Conformed Copy - L3259- Second Petrochemicals Development Project - Loan Agreement

Page 1 CONFORMED COPY LOAN NUMBER 3259 IN Loan Agreement (Second Petrochemicals Development Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and INDIAN PETROCHEMICAL CORPORATION LIMITED Dated November 7, 1990 LOAN NUMBER 3259 IN LOAN AGREEMENT AGREEMENT, dated November 7, 1990 between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank) and INDIAN PETROCHEMICAL CORPORATION LIMITED (the Borrower). WHEREAS: (A) India, acting by its President (the Guarantor) and the Borrower, having been satisfied as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, have requested the Bank to assist in the financing of the Project; (B) by an agreement (the Guarantee Agreement) of even date herewith between the Guarantor and the Bank, the Guarantor has agreed to guarantee the obligations of the Borrower in respect of the Loan; and (C) by an agreement (hereinafter called the Government Loan Agreement) of even date herewith between the Guarantor and the Bank, the Bank has agreed to make a loan to the Guarantor in an aggregate principal amount of $12,000,000 to assist in the financing of Part C of the Project on the terms and conditions set forth in the Government Loan Agreement; and WHEREAS the Bank has agreed, on the basis, inter alia, of the foregoing, to extend the Loan to the Borrower upon the terms and Page 2 conditions set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated January 1, 1985, with the last sentence of Section 3.02 deleted (the General Conditions) constitute an integral part of this Agreement. Section 1.02. 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) "Government Loan Agreement means the agreement of even date herewith entered into between the Guarantor and the Bank for the purposes of carrying out Part C of the Project. (b) "LLDPE," "HDPE", "PP" and "PBR" mean, respectively, linear low density polyethylene, high density polyethylene, polypropylene and polyutedine rubber; (c) "MGCC" means the Maharashtra Gas Cracker Complex located in the State of Maharashtra; (d) "tpy" means tons per year; and (e) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement. ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Loan Agreement, various currencies that shall have an aggregate value equivalent to the amount of two hundred thirty-three million dollars ($233,000,000), being the sum of withdrawals of the proceeds of the Loan with each withdrawal valued by the Bank as of the date of such withdrawal. Section 2.02. (a) The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for Parts A and B of the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Loan and in respect of interest and other charges on the Loan. (b) The Borrower shall, for the purposes of Parts A and B of the Project, open and maintain in dollars a special deposit account in the State Bank of India on terms and conditions satisfactory to the Bank. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 5 to this Agreement. (c) On each of the semi-annual interest payment dates speci- fied in Section 2.06 of this Agreement, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and pay to itself the amounts required to pay, on such date, interest and other charges on the Loan accrued and payable on or before the date set forth, and up Page 3 to the amount allocated, in Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Bank and the Borrower. Section 2.03. The Closing Date shall be September 30, 1996 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower and the Guarantor of such later date. Section 2.04. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one percent (3/4 of l%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.05. (a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time, at a rate for each Interest Period equal to the Cost of Qualified Borrowings determined in respect of the preceding Semester, plus one-half of one percent (1/2 of l%). On each of the dates specified in Section 2.06 of this Agreement, the Borrower shall pay interest accrued on the principal amount outstanding during the preceding Interest Period, calculated at the rate applicable during such Interest Period. (b) As soon as practicable after the end of each Semester, the Bank shall notify the Borrower of the Cost of Qualified Borrowings determined in respect of such Semester. (c) For the purposes of this Section: (i) "Interest Period" means a six - month period ending on the date immediately preceding each date specified in Section 2.06 of this Agreement, beginning with the Interest Period in which this Agreement is signed. (ii) "Cost of Qualified Borrowings" means the cost, as reasonably determined by the Bank and expressed as a percentage per annum, of the outstanding borrowings of the Bank drawn down after June 30, 