Peru - Huinco Project : Loan 0260 - Loan Agreement - Conformed

LOAN NUMBER 260 PE Loan Agreement (Huinco Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION * AND DEVELOPMENT AND LIMA LIGHT AND POWER COMPANY (Empresas Electricas Asociadas) DATED JUNE 29, 1960 LOAN NUMBER 260 PE Loan Agreement (Huinco Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND LIMA LIGHT AND POWER COMPANY (Empresas Electricas Asociadas) DATED JUNE 29, 1960 IEan Agrerment AGREEMENT, dated June 29, 1960, between INTER- NATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and LIMA LIGHT AND POWER COMPANY (EMPRESAS ELECTRICAS ASOCIADAS) (hereinafter called the Borrower). ARTICLE I Loan Regulations; Special Definitions SECTION 1.01. The parties to this Loan Agreement accept all the provisions of Loan Regulations No. 4 of the Bank dated June 15, 1956, subject, however, to the modifica- tions thereof set forth in Schedule 3 to this Agreement (said Loan Regulations No. 4 as so modified being here- inafter 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 re- quires, the following terms have the following meanings wherever used in this Loan Agreement or any Schedule thereto: (a) The term "Indenture" means the Indenture dated as of July 1, 1957, executed by the Borrower in favor of Schroder Trust Company, as Trustee, and includes any indenture supplemental thereto which has been or shall be executed and delivered in accord- ance with the provisions of the Indenture. (b) The term "Supplemental Indenture" means the supplemental indenture or supplemental indentures which shall be executed by the Borrower pursuant to the provisions of Section 5.04 of this Agreement providing for the issue, authentication and delivery of Debentures of the Series D. 4 (c) The term "Debentures" shall mean debentures issued in accordance with the terms of the Indenture. (d) The term "Debentures of the Series D" shall mean Debentures of the various series issued pursuant to the Supplemental Indenture and this Agreement. (e) The term "subsidiary" shall mean any corporation, firm or association directly or indirectly controlled by the Borrower. (f ) The term "Affiliate" or "Hidrandina" means Energia Hidroelectrica Andina S.A. (g) The term "soles" and the symbol "S/." mean cur- rency of the Guarantor. 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, an amount in various currencies equivalent to twenty-four million dollars ($24,000,000). 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 pro- vided 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 (34 of 1o) per annum on the principal amount of the Loan not so withdrawn from time to time. Such com- mitment charge shall accrue from a date sixty days after the date of this Agreement to the respective dates on which * 5 amounts shall be withdrawn by the Borrower from the Loan Account as provided in Article IV of the Loan Regulations or shall .be cancelled pursuant to Article V of the Loan Regulations. SECTION 2.04. The Borrower shall pay interest at the iate of six per cent (6%) 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 com- mitments 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/ of 17) per annum on the principal amount of any such special commitments outstanding from time to time. SECTION 2.06. Interest and other charges shall be pay- able semi-annually on March 15 and September 15 iti each year. SECTION 2.07. The Borrower shall repay the principal of the Loan in accordance with the amortization 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 financing the cost of goods required to carry out the Project described in Schedule 2 to this Agreement. The specific goods to be financed out of the proceeds of the Loan and the methods and procedures for procurement of such goods shall be determined by agreement between the Bank and the Borrower, subject to modification by further agreement between them. 6 SECTION 3.02. The Borrower shall cause all goods financed out of the proceeds of the Loan to be imported into the territories of the Guarantor and there to be used exclusively in the carrying out of the Project and, except as the Bank shall otherwise agree, title to all such goods shall be acquired by the Borrower free and clear of all liens, charges and encumbrances. ARTICLE IV Debentures SECTION 4.01. The Borrower shall execute and deliver Debentures of the Series D representing the principal amount of the Loan of the form, tenor and purport prescribed in the Indenture as modified by the Supple- mental Indenture and as provided therein