International Bank Loan (Approval) Act

The Laws of Zambia
Copyright Ministry of Legal Affairs, Government of the Republic of Zambia
REPUBLIC OF ZAMBIA
THE INTERNATIONAL BANK LOAN (APPROVAL) ACT
CHAPTER 372 OF THE LAWS OF ZAMBIA
CHAPTER 372 THE INTERNATIONAL BANK LOAN (APPROVAL) ACT
THE INTERNATIONAL BANK LOAN (APPROVAL) ACT
ARRANGEMENT OF SECTIONS
Section
1. Short title
2. Interpretation
3. Loan Agreements approved and provisions thereof to be binding
SCHEDULE -Loan Agreement and Subsidiary Agreement
CHAPTER 372
INTERNATIONAL BANK LOAN (APPROVAL) 21 of 1953
Statutory Instrument
159 of 1965
An Act to provide approval of a loan from the International Bank for Reconstruction
and Development.
[8th May, 1953]

Statutory Instrument
159 of 1965
An Act to provide approval of a loan from the International Bank for Reconstruction
and Development.
[8th May, 1953]

The Laws of Zambia
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W HEREAS by section three of the International Bank Loan (Rhodesia Railways) Act, the
Governor of the former Protectorate of Northern Rhodesia has been authorised to
raise by means of a loan from the International Bank for Reconstruction and
Development a sum not exceeding five million pounds sterling or the equivalent
thereof in other currencies or partly in sterling and partly in other currencies;
AND WHEREAS there has been raised a loan of fourteen million dollars in currency of the
United States of America from the said Bank and a Loan Agreement and Subsidiary
Agreement in respect thereof has been executed between the said Bank and the
Territory of the former Protectorate of Northern Rhodesia;
AND WHEREAS it is desired to obtain statutory approval of the said agreements;
Preamble
Cap. 371
AND WHEREAS it has been enacted by the Governor of the former Protectorate of
Northern Rhodesia with the advice and consent of the Legislative Council thereof as
follows:
Enactment
1. This Act may be cited as the International Bank Loan (Approval) Act. Short title
2.

onsent of the Legislative Council thereof as
follows:
Enactment
1. This Act may be cited as the International Bank Loan (Approval) Act. Short title
2.

In this Act, unless the context otherwise requires- Interpretation
"Loan Agreements" means the Loan Agreement and Subsidiary Agreement set out
in the Schedule. 3. The Loan Agreements are hereby approved and notwithstanding the provisions
of any written law now in force the terms and conditions of the Loan Agreements shall be
of full force and effect and binding upon the Government from the date of the execution
thereof. Loan Agreements
approved and
provisions thereof to
be binding
SCHEDULE
(Section 2)
Loan Number 74 N.R. LOAN AGREEMENT (RHODESIA RAILWAYS PROJECT) BETWEEN TERRITORY OF
NORTHERN RHODESIA AND INTERNATIONAL BANK FOR RECONSTRUCTION AND
DEVELOPMENT. DATED MARCH 11, 1953
LOAN AGREEMENT
Agreement, dated March 11, 1953, between TERRITORY OF NORTHERN RHODESIA (hereinafter
called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
(hereinafter called the Bank)
ARTICLE I

NORTHERN RHODESIA (hereinafter
called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
(hereinafter called the Bank)
ARTICLE I

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Loan Regulations; Special Definitions
SECTION 1.01. The parties to this Agreement accept all the provisions of Loan Regulations No. 4 of the Bank dated October 15, 1952, subject, however, to the modifications thereof set forth in
Schedule 3 to this Agreement (such Loan Regulations No. 4 as so modified being hereinafter called
the Loan Regulations), with the same force and effect as if they were fully set forth herein. SECTION 1.02. Except where the context otherwise requires, the following terms have the
following meanings wherever used in this Agreement or any Schedule hereto:
(a) The term "Subsidiary Agreement" means the agreement of even date herewith between
the Borrower, the Colony of Southern Rhodesia and the Bank relating to the carrying out
of the Project and certain other matters connected with the Loan. (b) The term "Rhodesia Railways" means the Rhodesia Railways, a body corporate
established and incorporated under the Rhodesia Railways Act, 1949, as amended, of
the Colony of Southern Rhodesia.

hodesia Railways, a body corporate
established and incorporated under the Rhodesia Railways Act, 1949, as amended, of
the Colony of Southern Rhodesia.