1982, excluding such borrowings or portions thereof as the Bank has allocated to fund: (A) the Bank's investments; and (B) loans which may be made by the Bank after July 1, 1989 bearing interest rates determined otherwise than as provided in paragraph (a) of this Section. (iii) "Semester" means the first six months or the second six months of a calendar year. (d) On such date as the Bank may specify by no less than six months' notice to the Borrower, paragraphs (a), (b) and (c) (iii) of this Section shall be amended to read as follows: (a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time, at a rate for each Quarter equal to the Cost of Qualified Borrowings determined in respect of the preceding Quarter, plus one-half of one percent (1/2 of l%). On each of the dates specified in Section 2.06 of this Agreement, the Borrower shall pay interest accrued on the principal amount outstanding during the preceding Interest Period, calculated at the rates applicable during such Interest Period. (b) As soon as practicable after the end of each Quarter, the Bank shall notify the Borrower of the Cost of Qualified Borrowings determined in respect of such Quarter. (c) (iii) 'Quarter' means a three- month period commencing Page 4 on January 1, April 1, July 1 or October l in a calendar year. Section 2.06. Interest and other charges shall be payable semi-annually on March 1 and September 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. ARTICLE III Execution of the Project Section 3.01. The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement, and, to this end, shall carry out Parts A and B of the Project with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and industry practices, and shall provide, promptly as needed, the funds, faci- lities, services and other resources required for the Project. Section 3.02. Except as the Bank shall otherwise agree, pro- curement of the goods required for Parts A and B of the Project and to be financed out of the proceeds of the Loan shall be governed by the provisions of Schedule 4 to this Agreement. Section 3.03. The Borrower shall implement, in the manner agreed between the Bank and the Borrower, its market development plan (including the intended use of part of the proceeds of the Loan for such purpose) furnished or to be furnished by it to the Bank for LLDPE, HDPE, PP, PBR and such other products as may be agreed to by the Bank. Section 3.04. (a) The Borrower shall build and operate the facilities under Part A of the Project in accordance with environ- mental standards satisfactory to the Bank . (b) The Borrower shall, not later than December 31, 1990 in respect of the Nagothane complex and not later than September 30, 1991 in respect of the Vadodara complex, cause to be carried out a detailed safety audit by qualified consultants prior to the commissioning of the facilities under Part A of the Project to assess the impact of risks to the area covered by the Project and the surrounding community. ARTICLE IV Management and Operations of the Borrower Section 4.01. The Borrower shall carry on its operations and conduct its affairs in accordance with sound administrative, financial, engineering and industry practices under the supervision of qualified and experienced management assisted by competent staff in adequate numbers. Section 4.02. The Borrower shall at all times operate and maintain its plants, machinery, equipment and other property, and from time to time, promptly as needed, make all necessary repairs and renewals thereof, all in accordance with sound engineering, financial and industry practices. Section 4.03. The Borrower shall take out and maintain with responsible insurers, or make other provision satisfactory to the Bank for, insurance against such risks and in such amounts as shall be consistent with appropriate practice. Page 5 ARTICLE V Financial Covenants Section 5.01. (a) The Borrower shall maintain records and accounts adequate to reflect in accordance with sound accounting practices its operations and financial condition. (b) The Borrower shall: (i) have its records, accounts and financial statements (balance sheets, statements of income and expenses and related statements) and the records and accounts for the Special Account for each fiscal year audited, in accordance with appropriate 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 six 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 said records, accounts and financial statements as well as the audit thereof as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals from the Loan Account were made on the basis of statements of expenditure, the Borrower shall: (i) maintain, in accordance with paragraph (a) of this Section, records and accounts reflecting such expenditures; (ii) retain, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank's representatives to examine such records; and (iv) ensure that such records and accounts are included in the annual audit referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. Section 5.02. (a) Except as the Bank shall otherwise agree the Borrower shall: (i) not incur any debt, if after the incurrence of such debt, the aggregate principal amount of debt of the Borrower then incurred and outstanding would be greater than 1.5 times the equity of the Page 6 Borrower; (ii) maintain a ratio of current assets to current liabilities of not less than 1.3; (iii) not incur any debt unless a reasonable forecast of the revenues and expenditures of the Borrower shows that the projected internal cash generation of the Borrower for each fiscal year during the term of the debt to be incurred shall be at least 1.3 times the projected debt service requirements of the Borrower in such year on all debt of the Borrower including the debt to be incurred; and (iv) not prepay any debt, if as a result thereof, the current assets of the Borrower were to fall below 1.5 times the current liabilities of the Borrower. (b) For the purposes of this Section: (i) The term "debt" means any indebtedness of the Borrower maturing by its terms more than one year after the date on which it is originally incurred. (ii) Debt shall be deemed to be incurred: (i) under a loan contract or agreement or other instrument providing for such debt or for the modification of its terms of payment, on the date of such contract, agreement or instrument; and (ii) under a guarantee agreement, on the date the agreement providing for such guarantee has been entered into but only to the extent that the guaranteed debt is outstanding. (iii) The term "equity of the Borrower" means the sum of the total unimpaired paid-up capital, retained earnings and reserves of the Borrower not allocated to cover specific liabilities. (iv) The term "current assets" means cash, accounts receivable due within twelve months, marketable securities, pre-paid expenses properly chargeable to operating expenses within the next twelve months following the date on which such pre -paid expenses were made, and all other assets which could, in the ordinary course of business, be converted into cash within twelve months. (v) The term "current liabilities" means accounts payable within twelve months, customer advances, income taxes, dividends, bonuses and all other liabilities (including debt) which, pursuant to their terms, will become due and payable or could under circumstances then existing be called for payment within twelve months. (vi) The term "internal cash generation of the Borrower" means gross revenues of the Borrower from all sources, less all operating expenses of the Borrower, including expenses accountable to administration, maintenance and taxes (or payments in lieu of taxes), but before provision for depreciation of assets and interest and other charges on debt. Page 7 (vii) The term "debt service requirement" means the aggregate amount of amortization (including sinking fund payments, if any) of, and interest and other charges on, debt. (viii) The term "reasonable forecast" means a forecast prepared by the Borrower covering the fiscal year in which the debt in question is to be incurred, which the Bank has accepted as reasonable. (ix) Whenever it shall be necessary to value, in terms of currency of the Borrower, debt payable in another currency, such valuation shall be made on the basis of the prevailing lawful rate of exchange at which such other currency is, at the time of such valuation, obtainable for the purposes of servicing such debt, or, in the absence of such rate, on the basis of a rate of exchange acceptable to the Bank. ARTICLE VI Remedies of the Bank Section 6.01. Pursuant to Section 6.02 (k) of the General Conditions, the following additional events are specified: (a) a subsidiary or any other entity shall have been created or acquired or taken over by the Borrower, if such creation, acquisition or taking over would materially and adversely affect the conduct of the Borrower's business or the Borrower's financial condition or the efficiency of the Borrower's management and per- sonnel or the carrying out of the Project; and (b) the Guarantor or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of the Borrower or for the suspension of its operations. Section 6.02. Pursuant to Section 7.01 (h) of the General Conditions, the following additional events are specified: (a) any event specified in paragraph (a) of Section 6.