and in the Loan Regulations. SECTION 4.02, Except as the Bank and the Borrower shall otherwise agree, the Borrower shall, against payment by the Bank of any amount to be withdrawn from the Loan Account, deliver to or on the order of the Bank, Debentures of the Series D in the aggregate principal amount so paid. SECTION 4.03. The Borrower shall effect original issues of the Debentures of the Series D only as provided herein and in the Supplemental Indenture. SECTION 4.04. The Bank and the Borrower shall be at liberty to make such arrangements as they may from time to time mutually agree as to procedure for the issue, authentication and delivery of the Debentures of the Series D and such arrangements may be in addition to or' in substitution for any of the provisions of this Agreement or of the Loan Regulations. SECTION 4.05. (a) The Debentures of the Series D shall be bearer Debentures with coupons for semi-annual interest 7 attached (hereinafter sometimes called Series D coupon Debentures). Debentures of the Series D delivered to the Bank shall be Series D coupon Debentures in such tempor- ary or definitive form (authorized by the Supplemental .Indenture) as the Bank shall request. Series D coupon Debentures payable in dollars shall be substantially in the forms set forth in the Supplemental Indenture. Series D coupon Debentures payable in any currency other than dollars shall be substantially in the form set forth in the Supplemental Indenture, excel)t that they shall (i) provide for payment of principal, interest and )emiuml on redemp- tion, if any, in such other currency, (ii) provide for such place of payment at such agency as the Bank shall specify, and (iii) contain such other im odifications as the Bank shall reasonably request in order to conform to the laws or to the financial usage of the place where they are i payalble. (b) All Debentures of the Series ) shall have the guar- antee of the Guarantor en(lorsed thereon substaintially in the form set forth in Schedule 3 of the Loan Regula.tions. ARTICLE V Particular Covenants SECTio- 5.01. The Borrower shall carry out and coii- plkte the Project and operate and maintain its business and properties, including the Project, with due diligence an(d efliciency and in conformity with sound engineering, business, financial and electric utility practices. To that end, the Borrower shall employ engineering consultants mutually acceptable to the Borrower and the Bank on terms and conditions mutually satisfactory to the Bor- rower and the Bank. SECTION 5.02. (a) The Borrower shall furnish to the Bank, promptly upon their preparation, the plans and specifications (including construction schedules) for the a Project and any material modifications subsequently made therein, in such detail as the Bank shall from time to tine request. (b) The Borrower shall maintain records adequate to identify the goods.financed out of the proceeds of the Loan, to disclose the use thereof in the Project, to record the progress of the Project (including the cost thereof) and to reflect in accordance with consistently maintained sound accounting practices the operations and financial condition of the Borrower and of its subsidiaries. (c) The Borrower shall enable the Bank's representa- tives to inspect the Project, the goods financed out of the proceeds of the Loan, the sites, works, construction and operations included in the Project and all other plants, works, properties, equipment and operations of the Bor- rower and its subsidiaries, and to examine any relevant records and documents. (d) The Borrower shall furnish to the Bank all such information as the Bank shall reasonably request con- cerning the expenditure of the proceeds of the Loan, the use of the goods purchased therewith, the progress of the Project and the operations and financial condition of the Borrower and of its subsidiaries. SECTION 5.03. (a) The Bank and the Borrower shall cooperate fully to assure that the purposes of the Loan will be accomplished. To that end, each of them shall furnish to the other all such information as it shall reason- ably request with regard to the general status of the Loan. (b) The Bank and the Borrower 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 Borrower shall promptly inform the Bank of any condition which interferes with, or threatens to interfere with, the accom- plishment of the purposes of the Loan or the maintenance of the service thereof. SECTIMN 5.04. The Borrower shall execute and deliver a Supplemental Iidenture, the 