Morocco - Third Hotel Development Project : Loan 1279 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1279 MOR LOAN AGREEMENT (Third Hotel Development Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and CREDIT IMMOBILIER ET HOTELIER Dated July 2, 1976 LOAN AGREEMENT AGREEMENT, dated July 2, 1976, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and CREDIT IMMOBILIER ET HOTELIER (hereinafter called the Borrower), a company established and operating under the laws of the Kingdom of Morocco. -2- ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable 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 hereinafter called the General Conditions). Section 1.02. Wherever used in the Loan 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) "sub-loan" means a loan or credit made or proposed to be made by the Borrower out of the proceeds of the Loan to an In- vestment 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 (c) of this Agreement. (b) "investment" means an investment other than a sub-loan made or proposed to be made by the Borrower out of the proceeds of the Loan in an Investment Enterprise for an Investment Project. 0 -3- (c) "Investment Enterprise" means an enterprise to which the Borrower proposes to make or has made a sub-loan or in which it proposes to make or has made an investment. (d) "Investment Project" means 7. specific development proj- ect to be carried out by an Investment Enterprise utilizing the proceeds of a sub-loan or investment. (e) "Dirhams" and "DH" mean the currency of the Guarantor. (f) "foreign currency" means any currency other than the currency of the Guarantor. (g) "Statutes" means the statutes of the Borrower as amended to July 31, 1975. (h) "Prior Loan Agreement" means any outstanding loan agree- ment between the Bank and the Borrower dated before the date of this Agreement and "Prior Loan" means any loan provided for therein. (i) "subsidiary" means any company of which a majority of the outstanding voting stock or other proprietary interest is owned or effectively controlled by the Borrower or by any one or more subsidiaries of the Borrower or by the Borrower and one or more of its subsidiaries. (j) "Statement of Policy" means the Statement of General Policies approved by the Board of Directors of the Borrower on June 17, 1974 as amended to the date of this Agreement. 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 referred to, an amount in various currencies equivalent to twenty five mil- lion dollars ($25,000,000). Section 2.02. (a) Subject to the provisions of paragraphs (b), (c) and (d) of this Section, the Borrower may withdraw from the Loan Account: (i) amounts expended (or if the Bank shall so agree, required to meet expenditures to be made) for the reasonable foreign- exchange cost of goods and services (except those described in clauses (ii) and (iii) of this paragraph) required for the Invest- ment Project in respect of which the withdrawal is requested, (ii) the equivalent of 65% of the invoiced price less all taxes, paid for goods previously imported into Morocco through normal trade channels or produced in Morocco from components or raw materials so imported, with a resulting foreign-exchange cost component in excess of or equal to such percentage, and purchased in Mbrocco by Investment Enterprises to carry out Investment Projects, and (iii) the equivalent of the appropriate percentage, as set forth in paragraph (b) below, of amounts expended by Investment Enter- prises for works of construction comprising or included in Invest- ment Projects, such percentages representing the respective foreign- excha.-e components of the costs of such works of construction; provided, however, that no amount shall be withdrawn from the Loan Account in respect of an Investment Proje7t unless (A) the sub-loan S -5- or investment for such Investment Project shall have been approved by the Bank or (B) the sub-loan shall be a free-limit sub-loan for which the Bank shall have authorized withdrawals froL. the Loan Account. (b) For the purposes of withdrawals pursuant to paragraph (a) (iii) of this Section, amounts expended for works of construc- tion shall include the full purchase price and costs of delivery and installation of all capital equipment required in such con- struction, and the respective percentages of such amounts for the purposes of such withdrawals, based upon the classifications es- tablished by the Ministry of Tourism of the Guarantor, shall be as follows: 5 star classification 37% 4 star classification 36% 3 star classification 31% 2 star classification 24% 1 star classification 20% Withdrawals on account of amounts expended for any works of con- struction carried out pursuant to designs not so classified shall be on the basis of such percentage as shall be agreed upon between the Borrower and the Bank for each Investment Project. (c) A free-limit sub-loan shall be a sub-loan in an amount to be financed under the Loan Agreement which, together with any other amount or amounts financed or proposed to be financed for the same project out of the proceeds of the Loan or of any Prior 6 Loan, and not repaid, shall not exceed in the aggregate the equiv- alent of $800,000, such amunt being subject to change from time to time as determined by the Bank. (d) 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 expendi- tures 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 