Dominican Republic - Urgent Improt Requirements For Hurricane Reconstruction Program : Loan 1782 - Loan Agreement - Conformed

OFFICIAL 1 LOAN NUMBER 1782 DO DOCTi S Loan Agreement (Urgent Import Requirements for Hurricane Reconstruction Program) between DOMINICAN REPUBLIC and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated , 1980 LOAN NUMBER 1782 DO LOAN AGREEMENT AGREEMENT, dated , 1980, between DOMINICAN REPUBLIC (herein ter call4 the Borrower) and INTERNA- TIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). ARTICLE 1 General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Project Account" means the account established in the name of the Borrower by the Central Bank pursuant to Section 3.02 (a) of this Agreement; (b) "Central Bank" means Banco Central de la Repfblica Dominicana; and (c) "Public Sector Entity" means any administrative subdivi- sion or agency of the Borrower and any corporation or juridical entity owned by, or under the control of, the Borrower or any such administrative subdivision or agency. For purposes of this defini- tion, the term "control" shall mean, with respect to any Public Sector Entity, the right to receive 50% or more of any distribu- tion of the earnings or capital of such Entity, the right to cast 50% or more of the votes capable of being cast at any meeting of holders of the shares or other ownership interests of such Entity or the right to appoint the principal official or directing board of such Entity. -2- 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 million dollars ($25,000,000). Section 2.02. (a) The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of this Agreement for expenditures made in respect of the reasonable cost of imported goods for the Project listed in Schedule 1 to this Agreement, as such.Schedule may be amended from time to time by agreement between the Borrower and the Bank, and which shall be eligible for financing out of the proceeds of the Loan. (b) Except as otherwise agreed between the Borrower and the Bank and for purposes of paragraph (a) above, it is hereby agreed that final consumption goods shall not be considered among the goods listed in the Schedule referred to in such paragraph. (c) The Borrower shall entrust the Central Bank with respon- sibility for the coordination and collection of relevant documen- tation, and the preparation of withdrawal applications, under the Loan, and shall cause the Central Bank to fulfill such responsi- bility as provided in this Agreement. (d) Notwithstanding the provisions of paragraph (a) above, no withdrawals shall be made in respect of: (i) expenditures in the currency of the Borrower, or for goods or services supplied from, the territory of the Borrower; (ii) expenditures for goods imported into the Borrower's territory before October 1, 1979; (iii) payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; (iv) expenditures for goods procured under invoices for less than $2,000 equivalent; and -3- (v) expenditures for goods in respect of which there is no satisfactory evidence of: (A) importation into the country; or (B) the purchase contract price and payment to the suppliers, the foregoing to be proved by appropriate documentation, such as bills of lading, receipts and customs warrants; or (C) the release by Central Bank of the foreign currency relating to the importation ef such goods. (e) If the Bank shall have reasonably determined that the procurement of any item financed, or intended to be financed, from the proceeds of the Loan is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Loan and the Bank may, unless otherwise agreed between the Borrower and the Bank and without in any way restricting or limiting any other right, power or remedy of the Bank under this Agreement, by notice to the Borrower, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan. Section 2.03. Except as the Bank shall otherwise agree, goods imported under the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Loan shall be governed by the following provisions: (a) contracts for goods costing more than the equivalent of $100,000 to be imported by, or on account or for the benefit of, a Public Sector Entity shall be awarded only after solicitation of not less than three price quotations from suppliers in member countries of the Bank and Switzerland; and (b). contracts for imported goods other than those referred to in (a) above shall be awarded through normal trade channels on the basis of the usual procurement procedures of the purchaser of such goods. Section 2.04. The Closing Date shall be December 31, 1980 or such later date as the Bank shall establish, The Bank shall promptly notify the Borrower of such later d&te. 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. -4- Section 2.06. The Borrower shall pay interest at the rate of seven and ninety-five hundredths per cent (7.95%) per annum on the pincipal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semiannually on March 1 and September 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall carry out the Project described in Schedule 2 to this Agreement or cause the Project to be carried out with due diligence and efficiency and in conformity with appropriate administrative and financial practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) Without limitation or restriction to the foregoing, the Borrower shall take all such action as shall be necessary or convenient to facilitate the timely importation of goods to be financed out of the proceeds of the Loan. Section 3.02. (a) The Borrower shall cause the Central Bank to open a Project Account in the name of the Borrower, and to credit to the Project Account, upon each withdrawal from the Loan Account, the equivalent in Dominican pesos of the currency or currencies withdrawn from the Loan Account (such equivalent to be determined at the exchange rates prevailing as of the respective dates of such withdrawals). (b) Except as the Bank shall otherwise agree, withdrawals shall be made from the Project Account only to finance the local currency costs of development or reconstruction projects. Section 3.03. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any -5- indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) Except as the Bank shall otherwise agree, the Borrower shall cause all goods financed out of the proceeds of the Loan to be used exclusively for the Project. Section 3.04. (a) The Borrower: (i) shall cause the Central Bank to maintain records and procedures adequate to record and monitor the progress of the Project, to identify the goods financed out of the proceeds of the Loan, and to disclose their use in the Project; (ii) shall cause the Central Bank to enable the Bank's accredited representatives to examine any relevant records and documents in connection with the goods financed out of the proceeds of the Loan; and (iii) shall furnish and cause the Central Bank to furnish to the Bank at regular intervals all such information as the Bank shall reasonably request concerning the Project, its cost and the expenditure of the proceeds of the Loan and the goods financed out of such proceeds. (b) Promptly after completion of the Project, but in any event not later than six months after the Closing Date or such later date as may be agreed for this purpose between the Borrower and the Bank, the Borrower shall cause the Central Bank to prepare and furnish to the Bank a report, of such scope and in such detail as the Bank shall reasonably request, on the carrying out of the Project, its cost and the benefits i4erived and to be derived from it, the performance by the Borrower, the Bank and the Central Bank of their respective obligationzs under the Loan Agreement and the accomplishment of the purposes of the Loan. 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 foreign 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, -6- realization or distribution of foreign exchange, such lien shall, unless the Bank shall otherwise agree, ipso 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 permitting 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 administrative 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 satisfactory 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; and (ii) any lien arising in the ordinary course of banking transactions 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 subdivision thereof and of any entity owned or controlled by, or operating 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. Section 4.02. (a) The Borrower shall cause the Central Bank to maintain records adequate to reflect in accordance with con- sistently maintained appropriate accounting practices the opera- tions, resources and expenditures, in respect of the Project and of the Project Account. (b) The Borrower shall cause the Central Bank to: (i) have the Project Account for each fiscal year of the Borrower audited, in accordance with appropriate auditing principles consistently applied, by the competent auditing body of the Borrower's Secretariat of Finance; (ii) furnish to the Bank as soon as available, but in any case not later than four months after the end of each such year, 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 account referred to in (i) above and the audit thereof as the Bank shall from time to time reasonably request. -7- ARTICLE V Termination Section 5.01. The date L , is hereby speci- fied for the purposes of Secti 12.04 of the General Conditions. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Governor of the Central Bank is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Banco Central de la Repfblica Dominicana Calle Pedro Henrfquez Urefia Santo Domingo, D.N. Dominican Republic Cable address: Telex: BANCENTRAL 3460052 (ITT) Santo Domingo 3464186 (RCA) 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) -8- IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreemenc to be signed in their respective names in Santo Domingo, DN, Dominican Republic, and delivered in the District of Columbia, United States of America, as of the day and year first above written. DOMINICAN REPUBLIC By C Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By tRegional Vice President Latin erica and the Caribbean SCHEDULE 1 Imported Goods Eligible for Financing under the Loan The list below sets forth the Categories of imported items to be financed out of the proceeds of the Loan: Category (1) Chemical products (2) Manufactures of plastic and rubber, natural and synthetic (3) Wood and wood products (4) Manufactures of stone, gypsum, ceramics and glass (5) Base metals and manu- factures of base metals (6) Machinery and equipment including electrical (7) Transportation (other than automobiles) and haulage equipment - 10 - SCHEDULE 2 Description of the Project The Project consists of: (a) a program of importation into the Dominican Republic of foreign goods as are listed in Schedule 1 to this Agreement for use in the necessary works of reconstruc- tion and repair of the productive facilities damaged by the hurricanes David and Frederick of August 31, 1979 and September 5, 1979, respectively; and (b) a program of development and recon- struction projects for the financing of the local costs of which funds from the Project Account will be used. - 11 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each March 1 and September 1 beginning September 1, 1984 through September 1, 1996 960,000 On March 1, 1997 1,000,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. - 12 - Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions: Time of Prepayment Premium Not more than three years 1.40% before maturity More than three years but 2.80% not more than six years before maturity More than six years but 5.15% not more than eleven years before maturity More than eleven years but 7.00% not more than fifteen years before maturity More than fifteen years 7.95% before maturity INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Bank for Reconstruction and Develop- ment. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Bank thereunto this _ _ day of , 199is. FOR SECRETARY