Loan Agreement. Public Disclosure Authorized. DUM NTLOAN NUMBER -YU Public Disclosure Authorized

Transcription

1 Public Disclosure Authorized DUM NTLOAN NUMBER -YU Public Disclosure Authorized Loan Agreement (Third Agricultural Credit Project) Public Disclosure Authorized between VOJVODJANSKA BANKA - UDRUZENA BANKA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Public Disclosure Authorized Dated re6 ruarl, 1980

2 LOAN AGREEMENT AGREEMENT, dated t6rulaj c 9, 1980, between INTERNA- TIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and VOJVODJANSKA BANKA - UDRUZENA BANKA (hereinafter sometimes called the Borrower or VB), which is a bank established and operating under the laws of the Socialist Federal Republic of Yugoslavia (hereinafter called the Guarantor), is acting both on its own behalf and on behalf of its basic banks (as this term is hereinafter defined). WHEREAS (A) the Guarantor and the Borrower have requested the Bank to assist in the financing of an agricultural credit project described in Schedule 2 to this Agreement by making the Loan as hereinafter provided; (B) the Borrower and the Participating Banks (as this term is hereinafter defined) will participate irt the carrying out of Part A and B of the Project, and for such purpose the Borrower will make available to the Participating Banks, by entering into a Subsidiary Loan Agreement with each of the Participating Banks, portions of the proceeds of the Loan as hereinafter provided; and (C) the Borrower and the Participating Banks have undertaken to use their best endeavors to secure all foreign exchange resources (in addition to the Loan) which may, from time to time, be required for the Project. WHEREAS the Bank is willing, 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 provided that the Guarantor guarantee the Loan upon the terms and conditions set forth in a guarantee agreement of even date herewith between the Guarantor and the Bank. NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 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

3 -2- same force and effect as if they were fully set forth herein, subject, however, to the following modification thereof (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank, as so modified, being hereinafter called the General Conditions), namely, that the following subparagraph (d) is added to Section 3.05 of the General Conditions: "(d) The Bank and the Borrower may from time to time agree upon arrangements for prepayment of the Loan and the application of such prepayment in addition to, or in substitution for, those set forth in paragraph (b) of Section 3.05." Section Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Republic" means any of the six Socialist Republics of the Guarantor: Bosnia and Herzegovina, Croatia, Macedonia, Montenegro, Serbia and Slovenia. (b) "Province" means either of the two Socialist Autonomous Provinces of Kosovo and Vojvodina. (c) "Participating Banks" means the following banks established and operating under the laws of the Guarantor and of its Republics and Provinces: Udrulena Beogradska Banka-Beograd in Serbia, Investiciona Banka Titograd-Udrugena Banka in Montenegro, Udrulena Kosovska Banka-Priltina in Kosovo, Ljubljanska Banka-Zdrulena Banka-Ljubljana in Slovenia, Privredna Banka Sarajevo-Udrugena Banka in Bosnia and Herzegovina, Stopanska Banka-Zdrugena Banka-Skopje in Macedonia and Zagrebaika Banka-Zagreb in Croatia. (d) "Subsidiary Loan Agreement" means the agreement to be entered into by the Borrower and the Participating Banks, pursuant to Section 3.01 of this Agreement, as such agreement may be amended from time to time with the approval of the Bank, for the purpose of relending to each of the Participating Banks a portion of the Loan amount specified in Schedule 1 to this Agreement. (e) "Self-Management Agreement of the Borrower" means the Self-Management Agreement of the Borrower, dated December 30, 1977, as it may be amended from time to time.

4 -3- (f) "Statute of the Borrower" means the statutes of the Borrower, dated December 30, 1977, as it may be amended from time to time. (g) "Sub-loan" means a loan made or proposed to be made by the Borrower or by a Participating Bank out of their own contribution and out of the proceeds of the Loan in accordance with Section 3.02 (a) of this Agreement. (h) "Sub-borrower" means an eligible beneficiary of a Sub-loan who may be either: (i) an Individual Sub-borrower who is an individual farmer sub-borrowing through his own farmers' cooperative or through a social sector organization or an individual farmer directly sub-borrowing; or (ii) a Social Sector Sub-borrower which may be any form of social sector organization. (i) "Investment Project" means a specific investment project to be carried out by a Sub-borrower utilizing the proceeds of a Sub-loan. (J) "Statement of Operations and Policies for Parts A and B of the Project" means the statement of lending and investment operations and policies for Parts A and B of the Project set forth in Schedule 5 to this Agreement, as such statement may be amended from time to time with the prior approval of the Bank. (k) "Project Unit" means the Project Operations Department established by the Borrower within its organization and referred to in Section 3.01 of this Agreement. (1) "Dinars" and the letters "Din" mean the currency of the Guarantor. (m) "Social Accounting Service" means the Slulba Drugtvenog Knjigovodstva referred to in paragraph (5) of Article 281 of the Guarantor's Constitution. (n) "Subsidiary Loan(s)" means the amount(s) to be lent by the Borrower to the Parti_ipating Banks pursuant to Section 2.01 of the Subsidiary Loan Agreement. (o) "basic bank" means any bank which is, or shall become, a party to the Self-Management Agreement of the Borrower, pursuant to the pertinent provisions thereof.