appli- cation and information required by Section 2.03 (a) of this Agree- ment 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 2.03 (b). Section 2.03. (a) When presenting a sub-loan (other than a free-limit sub-loan) or an investment to the Bank for approval, the Borrower shall furnish to the Bank an application, in form satisfactory to the Bank, together with a description of the In- vestment Enterprise and an appraisal of the Investment Project (including a description of the expenditures proposed to be fi- nanced out of the proceeds of the Loan) and the proposed terms and conditions of the sub-loan or investment, including the schedule of amortization of the sub-loan or of repayment to the Bank of the amount of the Loan to be used for the investment, and such other information as the Bank shall reasonably request. 40 -7- (b) Each request by the Borrower for authorization to make withdrawals from the Loan Account in respect of a free-limit sub- loan shall contain a summary description of the Investment Enter- prise and the Investment Project (including a description of the expenditures proposed to be financed out of the proceeds of the Loan) and the terms and conditions of such free-limit sub-loan, including the schedule of amortization therefor. (c) Except as the Bank and the Borrower shall otherwise agree, applications and requests made pursuant to the provisions of paragraphs (a) and (b) of this Section shall be presented to the Bank on or before June 30, 1978. Section 2.04. The Closing Date shall be December 31, 1980 or such later date as shall be determined by the Bank. Section 2.05. 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. Section 2.06. The Borrower shall pay interest at the rate of eight and one-half per cent (8-1/2%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semi-annually on Febrvary 15 and August 15 in each year. -8- Section 2.08. (a) 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) conform in relevant part substantially to the aggregate of the amortization schedules applicable to sub-loans and the schedules of repayment to the Bank in respect of investments, 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 Article VI of the Gen- eral Conditions and any repayments made by the Borrower under Sec- tion 2.09 of this Agreement; provided that repayments due hereunder shall be made on February 15 and August 15 in each year. Such amendments of said Schedule 1 shall include amendments to the table of premitms on prepayment, if necessary. (b) The amortization schedule applicable to each sub-loan and the schedule of repayment to the Bank in respect of each in- vestment shall provide for an appropriate period of grace, and, unless the Bank and the Borrower shall otherwise agree (i) shall not extend beyond August 15, 1996 and (ii) shall provide for approximately equal semi-annual, or more frequent, aggregate payments of principal and interest or approximately equal semi- annual, or more frequent, payments of principal. (c) The Borrower shall transmit to the Bank, for its approval, any substantial changes proposed to be made by the Borrower in respect of the repayment provisions of any sub-loan. 9 Section 2.09. Unless the Bank and the Borrower shall otherwise agree: (a) If a sub-loan or any part thereof shall be repaid to the Borrower in advance of maturity or if a sub-loan or an investment or any part thereof shall be sold, transferred, assigned or other- wise disposed of for value by the Borrower, the Borrower shall promptly notify the Bank and shall repay to the Bank on the next following interest payment date, together with the premiums speci- fied in Schedule 1 to this Agreement or in any amendment thereof under Section 2.08 (a) of this Agreement, the amount withdrawn from the Loan Account in respect of such sub-loan or investment or part thereof and not theretofore 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 me,- turity 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, and (ii) in the case of an investment, pro rata to the maturity or maturities of the Loan reflecting amounts to be repaid on account of such investment. (c) Paragraph (b) of Section 3.05 of the General Conditions shall not apply to any repayment made under paragraph (a) of this Section. (d) For the purposes of paragraph (a) of this Section, as- signments to financial institutions of portions of sub-loans to secure debts for periods not exceeding ona year (mise en pension) shall not be considered disposals of sub-loans. - 10 - ARTICLE III The Project; Management and Operations of the Borrower Section 3.01. (a) The purpose of the Project is to assist the Borrower in financing, in the sector of tourism, specific projects of construction rehabilitation, expansion, modernization or equipping of hotels, other tourist accommodations, restaurants, recreation centers and ancillary facilities, in the territory of the Guarantor. The Project consists in the financing by the Bor- rower of specific development projects through loans to and in- vestments in enterprises in such territory, in furtherance of the corporate purposes of the Borrover. (b) The Borrower shall carry out the Project and conduct its operations and affairs in accordance with sound financial standards and practices, with qualified management and personnel, and in accordance with the Statutes and Statement of Policy. Section 3.02. (a) The Borrower undertakes that, unless