Cameroon - Second Socapalm Project : Loan 1392 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1392 CM Loan Agreement (Second SOCAPALM Project) between UNITED REPUBLIC OF CAMEROON and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated August 25, 1977 LOAN AGREEMENT AGREEMENT, dated August 25, 1977, between UNITED REPUBLIC OF CAMEROON (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS (A) the Borrower has requested the Bank to assist in the financing of the foreign exchange cost of the Project described in Schedule 2 to this Agreement by making the Loan as hereinafter provided; (B) the Borrower has also requested the Bank to provide additional assistance towards the financing of the Project under the Interest Subsidy Fund for the Third Window established by Resolution No. 75-111 of the Executive Directors of the Bank and by an agreement of even date herewith between the Borrower and the Bank (hereinafter called the Intermediate Term Loan Agreement), the Bank is agreeing to provide such assistance in an aggregate principal amount equivalent to seven million dollars ($7,000,000) (hereinafter called the Intermediate Term Loan); (C) the Borrower and the Bank intend that the proceeds of this Loan and of the Intermediate Term Loan be disbursed pro rata on the basis of a 18:7 ratio; -2- (D) Parts A and B of the Project will be carried out by the Sociftf Camerounaise de Palmeraies (hereinafter called SOCAPALM), and Part C of the Project will be carried out jointly by SOCAPALM and the Fonds National de D6veloppement Rural (hereinafter called FONADER), all with the Borrower's assistance and, as part of such assistance, the Borrower will make available to SOCAPALM the proceeds of the Loan allocated to said Parts of the Project as hereinafter provided; (E) Part D of the Project will be carried out by the Coastal Estates Center (hereinafter called CEC) and, for this purpose, the Borrower will make available to CEC the proceeds of the Loan allocated to said Part of the Project as hereinafter provided; (F) pursuant to a loan agreement and a supplemental loan agreement dated April 15, 1969, and April 9, 1973, respectively, the Bank has made available to SOCAPALI4 two loans (Nos. 593 CM and 886 CM, respectively) for the purpose of assisting SOCAPALM in financing a first oil palm project; and WHEREAS the Bank has agreed, on the basis inter alia of the foregoing, to make the Loan available to the Borrower upon the terms and conditions set forth hereinafter and in a project agreement of even date herewith between the Bank and SOCAPALM; NOW THEREFORE the parties hereto hereby agree as follows: -3- ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "SOCAPALM" means Soci6td Camerounaise de Palmeraies, a Socifte de Deveioppement of the Borrower established and operating pursuant to the Borrower's Law No. 68/LF/9 dated June 11, 19b8, Decree No. 68/DF/275 dated July 15, 1968, Decree No. 68/DF/451 dated November 23, 1968, Decree No. 72/DF/4 dated January 3, 1972, and Decree No. 73/32 dated January 29, 1973, as such Law and Decrees may be amended from time to time; -4- (b) "Project Agreement" means the agreement between the Bank and SOCAPALM of even date herewith, as the same may be amended from time to time, and such term includes all agreements supplemental to the Project Agreement; (c) "SOCAPALM Financing Agreement" means the agreement to be entered into between the Borrower and SOCAPALM pursuant to Section 3.01 (b) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the SOCAPALM Financing Agreement; (d) "FONADER" means the Fonds National de Dfveloppement Rural of the Borrower, established and operating pursuant to the Borrower's Ordinance No. 73/24 of May 29, 1973, and Decree No. 73/496 of August 28, 1973, as such Ordinance and Decree may be amended from time to time; (e) "Credit Administration Agreement" means the agreement to be entered into between FONADER and SOCAPALM pursuant to Section 3.04 (a) of this Agreement and Section 2.02 (a) (i) of the Project Agreement, as the same may be amended from time to time, and such term includes all schedules to the Credit Administration Agreement; -5- (f) "CEC" means the Coastal Estates Center to be established by, inter alia, SOCAPALM, the Cameroon Development Corporation, the Soci6t6 H6v6a - Cameroun and the Sociftf Africaine Foresti8re et Agricole - Cameroun for the purpose of carrying out Part D of the Project; (g) "CEC Subsidiary Loan Agreement" means the Agreement to be entered into between the Borrower and CEC pursuant to Section 3.02 (a) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the CEC Subsidiary Loan Agreement; (h) "francs CFA" and the letters "CFAF" mean the currency of the Borrower; and (i) "Intermediate Term Loan Account" means the account opened by the Bank on its books in the name of the Borrower to which the amount of the Intermediate Term Loan is credited. - 6 - 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 eighteen million dollars ($18,000,000). Section 2.02. The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Bank, 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 the Project and to be financed out of the proceeds of the Loan. Section 2.03. Except as the Bank shall otherwise agree, contracts for the purchase of goods or for civil works to be financed out of the proceeds of the Loan, shall be procured in accordance with the provisions of Schedule 4 to this Agreement. Section 2.04. The Closing Date shall be June 30, 1982, or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower 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. -7- Section 2.06. The Borrower shall pay interest at the rate of eight and one-half per cent (8-1/2%) 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 March 1 and September 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. - 8 - ARTICLE III Execution of the Project Section 3.01. (a) Without any limitation or restriction upon any of its other obligations under the Loan Agreement, the Borrower shall cause SOCAPALM to perform in accordance with the provisions of the Project Agreement, the SOCAPALM Financing Agreement and the Credit Administration Agreement all the obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable SOCAPALM to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall make available the proceeds of the Loan allocated to Parts A, B and C (i) of the Project to SOCAPALM under a financing