5 -4- (p) "Federal Coordination Committee" means the committee referred to in Section 3.03 of the Guarantee Agreement. ARTICLE II The Loan Section 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 eighty-six million dollars ($86,000,000). Section (a) The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time, for amounts disbursed (or, if the Bank shall so agree, for disbursements required to be made) by the Borrower or the Participating Banks under Sub-loans in respect of the reasonable cost of goods and services required for Parts A and B of the Project and to be financed under the Loan Agreement; provided, however, that no withdrawal shall be made in respect of a Sub-loan to be made to a Sub-borrower by the Borrower or by a Participating Bank unless: (1) the Sub-loan shall have been approved by the Bank; or (2) the Sub-lean shall be a free-limit sub-loan for which the Bank shall have authorized withdrawals from the Loan Account. (b) Subject to the provisions of Schedule 5 to this Agreement concerning the prior approval by the Bank of the Sub-loans specified therein, a free-limit Sub-loan shall be a sub-loan for an Investment Project in an amount to be financed out of the proceeds of the Loan which, together with any other amount or amounts financed or proposed to be financed for the same project out of other sources, shall not exceed in the aggregate the equivalent of $3,000,000, the foregoing amount being subject to change from time to time as mutually agreed upon between the Borrower and the Bank. Section The Closing Date shall be March 31, 1985 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower and the Guarantor of such later date. Section 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.

6 -5- Section 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 outstanding from time to time. Section Interest and other charges shall be payable semi-annually on May 15 and November 15 in each year. Section (a) The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement as such Schedule shall be amended from time to time by the Bank to the extent required to: (i) conform in relevant part substantially to the aggregate of the respective amortization schedules applicable to the Subloans which have been approved or authorized for withdrawals from the Loan Account under Section 2.02 of this Agreement; and (ii) take into account any cancellation pursuant to krticle VI of the General Conditions and any repayments made by Aie Borrower under Section 2.08 of this Agreement; provided that repayments due hereunder shall be made on May 15 and November 15 in each year. Such amendments of said Schedule 3 shall include amendments to the table of premiums on prepayment, if necessary. (b) The amortization schedule applicable to each Sub-loan shall provide for an appropriate period of grace, and, unless the Bank and the Borrower shall otherwise agree (i) shall not extend beyond fifteen years from the date hereof, and (ii) shall provide for approximately equal semi-annual, or more frequent, aggregate payments of principal and interest or approximately equal semiannual, or more frequent, payments of principal. (c) The Borrower shall transmit to the Bank, for its prior approval, any substantial changes proposed to be made by the Borrower in respect of the repayment provisions of any Sub-loan. Unless the Bank and the Borrower shall other- Section wise agree: (a) If a Sub-loan or any part thereof shall be repaid to the Borrower or any Participating Bank in advance of maturity or if a Sub-loan or any part thereof shall be sold, transferred, assigned or otherwise disposed of for value by the Borrower or any Participating Bank, the Borrower shall promptly notify the Bank and shall repay to the Bank on the next following interest payment date, together with the premiums specified in Schedule 3 to this