'orm and substance of which shall be satisfactory to the Bank, providing for the issue, authentication and delivery of Debentures of the Series 1) shall protocolize, record, file and register the Supplenenial identure as provided in Section 7.09 of the Indenture as promptly as shall be reasonably practicable ; and shall, upo.n the protocolizatioi, recordation, filing and registra- tion thereof, furnish to the Bank an opinion or opinions satisfactory to the Bank of legal counsel acceptable to the Bank showing that the Supplemental Indenture has been validly and effectively protocolized, recorded, filed and registered, and has created valid and effective liens, charges and priorities in accordaiice with its terms. SECTioN 5.05. Except as the Bank and the Borroi,r shall otherwise agree, the Borrower will not, and will not porMit any sub'sidiary to, create, incur, assume or suffer to oxist any mortgage, pledge, lien or elcuml]brance, except the lion of the Indenture, upon any of its properties or assels, whether now owned or hereafter acquired, unless such mortgage, pledge or lien shall provide for the security of the Debentures in priority to the debentures, notes or other obligations or liabilities of whatsoever character which are to be secured by such mortgage, pledge or lien; pro- vided, 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; or (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date; or (iii) any "permitted lien" as defined in the Indenture on the date of this Agreement, excluding sub- section (i) of said definition. 10 SECTION 5.06. The Borrower shall pay or cause to be paid all taxes or fees, if any, imposed under the laws of the Guarantor or laws in effect in the territories of the Guarantor on or in connection with the execution, issue, delivery or registration of this Agreement, the Guarantee Agreement, the Indenture, the Supplemental Indenture or the Debentures of the Series D, or the payment of principal, interest or other charges thereunder; provided, however, that the provisions of this Section shall not apply to tax- ation of, or fees upon, payments under any Debenture of the Series D to a holder thereof other than the Bank when such Debenture of the Series D is beneficially owned by an individual or corporate resident of the Guarantor. SECTION 5.07. The Borrower shall pay or cause to be paid all taxes and fees, if any, imposed under the laws of the country or countries in whose currency the Loan and the Debentures of the Series D are payable or laws in effect in the territories of such country or countries on or in connection with the execution, issue, delivery or regis- tration of this Agreement, the Guarantee Agreement, the Indenture, the Supplemental Indenture or the Debentures of the Series D. SECTION 5.08. Except as shall be otherwise agreed between the Bank and the Borrower, the Borrower shall take out or cause to be taken out and maintain or cause to be maintained such insurance, against such risks and in such amounts, as shall be consistent with sound business practices. Insurance covering marine and transit hazards on the goods financed out of the proceeds of any part of the Loan shall be payable in dollars or in the currency. in which the cost of the goods insured thereunder shall be payable. SECTION 5.09. (a) The Borrower shall at all times main- tain its existence and right to carry on operations and shall, except as the Bank shall otherwise agree, take all 0 11 stops necessary to maintain and renew all rights, powers, privileges and franchises which are necessary or useful in the conduct of its business. (b) The Borrower shall operate and maintain its plants, equipment and property, and from time to time make all necessary renewals and repairs thereof, all in accordance with sound engineering standards; and shall at all times operate its plants and equipment and maintain its financial position in accordance with sound business and public utility practices. SECTION 5.10. The Borrower shall not agree to any change in the contract between it and its Affiliate, dated February 7, 1956, known as the Amended Contract for the Supply of Electric Power, unless the Borrower shall have notified the Bank in advance and obtained approval by the Bank of the change or a determination by the Bank that the change is not material. SECTION 5.11. The Borrower shall have: 's financial state- ments (balance sheet and related income and earned sur- plus statements) certified annually by an independent accounting firm satisfactory to the Bank