Bolivia - Banco Industrial Mining And Industrial Credit Project : Loan 1290 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1290 BO LOAN AGREEMENT (Banco Industrial Mining and Industrial Credit Project) between REPUBLIC OF BOLIVIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated October 15, 1976 LOAN AGREEMENT AGREEMENT, dated October 15, 1976, between REPUBLIC OF BOLIVIA (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECON- STRUCTION AND DEVELOPMENT (hereinafter called the Bank). -2- ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Aplicable to Loan and Guar- antee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein, subject, however, to the modifications thereof set forth in Schedule 2 to this Agreement (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank, as so modified, being herein- after called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the Gen- eral Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "BISA" means Banco Industrial, S.A., a bank established under Decreto Iey No. 06213, dated September 12, 1962, of the Bor- rover on industrial banks and operating under the laws of the Bor- rover. (b) "Project Agreement" means the agreement between the Bank and BISA of even date herewith, as the same may be amended from time to time. (c) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and BISA pursuant to Section 3.02 (a) of this Agreement, as the same may be amended from time - 3 - to time, and such term includes all schedules to the Subsidiary Loan Agreement. (d) "Subsidiary Loan" means the loan to be made to BISA under the Subsidiary Loan Agreement. (e) "sub-loan" means a loan or credit made or proposed to be made by BISA out of the proceeds of the Loan relent to BISA under the Subsidiary Loan Agreement to an Investment Enterprise for an Investment Project and "free-limit sub-loan" means a sub-loan, as so defined, which qualifies as a free-limit sub-loan pursuant to the provisions of Section 2.02 (b) of this Agreement. (f) "investment" means an investment other than a sub-loan made or proposed to be made by BISA out of the proceeds of the Loan relent to BISA under the Subsidiary Loan Agreement in an Investment Enterprise for an Investment Project. (g) "Investment Enterprise" means an enterprise to which BISA proposes to make or has made a sub-loan or in which it pro- poses to make or has made an investment. (h) "Investment Project" means a specific development proj- ect to be carried out by an Investment Enterprise utilizing the proceeds of a sub-loan or investment. (i) "Bolivian Pesos" and "$b" means the currency of the Borrower, (j) "foreign currency" means any currency other than the currency of the Borrower. -4- (k) "Statutes" means the Estatutos of BISA dated December 28, 1973, as amended to the date of this Agreement. (1) "Statement of Policy" means the statement of lending and investment policy approved by the Directors of BISA on June 1, 1976 as amended to the date of this Agreement. (m) "Development Credit Agreement" means agreement No. 455 BO dated January 18, 1974 between the Borrower and the International Development Association and related to a Mining Credit Project and "Prior Loan" means any loan provided for therein. (n) "Subsidiary" means any company of which a majority of the outstanding voting stock or other proprietary interest is owned or* effectively controlled by BISA or by any one or more subsidiaries of BISA or by BISA and one or more of its subsidiaries. (o) "Corporation" means the International Finance Corporation. (p) "Share Investment Agreement" means the agreement to be entered into between the Corporation and BISA providing for the subscription by the Corporation of Class C shares of BISA's capi- tal, as the same may be amended from time to time. -5- ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or re- ferred to, an amount in various currencies equivalent to ten mil- lion dollars ($10,000,000). Section 2.02. (a) The amount of the Loan may be withdrawn from the Loan Account to finance the reasonable cost of goods and services required under a sub-loan or investment for the Invest- ment Project in respect of which the withdrawal is requested: (i) for amounts expended by BISA for an Investment Project or, if the Bank shall so agree, for ex- penditures required to be made by BISA for an Investment Project, in foreign currency for goods procured, or services supplied from, outside the territory of the Borrower; (ii) the equivalent of sixty per cent (60%) of amounts expended for imported machinery and equipment procured in the territory of the Borrover, which percentage represents the estimated foreign currency component of such goods; and (iii) the equivalent of thirty-five per ceut (35%) of amounts expended for civil works, which percentage represents the estimated foreign currency component of such services; -6- provided, however, that