(c) The term "Southern Rhodesia currency" means currency issued by the Southern
Rhodesia Currency Board pursuant to the Coinage and Currency Act, 1938, of the
Colony of Southern Rhodesia, as amended, or such other coin and currency as at the
time referred to shall be legal tender for the payment of public and private debts in the
territory of the Borrower. ARTICLE II
The Loan
SECTION 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in this
Agreement set forth or referred to, the sum of Fourteen Million dollars ($14,000,000), or the
equivalent thereof in currencies other than dollars. SECTION 2.02. The Bank shall open a Loan Account on its books in the name of the Borrower
and shall credit to such Account the amount of the Loan. The amount of the Loan may be withdrawn
from the Loan Account as provided in, and subject to the rights of cancellation and suspension set
forth in, the Loan Regulations. SECTION 2.03. The Borrower shall pay to the Bank a commitment charge at the rate of
three-fourths of one per cent. (3/4%) per annum on the principal amount of the Loan not so withdrawn
from time to time. SECTION 2.04.

e at the rate of
three-fourths of one per cent. (3/4%) per annum on the principal amount of the Loan not so withdrawn
from time to time. SECTION 2.04.

The Borrower shall pay interest at the rate of four and three-fourths per cent. (4
3/4%) per annum on the principal amount of the Loan so withdrawn and outstanding from time to
time. SECTION 2.05. Except as the Bank and the Borrower shall otherwise agree, the charge payable
for special commitments entered into by the Bank at the request of the Borrower pursuant to Section
4.02 of the Loan Regulations shall be at the rate of one-half of one per cent. (1/2%) per annum on the
principal amount of such special commitments outstanding. SECTION 2.06. Interest and other charges shall be payable semi-annually on February 1 and
August 1 in each year. SECTION 2.07. The Borrower shall repay the principal of the Loan in accordance with the
amortisation schedule set forth in Schedule 1 to this Agreement. ARTICLE III
Use of Proceeds of the Loan
SECTION 3.01. The Borrower shall apply the proceeds of the Loan exclusively to the cost of
goods which will be required to carry out the Project described in Schedule 2 to this Agreement.

y the proceeds of the Loan exclusively to the cost of
goods which will be required to carry out the Project described in Schedule 2 to this Agreement.

The
specific goods to be purchased out of the proceeds of the Loan shall be determined by agreement
between the Borrower and the Bank, and the list of such goods may be modified from time to time by
agreement between them. SECTION 3.02. The Borrower shall cause all goods purchased in whole or in part with the
proceeds of the Loan to be used exclusively in the carrying out of the Project.

Borrower shall cause all goods purchased in whole or in part with the
proceeds of the Loan to be used exclusively in the carrying out of the Project.

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ARTICLE IV
Bonds
SECTION 4.01. The Borrower shall execute and deliver Bonds representing the principal amount
of the Loan as provided in the Loan Regulations. SECTION 4.02. The Governor of the Borrower in office at the time in question and such person
or persons as he shall appoint in writing are designated as authorised representatives of the
Borrower for the purposes of Section 6.12(a) of the Loan Regulations. ARTICLE V
Particular Covenants
SECTION 5.01. The Borrower shall make the proceeds of the Loan available to the Rhodesia
Railways on terms and conditions satisfactory to the Bank. SECTION 5.02. It is the mutual intention of the Borrower and the Bank that no debt other than
debt payable in Southern Rhodesia currency shall enjoy any priority over the Loan by way of a lien on
governmental assets.

ank that no debt other than
debt payable in Southern Rhodesia currency shall enjoy any priority over the Loan by way of a lien on
governmental assets.

To that end, the Borrower undertakes that, except as the Bank shall otherwise
agree, if any lien shall be created on any of the assets of the Borrower as security for any such debt,
such lien will ipso facto equally and rateably secure the payment of the principal of, and interest and
other charges on, the Loan and the Bonds, and that in the creation of any such lien express provision
will be made to that effect, provided, however, that the foregoing provisions of this Section shall not
apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for the
payment of the purchase price of such property; (ii) any lien on commercial goods to secure a debt
maturing not more than one year after the date on which it is originally incurred and to be paid out of
the proceeds of sale of such commercial goods; or (iii) any lien arising in the ordinary course of
banking transactions to secure a debt maturing not more than one year after the date on which it is
originally incurred. The word Borrower as used in this Section means the Borrower or any of its political subdivisions
or any agency of any of the foregoing. SECTION 5.03.