and shall promptly after their preparation transmit to the Bank certified copies of such statements and a signed copy of the accountant's report. SECTION 5.12. Unless it shall have obtained the prior approval of the Bank, the Borrower shall not make any investment in any corporation, firm or association in excess of $1,000,000 or its equivalent in other currencies. SECTION 5.13. Unless it shall have obtained the prior approval of the Bank, the Borrower will not redeem or prepay, prior to the maturity thereof, any Debentures otherwise than: (i) upon a refunding thereof by the issu- ance of Debentures of the same or later maturity or 12 maturities; or (ii) for the purpose from time to time of meeting the next semi-annual sinking fund or analogous payment. SECTION 5.14. The Borrower shall not consent to any action taken at any'meeting of Debentureholders pursuant to Section 13.06 of the Indenture or by written instrument pursuant to Section 13.09 of the Indenture, unless the Bank shall have given its approval of such action or consent. SECTION 5.15. The Borrower may authorize the issue, execution and delivery of additional Debentures upon com- pliance with the present provisions of Sections 4.02 and 4.04 of the Indenture. SECTION 5.16. The Borrower shall duly perform all covenants, agreements and obligations to be performed by it under the Indenture. SECTION 5.17. Except as the Bank and the Borrower shall otherwise agree, the Borrower shall, as prouiptly as may be required, offer for subscription at a price reason- ably related to their market price such additional capital shares as shall be sufficient to provide funds, not otherwise available, needed to carry out and complete the Project and to provide adequate working capital during and at the completion thereof. ARTICLE VI Remedies of the Bank SECTION 6.01. (i) If any event specified in paragraph (a), paragraph (b), paragraph (e) or paragraph (f) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of thirty days, or (ii) if the event specified in Section 6.02 of this Agreement shall occur, or (iii) if any event specified in paragraph (c) of Section 5.02 of the Loan Regulations shall occur and shall continue 13 for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower, then a.t any sub- sequent time during the continuance thereof, the Baik, at its option, may declare the principal of the Loan and of all the Debentures of the Series D then outstanding to be due and payable immediately, and upon any such declar- ation such principal shall become due and payable imme- diately, anything in thi, Agreement, or in the Indenture, or in the Debentures of the Series D to the contrary notwithstanding. SECTION 6.02. For the purposes of Section 5.02 (j) of the Loan Regulations, the following event is specified, namely, that there shall have occurred one of the events specified in the Indenture as "events of default." ARTICLE VII Effective Date; Termination SECTION 7.01. The following events are specifie(l as additional conditions to the effectiveness of this Agi-ee- ment within the meaning of Section 9.01 (a) (ii) of the Loan Regulations: (a) that, since December 31, 1959, the Borrower has issued for cash additional shares with either paid-in or par value of not less than 7 million dollars or the equivalent thereof in soles; (h) that, since December 31, 1959, the Borrower has sold Debentures in an aggregate principal amount of 3 million dollars and has executed a contract whereby Compagnie Sud-Americaine d'Electricit6, Zurich, undertakes to purchase on or before December 31, 1961 additional Debentures in an aggregate prin- cipal amount of 3 million dollars, in the event that the Borrower has not otherwise sold said additional principal amount of Debentures; 14 (c) that the Borrower has executed a contract with Hidrandina whereby Hidrandina is obligated, to the extent its funds are in excess of the amount required to meet its expenses, its regular dividends, its working capital and its obligations to other creditors, to use such excess: first, to repay advances made to it by the Borrower; and, second, to make long-term advances to the Borrower; (d) that the Borrower has complied with Section 5.04 of this Agreement; and (e) that the Borrower shall have certified in writing to the Bank that, as of a date to be agreed between the Borrower and the Bank, there has been no material adverse change in its condition since the date of this Agreement. SECTION 7.02. The following are specified as additional matters, within the meaning of Section 9.02(e) of the Loan Regulations, to be included in the opinion or opinions to be furnished to the Bank: (a) that the Debentures of the Series D issued to satisfy Section 7.01(b) are valid and binding obligations of the Borrower and comply with the provisions of the Indenture; (b) that the agreements required pursuant to Section 7.01(b) and (c) constitute valid and binding obli- gations of the parties thereto; and (c) that the requirements of Section 5.04 of this Agree- have been satisfied. SECTION 7.03. March 1, 1961 is hereby specified for the purposes of Section 9.04 of the Loan Regulations. 