the Bank shall otherwise agree, any sub-loan or investment will be made on terms whereby the Borrower shall oLtain, by written con- tract with the Investment Enterprise or by other appropriate legal means, rights adequate to protect the interests of the Bank and the Borrower, including, in the case of any sub-loan and to the extent that it shall be appropriate in the case of any investment, the right of the Borrower to: (i) require the Investment Enterprise to carry out and operate the Investment Project with due diligence and efficiency and in accordance with sound technical, financial I - 11 - and managerial standards and to maintain adequate records; (ii) require that (1) the goods and services to be financed out of the proceeds of the Loan shall be purchased at a reasonable price, account being taken also of other relevant factors such as time of delivery and efficiency and reliability of the goods and avail- ability of maintenance facilities and spare parts therefor, and, in the case of services, of their quality and the competence of the parties rendering them and (2) such goods and services shall be used exclusively in the carrying out of the Investment Project; (iii) inspect, by itself or jointly with representatives of the Bank if the Bank shall so request, such goods and the sites, works, plants and construction included in the Investment Project, the operation thereof, and any relevant records and documents; (iv) require that: (1) the Investment Enterprise shall take out and maintain with responsible insurers such insurance, against such risks and in such amounts, as shall be consistent with sound bus- iness practice and (2) without any limitation upon the foregoing, such insurance shall cover marine, transit and other hazards inci- dent to the acquisition, transportation and delivery of goods fi- nanced out of the proceeds of the Loan to the place of use or in- stallation, any indemnity thereunder to be made payable in a cur- rency freely usable by the Investment Enterprise to replace or repair such goods; (v) obtain all such information as the Bank or the Borrower shall reasonably request relating to the foregoing and to the administration, operations and financial condition of the Investment Enterprise; and (vi) suspend or terminate the right of the Investment Enterprise to the use of the proceeds of the Loan upon failure by such Investment Enterprise to perform its obligations under its contract with the Borrower. - 12 - (b) The Borrower shall exercise its rights in relation to each Investment Project in such manner as to: (i) protect the in- terests of the Bank and the Borrower, (ii) comply with its obliga- tions under this Agreement, and (iii) achieve the purposes of the Project. Section 3.03. The Borrower shall furnish to the Bank all such information as the B9nk shall reasonably request concerning the expenditure of the proceeds of The Loan, the Project, the Investment Enterprises, the Investment Projects, and the sub-loans and invest- ments. Section 3.04. The Borrower shall duly perform all its obliga- tions under agreements under which funds have been lent or other- wise put at the disposal of the Borrower by the Guarantor or its agencies or others for relending, investment or management. The Borrower shall promptly inform the Bank of any action which would have the effect of assigning, or of amending, abrogating or waiv- ing any material provision of, any such agreement. Section 3.05. If the Borrower establishes or acquires any subsidiary, the Borrower shall cause such subsidiary to observe and perform the obligations of the Borrower hereunder to the ex- tent to which such obligations shall or can be applicable thereto, as though such obligations were binding upon such subsidiary. Section 3.06. (a) The Borrower agrees that pursuant to Sec- tion 3.01 (b) above, total outstanding financing in loans and in- vestments in favor of any single enterprise which is not fully secured by guarantees of the Guarantor or of other adequate insti- S I - 13 - tutions, shall not, unless the Borrower and the Bank shall other- wise agree, exceed 20 per cent (20%) of the aggregate of the Bor- rower's unimpaired capital, surplus and free reserves and of all its subsidiaries, after excluding therefrom equity interests of the Borrower in any such subsidiary or of any such subsidiary in the Borrower or in any other subsidiary. (b) For the purpose of this Section, affiliated companies which are borrowers from, or beneficiaries of investments of, the Borrower shall be deemed to be single enterprises. Section 3.07. The Borrower shall not modify its Statement of Policy without prior consultation with the Bank. -14 - i ARTICLE IV Financial Covenants Section 4.01. The Borrower shall maintain records adequate to record the progress of the Project and of each Investment Proj- ect (including the cost thereof) and to reflect in accordance with consistently maintained sound accounting practices the operations and financial condition of the Borrower. Section 4.02. The Borrower shall: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited in accordance with sound auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank, as soon as available but in any case not later than five 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 said auditors, of such scope and in such detail as the Bank shall have reasonably requested; 