The word Borrower as used in this Section means the Borrower or any of its political subdivisions
or any agency of any of the foregoing. SECTION 5.03.

The principal of, and interest and other charges on, the Loan and the Bonds
shall be paid without deduction for and free from any taxes or fees imposed under the laws of the
Borrower or laws in effect in its territories; provided, however, that the provisions of this Section shall
not apply to taxation of, or fees upon, payments under any Bond to a holder thereof other than the
Bank when such Bond is beneficially owned by an individual or corporate resident of the Borrower. SECTION 5.04. The Loan Agreement and the Bonds 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 and the Borrower shall pay all such taxes
and fees, if any, imposed under the laws of the country or countries in whose currency the Loan and
the Bonds are payable or laws in effect in the territories of such country or countries. SECTION 5.05. The principal of, and interest and other charges on, the Loan and the Bonds
shall be paid free from all restrictions imposed under the laws of the Borrower or laws in effect in its
territories. SECTION 5.06.

Loan and the Bonds
shall be paid free from all restrictions imposed under the laws of the Borrower or laws in effect in its
territories. SECTION 5.06.

The Borrower shall satisfy the Bank that adequate arrangements have been
made to insure the goods financed with the proceeds of the Loan against risks incident to their
purchase and delivery for use in the Project. ARTICLE VI

de to insure the goods financed with the proceeds of the Loan against risks incident to their
purchase and delivery for use in the Project. ARTICLE VI

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Remedies of the Bank
SECTION 6.01. If any event specified in paragraph (a) or paragraph (b) of Section 5.02 of the
Loan Regulations shall occur and shall continue for a period of thirty days or if any event specified in
paragraph (c) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of
sixty days after notice thereof shall have been given by the Bank to the Borrower, then at any
subsequent time during the continuance thereof, the Bank, at its option, may declare the principal of
the Loan and of all the Bonds then outstanding to be due and payable immediately, and upon any
such declaration such principal shall become due and payable immediately, anything in this Loan
Agreement or in the Bonds to the contrary notwithstanding. ARTICLE VII
Effective Date; Termination
SECTION 7.01.

le immediately, anything in this Loan
Agreement or in the Bonds to the contrary notwithstanding. ARTICLE VII
Effective Date; Termination
SECTION 7.01.

The following events are specified as additional conditions to the effectiveness
of this Agreement within the meaning of Section 9.01 (c) of the Loan Regulations:
(a) Arrangements satisfactory to the Bank shall have been made for the exchange of
information on work in progress in Southern Rhodesia and the Portuguese Province of
Mozambique for the construction of the connecting railway lines described in paragraph
(i) of Schedule 2 to this Agreement, and for mutual assistance where practicable and
desirable between the bodies in Southern Rhodesia and the Province of Mozambique
charged with the carrying out of such construction for the completion of such railway
lines. (b) The execution and delivery of the Subsidiary Agreement on behalf of the Borrower and
on behalf of the Colony of Southern Rhodesia shall have been duly authorised or ratified
by all necessary governmental action. SECTION 7.02.

rower and
on behalf of the Colony of Southern Rhodesia shall have been duly authorised or ratified
by all necessary governmental action. SECTION 7.02.

The following is specified as an additional matter within the meaning of Section
9.02 (d) of the Loan Regulations, to be included in the opinion or opinions to be furnished to the
Bank: That the Subsidiary Agreement has been duly authorised or ratified by, and executed and
delivered on behalf of the Borrower and the Colony of Southern Rhodesia and constitutes a valid and
binding obligation of the Borrower and of the Colony of Southern Rhodesia in accordance with its
terms. SECTION 7.03. May 31, 1953, is hereby specified for the purposes of Section 9.04 of the Loan
Regulations. ARTICLE VIII

a in accordance with its
terms. SECTION 7.03. May 31, 1953, is hereby specified for the purposes of Section 9.04 of the Loan
Regulations. ARTICLE VIII