15 ARTICLE VIII Miscellaneous SECTION 8.01. The Closing Date shall be June 30, 1965. SECTION 8.02. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: For the Borrower: Lima Light and Power Company Veracruz 261 Lima, Peru Alternative address for cablegrams and radiograms: Asociadas Lima, Peru For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington 25, D. C. United States of America Alternative address for cablegrams and radiograms: Intbafrad Washington, D. C. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have 16 caused this Loan Agreement to be signed in their respec- tive names and delivered in the District of Columbia, United States of America, as of the day and yar first above written. INTERNATIONAL BANK FOR RECONSTRITCTION AND DEVELOPMENT by /s/ EUGENE R. BLACK President LiMA LIGHT AND POWER COMPANY (EMPRESAs ELECTRICAS JSOCIADAS) by s H. DE LAVALLE Autihorized Representative 17 SCHEDULE 1 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* September 15, 1965 $305,000 March 15, 1966 314,000 September 15, 1966 324,000 March 15, 1967 333,000 September 15, 1967 343,000 March 15, 1968 354,000 September 15, 1968 364,000 March 15, 1969 375,000 September 15, 1969 387,000 March 15, 1970 398,000 September 15, 1970 410,000 March 15, 1971 422,000 September 15, 1971 435,000 March 15, 1972 448,000 September 15, 1972 461,000 March 15, 1973 475,000 September 15, 1973 490,000 March 15, 1974 504,000 September 15, 1974 519,000 March 15, 1975 535,000 September 15, 1975 551,000 March 15, 1976 568,000 September 15,1976 585,000 March 15, 1977 602,000 September 15, 1977 620,000 March 15, 1978 639,000 Septeriber 15, 1978 658,000 March 15, 1979 678,000 September 15, 1979 698,000 March 15, 1980 719,000 September 15, 1980 741,000 March 15, 1981 763,000 September 15, 1981 786,000 March 15, 1982 809,000 September 15, 1982 834,000 March 15, 1983 859,000 September 15, 1983 884,000 March lo, 1984 911,000 September 15, 1984 938,000 March 15, 1985 966,000 September 15, 1985 995,000 *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 this column represent dollar equivalents determined as for purposes of withdrawal. 18 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 3 years before maturity 1/2 of 17 More than 3 years but not more than 6 years before maturity .............. 170 More than 6 years but not more than 11 years before maturity ............. 217 More than 11 years but not more than 16 years before maturity ........... 3% More than 16 years but not more than 21 years before maturity ........... 4-o More than 21 years but not more than 23 years before maturity ........... 5% More than 23 years before maturity ... 6% 19 SCHEDULE 2 Description of Project The Project includes two separate, but related, parts: the first stage of the Marcapomacocha Diversion Scheme and the Huinco Hydroelectric Power Plant. I MARCAPOMACOCHA DIVERSION SCHEME The Marcapomacocha Diversion Scheme entails the diversion of water from the Marcapomacocha Basin on the Eastern slope of the Andes Mourtain Range to the Santa Eulalia Basin on the Western side of that Range. The principal works to be constructed for the first stage of this Scheme include: (A) Two concrete gravity daims to control the flow from two natural lakes, Huarmicocha and Sangrar; (B) Concrete intake structures on the Cuevas, Anta- casha and Sangrar Rivers; (C) A concrete diversion canal about five kilt_iiters long to conduct water from the intakes to the diversion tunnel; and (D) A diversion tunnel about ten kilometers long with a capacity of about ten cubic meters per second to convey water from the Marcapomacocha Basin to the Santa Eulalia Basin. It is expected that this part of the Project will be com- pleted about mid-1962. II HUINCO HYDROELECTRIC POWER PLANT The Huinco Hydroelectric Power Plant, which will be located about 65 kilometers northeast of Lima, will exploit waters from the Santa Eulalia Basin. Its principal