7 -6- Agreement or in any amendment thereof under Section 2.07 (a) of this Agreement, the amount withdrawn from the Loan Account in respect of such Sub-loan or part thereof and not theretofore repaid to the Bank. (b) Any amount so repaid by the Borrower shall be applied by the Bank, to the maturity or maturities of the Loan in amounts corresponding to the outstanding amounts of the maturity or maturities of the Sub-loan so repaid or disposed of. (c) Paragraph (b) of Section 3.05 of the General Conditions shall not apply to any repayment made under paragraph (a) of this Section. ARTICLE III Execution of the Project Section The Borrower shall undertake and cause the Participating Banks to carry out Parts A and B of the Project with due diligence and efficiency, in conformity with appropriate agricultural, administrative and financial policies and practices and in accordance with the Statement of Operations and Policies for Parts A and B of the Project and, to that end: (i) The Borrower shall maintain, under arrangements satisfactory to the Bank, a Project Unit appropriately staffed, in accoreance with the pertinent provisions of Schedule 5 to the Loan Agreement dated June 20, 1975 and Section 3.01 (a) of the Loan Agreement dated July 29, 1977, both between the parties hereto. It is further specified that the Borrower shall, as from September 30, 1980 (or such other date as the Bank may agree), employ in, or assign to, said unit one additional agroindustry specialist and one additional marketing specialist whose qualifications and experience and terms and conditions of employment shall be satisfactory to the Bank and shall, from time to time after the date hereof, carry out training programs for the Borrower's staff as well as for the staff of the Participating Banks, such programs to be satisfactory to the Bank. (ii) The Borrower shall relend to each of the Participating Banks the amount of the Loan allocated to

8 -7- such Participating Bank pursuant to Schedule 1 to this Agreement for the purpose of carrying out Parts A and B of the Project, under a subsidiary loan agreement satisfactory to the Bank which shall provide inter alia that: (A) the Participating Banks shall pay to the Borrower a commitment charge in dollars at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Subsidiary Loan respectively allocated to each of them from time to time under Schedule 1 to this Agreement and not withdrawn. Upon full withdrawal or cancellation of the Loan, appropriate adjustments shall be made in such commitment charge on the basis of the actual amounts of the Subsidiary Loan outstanding to the credit of each of the Participating Banks from time to time; (B) each of the Participating Banks shall also pay to the Borrower in dollars any additional charges payable by the Borrower to the Bank under the Loan Agreement on account of any special commitment entered into by the Bank, in accordance with Section 5.02 of the General Conditions, at the request of the Borrower in respect of any Sub-loan by such Participating Bank. The Borrower shall promptly request the Bank to enter into such special commitments only upon written application of such Participating Bank and upon such terms and conditions as shall be agreed between the Borrower and such Participating Bank; (C) each of the Participating Banks shall pay interest to the Borrower at the rate specified in Section 2.05 hereof on the principal amount of its Subsidiary Loan withdrawn and outstanding from time to time; and (D) for the purpose of compensating the Borrower for services rendered in the implementation of Parts A and B of the Project, each of the Participating Banks shall pay to the Borrower

9 -8- a commission of one per cent (1%) on the principal amount of its Subsidiary Loan withdrawn; the commission shall be payable in Dinars at the official exchange rate prevailing at the time Subsidiary Loans are withdrawn. Section (a) The Borrower undertakes that, unless the Bank shall otherwise agree, any Sub-loan by the Borrower or any of the Participating Banks will be made on financial terms and conditions consistent with the Statement of Operations and Policies for the Project and on additional terms and conditions whereby the Borrower or the Participating Bank, as the case may be, shall obtain, by written contract with the Sub-borrower (which term shall, for purposes of this Section, also include, but without limitation, a farmers' cooperative or a social sector organization through which Sub-loans are to be made to Individual Sub-borrowers) or by other appropriate legal means, rights adequate to protect the interests of the Bank and the Borrower or the Participating Bank, including, in the case of any such Sub-loan, the right of the Borrower or the Participating Bank to: (i) require the Sub-borrower to carry out its Investment Project with due diligence and efficiency and in accordance with appropriate agricultural, technical, administrative and financial policies qnd practices and to maintain adequate records; (ii) require ae Sub-borrowers, which carry out Investment Projects included in Part B of the Project and whose estimated cost is $3,000,000 equivalent or more, to employ suitably qualified and experienced consultants or firms for review of the design, economics and scale of the proposed investment in relation to the market prospects and of the bidding documents and also to ensure that the proposed technical solution yield an optimum final output in relation to its costs; (iii) require that (1) the goods and services to be financed out of the proceeds of the Loan shall be procured in accordance with Schedule 4 to this Agreement, and (2) such goods and services shall be used exclusively in the carrying out of an Investment Project; (iv) inspect, by itself or jointly with representatives of the Bank if the Bank shall so request, such goods and the sites, works, buildings, property, equipment and construction included in any Investment Project, the operation thereof, and any relevant records and documents; (v) require that; (1) the Sub-borrower shall take out and maintain with responsible insurers such insurance, against such risks and in such amounts, as shall be consistent with appropriate business practice, and (2) without any limitation upon the foregoing, such insurance shall

