Page:United States Statutes at Large Volume 60 Part 2.djvu/360

 INTERNATIONAL AGREEMENTS OTHER THAN TREATIES [60 STAT. si, (ii) The Bank may modify the terms of amortization or extend the life of the loan, or both. Section 5. Guarantees uarantee commis- (a) In guaranteeing a loan placed through the usual investment channels, the Bank shall charge a guarantee commission payable peri- odically on the amount of the loan outstanding at a rate determined by the Bank. During the first ten years of the Bank's operations, this rate shall be not less than one percent per annum and not greater than one and one-half percent per annum. At the end of this period of ten years, the rate of commission may be reduced by the Bank with re- spect both to the outstanding portions of loans already guaranteed and to future loans if the reserves accumulated by the Bank under Section 6 of this Article and out of other earnings are considered by it sufficient to justify a reduction. In the case of future loans the Bank shall also have discretion to increase the rate of commission beyond the above limit, if experience indicates that an increase is advisable. (b) Guarantee commissions shall be paid directly to the Bank by the borrower. (c) Guarantees by the Bank shall provide that the Bank may termi- nate its liability with respect to interest if, upon default by the bor- rower and by the guarantor, if any, the Bank offers to purchase, at par and interest accrued to a date designated in the offer, the bonds or other obligations guaranteed. (d) The Bank shall have power to determine any other terms and conditions of the guarantee. Section 6. Special reserve The amount of commissions received by the Bank under Sections 4 and 5 of this Article shall be set aside as a special reserve, which shall be kept available for meeting liabilities of the Bank in accordance with Section 7 of this Article. The special reserve shall be held in such liq- uid form, permitted under this Agreement, as the Executive Directors may decide. Section 7. Methods of meeting liabilities of the Bank in case of defaults In cases of default on loans made, participated in, or guaranteed by the Bank: (a) The Bank shall make such arrangements as may be feasible to adjust the obligations under the loans, including arrangements under or analogous to those provided in Section 4 (c) of this Article. Arnt, p. 1445. (b) The payments in discharge of the Bank's liabilities on borrow- ings or guarantees under Section 1 (a) (ii) and (iii) of this Article shall be charged: (i) first, against the special reserve provided in Section 6 of this Article. (ii) then, to the extent necessary and at the discretion of the Bank, against the other reserves, surplus and capital available to the Bank. 1448

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