECTION 2.06. The Borrower shall repay the principal amount of the Credit withdrawn in semi-annual install- ments payable on each February 1 and August 1 commenc- ing August 1, 1977 and ending February 1, 2017, each 6 installment to and including the installment payable on February 1, 1987 to be one-half of one per cent of such principal amount, and each installment thereafter to be one and one-half per cent of such principal amount. SECTION 2.07. The currency of the United Kingdom of Great Britain and Northern Ireland is hereby specified for the purposes of paragraph (a) of Section 3.02 of the Regulations. 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 the Schedule to this Agreement. The specific allocation of the proceeds of the Credit and the methods and procedures for procurement of the goods to be finannced out of such pro- ceeds shall be determined by agreement between the Borrower and the Association, subject to modification by further agreement between them. ARTICLE IV Particular Covenants SECTION 4.01. (a) The Borrower shall cause the Project to be carried out and shall cause the Corporation to conduct its operations and affairs in accordance with sound agri- cultural, engineering and financial practices and under capable and efficient management appointed in consultation with the Association. (b) The Borrower shall take or cause to be taken all action which shall be necessary on its part to enable the Corporation to perform all its obligations under the Project Agreement and shall not take, or pcimit any agency of the Borrower to take, any action that would prevent or interfere with the performance of such obligations by the Corporation. 7 SECTION 4.02. (a) The Borrower shall re-lend the pro- ceeds of the Credit or the equivalent thereof to the Corporation on terms and conditions satisfactory to the Association. (b) The Borrower shall make or cause to be made avail- able promptly as needed all funds, services, facilities and resources other than the proceeds of the Credit which shall be required for the carrying out of the Project and all other operations of the Corporation. 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 reason- ably 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 con- ditions in the territories of the Borrower and the inter- national balance of payments positions 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 interfer, with, the accom- plishment of the purposes of the Credit or the maintenance of the service thereof. (c) The Borrower shall afford all reasonable opportunity for accredited representatives of the Association to visit any part of the territories of the Borrower for purposes related to the Credit. SECTION 4.04. The principal of, and service charges on, the Credit shall be paid without deduction for, and free from, any taxes, and free from all restrictions, imposed under the laws of the Borrower or laws in effect in its territories. 0s 8 SECTION 4.05. This Agreement and the Project Agree- ment shall be free from any taxes that shall be imposed under the laws of the Borrower or laws in effect in its territories on or in connection with the execution, delivery or registration thereof. ARTICLE V Remedies of the Association SECTION 5.01. (i) If any event specified in paragraph (a) or paragraph (c) of Section 5.02 of the Regulations shall occur and shall continue for a period of thirty days, or (ii) if any event specified or referred to in paragraph (b) or paragraph (k) of Section 5.02 of the Regulations shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Association to the Borrower, then at any subsequent time the Associ- ation, 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. SECTION 5.02. For the purposes of Section 5.02 (k) of the Regulations, the following additional events are specified: (a) The Corporation shall have failed to perform any of its obligations under the Project Agreement. (b) Before the Project Agreement shall have terminated in accordance with its terms, the Borrower shall have taken any action for the dissolution or disestablishment of the Corporation or for the suspension of its operations without the consent of the Association. (c) A substantial change shall have been made in the Corporation's legal framework without the Association's consent. 9 SecTION 5.03. The Borrower and the Association hereby agree that for the purposes of the First Development Credit Agreement and this Agreement, respectively, an. event referred to in paragraph (b) of Section 5.02 of the Regulations applicable to one of the two Agreements shall be deemed to be an event under paragraph (b) of Section 5.02 of the Regulations applicable to the other Agreement. ARTICLE VI Effective Date; Termination SECTIO. 6.01. The following events are specified as additional conditions to the effectiveness of this Agreement within the meaning of Section 8.01(b) of the Regulations: (a) The execution and delive,ry of the Project Agreement on behalf of the Corporation shall have been duly author- ized or ratified by all necessary corporate and governmental action. (b) The terms and conditions for the re-lending of the proceeds of the Credit, or the equivalent thereof, in accord- ance with Section 2.02 of the Project Agreement shall have been accepted and agreed upon by the Corporation and the Borrower. SECTION 6.02. The following are specified as additional matters, within the meaning of Section 8.02(b) of the Regu- lations, to be included in the opinion or opinions to be furnished to the Association: (a) That the Project Agreement has been duly author- ized or ratified by, and executed and delivered on behalf of, the Corporation and constitutes a valid and binding obli- gation of the Corporation in accordance with its terms. (b) That the re-lending agreement referred to in Section 4.02(a) of this Agreement is valid and binding on the Borrower and the Corporation. 10 SECTION 6.03. The date of August 10, 1967 is hereby specified for the purposes of Section 8.04 of the Regulations. SECTION 6.04. Upon termination of the Project Agree- ment in accordance with its terms, the obligations of the Borrower with respect to the Project shall forthwith terminate. ARTICLE VII Miscellaneous SECTION 7.01. The Closing Date shall be October 31, 1971 or such other date as may from time to time be agreed between the Borrower and the Association. SECTION 7.02. The foll-ving addrt ses are specified for the purposes of Section 7.u- of the Regulations: For the Borrower: Jordan Development Board P.O. Box 555 Amman Jordan Alternative address for cablegrams and radiograms: JODB Amman For the Association: International Development Association 1818 H Street, N.W. Washington, D. C. 20433 United States of America Alternative address for cablegrams and radiograms: Indevas Washington, D. C. 11 SECTION 7.03. The Vice President or the Secretary Gen- eral of the Jordan Development Board of the Borrower is designated for the purposes of Section 7.03 of the Regulations. [N 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 Columbia, United States of America, as of the day and year Arst above written. THE HASHEMITE KINGDGM OF JORDAN By /s/ FARHAN SHUBEILAT Authorized Representative INTERNATIONAL DEVELOPMENT ASSOIATION By /s/ A. BROCHES General Counsel 12 SCHEDULE Description of Project The Project consists of: A. ThJ use of the proceeds of the Credit augmented by funds derived from the Corporation's own resources to make loans to farmers totalling approximately $5 million equivalent (about 1.8 million Dinars) for the following purposes: 1. Land reclamation and improvement; 2. Tree crop establishment; 3. Farm water supply development; 4. Purchases of farm machinery; 5. On-farm development within irrigation schemes; and 6. Such other purposes as shall be agreed from time to time between the Corporation and the Association. B. The employment of technical experts and provision of extension services to farmers to whom loans are made. The Project is expected to be executed within a period not exceeding four years from the date of this Agreement.