10 -9- cover hazards incident to the acquisition, transportation and delivery of goods financed out of the proceeds of the Loan to the place of use or installation, any indemnity thereunder to be made payable in a currency freely usable by the Sub-borrower to replace or repair such goods; (vi) obtain all such information as the Bank or the Borrower or any of the Participating Banks shall reasonably request relating to the foregoing and to the administration, operations and financial condition of the Sub-borrower; (vii) suspend or terminate che right of the Sub-borrower to the use of the proceeds of the Loan upon failure by such Sub-borrower to perform its obligations under its contract with the Borrower or the Participating Bank and, in appropriate cases, to premature the Sub-loan; and (viii) require any of the Social Sector Subborrowers: (1) to have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with appropriate accounting principles consistently applied by the Social Accounting Service or another competent and experienced independent accounting organization; (2) to furnish to the Borrower or the Participating Bank as soon as available but in any case not later than six months after the end of each such year, certified copies of its certified financial statements for each such year as so audited and the report of such audit; and (3) to furnish to the Borrower or the Participating Bank such other information concerning the accounts, iinancial statements and records of the Social Sector Sub-borrower as the Borrower or the Participating Bank shall from time to time reasonably request. (b) The Borrower shall exercise its rights, directly or through the Participating Banks, in relation to each Investment Project and the Subsidiary Loan Agreement in such manner as to: (i) protect the interests of the Bank, the Borrower, and the Participating Banks; (ii) comply with its obligations under this Agreement; and (iii) achieve the purposes of Parts A and B of the Project. Section The Borrower shall arrange for the Project Unit: (i) to maintain records adequate to record the progress of Parts A and B of the Project and of each Investment Project (including the cost thereof, the amount of financing provided by the Borrower or any of the Participating Banks, disbursements, repayments, interest and other charges on such financing, including the Sub-loan therefor and general information on agriculture and economic policy affecting the implementation of Parts A and B of the Project); (ii) to furnish to the Bank quarterly reports

11 thereon, in such detail as the Bank shall reasonably request and within 45 days of the close of the quarter concerned; and (iii) to assist and make recommendations to the Borrower and the Participating Banks on supervision and evaluation reports prepared for each Investment Project by the Borrower and the Participating Banks in accordance with the provisions of paragraph 4 of Schedule 5 hereto. Section (a) The Borrower shall furnish to the Bank all such information as the Bank shall reasonably request concerning the expenditure of the proceeds of the Loan, Parts A and B of the Project, the Project Unit and its procedures, operations and records, the Investment Projects, and the Sub-loans. (b) For the purpose of evaluating the benefits of Parts A and B of the Project and the Projects referred to in the Loan Agreements dated June 20, 1975 and July 29, 1977, respectively, between the parties hereto, the Borrower shall continue to use monitoring and evaluation procedures acceptable to the Bank and to submit each year to the Bank an evaluation report on such benefits to be prepared according to a format acceptable to the Bank. (c) Promptly after completion cf Parts A and B of the Project, but in any event not later than six months after the Closing Date or such later date as may be agreed for this purpose between the Borrower and the Bank, the Borrower shall prepare and furnish to the Bank a report, of such scope and in such detail as the Bank shall reasonably request, on the execution and initial operation of Parts A and B of the Project, their cost and the benefits derived and to be derived therefrom, the performance by the Borrower and the Bank of their respective obligations under the Loan Agreement and the accomplishment of the purposes of the Loan. Section The Borrower shall not terminate or consent to the termination of, or to any amendment of, or waiver of, any provision of the Subsidiary Loan Agreement without the prior approval of the Bank. ARTICLE IV Management and Operations of the Borrower Section The Borrower shall at all times conduct its business and operations in accordance with appropriate administrative and financial policies and practices, under the supervision

12 accor- of qualified and experienced management and staff, and in dance with its Self-Management Agreement and its Statute. ARTICLE V Financial Covenants Section The Borrower shall maintain records adequate to reflect in accordance with consistently maintained appropriate accounting practices the progress of the Project and its operations and financial condition. Section (a) The Borrower shall establish and maintain separate accounts for the Project and shall record, in such accounts, all amounts disbursed or received for or in connection with the Project. (b) Without any limitation upon the generality of the foregoing, the Borrower shall retain until one year after the Closing Date, all records (orders, invoices, bills, receipts and other documents) evidencing the rxpenditures on account of which withdrawals were requested from the Loan Account on the basis of certificates of expenditure, and shall enable the Bank's accredited representatives to inspect such records. Section The Borrower shall: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) and its records supporting the certificates of expenditure referred to in Section 5.02 (b) hereof for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by the Social Accounting Service or another competent and experienced independent auditing organization acceptable to the Bank; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of its financial statements for such year as so audited and (B) the report of such audit by the said auditors, of such scope and in such detail as the Bank shall have reasonably requested, together with a separate opinion by said auditors as to whether satisfactory procedures are in operation to ensure that the proceeds of the Loan,withdrawn from the Loan Account on the basis of certificates of expenditure have been used for the purpose for which they were provided; and (iii) furnish to the Bank such other information concerning the accounts and financial statements of the Borrower and the audit thereof, as the Bank shall from time to time reasonably request.