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower; and (b) any event specified in paragraph (b) of Section 6.01 of this Agreement shall occur. ARTICLE VII Effective Date; Termination Section 7.01. The following events are specified as additional conditions to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions, namely, that all conditions precedent to the effectiveness of the Government Loan Agreement, except for those related to the effectiveness of this Agreement, have been fulfilled. Section 7.02. The date ninety (9O) days after the date of this Agreement is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VIII Representative of the BorroWer; Addresses Page 8 Section 8.01. The Chairman of the Borrower or such other person as the Borrower shall designate in writing is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 8.02. 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.U. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 197688 (TRT) Washington, D.C. 248423 (RCA) 64145 (WUI) or 82987 (FTCC) For the Borrower: Indian Petrochemical Corporation Limited P.O. Box Petrochemicals - 391346 391346 District Vadodara, Gujarat India Cable address: Telex: PETCOMPLEX 0175-364 Vadodara IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have caused this Agreement 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/ Daniel Ritchie Acting Regional Vice President Asia INDIAN PETROCHEMICAL CORPORATION LIMITED By /s/ Anil Kumar Authorized Representative SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expend- Page 9 itures for items so to be financed in each Category : Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Equipment and 80,300,000 100% of foreign materials under expenditures and Part A of the 100% of local Project expenditures (ex-factory cost) (2) Licenses and 32,300,000 100% of foreign engineering expenditures services (3) Materials under 75,000,000 100% of foreign Part B of the expenditures Project (4) Interest and 26,000,000 Amounts due pur- other charges on suant to Section the Loan accrued 2.02 (c) of this on or before Agreement March 1, 1996 (5) Unallocated 19,400,000 __________ TOTAL 233,000,000 =========== 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Guarantor for goods or services supplied from the territory of any country other than that of the Guarantor; and (b) the term "local expenditures" means expenditures in the currency of the Guarantor or for goods or services supplied from the territory of the Guarantor. 3. Notwithstanding the provisions of paragraph 1 above, no with- drawals shall be made in respect of payments made for expenditures prior to the date of this Agreement, except that withdrawals, in an aggregate amount not exceeding the equivalent of $10,000,000 may be made on account of payments made for expenditures before the date of this Agreement but after January 1, 1990. SCHEDULE 2 Description of the Project The objectives of the Project are to (i) support the Borrower's overall efforts to expand the capacity to produce basic petrochemicals economically and efficiently, and (ii) improve the efficiency and product quality of downstream plastics industry. The Project consists of the following parts, subject to such modifications thereof as the Borrower and the Bank may agree upon Page 10 from time to time to achieve such objectives : Part A: Investments 1. Expansion of the Maharashtra Gas Cracker Complex at Nagothane in the State of Maharashtra from 300 to 400 thousand tpy of ethylene capacity and expansion of the LLDPE/HDPE plant (in the same location) to include a 75,000 tpy broad range molecular weight HDPE train using ethylene from the proposed expansion. 2. Setting up a second phase 12,500 tpy wires/cables polyethylene compounding unit at Nagothane, doubling the capacity of the wires/cables unit currently being implemented to 25,000 tpy. 3. Setting up a new 7,500 tpy engineering plastics unit at Vadodara in the State of Gujarat for the manufacture of blends and composites of polycarbonate and polyphenylene oxide. 4. Setting up a new 75,000 tpy polypropylene unit at Vadodara. 5. Rehabilitation of and expansion to 35,000 tpy of IPCL's (Vadodara Complex) existing butadiene extraction and 50,000 tpy of polybutadiene rubber to utilize the additional production of butadiene in Nagothane. 6. Implementation of debottlenecking and equipment modernization schemes consisting of investments in several existing plants at both the Vadodara and Nagothane complexes, including improvements in the waste treatment facilities. Part B: Market Development Carrying out of a plan of pre-production imports of polymers for the purposes of market development. Part C: Technical Assistance Provision of testing and training equipment and overseas training of key personnel who will conduct courses sponsored by the Central Institute of Plastic Engineering and Technology. * * * The Project is expected to be completed by March 31, 1996. SCHEDULE 3 Amortization Schedule Payment of Principal Date PaYment Due (expressed in dollars~* March 1, 1996 4,240,000 September 1, 1996 4,405,000 March 1, 1997 4,575,000 September 1, 1997 