Philippines - Dredging Project : Loan 0290 - Loan Agreement - Conformed

LOAN NUMBER 290 PH Loan Agreement (Dredging Project) BETWEEN REPUBLIC OF THE PHILIPPINES AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT JULY 26, 1961 LOAN NUMBER 290 PH Loan Agreement (Dredging Project) BETWEEN REPUBLIC OF THE PHILIPPINES AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT JULY 26, 1961 Eminu Agrerntrut AGREEMENT, dated July 26, 1961, between REPUBLIC OF THE PHILIPPINES (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). ARTICLE I Loan Regulations SECTION 1.01. The parties to this Loan Agreement accept all the provisions of Loan Regulations No. 3 of the Bank dated February 15, 1961 (said Loan Regulations No. 3 being hereinafter called the Loan Regulations), with the same force and effect as if they were fully set forth herein. 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 eight million five hundred thousand dollars ($8,500,000). 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 The amount of the Loan may be withdrawn from the Loan Account as pro- vided in, and subject to the rights of cancellation and suspension set forth in, the Loan Regulations.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charge at the rate of three-fourths of one per cent (3/4 of 17) per annum on the principal amount of the Loan not so withdrawn from time to time. Such commit- ment charge shall accrue from a date sixty days after the 4 date of this Agreement to the respective dates on which amounts shall be withdrawn by the Borrower from the Loan Account as provided in or shall be cancelled pursuant to the Loan Regulations. SECTION 2.04. The Borrower shall pay interest at the rate of five and three-fourths per cent (5%/%) per annum on the principal amount of the Loan so withdrawn and outstanding from time to time. SECTION 2.05. Except as the Borrower and the Bank 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 (1/2 of 1%) 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 in 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 cause the proceeds of the Loan to be applied exclusively to financing the cost of goods required to carry out the Project described in Sched- dule 2 to this Agreement. The specific goods to be financed out of the proceeds of the Loan shall be determined by agreement between the Borrower and the Bank, subject to modification by further agreement between them. SECTION 3.02. Except as the Borrower and the Bank shall otherwise agree, the Borrower shall cause all goods 5 financed out of the proceeds of the Loan to be used in the territories of the Borrower exclusively in the carrying out of the Project. ARTICLE IV Bonds SECTION 4.01. The Borrower shall execute and deliver Bonds representing the principal amount of the Loan as provided in the Loan Regulations. SECTION 4.02. The Governor of Central Bank of the Philippines and such person or persons as he shall appoint in writing are designated as authorized representatives of the Borrower for the purposes of Section 6.12 of the Loan Regulations. ARTICLE V Particular Covenants SECTION 5.01. (a) The Borrower shall cause the Project to be carried out with due diligence and efficiency and in conformity with sound engineering and financial practices. (b) The Borrower shall at all times make available, promptly as needed, all sums which shall be required for the carrying out of the Project. (c) Upon request from time to time by the Bank, the Borrower shall promptly furnish or cause to be furnished to the Bank the plans, specifications and work schedules for the Project including the Borrower's dredging program and any material modifications subsequently made therein, in such detail as the Bank shall request. Should it become necessary to make any substantial changes in the dredging program, the Borrower will consult with the Bank before these changes are made. (d) The Borrower shall maintain or cause to be main- tained records adequate to identify the goods financed out of the proceeds of the Loan, to disclose the use thereof in 0 6 the Project, and 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 agency or agen- cies responsible for the carrying out of the Project or any part thereof; shall enable the Bank's representatives to inspect the Project, the goods and any relevant records and documents; and shall furnish to the Bank all such informa- tion as the Bank shall reasonably request concerning the expenditure of the proceeds of the Loan, the Project, and the goods, and the operations and financial condition of the agency or agencies of the Borrower responsible for the Project or any part thereof. SECTION 5.02. The Borrower shall cause the goods pur- chased with the proceeds of the Loan to be efficiently oper- ated and adequately maintained and shall cause all neces- sary repairs thereof to be made, all in accordance with sound engineering practices. SECTION 5.03. (a) The Borrower and the Bank 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. On the part of the Borrower, such information shall include information with respect to financial and economic condi- tions in the territories of the Borrower and the inter- national balance of payments position of the Borrower. (b) The Borrower and the Bank 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 inter- feres with, or threatens to interfere with, the accomplish- ment of the purposes of the Loan or the maintenance of the service thereof. 7 (c) The Borrower shall afford all reasonable opportunity for accredited representatives of the Bank to visit any part of the territories of the Borrower for purposes related to the Loan. SECTION 5.04. It is the mutual intention of the Borrower and the Bank that no other external debt shall enjoy any priority over the Loan by way of a lien on governmental assets. To that end, the Borrower undertakes that, except as the Bank shall otherwise agree, if any lien shall be created on any assets of the Borrower as security for any external debt, such lien will ipso facto equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan and the Bonds, and that in the creation of any such lien express provision will be made to that effect, provided, however, that the foregoing provi- sions 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; (ii) any lien on commercial goods to secure a debt maturing not more than one year after the date on which it is originally incurred and to be paid