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. Section 4.03. (a) The Borrower represents that at the date of this Agreement no lien exists on any of its assets as security for any debt, except as otherwise currently reported or disclosed in writing by the Borrower to the Bank. -15 - (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 any subsidiary 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 that 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 of any subsi- diary 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 pro- visions of this paragraph shall not apply to: (A) any lien cre- ated on property, at the time of purchase thereof, solely as se- curity for the payment of the purchase price of such property; or (B) any lien arising in the ordinary course of banking trans- actions and securing a debt maturing not more than one year after the date on which it is originally incurred. Section 4.04. Except as the Bank shall otherwise agree, the Borrower shall: (i) conduct its operations and affairs in such manner as shall be necessary to maintain, at all times, its debt/ equity ratio within the limit provided in Section 4.06 of this Agreement; and (ii) if such ratio shall, for reasons beyond the Borrower's control, be exceeded, promptly take all such reason- able action as shall be necessary or advisable to bring such ratio within such limit. - 16 - Section 4.05. The Borrower shall not make any repayment in advance of maturity in respect of any outstanding debt of the Borrower which, in the judgment of the Bank, would materially af- fect the Borrower's ability to meet its financial obligations. Section 4.06. Except as shall be otherwise agreed between the Bank and the Borrower, the Borrower shall not incur or permit any subsidiary to incur any debt if, after the incurring of such debt, the consolidated debt of the Borrower and all its subsidi- aries then incurred and outstanding would be greater than seven and one-half times the consolidated capital and surplus of the Borrower and all its subsidiaries. For the purposes of this Section: (a) The term "debt" means (i) any debt incurred by the Bor- rower or any subsidiary maturing more than one year after the date on which it is originally incurred, including debt assumed or guaranteed by the Borrower or by a subsidiary but not including debt so guaranteed by the Borrower or subsidiary when the liabil- ity of the Borrower or subsidiary resulting from such guarantee is fully covered by a guarantee of the Guarantor in favor of the Borrower or subsidiary, as the case may be, and (ii) the aggre- gate principal amount utilized by the Borrower pursuant to any rediscounting facility granted by the Bancue du Maroc in favor of the Borrower for the rediscounting of its loans for housing and hotels. (b) Wherever reference is made in this Section to the in- curring of debt, such reference shall include any modification of the terms of payment of such debt. Debt shall be deemed to be incurred (i) under a loan contract or agreement on the date and - 17 - to the extent it is drawn down pursuant to such loan contract or agreement and (ii) under a guarantee agreement, on the date the agreement providing for such guarantee has been entered into, (c) Whenever in connection with this Section it shall be necessary to value in terms of Dirhams debt payable in foreign currency, such valuation shall be made at the prevailing lawful rate of exchange at which such foreign currency is, at the ±ime of such valuation, obtainable for the purposes of servicing such debt. (d) The term "consolidated debt of the Borrower and all its subsidiaries" means the total amount of debt of the Borrower and all its subsidiaries, excluding (i) any debt owed by the Borrower to any subsidiary or by any subsidiary to the Borrower or to any other subsidiary and (ii) the amounts referred to in paragraph (e) (ii), (iii) and (iv) of this Section. (e) The term "consolidated capital and surplus of the Bor- rower and all its subsidiaries" means the aggregate of (i) the total unimpaired capital, surplus and free reserves of the Borrower and of all its subsidiaries after excluding such items of capital, surplus and free reserves as shall represent equity interests of the Borrower in any such subsidiary or of any such subsidiary in the Borrower or in any other subsidiary, (ii) such amounts of the principal of the 15-year subordinated bonds of the Borrower subscribed for in 1970 and 1971 by the Caisse de DGp8ts et de Gestion or of the 15-year subordinated bonds issued in renewal thereof as shall mature after the latest of the dates of all out- standing maturities of the sub-loans, of the schedules of amor- - 18 - tization agreed to by the Bank in respect of the investments and of any sub-loans or investments made by the Borrower out of the proceeds of any Prior Loan, (iii) the amount of the subordinated loan from the Guarantor of December 1975 reduced by DH million each year beginning January 1, 1977, and (iv) such amount of any other borrowing of the Borrower which the Bank may determine to be included in the consolidated capital and surplus of the Borrower. Section 4.07. The Borrower shall take such steps satisfactory to the Bank as shall be necessary to protect itself against risk of loss resulting from changes in the rates of exchange between the currencies (including Dirhams) used in its operations. Section 4.08. The Bank and the Borrower shall from time