Senegal - Second Sofisedit Project : Loan 1332 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1332 SE LOAN AGREEMENT (Second SOFISEDIT Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and SOCIETE FINANCIERE SENEGALAISE POUR LE DEVELOPPEMENT INDUSTRIEL ET TOURISTIQUE Dated October 14, 1976 LOAN AGREEMENT AGREEMENT, dated October 14, 1976, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and SOCIETE FINANCIERE SENEGALAISE POUR LE DEVELOPPEMENT INDUSTRIEL ET TOURISTIQUE (hereinafter called the Borrower), a banking institu- tion established and operating under the laws of the Republic of Senegal (hereinafter called the Guarantor). -2- ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of th:e General Conditions Applicable to Loan and Guar- antee Agreements of the Bank dated March 15, 1974, with the same force and effect as if they were fully set forth herein, subject, however, to the modifications thereof set forth in Schedule 2 to this Agreement (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank, as so modified, being herein- after 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 have the respective meanings therein set forth, and the following additional terms have the following meanings: (a) "Sub-loan" means a loan or credit made or proposed to be made by the Borrower out of the proceeds of the Loan to an Invest- ment Enterprise for an Investment Project and "free-limit sub-loan" means a sub-loan, as so defined, which qualifies as a free-limit sub-loan pursuant to the provisions of Section 2.02 (b) of this Agreement. (b) "Investment" means an investment other than a sub-loan made or proposed to be made by the Borrower out of the proceeds of the Loan in an Investment Enterprise for an Investment Project. -3- (c) "Investment Enterprise" means an enterprise to which the Borrower proposes to make or has made a sub-loan or in which it proposes to make or has made an investment. (d) "Investment Project" means a specific development proj- ect to be carried out by an Investment Enterprise utilizing the proceeds of a sub-loan or investment. (e) "CFA Franc" and "CFAF" mean the currency of the Guarantor. (f) "Foreign currency" means any currency other than the cur- rency of the Guarantor, including CFA Francs in countries where such currency is also the national currency. (g) "Statutes" means the Statuts of the Borrower dated March 19, 1974, as amended to the date of this Agreement and as further amended from time to time with the prior approval of the Bank. (h) "Statement of Policy" means the General Policy Regula- tions approved by the Directors of the Borrower on March 21, 1974, as amended to the date of this Agreement and as further amended from time to time with the prior approval of the Bank. (i) "General Lending Conditions" means the general conditions applicable to medium- and long-term loans granted by the Borrower and approved by the Directors of the Borrower on March 10, 1975, as amended to the date of this Agreement and as further amended from time to time. (j) "Prior Loan Agreement" means any outstanding loan agree- ment between the Bank and the Borrower dated before the date of this Agreement and "Prior Loan" means any loan provided for therein. (k) "Subsidiary" means any company of which a majority of the outstanding voting stock or other proprietary interest is owned or effectively controlled by the Borrower or by any one or more subsidiaries of the Borrower or by the Borrower and one or more of its subsidiaries. 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 four million two hundred thousand dollars ($4,200,000). Section 2.02. (a) An amount of the Loan not exceeding the equivalent of $200,000 may be withdrawn from the Loan Account by the Borrower on behalf of the Guarantor for the purposes specified in Section 3.04 of the Guarantee Agreement. (b) The amount of the Loan not subject to withdrawal under paragraph (a) of this Section may be withdrawn from the Loan Account for amounts expended by the Borrower for an Investment Project or, if the Bank shall so agree, for amounts to be expended by the Borrower for an Investment Project, to finance the reasonable cost of goods and services required under a sub-loan or investment for the Investment Project in respect of which the withdrawal is requested; provided, however, that no withdrawal shall be made in respect of a sub-loan or investment unless (i) the sub-loan or investment shall have been approved by the Bank, or (ii) the sub- loan shall be a free-limit sub-loan for which the Bank shall have authorized withdrawals from the Loan Account. For the purposes of the foregoing, withdrawals from the Loan Account shall be author- ized by the Bank in respect of the following expenditures under a sub-loan or investment: (i) in a foreign currency for goods procured, or services supplied from, outside the territories of the Guarantor; (ii) in CFA Francs on account of seventy five per cent (75%) of the invoiced price for goods previously imported into the territories of the Guarantor through normal trade channels; (iii) in CFA Francs on account of fifty per cent (50%) of the invoiced price for goods produced in the territories of the Guarantor to a substantial extent from materials previously imported into the territories of the Guarantor; and (iv) in CFA Francs on account of forty five per cent (45%) of the contract price under civil works and construction contracts to be carried out