4,755,000 March 1, 1998 4,940,000 September 1, 1998 5,130,000 March 1, l999 5,330,000 September 1, 1999 5,535,000 March 1, 2000 5,750,000 September 1, 2000 5,975,000 March 1, 2001 6,205,000 September 1, 2001 6,445,000 March l, 2002 6,695,000 September 1, 2002 6,955,000 March 1, 2003 7,225,000 September 1, 2003 7,505,000 Page 11 March 1 , 2004 7 , 795 , 000 September 1, 2004 8,095,000 March 1, 2005 8,410,000 September 1, 2005 8,735,000 March 1, 2006 9,075,000 September 1, 2006 9,425,000 March 1, 2007 9,790,000 September 1, 2007 10,170,000 March 1, 2008 10,565,000 September 1, 2008 10,975,000 March 1, 2009 11,400,000 September l, 2009 11,840,000 March l, 2010 12,300,000 September 1, 2010 12,760,000 ______________________ * The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal. See General Conditions, Sections 3.04 and 4.03. Premiums on Prepayment Pursuant to Section 3.04 (b) of the General Conditions, the premium payable on the principal amount of any maturity of the Loan to be prepaid shall be the percentage specified for the applicable time of prepayment below: Time of Prepayment Premium The interest rate (expressed as a percentage per annum) applicable to the Loan on the day of prepayment multiplied by : Not more than three years 0.15 before maturity More than three years but 0.30 not more than six years before maturity More than six years but 0.55 not more than 11 years before maturity More than 11 years but not 0.80 more than 16 years before maturity More than 16 years but not 0.90 more than 18 years before maturity More than 18 years before 1.00 maturity SCHEDULE 4 Procurement Procurement of Goods Page 12 Part A : International Competitive Bidding Except as provided in Part C hereof, goods shall be procured under contracts awarded in accordance with procedures consistent with those set forth in Sections I and II of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1985 (the Guidelines). Part B: Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A hereof, goods manufactured in India may be granted a margin of preference in accordance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraphs 1 through 4 of Appendix 2 thereto. Part C: Other Procurement Procedures 1. Items with an estimated value of less than $200,000 equivalent not exceeding $54,100,000 in the aggregate, may be procured under contracts awarded through limited international bidding procedures on the basis of evaluation and comparison of bids invited from a list of at least three qualified suppliers eligible under the Guidelines and in accordance with the procedures set forth in Sections I and II of the Guidelines (excluding paragraphs 2.8, 2.9, 2.55 and 2.56 thereof). 2. Equipment and licenses proprietary to the process design and sole-source equipment not exceeding $7,000,000 in the aggregate, may be procured through direct purchase from manufacturers on standard commercial terms. Part D: Review of the Bank of Procurement Decisions 1. (a) With respect to each contract for equipment and materials estimated to cost the equivalent of $ 750,000 or more and all contracts for engineering services financed out of the proceeds of the Loan, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract required to be furnished to the Bank pursuant to said paragraph 2 (d) shall be furnished to the Bank prior to the making of the first payment out of the Special Account in respect of such contract. (b) With respect to each contract not governed by the prece- ding paragraph, the procedures set forth in paragraphs 3 and 4 of Appendix 1 to the Guidelines shall apply. Where payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract together with the other information required to be furnished to the Bank pursuant to said paragraph 3 shall be furn- ished to the Bank as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 5 to this Agreement. (c) The provisions of the preceding sub-paragraph (b) shall not apply to contracts on account of which the Bank has authorized withdrawals from the Loan Account on the basis of statements of expenditure. Such contracts shall be retained in accordance with Section 5.01 (c) (ii) of this Agreement. 2. The figure of 15% is hereby specified for purposes of paragraph 4 of Appendix l to the Guidelines. SCHEDULE 5 Page 13 Special Account 1. For the purposes of this Schedule: (a) The term "eligible Categories" means Categories (l), (2), and (3) set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (b) the term "eligible expenditures" means expenditures in respect of the reasonable cost of goods and services required for Parts A and B of the Project and to be financed out of the proceeds of the Loan allocated from time to time to the eligible Categories in accordance with the provisions of Schedule l to this Agreement; and (c) the term "Authorized Allocation" means an amount equiva - lent to $20,000,000 to be withdrawn from the Loan Account and deposited into the Special Account pursuant to paragraph 3 (a) of this Schedule. 