to time, at the request of either party, exchange views through their representatives with regard to the administration, opera- tions and financial condition of the Borrower and its subsid- iaries, and the Borrower shall furnish to the Bank all such in- formation as the Bank shall rcasonably request concerning the ad- ministration, operations and fi.ancial condition of the Borrover and subsidiaries. Section 4.09. The Borrower shall enable the Bank's represent- atives to inspect the records referred to in Section 4.01 of this Agreement and any relevant documents. Section 4.10. The Borrower shall ensure that the maturities of such of its borrowings as are or will be utilized as resources for relending are appropriate to ensure as of right the availabil- ity to the Borrower of such resources when and as necessary accord- ing to the terms and conditions of the Borrower's present and an- ticipated commitments towards beneficiaries of such relending. -19- ARTICLE V Remedies 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) any part of the principal amount of any loan to the Borrower having an original maturity of one year or more shall, in accordance with its terms, have become due and payable in ad- vance of maturity as provided in the relative contractual instru- ments, or any security for any such loan shall have become en- forceable; (b) a change shall have been made in the Statutes or in the Statement of Policy which, in the judgment of the Bank, will ma- terially and adversely affect the financial condition or operations of the Borrower; (c) a resolution shall have been passed for the dissolution or liquidation of the Borrower; and (d) a subsidiary or any other entity shall have been cre- ated or acquired or taken over by the Borrower, if such creation, acquisition or taking over would adversely affect the conduct of the Borrower's business or the Borrower's financial situation or the efficiency of the Borrower's management and personnel or the carrying out of the Project. - 20 - Section 5.02. For the purposes of Section 7.01 of the Gen- eral Conditions the following additional events are specified: (a) the event specified in paragraph (a) or paragraph (b) or paragraph (c) of Section 5.01 shall occur; and (b) the event specified in paragraph (d) 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. - 21 - ARTICLE VI Termination Section 6.01. The date September 20, 1976 is hereby speci- fied for the purposes of Section 12.04 of the General Conditions. - 22 - ARTICLE VII Addresses Section 7.01. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: 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) For the Borrower: Cr'dit Immobilier et H8telier 159, Avenue Hassan II Casablanca, Morocco Cable address: Telex: CREDITHOTEL 22839 M Casablanca -23 - IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereurto 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. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ W. A. Wapenhans Regional Vice President Europe, Middle East and North Africa CREDIT IMMOBILIER ET HOTELIER By /s/ Abdelhadi Boutaleb Authorized Representative -24 - i SCHEDULE 1 Amortization Schedule* Payment of Principal Date Payment Due (expressed in dollars)" February 15, 1979 110,000 August 15, 1979 110,000 February 15, 1980 325,000 August 15, 1980 335,000 February 15, 1981 510,000 August 15, 1981 525,000 February 15, 1982 590,000 August 15, 1982 610,000 February 15, 1983 635,000 August 15, 1983 665,000 February 15, 1984 670,000 August 15, 1984 710,000 February 15, 1985 725,000 August 15, 1985 760,000 February 15, 1986 790,000 August 15, 1986 815,000 February 15, 1987 840,000 Au-ust 15, 1987 865,000 February 15, 1988 910,000 August 15, 1988 950,000 February 15, 1989 975,000 August 15, 1989 1,015,000 February 15, 1990 1,050,000 August 15, 1990 1,090,000 February 15, 1991 1,135,000 August 15, 1991 1,165,000 February 15, 1992 1,215,000 August 15, 1992 1,250,000 February 15, 1993 1,060,000 August 15, 1993 1,010,000 February 15, 1994 550,000 August 15, 1994 510,000 - 25 - Payment of Principal Date Payment Due (expressed in dollars) February 15, 1995 125,000 August 15, 1995 125,000 February 15, 1996 115,000 IA,,iust 15, 1996 160,000 * 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 equi- valents determined as for purposes of withdrawal. - 26 - 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 2.09 (a) of the Loan Agreement: Time of Prepayment Premium Not more than three years before maturity 1-1/4% More than three years but not more than six years before maturity 2-1/2% More than six years but not more than eleven years before maturity 4-1/2% More than eleven years but not more than sixteen years before maturity 6-3/4% More than sixteen years but not more than eighteen years before maturity 7-1/2% More than eighteen years before maturity 8-1/2% 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 (c) of Section 2.03 of the Loan Agreement no applications or requests permitted under paragraph (a) or paragraph (b) of such - 28 - Section shall have been received by the Bank in respect 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, or (d) the Bank shall have received notice from the Guar- antor pursuant to Section 6.07 with respect to an amunt of the Loan, the Bank may by notice to the Borrower ter- minate the right of the Borrower to submit such applica- tions 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."