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Miscellaneous
SECTION 8.01. The Closing Date shall be December 31, 1954. SECTION 8.02. May 1, 1953, or the Effective Date, whichever shall be the earlier, is hereby
specified for the purpose of Section 2.02 of the Loan Regulations. SECTION 8.03. The following addresses are specified for the purposes of Section 8.01 of the
Loan Regulations:
For the Borrower:
The Financial Secretary to the Government of Northern Rhodesia,
The Secretariat,
Lusaka, Northern Rhodesia. For the Bank:
International Bank for Reconstruction and Development,
1818 H Street, N.W.,
Washington 25, D.C.,
United States of America. SECTION 8.04. The Governor of the Borrower in office at the time in question is designated for
the purposes of Section 8.03 (a) of the Loan Regulations, set forth in Schedule 3 to this Agreement. IN WITNESS WHEREOF the parties hereto, acting through their representatives thereunto duly
authorised, have caused this Loan Agreement to be signed in than respective names and delivered in
the District of Columbia, United States of America, as of the day and year first above written.

to be signed in than respective names and delivered in
the District of Columbia, United States of America, as of the day and year first above written.

TERRITORY OF NORTHERN
RHODESIA
by J. B. Ross
Authorised Representative
INTERNATIONAL BANK FOR
RECONSTRUCTION
AND DEVELOPMENT
by R. L. GARNER
Vice President
SCHEDULE 1

THERN
RHODESIA
by J. B. Ross
Authorised Representative
INTERNATIONAL BANK FOR
RECONSTRUCTION
AND DEVELOPMENT
by R. L. GARNER
Vice President
SCHEDULE 1

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Amortisation Schedule
Principal amount
Payment of outstanding after
(Principal each payment
(expressed (expressed
Date Payment Due in dollars)* in dollars)*
August 1, 1955 $000,000 $14,000,000
February 1, 1956 284,000 13,716,000
August 1, 1956 291,000 13,425,000
February 1, 1957 298,000 13,127,000
August 1, 1957 305,000 12,822,000
February 1, 1958 312,000 12,510,000
August 1, 1958 320,000 12,190,000
February 1, 1959 327,000 11,863,000
August 1, 1959 335,000 11,528,000
February 1, 1960 343,000 11,185,000
August 1, 1960 351,000 10,834,000
February 1, 1961 359,000 10,475,000
August 1, 1961 368,000 10,107,000
February 1, 1962 377,000 9,730,000
August 1, 1962 386,000 9,344,000
February 1, 1963 395,000 8,949,000
August 1, 1963 404,000 8,545,000
February 1, 1964 414,000 8,131,000
August 1, 1964 424,000 7,707,000
February 1, 1965 434,000 7,273,000
August 1, 1965 444,000 6,829,000
February 1, 1966 455,000 6,374,000
August 1, 1966 465,000 5,909,000
February 1, 1967 476,000 5,433,000
August 1, 1967 488,000 4,945,000
February 1, 1968 499,000 4,446,000
August 1, 1968 511,000 3,935,000
February 1, 1969 523,000 3,412,000
August 1, 1969 536,000 2,876,000
February 1, 1970 548,000 2,328,000
August 1, 1970 562,000 1,766,000
February 1, 1971 575,000 1,191,000
August 1, 1971 589,000 602,000
February 1, 1972 602,000 -
*To the extent that any part of the Loan is repayable in a currency other than dollars (see Loan Regulations, Section
3.02), the figures in these columns represent dollar equivalents determined as for purposes of withdrawal.

than dollars (see Loan Regulations, Section
3.02), the figures in these columns represent dollar equivalents determined as for purposes of withdrawal.