no withdrawal shall be made in respect of a sub-loan or investment unless (1) the sub-loan or investment shall have been approved by the Bank, or (2) the sub-loan shall be a free-limit sub-loan for which the Bank shall have authorized withdrawals from the Loan Account. (b) A free-limit sub-loan shall be a sub-loan for an Invest- ment Project (other than for either of the first two Investment Projects in the industrial sector, exceeding the sum of $30,000 equivalent, presented to the Bank in accordance with the provisions of Section 2,02 of the Project Agreement) in an amount to be fi- nanced out of the proceeds of the Loan which shall not exceed the sum of (i) $600,000 equivalent with respect to an Investment Proj- ect in the mining sector, and (ii) $300,000 equivalent with respej) to an Investment Project in the industrial sector, when added to any other outstanding amounts financed or proposed to be financed out of the proceeds of the Loan or of any Prior Loan for such Investment Project, the foregoing amounts being subject to change from time to time as determined by the Bank. (c) Except as the Bank and the Borrower shall otherwise agree, no withdrawals shall be made on account of expenditures made by an Investment Enterprise in respect of a sub-loan subject to the Bank's approval, or in respect of an investment, if such expenditures shall have been made before the date of this Agreement or more than ninety days prior to the date on which the Bank shall have received in respect of such sub-loan or investment the application and information required by Section 2.02 (b) of the Project Agreement or, under a free-limit sub-loan, more than ninety days prior to the date on which the Bank shall have received in respect of such free-limit sub-loan the request and information required by Section 2.02 (c) of the Project Agreement. Section 2.03. The Closing Date shall be December 31, 1980 or such other date as shall be determined by the Bank. Section 2.04. 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 2.05. The Borrower shall pay interest at the rate of eight and eighty-five hundredths per cent (8.85%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.06. Interest and other charges shall be payable semi-annually on March 1 and September 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 1 to this Agreement as such Schedule shall be amended from time to time by the Bank to the extent required to: (i) con- form in relevant part substantially to the aggregate of the amor- tization schedules applicable to sub-loans and the schedules of repayment to the Bank in respect of investments referred to in Section 2.02 (d) of the Project Agreement, which have been approved -8- or authorized for withdrawals from the Loan Account under Section 2.02 of this Agreement and (ii) take into account any cancellation pursuant to Article VI of the General Conditions and any repayments made by the Borrower under Section 2.08 of this Agreement; provided that repayments due hereunder shall be made on March 1 and Septem- ber 1 in each year. Such amendments of said Schedule 1 shall include amendments to the table of premiums on prepayment, if necessary. Section 2.08. Unless the Bank and the Borrower shall otherwise agree: (a) If a sub-loan or any part thereof shall be repaid to BISA in advance of maturity or if a sub-loan or an investment or any part thereof shall be sold, transferred, assigned or otherwise di posed of for value by BISA, the Borrower shall promptly notify the Bank and shall repay to the Bank on the next following interest pay- ment date, together with the premiums specified in Schedule 1 to this Agreement or in any amendment thereof under Section 2.07 of this Agreement, the amount withdrawn from the Loan Account in re- spect of such sub-loan or investment or part thereof and not there- tofore repaid to the Bank. (b) Any amount so repaid by the Borrower shall be applied by the Bank as follows: (i) in the case of a sub-loan, to the maturity or maturities of the Loan in amounts corresponding to the outstand- ing amounts of the maturity or maturities of the sub-loan so repaid or disposed of, and (ii) in the case of an investment, pro rata to the maturity or maturities of the Loan reflecting amounts to be re- paid on account of such investment. -9- (c) Paragraph (b) of Section 3,05 of the General Conditions shall not apply to any repayment made under paragraph (a) of this Section. Section 2.09. BISA is designated as representative of the Borrower for the purposes, of taking any action required or per- mitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. Section 2.10. In consideration of the Borrower's assumption of the risk of loss resulting from changes in the rates of exchange between the dollar and the currencies withdrawn from the Loan Ac- count, the Borrower shall collect from BISA a