13 Section (a) The Borrower represents that at the date of this Agreement no lien exists on any of its assets or on any assets of any basic bank of the Borrower as security for any debt. (b) The Borrower undertakes that, except as the Bank shall otherwise agree: (i) if any lien shall be created on any assets of the Borrower or on any assets of any basic bank of the Borrower as security for any debt, such lien will equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan, and in the creation of any such lien express provision will be made to that effect, at no cost to the Bank; and (ii) if any statutory lien shall be created on any assets of the Borrower or on any assets of any basic bank of the Borrower as security for any debt, the Borrower shall grant, at no cost to the Bank, an equivalent lien satisfactory to the Bank to secure the payment of the principal of, and interest and other charges on, the Loan; provided, however, that the foregoing provisions of this paragraph shall not apply to (A) any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property, or (B) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after the date on which it is originally incurred. (c) The foregoing provisions supersede any prior agreement between the parties hereto on the same subject. Section The Borrower shall continue to maintain, and cause the Participating Banks to continue to maintain, arrangements satisfactory to the Bank to protect themselves against the risk of losses resulting from changes in the rates of exchange between the currencies (including Dinars) used in their lending and borrowing operations for the purpose of carrying out Parts A and B of the Project and servicing the Loan. ARTICLE VI Remedies of the Bank Section For the purposes of Section 6.02 of the General Conditions, the following additional events are specified: (a) Any part of the principal amount of any loan to the Borrower or any Participating Bank having an original maturity

14 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. (b) A change shall have been made in the Self-Management Agreement or in the Statute of the Borrower or in the Self- Management Agreement or the Statute of any of the Participating Banks which would materially and adversely affect the financial condition or operations of the Borrower or any of the Participating Banks or the carrying out of the Project. (c) Any of the Partic.ipating Banks shall have become unable to pay its debts as they mature or any action or proceeding shall have been taken by any of the Participating Banks or by others whereby any of the property of any such Participating Bank shall or may be distributed among its creditors. (d) The Guarantor or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of any of the Participating Banks or for the suspension of its operations. (e) An extraordinary situation shall have arisen which shall make it improbable that any of the Participating Banks will be able to perform its obligations under the Subsidiary Loan Agreement. (f) Any of the Participating Banks shall have failed to perform any covenant, agreement or obligation of said Participating Bank under the Subsidiary Loan Agreement. Section For the purposes of Section 7.01 of the General Conditions, the following additional events are specified: (a) The event specified in paragraph (f) of Section 6.01 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 the Guarantor. (b) Any event specified in paragraphs (a), (b), (c) or (d) of Section 6.01 of this Agreement shall occur.

15 ARTICLE VII Effective Date; Termination Section The following event is specified as an additional condition to the effectiveness of the Loan Agreement within the meaning of Section (c) of the General Conditions, namely, that the Borrower shall have entered into the Subsidiary Loan Agreement and such agreement shall have come into full force and effect. Section The following is specified as an additional matter, within the meaning of Section (c) of the General Conditions, to be included in the opinion or opinions to be furnished to the Bank, namely, that the Subsidiary Loan Agreement has been duly executed and authorized or ratified by all necessary corporate action and constitutes a valid and binding obligation of the parties thereto in accordance with its terms. Section The date'nye& 30, 'gi%, is hereby specified for the purposes of Section of the General Conditions. ARTICLE VIII Addresses Section The following addresses are specified for the purposes of Section of the General Conditions: For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C United States of America Cable address: Telex: INTBAFRAD (ITT) Washington, D.C (RCA) or (WUI)

16 For the Borrower: Vojvodjanska Banka - Udrugena Banka Bulevar Margala Tita Novi Sad Yugoslavia Telex address: YU VOJBA 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. INTERNATIONAL BANK FOR RECONSTRUCTION AND Is/ ATTILA DEVELOPMENT traraohavo6u By AJI Regional Vice President Europe, Middle East and North Africa VOJVODJANSKA BANKA - UDRUZENA BANKA By fsavo PECo VI C- Authorized Representative