ele- ments include: (A) Construction across the Rio Santa Eulalia at Sheque of a concrete arch dam about forty meters high 20 to create a reservoir with a water storage capacity of about 800,000 cubic meters. Associated structures will in- clude diversion tunnels, intake structures, a silt sluice, a spillway, a bottom discharge tunnel and a flood water bypass canal and tunnel. (B) Construction of a concrete-lined pressure tunnel, with a length of about thirteen kilometers and a maximum capacity of twenty-four cubic meters per second. (C) A valve chamber and surge tank 1-ill be built at the lower end of the pressure tunnel. (D) A penstock and a steel-lined pressure shaft with combined length of about 2000 meters will connect the pressure tunnel with the powerhouse. (E) Excavation of an underground powerhouse cavern large enough to accommodate four turbine generating units. The powerhouse cavern will be lined with concrete. IF) Construction of an access tunnel, a tailrace and a canal connecting the tailrace and the intake for the exist- ing Callahuanca Plant. (G) Installation in the powerhouse cavern of two units, each consisting of a Pelton type turbine and a 60 MW generator; of two 90,000 KVA transformer banks, each consisting of three single-phase units (with one spare single-phase unit) ; and of auxiliary equipment. (H) Construction of an outdoor switchyard and its connection with the Santa Rosa Substation in Lima by means of a 220 KV double circuit transmission line about 65 kilometers in length. (I) Expansion of the Santa Rosa Substation by the installation of two 90,000 KVA transformer banks con- sisting of three single-phase units. It is expected that this part of the Project will be com- pleted toward the end of 1964. 21 SCHEDULE 3 Modifications of Loan Regulations No. 4 For the purposes of this Agreement the provisions of Loan Regulations No. 4 of the Bank, dated June 15, 1956, are modified as follows: (a) Wherever the terms "Bond" or "Bonds" are used in the Loan Regulations, the terms "Debenture of the Series D" or "Debentures of the Series D" shall be sub- stituted therefor. (b) Section 2.02 is deleted. (c) The following sentence is added at the end of Sc- tion 3.05: "Whenever it shall be necessary to value soles in terms of dollars or another currency, such value shall be as reasonably determined by the Bank." (d) By the deletion of the first five lines of Sectio 5.02 and the substitution therefor of the following lins: . "Section 5.02. Suspension by the Bank. If any of the following events shall have happened and be 0on- tinuing, the Bank may at any time or from time to time by notice to the Borrower suspend in whole or in part the right of the Borrower to make withdrawals from the Loan Account:" (e) By the deletion of subparagraphs (c), (f) and (i) of section 5.02 an(i the substitution therefor of the following subparagraphs: " (c) A default shall have occurred in the perform- ance of any other covenant or agreement on the part of the Borrower or the Guarantor under the Loan Agreement, the Guarantee Agreement, the Indenture, the Supplemental Indenture or the Debentures of the Series D." 22 (f) The Guarantor or any governmental authority having jurisdiction shall have taken any action for the dissolution or disestablishment of the Borrower or for the suspension of its operations oi for the acquisition or control of all or a substantial part of its undertaking or assets." " (i) On or after the date of the Loan Agreement and prior to the Effective Date there shall have beon any act or omission to act which would have consti- tuted a violation of any covenant contained in the Loan Agreement or the Guarantee Agreement if the Loan Agreement and Guarantee Agreement had been effective on the date of such act or omission." (f) By the deletion of the last paragraph of Section 5.02 and the substitution therefor of the following paragraph: "The right of the Borrower to make withdrawals from the Loan Account shall continue to be suspended in whole or in part, as the case may be, until the event or events which gave rise to such suspension shall have ceased to exist or until the Bank shall have notified the Borrower that the right to make with- drawals has been restored, whichever is the earlier; provided, however, that in the case of any such notice of restoration, the right to make withdrawals shall be restored only to the extent and subject to the con- ditions specified in such notice, and no such notice shall affect or impair any -ight, power or remedy of the Bank