Premiums on Prepayment and Redemption
The following percentages are specified as the premiums payable on repayment in advance of maturity of any part of
the principal amount of the Loan pursuant to Section 2.05 (b) of the Loan Regulations or on the redemption of any Bond
prior to its maturity pursuant to Section 6.16 of the Loan Regulations:
Time of Prepayment or Redemption Premium
Not more than 5 years before maturity . . . . . . . . . . 1/2%
More than 5 years but not more than 10 years before maturity . . . . . . 1%
More than 10 years but not more than 15 years before maturity . . . . . . 13/4%
More than 15 years before maturity . . . . . . . . 21/2%
SCHEDULE 2

1%
More than 10 years but not more than 15 years before maturity . . . . . . 13/4%
More than 15 years before maturity . . . . . . . . 21/2%
SCHEDULE 2

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Description of Project
The Project is the Development Program of the Rhodesia Railways as budgeted for the triennium
ending the 31st March 1955 and estimated to cost approximately £28,000,000. The program is
designated to increase the capacity of the railway and road transport facilities of the Rhodesia
Railways by (a) the improvement and modernisation of, and additions to, the existing facilities, and
(b) the construction of a new railway line for the purpose of obtaining another outlet to the sea, all in
accordance with sound railway standards and practices, both as to extent and as to manner of
performance.

obtaining another outlet to the sea, all in
accordance with sound railway standards and practices, both as to extent and as to manner of
performance.

The Project consists of:
(i) The construction of a new railway line in Southern Rhodesia, known as the South East
Connection, from Bannockburn to the Mozambique border to connect with a line to be
built in the Portuguese Province of Mozambique leading to the port of Lourenco
Marques;
(ii) The strengthening and improvement of existing permanent way and bridges by the
replacement of rails and sleepers by heavier materials, the replacement of bridges by
stronger bridges, and the construction of deviations and regradings;
(iii) The improvement and expansion of rolling stock by the acquisition of steam and
diesel-electric locomotives, wagons, carriages and other rolling stock items;
(iv) The modernisation and improvement of repair facilities by the construction and
expansion of workshops and running sheds and the acquisition and installation of
equipment therefor;
(v) The rehabilitation, improvement, construction and acquisition of communications and
train-control equipment, signalling equipment, construction and coal-handling equipment,
goods depots, stations, warehouses, administrative buildings, water supplies, railway
yards, sidings and crossing loops, and other railway facilities;
(vi) The improvement and expansion of road motor services by the acquisition of lorries,
trailers, buses, and other motor vehicle items;
(vii) The improvement and expansion of housing for employees of the Rhodesia Railways by
the construction of houses, apartments and related buildings; and auxiliary construction
of roads, water and sewer networks, and other amenities.

s by
the construction of houses, apartments and related buildings; and auxiliary construction
of roads, water and sewer networks, and other amenities.

SCHEDULE 3
Modification of Loan Regulations No. 4
For the purposes of this Agreement, Loan Regulations No. 4 of the Bank, dated October 15, 1952,
shall be deemed to be modified as follows:
(a) Section 4.01 shall read as follows: "The Borrower shall be entitled, subject to the
provisions of these Regulations, to withdraw from the Loan Account (i) such amounts as
shall be required by the Borrower to reimburse it for the reasonable cost of goods to be
financed under the Loan Agreement, and (ii), if the Bank shall so agree, such amounts as
shall be required by the Borrower to meet the reasonable cost of such goods. Except as
shall be otherwise agreed between the Bank and the Borrower, no withdrawals shall be
made on account of (a) expenditures prior to the Effective Date or (b) expenditures in
Southern Rhodesia currency or (c) goods acquired from sources within the Borrower's
territory or within the territory of Southern Rhodesia."

itures in
Southern Rhodesia currency or (c) goods acquired from sources within the Borrower's
territory or within the territory of Southern Rhodesia."

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(b) Section 5.02 (c) shall read as follows: "A default shall have occurred in the performances
of any other covenant or agreement on the part of the Borrower or the Guarantor or the
Colony of Southern Rhodesia under the Loan Agreement, the Guarantee Agreement, the
Bonds or the Subsidiary Agreement."
(c) Section 5.02 (d) shall read as follows: -An extraordinary situation shall have arisen which
shall make it improbable that the Borrower or the Guarantor or the Colony of Southern
Rhodesia will be able to perform its obligations under the Loan Agreement, the
Guarantee Agreement or the Subsidiary Agreement."
(d) Section 5.02 (e) and Section 5.02 (f) shall be deleted, and consequently Section 5.02 (g),
(h), (i) and (j) shall become Section 5.02 (e), (f), (g) and (h). (e) Section 7.02 shall read as follows: "The obligations of the Guarantor under the
Guarantee Agreement shall not be discharged except by performance and then only to
the extent of such performance.

igations of the Guarantor under the
Guarantee Agreement shall not be discharged except by performance and then only to
the extent of such performance.