17 SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Borrower: (a) Sub-loans 6,700,000 40% of amounts under Part A disbursed by of the Pro- the Borrower ject (b) Sub-loans 5,300, % of foreign under Part B expenditures of the Pro- and 50% of ject amounts disbursed by the Borrower on account of local expenditures, in both instances subject to a maximum of either 50% of the total amount of each Sub-loan or a total amount of $4,000,000 equivalent (whichever is lower)

18 Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (2) Udrugena Beogradska Banka- Beograd: (a) Sub-loans 9,300,000 60% of amounts under Part A disbursed by, of the Pro- Udrulena Beoject gradska Banka- Beograd (b) Sub-loans 5,200, % of foreign under Part B expenditures of the Pro- and 50% of ject amounts disbursed by Udrulena Beogradska Banka- Beograd on account of local expenditures, in both instances subject to a maximum of either 50% of the total amount of each Sub-loan or a total amount of $4,000,000 equivalent (whichever is lower) (3) Investiciona Banka Titograd-Udrugena Banka: (a) Sub-loans 3,500,000 40% of amounts under Part A disbursed by of the Pro- Investiciona ject Banka Titograd- Udrulena Banka

19 Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (b) Sub-loans 1,700, % of foreign under Part B expenditures of the Pro- and 50% of amount ject disbursed by Investiciona Banka Titograd- UdruEena Banka on account of local expenditures, in both instances subject to a maximum of either 50% of the total amount of each Sub-loan or a total amount of $4,000,000 equivalent (whichever is lower) (4) UdruEena Kosovska Banka Priltina: (a) Sub-loans 13,000,000 40% of amounts under Part A disbursed by of the Pro- UdruEena Kosovject ska Banka Prigtina (b) Sub-loans 2,500, % of foreign under Part B expenditures of the Pro- and 50% of ject amounts disbursed by UdruEena Kosovska Banka Prigtina on account of

20 Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (5) Ljubljanska Banka- Zdrulena Banka- Ljubljana: local expenditures, in both instances subject to a maximum of either 50% of the total amount of each Sub-loan or a total amount of $4,000,000 equivalent (whichever is lower) (a) Sub-loans 2,000,000 40% of amounts under Part A disbursed by of the Pro- Ljubljanska ject Banka-Zdrugena Banka-Ljubljana (b) Sub-loans 1,500, % of foreign under Part B expenditures of the Pro- and 50% of ject amounts disbursed by Ljubljanska Banka-Zdrugena Banka-Ljubljana on acccont of local expenditures, in both instances subject to a maximum of either 50% of the total

21 Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (6) Privredna Banka Sarajevo-Udrulena Banka: amount of each Sub-loan or a total amount of $4,000,000 equivalent (whichever is lower) (a) Sub-loans 10,300,000 40% of amounts under Part A disbursed by of the Pro- Privredna Banka ject Sarajevo- Udrulena Banka (b) Sub-loans 3,500, % of foreign under Part B expenditures of the Pro- and 50% of ject amounts disbursed by Privredna Banka Sarajevo-Udrulena Banka on account of local expenditures, in both instances subject to a maximum of either 50% of the total amount of each Sub-loan or a total amount of $4,000,000 equivalent (whichever is lower)

22 Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (7) Stopanska Banka - ZdruEena Banka - Skopje: (a) Sub-loans 7,600,000 40% of amounts under Part A disbursed by of the Pro- Stopanska Bankaject Zdrulena Banka - Skopje (b) Sub-loans 1,900, % of foreign under Part B expenditures of the Pro- and 50% of ject amounts disbursed by Stopanska Banka- Zdrugena Banka - Skopje on account of local expenditures, in both instances subject to a maximum of either 50% of the total amount of each Sub-loan or a total amount of $4,000,000 equivalent (whichever is lower) (8) Zagrebacka Banka Zagreb: (a) Sub-loans 7,800,000 40% of amounts under Part A disbursed by of the Pro- Zagrebacka Bankaject Zagreb

23 Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (b) Sub-loans 4,200, % of foreign under Part B expenditures of the Pro- and 50% of ject amounts disbursed by Zagrebacka Banka- Zagreb on account of local expenditures, in both instances subject to a maximum of either 50% of the total amount of each Sub-loan or a total amount of $4,000,000 equivalent (whichever is lower) TOTAL 86,000, For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than Yugoslavia and for goods or services supplied from the territory of any country other than Yugoslavia; and (b) the term "local expenditures" means expenditures in the currency of Yugoslavia and for goods or services supplied from the territory of Yugoslavia. 3. The disbursement percentages have been calculated in compliance with the policy of the Bank that no proceeds of the