out of the proceeds of sale of such commercial goods; or (iii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. The term "assets of the Borrower" as used in this Section includes assets of the Borrower or of any of its political subdivisions or of any agency of the Borrower or of any such political subdivision, including Central Bank of the Philippines or any other institution performing the func- tions of a central bank. SECTION 5.05. The principal of, and interest and other charges on, the Loan and the Bonds shall be paid without deduction for, and free from, any taxes or fees imposed under the laws of the Borrower or laws in effect in its territories; provided, however, that the provisions of this 8 Section shall not apply to taxation of, or fees upon, pay- ments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual or corporate resident of the Borrower. SECTION 5.06. The Loan Agreement and the Bonds shall be free from any taxes or fees that shall be imposed under the laws of the Borrower or laws in effect in its territories on or in connection with the execution, issue, delivery or registration thereof and the Borrower shall pay all such taxes and fees, if any, imposed under the laws of the coun- try or countries in whose currency the Loan and the Bonds are payable or laws in effect in the territories of such country or countries. SECTION 5.07. The principal of, and interest and other charges on, the Loan and the Bonds shall be paid free from all restrictions imposed under the laws of the Borrower or laws in effect in its territories. SECTION 5.08. (a) The Borrower shall satisfy the Bank that adequate arrangements have been made to insure the goods financed out of the proceeds of the Loan against damage or loss during their construction outside of, and importation into, the territories of the Borrower; such insurance shall be consistent with sound commercial prac- tice and shall be payable in the currency in which the cost of the goods insured thereunder shall be payable. (b) Except as the Borrower and the Bank shall other- wise agree, the Borrower shall, in addition to the insurance provided for in subparagraph (a) of this Section, take out or cause to be taken out, and maintain or cause to be main- tained, insurance with a commercial insurer on the floating equipment financed out of the proceeds of the Loan against such risks and in such amount, as shall be consistent with sound commercial practice; such insurance shall be payable in the currency in which the cost of the goods insured thereunder shall be payable. 9 ARTICLE VI Remedies of the Bank SECTION 6.01. (i) If any event specified in paragraph (a) or paragraph (b) of Section 5.02 of the Loan Regula- tions shall occur and shall continue for a period of thirty days, or (ii) if any event specified in paragraph (c) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower, then at any subsequent time during the continuance thereof, the Bank, at its option, may declare the principal of the Loan and of all the Bonds then outstanding to be due and pay- able immediately, and upon any such declaration such principal shall become due and payable immediately, any- thing in the Loan Agreement or in the Bonds to the con- trary notwithstanding. ARTICLE VII Miscellaneous SECTION 7.01. The Closing Date shall be August 31, 1963, or such other date as shall be agreed upon by the Borrower and the Bank. SECTION 7.02. A date sixty days after the date of this Agreement is hereby specified for the purposes of Section 9.04 of the Loan Regulations. SECTION 7,03. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: For the Borrower: The Director of Public Works Bureau of Public Works Manila, Philippines 10 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. SECTION 7.04. The Director of Public Works of the Bor- rower is designated for the purposes of Section 8.03 of the Loan Regulations. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Loan Agreement to be signed in their respective names and delivered in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF THE PHILIPPINES By FLORENCIO MORENO Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By W. A. B. ILIFF Vice President 11 SCHEDULE 1 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* September 15, 1963 $174,000 March 15, 1964 179,000 September 15, 1964 184,000 March 15, 1965 189,000 September 15, 1965 194,000 March 15, 1966 200,000 September 15, 1966 206,000 March 15, 1967 212,000 September 15,1967 218,000 March 15, 1968 224,000 September 15, 1968 230,000 March 15,1969 237,000 September 15, 1969 244,000 March 15, 1970 251,000 September 15, 1970 258,000 March 15, 1971 265,000 September 15, 1971 273,000 March 15, 1972 281,000 September 15, 1972 289,000 March 15, 1973 297,000 September 15, 1973 306,000 March 15, 1974 315,000 September 15, 1974 324,000 March 15, 1975 333,000 September 15, 1975 343,000 March 15, 1976 353,000 September 15, 1976 363,000 March 15, 1977 373,000 September 15, 1977 384,000 March 15, 1978 395,000 September 15, 1978 406,000 * To the extent that any part of the Loan is repay able in a currency other than dollars (see Loan Regulations, Section 3.03), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. 12 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 1% More than 3 years but not more than 6 years before maturity........... 2% More than 6 years but not more than 11 years before maturity.......... 3/2 % More than 11 years but not more than 15 years before maturity.......... 43/4% More than 15 years before maturity.. 53/4% 13 SCHEDULE 2 Description of the Project The Project is the dredging of the Borrower's public ports to provide depths of water adequate for the naviga- tional needs of inter-island and ocean-going shipping, and dredging thereafter to maintain such depths. To this end, the Borrower will, inter alia: 1 Acquire, operate, maintain and repair a. One hopper dredge of approximately 1,000 cu. yd. hopper capacity; b. One 20-in. cutter-suction dredge with pipeline; c. Three 14-in. cutter-suction dredges with pipelines; d. One self propelled grab hopper dredge; e. One work launch; f. Two dredge tenders; g. One floating crane of 40 tons capacity; and h. Echo sounding equipment. 2. Procure spare parts for this equipment. 3. Design, construct and operate a slipway and workshop for repair of the dredging equipment of the Bor- rower's Department of Public Works, Communica- tions and Transportation.