Such obligations shall not be subject to any prior notice
to, demand upon or action against the Borrower or the Colony of Southern Rhodesia or
to any prior notice to or demand upon the Guarantor with regard to any default by the
Borrower under the Loan Agreement or by the Borrower or the Colony of Southern
Rhodesia under the Subsidiary Agreement, and shall not be impaired by any of the
following: any extension of time, forbearance or concession given to the Borrower or to
the Colony of Southern Rhodesia; any assertion of, or failure to assert, any right or
remedy against the Borrower or the Colony of Southern Rhodesia or in respect of any
security for the Loan; any modification or amplification of the provisions of the Loan
Agreement or of the Subsidiary Agreement contemplated by the terms thereof; any
failure of the Borrower or the Colony of Southern Rhodesia to comply with any
requirement of any law, regulation or order of the Guarantor or of any political subdivision
or agency of the Guarantor."
(f) Section 7.03 shall read as follows: "No delay in exercising or omission to exercise, any
right or power accruing to any party under the Loan Agreement, the Guarantee
Agreement, or the Subsidiary Agreement upon any default shall impair any such right or
power 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 or any acquiescence in any
default, affect or impair any right or power of such party in respect of any other or
subsequent default."
(g) The term "Guarantor" as used in the last sentence of Section 7.04 (k) shall be deemed to
mean the Guarantor or the Borrower.

subsequent default."
(g) The term "Guarantor" as used in the last sentence of Section 7.04 (k) shall be deemed to
mean the Guarantor or the Borrower.

(h) A new Section 8.03 (a) shall be inserted: "Action on behalf of Borrower. Any action
required or permitted to be taken, and any documents required or permitted to be
executed, under the Loan Agreement on behalf of the Borrower may be taken or
executed by the representative of the Borrower designated in the Loan Agreement for the
purpose of this Section or any person thereunto authorised in writing by him. Any
modification or amplification of the provisions of the Loan Agreement may be agreed to
on behalf of the Borrower by written instrument executed on behalf of the Borrower by
the representative so designated or any person thereunto authorised in writing by him;
provided that, in the opinion of such representative, such modification or amplification is
reasonable in the circumstances and will not substantially increase the obligations of the
Borrower under the Loan Agreement.

tion or amplification is
reasonable in the circumstances and will not substantially increase the obligations of the
Borrower under the Loan Agreement.

The Bank may accept the execution by such
representative or other person of any such instrument as conclusive evidence that in the
opinion of such representative any modification or amplification of the provisions of the
Loan Agreement effected by such instrument is reasonable in the circumstances and will
not substantially increase the obligations of the Borrower thereunder."
(i) Section 10.01 (12) shall read as follows: The term "Project" means the project or projects
or program or programs for which the Loan is granted, as described in the Loan
Agreement and as the description thereof shall be amended from time to time by
agreement between the Bank, the Borrower, the Colony of Southern Rhodesia and the
Guarantor. Loan Number
74 N.R. SUBSIDIARY AGREEMENT (RHODESIA RAILWAYS PROJECT) BETWEEN COLONY OF
SOUTHERN RHODESIA AND TERRITORY OF NORTHERN RHODESIA AND INTERNATIONAL
BANK FOR RECONSTRUCTION AND DEVELOPMENT. DATED MARCH 11, 1953

BETWEEN COLONY OF
SOUTHERN RHODESIA AND TERRITORY OF NORTHERN RHODESIA AND INTERNATIONAL
BANK FOR RECONSTRUCTION AND DEVELOPMENT. DATED MARCH 11, 1953

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SUBSIDIARY AGREEMENT
AGREEMENT, dated March 11, 1953, between the COLONY OF SOUTHERN RHODESIA and the
TERRITORY OF NORTHERN RHODESIA (hereinafter collectively called the Rhodesias) parties of
the first part, and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
(hereinafter called the Bank) party of the second part.

hodesias) parties of
the first part, and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
(hereinafter called the Bank) party of the second part.