in respect of any other or subsequent event described in this Section." (g) By the deletion of Section 5.03 and the substitution therefor of the following section: "Section 5.03. Cancellation by the Bank. (a) If any of the events described or referred to in Section 5.02 shall have happened and be continuing, 23 the Bank may by notice to the Borrower terminate in whole or in part the right of the Borrower to make withdrawals from the Loan Account and, upon the giving of such notice, the unwithdrawn amount of the Loan with respect to. which such notice of termination shall have been given shall be cancelled. (b) If the Borrower shall not at the Closing Date have withdrawn from the Loan Account the full amount of the Loan, the Bank may by notice to the Borrower terminate the right of the Borrower to make withdrawals from the Loan Account. Upon the giving of such notice the unwithdrawn amount of the Loan shall be cancelled." (h) Section 6.01 is deleted. (i) The words "delivered pursuant to any request under Section 6.03' and the words "in such request " are deleted from Sections 6.05 and 6.10. (j) Section 6.07 is deleted. (k) The first two sentences of Section 6.09 are deleted. (1) Subparagraph (a) of Section 6.12 is deleted. (m) Subparagraph (b) of Section 6.11 is deleted. (n) Section 6.13 is deleted. (o) Section 6.18 is deleted. (p) By the addition in Section 7.01, after the words "Guarantee Agreement" where those words occur, of the words ", the Indenture, the Supplemental Indenture". (q) By the deletion of the second sentence of Section 7.02 and the substitution therefor of the following sentence: "Such obligations shall not be subject to.any prior notice to, demand upon or action against the Borrower or to any prior notice to or demand upon the Guar- antor with regard to any default by the Borrower, 24 and shall not be impaired by any of the following: any extension of time, forbearance or concession given to the Borrower; any assertion of, or failure to assert, or delay in asserting, any right, power or remedy against the Borrower or in respect of any security for the Loan; any modification or amplification of the provisions of the Loan Agreement contemplated by the terms thereof; any modification or amplifi- cation of any other document related to the Loan or related to any security therefor; any failure of the Borrower to comply with any requirement of any law, regulation or order of the Guarantor or of any political subdivision or agency of the Guarantor." (r) By the deletion of subparagraph (j) of Section 7.04 and the substitution therefor of the following: " (j) The provisions for arbitration set forth in this Section shall be in lieu of any other procedure for the determination of controversies between the parties under the Loan Agreement and Guarantee Agreement or any claim by any such party against any other such party arising thereunder; provided, however, that nothing herein shall be deemed to pre- clude any of the said parties from exercising, or instituting any legal or equitable action to enforce, any right or claim arising out of or pursuant to the Indenture, Supplemental Indenture or the Debentures of the Series D, and submission to arbitration here- under shall not be deemed to be a condition precedent or in any way to prejudice such exercise or other enforcement of any such right or claim." (s) Subparagraph (b) of Section 9.02 is deleted. (t) By the deletion of Section 9.03 and the substitution therefor of the following section: " Section 9.03. Effective Date. Notwithstanding the provisions of Section 8.01, except as shall be other- wise agreed by the Bank and the Borrower, the Loan 25 Agreement and Guarantee Agreement shall come into force and effect on the date upon which the Bank dis- patches to the Borrower and to the Guarantor notice of its acceptance of the evidence required by Section 9.01." (u) Paragraph 10 of Section 10.01 is deleted. (v) By the deletion of paragraph 14 of Section 10.01 and the substitution therefor of the following: "The term 'external debt' means any debt payable in any medium other than currency of the Guarantor, whether such debt is or may become payable abso- lutely or at the option of the creditor in such other medium." (w) By the deletion of Schedules 1 and 2. (x) By the addition of the following paragraph to Schedule 3: "The Guarantor agrees to endorse its gurn.tee in the form hereof on any Debenture or Debentures which shall be issued in exchange or substitution for, or replacement of, the within Debenture."