in the territories of the Guarantor; (said percentages in each case representing the estimated foreign expenditure component). (b) A free-limit sub-loan is a sub-loan for an Investment Project in an amount to be financed out of the proceeds of the Loan which shall not exceed the sum of (i) $250,000 equivalent when added to any other outstanding amounts financed or proposed to be financed out of the proceeds of the Loan or of any Prior Loan for such Investment Project or (ii) $1,500,000 equivalent, -7- when added to all other free-limit sub-loans financed or proposed to be financed out of the proceeds of the Loan, the foregoing amounts being subject to change from time to time as determined by the Bank following consultation with the Borrower. (c) Except as the Bank and the Borrower shall otherwise agree, no withdrawals shall be made on account of expenditures made by an Investment Enterprise in respect of a sub-loan subject to the Bank's approval, or in respect of an investment, if such expenditures shall have been made before the date of this Agreement or more than ninety days prior to the date on which the Bank shall have received in respect of such sub-loan or investment the appli- cation and information required by Section 2.03 (a) of this Agree- ment or, under a free-limit sub-loan, more than ninety days prior to the date on which the Bank shall have received in respect of such free-limit sub-loan the request and information required by Section 2.03 (b). Section 2.03. (a) When presenting a sub-loan (other than a free-limit sub-loan) or an investment to the Bank for approval, the Borrower shall furnish to the Bank an application, in form satisfactory to the Bank, together with (i) a description of the Investment Enterprise and an appraisal of the Investment Project, including a description of the expenditures proposed to be financed out of the proceeds of the Loan; (ii) the proposed terms and con- ditions of the sub-loan or investment, including the schedule of amortization of the sub-loan or of repayment to the Bank of the amount of the Loan to be used for the investment; and (iii) such other information as the Bank shall reasonably request. -8- (b) Each request by the Borrower for authorization to make withdrawals from the Loan Account in respect of a free-limit sub- loan shall contain (i) a summary description of the Investment Enterprise and the Investment Project, including a description of the expenditures proposed to be financed out of the proceeds of the Loan, and (ii) the terms and conditions of such free-limit sub-loan, including the schedule of amortization therefor. (c) Except as the Bank and the Borrower shall otherwise agree, applications and requests made pursuant to the provisions of paragraphs (a) and (b) of this Section shall be presented to the Bank on or before June 30, 1979. Section 2.04. The Closing Date shall be June 30, 1981 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower and the Guarantor of such later date. Section 2.05. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.06. The Borrower shall pay interest at the rate of eight and ninety hundredths per cent (8.90%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semi-annually on February 1 and August 1 in each year. 1 -9- ARTICLE VI Miscellaneous Section 6.01. The date January 12, 1976 is hereby specified for the purposes of Section 12.04 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 Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INTBAFRAD Washington, D.C. For the Borrower: Societ6 Financiere Sin6galaise pour le Developpement Industriel et Touristique 70, Rue du Docteur Thhze B.P. 2003 Dakar RSpublique du S6negal Cable address: BANADESEG Dakar @1 - 10 - (c) The Borrower shall transmit to the Bank, for its prior approval, any substantial changes proposed to be made by the Borrower in respect of the repayment provisions of any sub-loan. (d) The principal amount of the Loan withdrawn from the Loan Account pursuant to paragraph (a) of Section 2.02 of this Agree- ment shall be repaid by the Borrower to the Bank in twenty equal semi-annual instalments beginning February 1, 1979. Section 2.09. Unless the Bank and the Borrower shall other- wise agree: (a) If a sub-loan or any part thereof shall be repaid to the Borrower in advance of maturity or if a sub-loan or an in- ___ vestment or any part thereof shall be sold, transferred, assigned or otherwise disposed of for value by the Borrower, the Borrower shall promptly notify the Bank and shall repay to the Bank on the next followiag ;terest payment date, together with the premiums specified in Schedule 1 to this Agreement or in any amendment thereof under Section 2,08 (a) of this Agreement, the amount with- drawn from the Loan Account in respect of such sub-loan or invest- mer't or part thereof and not theretofore repaid to the Bank. (b) Any amount so repaid by the Borrower shall be applied by the Bank ,s follows: (i) in the case of a sub-loan, to the maturi- ty or maturities of the Loan in amounts corresponding to the out- standing amounts of the maturity or maturities of the sub-loan so repaid or disposed of, and (ii) in the case of an investment, pro rata to the maturity or maturities of the Loan reflecting am6unts to be repaid on account of such investment. - 11 - (c) Paragraph (b) of Section 3.05 of the General Conditions shall not apply to any repayment made under paragraph (a) of this Section. -12- ARTICLE