WHEREAS by an agreement of even date herewith between the Territory of Northern Rhodesia
and the Bank (hereinafter called the Loan Agreement), the Bank has agreed to make to the Territory
of Northern Rhodesia a loan in the aggregate principal amount of fourteen million dollars
($14,000,000) or the equivalent thereof in other currencies to finance a program for the development
of the Rhodesia Railways, all as set forth in the Loan Agreement; and
WHEREAS such program is to be carried out in the territories of Southern Rhodesia, Northern
Rhodesia and Bechuanaland and the execution and the financing of such program are dependent on
the joint efforts of the Rhodesias, the part to be played by each to be allocated between them as they
may from time to time determine; and
WHEREAS the Bank has therefore agreed to make said loan only on the condition that the
Rhodesias agree to enter into a subsidiary agreement with the Bank relating to the carrying out of
such program and certain other matters connected with said loan; and
WHEREAS the Rhodesias, in consideration of the Bank's entering into said agreement with the
Territory of Northern Rhodesia, have agreed to enter into such a subsidiary agreement;
NOW THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
Loan Regulations; Definitions
SECTION 1.01.

ter into such a subsidiary agreement;
NOW THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
Loan Regulations; Definitions
SECTION 1.01.

Except where the context otherwise requires, any terms used in this Subsidiary
Agreement shall have the meanings set forth or referred to in the Loan Agreement. SECTION 1.02. The parties to this Subsidiary Agreement accept the provisions of Sections 7.01
and 7.04 of the Loan Regulations with the same force and effect as if they were fully set forth herein
provided that (i) the term "Loan Agreement" as used in said Sections shall be deemed to mean this
Subsidiary Agreement, (ii) the term "Borrower" as used in said Sections shall be deemed to mean the
Rhodesias and (iii) the term "Guarantor" as used in the last sentence of paragraph (k) of Section 7.04
shall be deemed to mean the Guarantor or either of the Rhodesias notwithstanding the modification
of said paragraph set forth in Schedule 3 of the Loan Agreement. ARTICLE II

the Guarantor or either of the Rhodesias notwithstanding the modification
of said paragraph set forth in Schedule 3 of the Loan Agreement. ARTICLE II

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Particular Covenants
SECTION 2.01. The Rhodesias shall provide for the financing of the Project and shall cause the
Project to be carried out with due diligence and efficiency and in conformity with sound engineering
and financial practices. SECTION 2.02. (a) The Rhodesias shall cause to be furnished to the Bank, in such detail as the
Bank shall from time to time require and promptly upon their preparation, the plans and specifications
for the Project, including plans for its financing, and any material modifications subsequently made
therein. (b) The Rhodesias shall cause to be maintained records showing the use made of the goods
and the progress of the Project (including the cost thereof) and the financial conditions
and operations of the Rhodesia Railways; shall enable the Bank's representatives to
examine the Project, the goods and any relevant records and documents; and shall
furnish to the Bank all such information as the Bank shall reasonably request concerning
the goods, the Project, and the financial condition and operations of the Rhodesia
Railways.

formation as the Bank shall reasonably request concerning
the goods, the Project, and the financial condition and operations of the Rhodesia
Railways.

(c) The Rhodesias and the Bank shall co-operate fully to assure that the purposes of the
Loan will be accomplished. To that end, each of the parties hereto shall furnish to any
other such party all such information as such other party shall reasonably request with
regard to the general status of the Loan. On the part of the Rhodesias, such information
shall include information with respect to financial and economic conditions in their
territories and their respective external balance of payments position, including their
respective balance of payments position with the United Kingdom. (d) The Rhodesias and the Bank shall from time to time exchange views through their
representatives with regard to matters relating to the purposes of the Loan and the
maintenance of the service thereof. The Rhodesias shall promptly inform the Bank of any
condition which shall arise that shall interfere with, or threaten to interfere with, the
accomplishment of the purposes of the Loan or the maintenance of the service thereof.

se that shall interfere with, or threaten to interfere with, the
accomplishment of the purposes of the Loan or the maintenance of the service thereof.