24 Loan shall be disbursed on account of payments for taxes levied by, or in the territory of, Yugoslavia on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Loan decreases or increases, the Bank may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Bank. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of disbursements made or to be made for Sub-loans approved by the Borrower, or in respect of payments made for expenditures, prior to the date of this Agreement. 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph 1 above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category or Sub-Category will be insufficient to finance the agreed percentage of all expenditures in that Category or Sub-Category, the Bank may, by notice to the Borrower: (i) reallocate to such Category or Sub- Category, to the extent required to meet the estimated shortfall, proceeds of the Loan which are then allocated to another Category or Sub-Category and which in the opinion of the Bank are not needed to meet other expenditures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category or Sub-Category may continue until all expenditures thereunder shall have been made. 6. If the Bank shall have reasonably determined that the procurement of any item in any Category or sub-category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan.

25 SCHEDULE 2 Description of the Project The Project is covered by the Guarantor's Interrepublican Agreement on the Long-Term Development Policy for Agriculture for the period agreed on by the Republics and Provinces. The Project consists of (i) a program of Sub-loans to be made by the Borrower and the Participating Banks to Individual Subborrowers and Social Sector Sub-borrowers to finance investments in the following sectors and (ii) the carrying out of an agroindustry study by the Federal Coordination Committee, all as described below: Part A: Primary Agriculture Production (a) Fruit and Vegetable Production, Livestock Production, and Irrigation and Drainage; Individual Sub-Borrowers (i) Provision of plastic houses for vegetable production. (ii) Provision of the several inputs required for the development of orchards, vineyards, hop fields and irrigation facilities for vegetables. (iii) Construction of small tobacco drying facilities. (iv) Construction of stables, barns, silos, slurry pits and provision of animals and various types of farm machinery and equipment, all as required for the production of milk, beef, pork, chicken and lamb. (v) Carrying out of drainage and irrigation schemes, through land leveling, the construction of access roads, the construction of, and the provision of equipment for, field drainage and sprinkler irrigation systems and the provision of farm machinery; it being understood that such schemes are to be carried out according to criteria and procedures acceptable to the Bank.

26 (b) Support Services, Individual and Social Sector Sub-Borrowers Provision of support services and facilities, such as grain drying and storage services and farm machinery services, construction of milk collection centers and minor irrigation schemes and improvement of communal pasture, such services and facilities to be for the benefit of Individual Sub-borrowers. Part B: Agro-industries DevelDpment - Social Sector Sub-Borrowers Engineering design, site preparation, building construction and provision of utilities (water and power installations), machinery and equipment, all as required for the development of milk, meat and fruits and vegetable processing facilities. Part C: Agroindustry Study - Federal Coordination Committee Carrying out of a study by the Federal Coordination Committee for the purpose of identifying the needs for the development of processing and storage facilities in the 1980s in Yugoslavia, taking into account the current and future domestic and export markets for major agro-industries products, the raw materials base, the existing processing capacities and the need, if any, for the modernization of such processing capacities. The Project is expected to be completed by September 30, 1984.

27 SCHEDULE 3 Amortization Schedule* Date Payment Due Payment of Principal (expressed in dollars)** November 15, ,000 May 15, ,000 November 15, ,000 May 15, ,000 November 15, ,050,000 May 15, ,950,000 November 15, ,850,000 May 15, ,950,000 November 15, ,900,000 May 15, ,800,000 November 15, ,100,000 May 15, ,100,000 November 15, ,100,000 May 15, ,100,000 November 15, ,100,000 May 15, ,100,000 November 15, ,950,000 May 15, ,750,000 November 15, ,200,000 May 15, ,250,000 November 15, ,300,000 May 15, ,250,000 November 15, ,350,000 May 15, ,000 * The Amortization Schedule is subject to amendment pursuant to the provisions of Section 2.07 of the Loan Agreement. ** 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.

28 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 or to Section 2.08 (a) of the Loan Agreement: Time of Prepayment Premium Not more than three years 1.65% before maturity More than three years but not 3.30% more than six years before maturity More than six years but not 6.00% more than eleven years before maturity More than eleven years but not 7.15% more than thirteen years before maturity More than thirteen years 8.25% before maturity