fee payable in dol- lars or dollar equivalent at the rate of one-fourth of one per cent (1/4 of 1%) per annum on the principal amount of the Subsid- iary Loan withdrawn and outstanding from time to time. -10- ARTICLE III The Project; Use of Proceeds of the Loan Section 3.01. The purpose of the Project is to assist BISA in financing such productive facilities and resources in Bolivia as will contribute to the economic and social development of the country. The Project consists in the financing of specific de- velppment projects in the mining and industrial sectors through loans to and investments in private enterprises in Bolivia, in furtherance of the corporate purposes of BISA. Section 3.02. (a) The Borrower shall relend the proceeds of the Loan to BISA under a subsidiary loan agreement to be entered into between the Borrower aid BISA, under terms and conditions which shall have been approved by the Bank. (b) The Borrower shall exercise its rights under the Sub- sidiary Loan Agreement in such manner as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan, and except as the Bank shall otherwise agree, the Borrower shall not assign, nor amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. Section 3.03. The Borrower covenants that it will not take, or cause or permit any of its political subdivisions or any of its agencies or any agency of any such political subdivisions to - 11 - take, any action which would prevent or interfere with the per- formance by BISA of its obligations contained in the Project Agreement and the Subsi diary Loan Agreement and will tae or cause to be taken all reasonable action necessary or appropriate to enable the Borrower to perform such obligations. - 12 - 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 concerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distribution of for- eign 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 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, i2so 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 per- mitting 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 admini- strative 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 satisfac- tory 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; - 13 - and (ii) any lien arising in the ordinary course of banking trans- actions 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 subdi- vision thereof and of any entity owned or controlled by, or oper- ating 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. - 1~4- ARTICLE V Reme?. of the Bank Section 5.01. For the purposes of Section 6.02 of the Gen- eral Conditions the following additional events are specified: (a) BISA shall have failed to perform any covenant, agree- ment or obligation of BISA under the Project Agreement; (b) the Borrower or BISA shall have failed to perform any of their respective covenants, agreements or obligations under the Subsidiary Loan Agreement; (c) BISA shall have failed to perform any covenant, agree- ment or obligation of BISA under the Share Investment Agreement; (d) any part of the principal amount of any loan to BISA having an original maturity of one year or more shall, in accor- dance 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; (e) a c'hange shall have been made in the Decreto Ley No. 06213, the Statutes or the Statement of Policy which will materi- ally and adversely affect the carrying out of the Project or the financial condition or operations of BISA; (f) the Borrower or any other authority having jurisdiction shall have taken any action, or a resolution shall have been passed, for the dissolution or liquidation of BISA; - 15 - (g) a subsidiary or any other entity shall have been cre- ated or acquired or taken over by BISA, if such creation, ac- quisition or taking over would adversely affect the conduct of BISA's business or BISA's financial situation or the efficiency of BISA's management and personnel or the carrying out of the Project; (h) a default shall have occurred under the Development Credit Agreement other than in respect of the payment of the principal or any other payment required thereunder; and (i) an extraordinary situation shall have arisen which shall make it improbable that BISA will be able to perform its obliga- tions under the Project Agreement. Section 5.02. For the purposes of Section 7.01 of the General Conditions the following additional events are specified: (a) the event specified in paragraph (a) or paragraph (b) or paragraph (c) or paragraph (g) of Section 5.01 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 (b) the event specified in paragraph (d) or paragraph (e) or paragraph (f) or paragraph (h) of Section 5.01 shall occur. - 16- ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as additional conditions to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions: (a) the execution of the Project Agreement on