(e) The Rhodesias shall afford all reasonable opportunity for accredited representatives of
the Bank to visit any part of their respective territories for purposes related to the Loan. ARTICLE III

opportunity for accredited representatives of
the Bank to visit any part of their respective territories for purposes related to the Loan. ARTICLE III

The Laws of Zambia
Copyright Ministry of Legal Affairs, Government of the Republic of Zambia
Miscellaneous
SECTION 3.01. Any notice or request required or permitted to be given or made under this
Subsidiary Agreement and any agreement between the parties contemplated by this Subsidiary
Agreement shall be in writing. 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 in this
Subsidiary Agreement, or at such other address as such party shall have designated by notice to the
party giving such notice or making such request. SECTION 3.02. Each of the Rhodesias shall furnish to the Bank sufficient evidence of the
authority of the person or persons who will on its behalf take any action or execute any documents
required or permitted to be taken or executed by it under this Subsidiary Agreement, and the
authenticated specimen signature of each such person. SECTION 3.03.

r permitted to be taken or executed by it under this Subsidiary Agreement, and the
authenticated specimen signature of each such person. SECTION 3.03.

Any modification or amplification of the provisions of this Subsidiary Agreement
may be agreed to (a) on behalf of Southern Rhodesia by written instrument executed on behalf of
Southern Rhodesia by the Prime Minister of Southern Rhodesia in office at the time in question or
any person thereunto authorised in writing by him, (b) on behalf of Northern Rhodesia by written
instrument executed on behalf of Northern Rhodesia by the Governor of Northern Rhodesia in office
at the time in question or by any person thereunto authorised in writing by him; provided that in the
opinion of such Prime Minister or such Governor, as the case may be, such modification or
amplification is reasonable in the circumstances and will not substantially increase the obligations of
Southern Rhodesia or Northern Rhodesia, as the case may be, under this Subsidiary Agreement.

es and will not substantially increase the obligations of
Southern Rhodesia or Northern Rhodesia, as the case may be, under this Subsidiary Agreement.

The Bank may accept the execution by such Prime Minister or such Governor, as the case may be,
or any such other person, of any such instrument as conclusive evidence that in the opinion of such
Prime Minister or such Governor, as the case may be, any modification or amplification of the
provisions of this Subsidiary Agreement effected by such instrument is reasonable in the
circumstances and will not substantially increase the obligations of Southern Rhodesia or Northern
Rhodesia, as the case may be, thereunder. SECTION 3.04. The following addresses are specified for the purposes of Section 3.01 of this
Subsidiary Agreement:
For the Colony of Southern Rhodesia:
Minister of Finance
Treasury
Salisbury, Southern Rhodesia
For the Territory of Northern Rhodesia:
The Financial Secretary to the Government of Northern Rhodesia
The Secretariat
Lusaka, Northern Rhodesia
For the Bank:
International Bank for Reconstruction and Development
1818 H Street, N. W. Washington 25, D. C. United States of America. SECTION 3.05. This Subsidiary Agreement shall come into force and effect on the Effective Date
of the Loan Agreement. SECTION 3.06.

States of America. SECTION 3.05. This Subsidiary Agreement shall come into force and effect on the Effective Date
of the Loan Agreement. SECTION 3.06.

This Subsidiary Agreement and all obligations of the parties thereunder shall
terminate on the date on which the Loan Agreement is terminated. SECTION 3.07. All obligations of the Rhodesias under this Subsidiary Agreement shall be joint
and several and the obligation of either of them to comply with any provision of this Subsidiary
Agreement is not subject to any prior notice to, demand upon or action against the other. SECTION 3.08. No delay in exercising or omission to exercise, any right or power accruing to
any party under the Loan Agreement, the Guarantee Agreement, or the Subsidiary Agreement upon
any default shall impair any such right or power 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 or any
acquiescence in any default, affect or impair any right or power of such party in respect of any other
or subsequent default. SECTION 3.09. This Subsidiary Agreement may be executed in several counterparts, each of
which shall be an original. All such counterparts shall collectively be but one instrument.

Agreement may be executed in several counterparts, each of
which shall be an original. All such counterparts shall collectively be but one instrument.

IN WITNESS WHEREOF the parties hereto, acting through their representatives thereunto duly
authorised, have caused this Subsidiary 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 first above
written. COLONY OF SOUTHERN

The Laws of Zambia
Copyright Ministry of Legal Affairs, Government of the Republic of Zambia