LOAN NUMBER i833-HO :,GCUMENTS Loan Agreement (Second Agricultural Credit Project) between REPUBLIC OF HONDURAS and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated 1 ' , 1980 ÿþLOAN AGREEMENT AGREEMENT, dated ,y18 , 1980, between REPUBLIC OF HONDURAS (hereinafter called the Borrower) and INTER- NATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS (A) the Borrower has requested the Bank to assist in the financing of the Project described in Schedule 2 to the Development Credit Agreement of even date herewith between the Borrower and the International Development Association (herein- after called the Development Credit Agreement) by making the Loan as hereinafter provided; (B) the Bourower has also requested the International Development Association (hereinafter called the Association) to provide additional assistance towards the financing of the Project and by the Development Credit Agreement the Association is agree- ing to provide such assistance in an amount equivalent to five million dollars ($5,000,000) (hereinafter called the Credit); (C) the Project will be partly carried out by Banco Central de Honduras (hereinafter called Banco Central), with the Bor- rower's assistance and, as part of such assistance, the Borrower will make available to Banco Central the proceeds of the Loan as hereinafter provided; (D) by an agreement of even date herewith between the Bank and the Association and Banco Central (hereinafter called the Project Agreement), Banco Central has undertaken certain obligations regarding its participation in the carrying out of the Project; and WHEREAS the Bank has agreed, on the basis, inter alia, of the foregoing, to make the Loan available to the Borrower upon the terms and conditions set forth hereinafter and in the Project Agreement; 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 -2- and Guarantee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agree- ments of the Bank being hereinafter called the General Condi- tions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions, in the Development Credit Agreement and in the Preamble to this Agreement have the respective meanings therein set forth. ARTICLE II T'ke 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 twenty million dollars ($20,000,000). Section 2.02. The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to the Development Credit Agreement, as such Schedule may be amended from time to time by agreement between the Borrower, the Bank and the Association, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Loan. Section 2.03. Except as the Bank shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Loan, shall be governed by the provisions of Schedule 3 to the Development Credit Agreement. Section 2.04. The Closing Date shall be June 30, 1985 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower of such later date. Section 2.05. The Borrower shall pay to the Bank a commit- ment 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 UI -3- on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semiannually on February 15 and August 15 in each year. Section 2.08. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in the Schedule to this Agreement. Section 2.09. Banco Central 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. ARTICLE III Execution of the Project Section 3.01. The Borrower undertakes toward the Bank the same obligations it is undertaking towards the Association pur- suant to Article III of the Development Credit Agreement, with the same force and effect as if such provisions were fully set forth herein; provided, however, that all references to the Association and the Credit in such Articles shall be deemed to be references to the Bank and the Loan, respectively. Section 3.02. All action taken by, and any notice given to, the Association pursuant to the Development Credit Agreement shall, unless the context shall require otherwise, be deemed to be taken or given also by or to the Bank. ARTICLE IV Other Covenants Section 4.01. (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, in normal circumstances, special security from the member con- cerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distri- bution of foreign exchange held under the control or for the benefit of such member. To that end, if any lien shall be created on any public assets (as hereinafter defined), as security for any external debt, which will or might result in a priority -4- for the benefit of the creditor of such external debt in the allocation, realization or distribution of foreign exchange, such lien shall, unless the Bank shall otherwise agree, ipso facto and at no cost to the Bank, equally and ratably secure the principal of, and interest and other charges on, the Loan, and the Borrower, in creating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on assets of any of its political or administrative subdivisions, the Borrower shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, the Loan by an equivalent lien on other public assets satisfactory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (c) As used in this Section, the term "public assets" means assets of the Borrower, of any political or administrative subdivision thereof and of any entity owned or controlled by, or operating for the account or benefit of, the Borrower or any such subdivision, including gold and other foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Borrower. ARTICLE V Remedies of the Bank Section 5.01. The events specified in Sections 4.01 and 4.02 of the Development Credit Agreement are specified as addi- tional events for purposes of Sections 6.02 and 7.01 of the General Conditions, respectively; provided, however, that the words "Loan Agreement" and "Association" in paragraph (c) of such Section 4.02 shall be deemed to read "Development Credit Agree- ment" and "Bank", respectively. - 5 - ARTICLE VI Effective Date; Termination Section 6.01. The following event is specified as an addi- tional condition to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions, namely, that the conditions precedent to the effectiveness of the Development Credit Agreement, other than the conditions set forth in Section 5.01 (e) thereof, have been fulfilled. Section 6.02. The date jL1 12 19 30 , is hereby specified for the purposes of Section 12.04 of the General Condi- tions. ARTICLE VII Representatives of the Borrower; Addresses Section 7.01. The prov1 ions of Article VI of the Devel- opment Credit Agreement are incorporated herein with same force and effect as if they were fully set forth herein, provided that references to the General Conditions shall be deemed to be references to the General Conditions as defined in Section 1.01 hereof. 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. REPUBLIC OF HONDURAS By /51 /j&1A_ h;L'Tw-t- Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /IS/ AcFI/A B, Regional Vice President Latin merica and the Caribbean -6- SCHEDULE Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each February 15 and August 15 beginning August 15, 1985 through August 15, 1999 665,000 On February 15, 2000 715,000 * 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. -7- 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 maturity 1.25% More than three years but not more than six years before maturity 2.50% More than six years but not more than eleven years before maturity 4.55% More than eleven years but not more than sixteen years before maturity 6.60% More than sixteen years but not more than eighteen years before maturity 7.40% More than eighteen 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 /i4 day of , 199. FOR SECRETARY