III The Project; Management and Operations of the Borrower Section 3.01. (a) The purpose of the Project is to assist the Borrower in financing such productive facilities and resources in the Republic of Senegal as will contribute to the economic and social development of the country. The Project consists in the financing of specific development projects through loans to and investments in productive enterprises in the Republic of Senegal, in furtherance of the corporate purposes of the Borrower. (b) The Borrower shall carry out the Project and conduct its operations and affairs in accordance with sound financial stand- ards and practices, with qualified -,management and personnel, and in accordance with the Statutes, Statement of Policy and General Lending Conditions. Section 3.02. (a) The Borrower undertakes that, unless the Bank shall otherwise agree, any sub-loan or investment will be made on terms whereby the Borrower shall obtain, by written con- tract with the Investment Enterprise or by other appropriate legal means, rights adequate to protect the interests of the Bank and the Borrower, including, in the case of any sub-loan and to the extent that it shall be appropriate in the case of any invest- ment, the right of the Borrower to: (i) require the Investment En- terprise to carry out and operate the Investment Project with due diligence and efficiency and in accordance with sound technical, financial and managerial standards and to maintain adequate re- cords; (ii) require that: (1) the goods and services to be financed - 13 - out of the proceeds of the Loan shall be purchased at a reasonable price, account being taken also of other relevant factors such as time of delivery and efficiency and reliability of the goods and availability of maintenance facilities and spare parts therefor, and, in the case of services, of their quality and the competence of the parties rendering them and (2) such goods and services shall be used exclusively in the carrying out of the Investment Project; (iii) inspect, by itself or jointly with representatives of the Bank if the Bank shall so request, such goods and the sites, works, plants and construction included in the Investment Project, the operation thereof, and any relevant records and documents; (iv) require that: (1) the Investment Enterprise shall take out and maintain with responsible insurers such insurance, against such - risks and in such amounts, as shall be consistent with sound business practice; and (2) without any limitation upon the foregoing, such insurance shall cover marine, transit and other hazards incident to the acquisition, transportation and delivery of goods financed out of the proceeds of the Loan to the place of use or installation, any indemnity thereunder to be made payable in a currency freely usable by the Investment Enterprise to replace or repair such goods; (v) obtain all such information as the Bank or the Borrower shall reasonably request relating to the foregoing and to the administration, operations and financial condition of the Investment Enterprise; and (vi) suspend or terminate the right of the Investment Enterprise to the use of the proceeds of the Loan upon failure by such Investment Enterprise to perform its obligations under its contract with the Borrower. (b) The Borrower shall exercise its rights in relation to each Investment Project in such manner as to: (i) protect the in- terests of the Bank and the Borrower, (ii) comply with its obli- gations under this Agreement, and (iii) achieve the purposes of the Project. Section 3.03. The Borrower shall furnish to the Bank all such information as the Bank shall reasonably request concerning the expenditure of the proceeds of the Loan, the Project, the In- vestment Enterprises, the Investment Projects, and the sub-loans and investments. Section 3.04. The Borrower shall duly perform all its obliga- tions under agreements under which funds have been lent or other- wise put at the disposal of the Borrower by the Guarantor or its agencies or others for relending, investment or management. The Borrower shall promptly inform the Bank of any action which would have the effect of assigning, or of amending, abrogating or waiv- ing any material provision of, any such agreement. Section 3.05. If the Borrower establishes or acquires any subsidiary, the Borrower shall cause such subsidiary to observe and perform the obligations of the Borrower hereunder to the ex- tent to which such obligations shall or can be applicable there- to, as though such obligations were binding upon such subsidiary. - 15 - ARTICLE IV Financial Covenants Section 4.01. The Borrower shall maintain records adequate to record the progress of the Project and of each Investment Proj- ect (including the cost thereof) and to reflect in accordance with consistently maintained sound accounting practices the operations and financial condition of the Borrower. Section 4.02. The Borrower shall: (i) have its accounts and financial statements (balance sheets, statements of income and expenses and related statements) for each fiscal year audited in accordance with sound auditing principles consistently applied, by independent auditors acceptable to the Bank; (ii) furnish to the Bank, as soon as available but in any case not later than three months after the end of each such year, (A) certified copies of its financial statements for such year as so audited and (B) the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish to the Bank such other information concerning the accounts and financial statements of the Borrower and the audit thereof as the Bank shall from time to time reasonably request. Section 4.03. (a) The Borrower represents that at the date of this Agreement no lien exists on any of its assets as security for any debt, except as otherwise currently reported or disclosed in writing by the Borrower to the Bank. - 16 - (b) The Borrower undertakes that, except as the Bank shall otherwise agree: (i) if any lien shall be created on any assets of the Borrower or any subsidiary as security for any debt, such lien will equally and ratably secure the payment of the principal of, and interest and other charges on the Loan and that in the creation of any such lien express provision will be made to that effect at no cost to the Bank; and (ii) if any statutory lien shall be created on any assets of the Borrower or of any subsid- iary as security for any debt, the Borrower shall grant, at no cost to the Bank, an equivalent lien satisfactory to the Bank to secure the payment of the principal of, and interest and other charges on the Loan; provided, however, that the foregoing pro- visions of this paragraph shall not apply to: (A) any lien cre- ated on property, at the time of purchase thereof, solely as se- curity for the payment of the purchase price of such property; or (B) any lien arising in the ordinary course of banking trans- actions and securing a debt maturing not more than one year after the date on which it is originally incurred. Section 4.04. Except as the Bank shall otherwise agree, the Borrower shall: (i) conduct its operations and affairs in such manner as shall be necessary to maintain, at all times, its debt/ equity ratio within the limit referred to in Section 4.06 of this Agreement; and (ii) if such ratio shall, for reasons beyond the Borrower's control, be exceeded, promptly take all such reason- able action as shall be necessary or advisable to bring such ratio within such limit. 0 - 17 - Section 4.05. The Borrower shall not make any repayment in advance of maturity in respect of any outstanding debt ol the Borrower which, in the judgment of the Bank, would materially affect the Borrower's ability to meet its financial obligations. Section 4.06. Except as shall be otherwise agreed between the Bank and the Borrower, the Borrower shall not incur or permit any subsidiary to incur any debt if, after the incurring of such debt, the consolidated debt of the Borrower and all its subsidi- aries then incurred and outstanding would be greater than three times the consolidated capital and surplus of the Borrower and all its subsidiaries. For the purposes of this Section: (a) "debt" means any debt incurred by the Borrower or any subsidiary maturing more than one year after the date on which it is originally incurred; (b) debt shall be deemed to be incurred: (i) under a loan contract or agreement (including the Loan Agreement) on the date and to the extent the amount of the loan is drawn down and out- standing pursuant to such loan contract or agreement, and (ii) under a guarantee agreement, on the date the agreement providing for such guarantee has been entered into but only to the extent that the guaranteed debt is outstanding; (c) whenever in connection with this Section it shall be necessary to value in terms of CFAF debt payable in foreign cur- rency, such valuation shall be made at the prevailing lawful rate of exchange at which such foreign currency is, at the time of such valuation, obtainable by the Borrower for the purposes of servicing such debt; - 18 - (d) "consolidated debt of the Borrower and all its subsid- iaries" means the total amount of debt of the Borrower and sub- sidiaries, excluding any debt owed by the Borrower to any subsid- iary or by any subsidiary to the Borrower or to any other subsidiary; and (e) "consolidated capital and surplus of the Borrower and subsidiaries" means the aggregate o! the unimpaired paid-up capital, surplus and free reserves of the Borrower and subsidiaries after excluding therefrom such amounts as shall represent equity interests of the Borrower in any subsidiary or of any subsidiary in the Bor- rower or any other subsidiary. Section 4.07. The Borrower shall take such steps satisfactory to the Bank as shall be necessary to protect itself against risk of loss resulting from changes in the rates of exchange between the currencies used in its lending and borrowing operations. Section 4.08. The Bank and the Borrower shall from time to time, at the request of either party, exchange views through their representatives with regard to the administration, opera- tions and financial condition of the Borrower and its subsid- iaries, and the Borrower shall furnish to the Bank all such in- formation as the Bank shall reasonably request concerning the administration, operations and financial condition of the Borrower and subsidiaries. Section 4.09. The Borrower shall enable the Bank's represen- tatives to inspect the records referred to in Section 4.01 of this Agreement and any relevant documents. 