2. Payments out of the Special Account shall be made exclusively for eligible expenditures in accordance with the provisions of this Schedule. 3. After the Bank has received evidence satisfactory to it that the Special Account has been duly opened, withdrawals of the Auth- orized Allocation and subsequent withdrawals to replenish the Special Account shall be made as follows: (A) for withdrawals of the Authorized Allocation, the Borrower shall furnish to the Bank a request or requests for a deposit or deposits which do not exceed the aggregate amount of the Authorized Allocation. On the basis of such request or requests, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and deposit into the Special Account such amount or amounts as the Borrower shall have requested. (b) (i) For replenishment of the Special Account, the Borrower shall furnish to the Bank requests for deposits into the Special Account at such inter- vals as the Bank shall specify. (ii) Prior to or at the time of each such request, the Borrower shall furnish to the Bank the documents and other evidence required pursuant to paragraph 4 of this Schedule for the payment or payments in respect of which replenishment is requested. On the basis of each such request, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and deposit into the Special Account such amount as the Borrower shall have requested and as shall have been shown by said documents and other evidence to have been made out of the Special Account for eligible expenditures. All such deposits shall be withdrawn by the Bank from the Loan Account under the respective eligible Categories, and in the res- pective equivalent amounts, as shall have been justified by said documents and other evidence. 4. For each payment made by the Borrower out of the Special Account, the Borrower shall, at such time as the Bank shall rea- sonably request, furnish to the Bank such documents and other evidence showing that such payment was made exclusively for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Sched- ule, the Bank shall not be required to make further deposits into Page 14 the Special Account : (a) if, at any time, the Bank shall have determined that all further withdrawals should be made by the Borrower directly from the Loan Account in accordance with the provisions of Article V of the General Conditions and paragraph (a) of Section 2.02 of this Agreement; or (b) once the total unwithdrawn amount of the Loan allocated to the eligible Categories for Parts A and B of the Project, less the amount of any outstanding special commitment entered into by the Bank pursuant to Section 5.02 of the General Conditions with respect to Parts A and B of the Project, shall equal the equivalent of twice the amount of the Authorized Allocation. Thereafter, withdrawal from the Loan Account of the remaining unwithdrawn amount of the Loan allocated to the eligible Categories for Parts A and B of the Project shall follow such procedures as the Bank shall specify by notice to the Borrower. Such further withdrawals shall be made only after and to the extent that the Bank shall have been satisfied that all such amounts remaining on deposit in the Special Account as of the date of such notice will be utilized in making payments for eligible expenditures. 6. (a) If the Bank shall have determined at any time that any payment out of the Special Account: (i) was made for an expenditure or in an amount not eligible pursuant to paragraph 2 of this Schedule; or (ii) was not justified by the evidence furnished to the Bank, the Borrower shall, promptly upon notice from the Bank: (A) provide such additional evidence as the Bank may request; or (B) deposit into the Special Account (or, if the Bank shall so request, refund to the Bank) an amount equal to the amount of such payment or the portion thereof not so eligible or justified. Unless the Bank shall otherwise agree, no further deposit by the Bank into the Special Account shall be made until the Borrower has provided such evidence or made such deposit or refund, as the case may be. (b) If the Bank shall have determined at any time that any amount outstanding in the Special Account will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the Bank, refund to the Bank such outstanding amount. (c) The Borrower may, upon notice to the Bank, refund to the Bank all or any portion of the funds on deposit in the Special Account. (d) Refunds to the Bank made pursuant to paragraphs 6 (a), (b) and (c) of this Schedule shall be credited to the Loan Account for subsequent withdrawal or for cancellation in accordance with the relevant provisions of this Agreement, including the General Conditions.