29 SCHEDULE 4 Procurement A. International Competitive Bidding 1. Except as provided in Part C hereof, goods and works shall be procured under contracts awarded in accordance with procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in March 1977 (hereinafter called the Guidelines), on the basis of international competitive bidding as described in Part A of the Guidelines. 2. For goods and works to be procured on the basis of international competitive bidding, in addition to the requirements of paragraph 1.2 of the Guidelines, the Borrower shall prepare and forward to the Bank as soon as possible, and in any event not later than 60 days prior to the date of availability to the public of the first tender or prequalification documents relating thereto, as the case may be, a general procurement notice, in such form and detail and containing such information as the Bank shall reasonably request; the Bank will arrange for the publication of such notice in order to provide timely notification to prospective bidders of the opportunity to bid for the goods and works in question. The Borrower shall provide the necessary information to update such notice annually so long as any goods or works remain to be procured on the basis of international competitive bidding. 3. (a) All bidders for equipment shall be required to undertake to furnish erection supervisors, to guarantee performance of the equipment and to train local staff in operation and maintenance of the equipment. (b) The processing plants included in Part B of the Project shall be procured on a "turnkey contract" basis or according to other procedures acceptable to the Bank. 4. For the purpose of evaluation and comparison of bids for the supply of goods to be procured on the basis of international competitive bidding: (i) bidders shall be required to state in their bid the c i.f. (port of entry) price for the imported goods, or the ex-factory price or off-the-shelf price of other goods, offered in such bid; and (ii) customs duties and other

30 import taxes levied in connection with the importation, or the sales and similar taxes levied in connection with the sale or delivery, pursuant to the bid, of the goods shall not be taken into account in the evaluation of the bids. B. Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A of this Schedule, goods manufactured in Yugoslavia may be granted a margin of preference in accordance with, and subject to, the following provisions: 1. All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the information required to establish the eligibility of a bid for such preference and the following methods and stages that will be followed in the evaluation and comparison of bids. 2. After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in Yugoslavia if the bidder shall have established to the satisfaction of the Borrower and the Bank that the manufacturing cost of such goods includes a value added in Yugoslavia equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other domestic bids. (3) Group C: bids offering any other goods. 3. In order to determine the lowest evaluated bid of each group, all evaluated bids in each group shall first be compared among themselves, without taking into account customs duties and other import taxes levied in connection with the importation, and sales and similar taxes levied in connection with the sale or delivery, pursuant to the bids, of the goods. Such lowest evaluated bids shall then be compared with each other, and if, as a result of this comparison, a bid from group A or group B is the lowest, it shall be selected for the award. 4. If, as a result of the comparison under paragraph 3 above, the lowest bid is a bid from group C, all group C bids shall be further compared with the lowest evaluated bid from

31 group A after adding to the evaluated bid price of the imported goods offered in each group C bid, for the purpose of this further comparison only, an amount equal to: (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in such group C bid; or (ii) 15% of the c.i.f. bid price of such goods if said customs duties and taxes exceed 15% of such price. If the group A bid in such further comparison is the lowest, it shall be selected for the award; if not, the bid from group C which as a result of the comparison under paragraph 3 is the lowest evaluated bid shall be selected. C. Other Procurement Procedures 1. All goods and works included in Part A of the Project and the goods included in Part B of the Project for which the cost of each individual contract shall not exceed $2,000,000 equivalent shall be procured on the basis of local procurement procedures acceptable to the Bank. 2. All works included in Part B of the Project, to the extent that they are not included in a turnkey contract referred to in Part A.3 (b) above, shall be procured on the basis of local procurement procedures acceptable to the Bank. D. Review of Procurement Decisions by the Bank 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for Part B of the Project estimated to cost the equivalent of $5,000,000 or more: (a) Before bids are invited, the Borrower shall furnish to the Bank, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Bank shall reasonably request. Any further modification to the bidding documents shall require the Bank's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform

32 the Bank of the name of the bidder to which it intends to award the contract and shall furnish to the Bank, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Bank's concurrence, materially differ from those on which bids were asked or prequalification invited. (d) Two conformed copies of the contract shall be furnished to the Bank promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 2. With respect to each contract not governed by the preceding paragraph, the Borrower shall furnish to the Bank, promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract, where the estimated cost of the contract is equivalent to $2,000,000 or more, and only upon the Bank's request, where the estimated cost of the contract is under such limit, two conformed copies of such contract, together with the analysis of the respective bids, recommendations for award and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. 3. Before agreeing to any material modification or waiver of the terms and conditions of a contract, or granting an extension of the stipulated time for performance of such contract, or issuing any change order under such contract (except in cases of extreme urgency) which would increase the cost of the contract by more than 20% of the original price, the Borrower shall inform the Bank of the proposed modification, waiver, extension or change order and the reasons therefor. The Bank, if it determines that the proposal would be inconsistent with the provisions of this Agreement, shall promptly inform the Borrower and state the reasons for its determination.