1 - 19 - ARTICLE V Remedies of the Bank Section 5.01. For the purposes of Section 6.02 of the Gen- eral Conditions the following additional events are specified: (a) any part of the principal amount of any loan to the Bor-ower having an original maturity of one year or more shall, in accordance with its terms, have become due and payable in advance of maturity as provided in the relative contractual in- struments, or any security for any such loan shall have become enforceable; (b) a change shall have been made in the Statutes which will materially and adversely affect the financial condition or opera- tions of the Borrower; (c) a change shall have been made in the Statement of Policy without the Bank's consent; (d) a resolution shall have been passed for the dissolution or liquidation of the Borrower; and (e) a subsidiary or any other entity shall have been cre- ated or acquired or taken over by the Borrower, if such creation, acquisition or taking over would adversely affect the conduct of the Borrower's business or the Borrower's financial situation or the efficiency of the Borrower's management and personnel or the carrying out of the Project. - 20 - Section 5.02. For the purposes of Section 7.01 of the General Conditions the following additional events are specified: (a) any event specified in paragraph (a), (b) or (d) of Section 5.01 shall occur; and (b) any event specified in paragraph (c) or (e) of Section 5.01 shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower. - 21 - ARTICLE VI Miscellaneous Section 6.01. The date January 12, 1977 is hereby specified for the purposes of Section 12.04 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 Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INTBAFRAD Washington, D.C. For the Borrower: Societe Financiere S6negalaise pour le Developpement Industriel et Touristique 70, Rue du Docteur Theze B.P. 2003 Dakar Ropublique du S6n4gal Cable address: BANADESEG Dakar - 22 - IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agree- ment to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Andre GuS Acting Regional Vice President Western Africa SOCIETE FINANCIERE SENEGALAISE POUR LE DEVELOPPEMENT INDUSTRIEL ET TOURISTIQUE By /s/ Bayoro Diallo Authorized Representative - 23 - SCHEDULE 1 Amortization Schedule* The principal amount of the Loan withdrawn pursuant to Section 2.02 (b) of this Agreement shall be repaid as provided below, and the remainder, as provided in Section 2.08 (d). Payment of Principal Date Payment Due (expressed in dollars)** August 1, 1980 150,000 February 1, 1981 150,000 August 1, 1981 216,000 February 1, 1982 216,000 August 1, 1982 216,000 February 1, 1983 216,000 August 1, 1983 216,000 February 1, 1984 216,000 August 1, 1984 216,000 February 1, 1985 216,000 August 1, 1985 216,000 February 1, 1986 216,000 August 1, 1986 216,000 February 1, 1987 216,000 August 1, 1987 216,000 February 1, 1988 216,000 August 1, 1988 66,000 February 1, 1989 66,000 August 1, 1989 66,000 February 1, 1990 66,000 August 1, 1990 66,000 February 1, 1991 66,000 August 1, 1991 66,ooo Payment of Principal Date Payment Due (expressed in dollars) February 1, 1992 66,ooo August 1, 1992 66,ooo February 1, 1993 66,ooo August 1, 1993 16,000 * The Amortization Schedule is subject to amendment pursuant to the provisions of Section 2.08 of the Loan Agreement. ** To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Sec- tion 4.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. - 25 - Premiums on Prepayment The following percentages are specified as the premiums pay- able on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions or to Section 2.09 (a) of the Loan Agreement: Time of Prepayment Premium Not more than three years before maturity 1.55% More than three years but not more than six years before maturity 3.15% More than six years but not more than eleven years before maturity 5.75% More than eleven years but not more than fifteen years before maturity 7.85% More than fifteen years before maturity 8.90% - 26 - SCHEDULE 2 Modifications of the General Conditions For the purposes of the Loan Agreement, the provisions of the General Conditions are modified as follows: (1) The following subparagraph (d) is added to Section 3.05: "(d) The Bank and the Borrower may from time to time agree upon arrangements for prepayment of the Loan and the application of such prepayment in addition to, or in sub- stitution for, those set forth in paragraph (b) of Section 3.05." (2) The words "Investment Projects" are substituted for the words "the Project" at the end of Section 5.03. (3) Section 6.03 is deleted and replaced by the following new Section: "Section 6.03 Cancellation by the Bank. If (a) the right of the Borrower to make withdrawals from the Loan Account shall have been suspended with respect to any amount of the Loan for a continuous period of thirty days, or (b) by the date specified in paragraph (c) of Section 2.03 of the Loan Agreement no applications or requests permitted under paragraph (a) or paragraph (b) of such -27 - Section shall have been received by the Bank in respect of any portion of the Loan, or having been so received, shall have been denied, or (c) after the Closing Date an amount of the Loan shall remain unwithdrawn from the Loan Account, or (d) the Bank shall have received notice from the Guarantor pursuant to Section 6.07 with respect to an amount of the Loan, the Bank may by notice to the Borrower terminate the right of the Borrower to submit such appli- cations or requests or to make withdrawals from the Loan Account, as the case may be, with respect to such amount or portion of the Loan. Upon the giving of such notice such amount or portion of the Loan shall be cancelled."