behalf of BISA has been duly authorized or ratified by all necessary corporate and governmental action; (b) the execution of the Subsidiary Loan Agreement on behalf of the Borrower and BISA, respectively, has been duly authorized or ratified by all necessary corporate and governmental action; (c) the Corporation has made the first payment under the Share Investment Agreement; and (d) BISA has certified to the Bank that, as of a date to be agreed between the Bank and BISA, there has been no material ad- verse change in its financial condition since the date of this Agreement. Section 6.02. The following are specified as additional mat- ters, within the meaning of Section 12.02 (c) of the General Con- ditions, to be included in the opinion or opinions to be furnished to the Bank: - 17 - (a) that the Project Agreement has been duly authorized or ratified by BISA, and is legally binding upon BISA in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly au- thorized or ratified by the Borrower and BISA, respectively, and is legally binding upon the Borrower and BISA in accordance with its terms. Section 6.03. The date January 13, 1977, is hereby specified for the purposes of Section 12.04 of the General Conditions. -18- ARTICLE VII Representative of the Borrower; Addresses Section 7.01. The Ministro de Finanzas of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministerio de Finanzas La Paz Bolivia Cable address: Telex: MINFINANZAS BX 5332 La Paz For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (wUI) -19- IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agree- ment 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 BOLIVIA By /s/ Alberto Crespo Gutierrez Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ S.M. L. van der Meer Acting Regional Vice President Latin America and the Caribbean - 20 0 SCHEDULE 1 Amortization Schedule* Payment of Principal Date Payment Due (expressed in dollars)** March 1, 1980 175,000 September 1, 1980 185,000 March 1, 1981 190,000 September 1, 1981 200,000 March 1, 1982 210,000 September 1, 1982 220,000 March 1, 1983 225,000 September 1, 1983 240,000 March 1, 1984 250,000 September 1, 1984 260,000 March 1, 1985 270,000 September 1, 1985 285,000 March 1, 1986 295,000 September 1, 1986 310,000 March 1, 1987 325,000 September 1, 1987 335,000 March 1, 1988 355,000 September 1, 1988 365,000 March 1, 1989 385,000 September 1, 1989 400,000 March 1, 1990 420,000 September 1, 1990 435,000 March 1, 1991 460,000 September 1, 1991 475,000 March 1, 1992 500,000 September 1, 1992 520,000 March 1, 1993 540,000 September 1, 1993 570,000 March 1, 1994 600,000 * The Amortization Schedule is subject to amendment pursuant to the provisions of Section 2.08 of the Loan Agreement. - ** To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Sec- tion 4.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. - 21 - Premiums on Prepayment The following percentages are specified as the premiums pay- able 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 1.45% before maturity More than three years but not 2.95% more than six years before maturity More than six years but not 5.40% more than eleven years before maturity More than eleven years but not 6.90% more than fourteen years before maturity More than fourteen years but not 7.85% more than sixteen years before maturity More than sixteen years 8.85% before maturity -22- SCHEDULE 2 Modifications of the General Conditions For the purposes of the Loan Agreement, the provisions of the General Conditions are modified as follows: (1) The following subparagraph (d) is added to Section 3.05: "(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 sub- stitution for, those set forth in paragraph (b) of Section 3.05." (2) The words "Investment Projects" are substituted for the words "the Project" at the end of Section 5.03. (3) Section 6.03 is deleted and replaced by the following new Section: "Section 6.03 Cancellation by the Bank. If (a) the right of the Borrower to make withdrawals from the Loan Account shall have been suspended with respect to any amount of the Loan for a continuous period of thirty days, or (b) by the date specified in paragraph (e) of Section 2.02 of the Project Agreement no applications or requests permitted under paragraph (a) or paragraph (b) of such Section shall have been received by the Bank in respect - 23 - of any portion of the Loan, or having been so received, shall have been denied, or (c) after the Closing Date an amount of the Loan shall remain unwithdrawn from the Loan Account, the Bank may by notice to the Borrover terminate the right of the Borrower to submit through BISA such appli- cations or requests or to make withdrawals from the Loan Account, as the case may be, with respect to such amount or portion of the Loan. Upon the giving of such notice such amount or portion of the Loan shall be cancelled."