agreement to be entered into between the Borrower and SOCAPALM, under terms and conditions which shall have been approved by the Bank. -9- (c) The Borrower shall exercise its rights under the SOCAPALM Financing Agreement in such manner as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan, and except as the Bank shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive the SOCAPALM Financing Agreement or any provision thereof. Section 3.02. (a) The Borrower shall relend the proceeds of the Loan allocated to Part D of the Project to CEC under a subsidiary loan agreement to be entered into between the Borrower and CEC, under terms and conditions which shall have been approved by the Bank. (b) Without any limitation or restriction upon any of its other obligations under the Loan Agreement, the Borrower shall cause CEC to perform in accordance with the provisions of the CEC Subsidiary Loan Agreement all the obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable CEC to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. - 10 - (c) The Borrower shall exercise its rights under the CEC Subsidiary Loan Agreement in such manner as to protect the interests of the Borrower and the Bank an' to accomplish the purposes of the Loan, and except as the Bank shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive the CEC Subsidiary Loan Agreement or any provision thereof. Section 3.03. Without limitation or restriction upon the provisions of Section 3.01 of this Agreement, the Borrower specifically undertakes: (a) to pay in or cause to be paid in, promptly as called by the Board of Directors (Conseil d'Administration) of SOCAPALM, the amounts required on account of subscriptions to SOCAPALM's share capital; (b) to take or cause to be taken all action necessary, including the guarantee of bank overdraft facilities of SOCAPALM and the provision of funds by the Borrower to SOCAPALM on terms and conditions satisfactory to the Bank, to enable SOCAPALM to perform its obligations under Section 4.04 (a) of the Project Agreement; and - 11 - (c) to make available to FONADER, for the purpose of the financial assistance to be provided to smallholders under Part C (ii) of the Project and promptly as needed for the carrying out thereof, an amount of not less than three hundred million francs CFA (CFAF300,000,000). Section 3.04. (a) The Borrower shall cause FONADER to enter into a credit administration agreement with SOCAPALM on terms and conditions satisfactory to the Bank for the purpose of the joint execution of Part C of the Project by FONADER and SOCAPALM and, in particular, the provision of financial assistance to smallholders under Part C (ii) of the Project. (b) The Borrower shall cause FONADER to duly perform all its obligations under the Credit Administration Agieement, to exercise its rights thereunder in such manner as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan and, except as the Bank may otherwise agree, not to assign, amend, suspend, terminate, abrogate or waive the Credit Administration Agreement or any provision thereof. - 12 - Section 3.05. (a) The Borrower shall make available to SOCAPALM, promptly as needed, all such land and rights in respect of land as shall be required for carrying out Parts A and B of the Project and the operation of the facilities included therein. (b) The Borrower shall take all action necessary to ensure that any smallholder participating in the smallholder development program to be established under Part C of the Project shall have the right to work the land planted with oil palms by such smallholder under said program for the entire period of the economic life of such oil palms. (c) The Borrower shall make available, or cause to be made available, to CEC, promptly as needed, all such land and rights in respect of land as shall be required for carrying out Part D of the Project and the operation of the facilities included therein. - 13 - ARTICLE IV Other Covenants Section 4.01. (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, in normal circumstances, special security from the member concerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distribution of foreign exchange held under the control or for the benefit of such member. To that end, if any lien shall be created on any public assets (as hereinafter defined), as security for any external debt, which will or might result in a priority for the benefit of the creditor of such external debt in the allocation, realization or distribution of foreign exchange, such lien shall, unless the Bank shall otherwise agree, ipso facto and at no cost to the Bank, equally and ratably secure the principal of, and interest and other charges on, the Loan, and the Borrower, in creating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on assets of any of its political or administrative subdivisions, the Borrower shall promptly and at no cost to the Bank secure the principal of, and interest and other - 14 - charges on, the Loan by an equivalent lien on other public assets satisfactory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (c) As used in this Section, the term "public assets" means assets of the Borrower, of any political or administrative subdivision thereof and of any equity owned or controlled by, or operating for the account or benefit of, the Borrower or any such subdivision, including gold and other foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Borrower. Section 4.02. The Borrower shall make arrangements satisfactory to the Bank to provide, promptly as needed, the funds, facilities, services and other resources required for the efficient operation and adequate maintenance of the school included in Part A of the Project. - 15 - Section 4.03. Without any limitation or restriction upon any of its other obligations under the Loan Agreement, the Borrower shall take, or cause to be taken all action, including the provision of funds, services and other resources, necessary to ensure (i) that the oil palm plantings to be established under Part C of the Project shall be brought into, and maintained, in production; and (ii) that adequate processing facilities are available for the produce of the oil palm plantings to be established under Parts A, B and C of the Project. Section 4.04. The Borrower shall: (i) set the producer prices for oil palm fruit bunches upon recommendation of SOCAPALM and at a level adequate to ensure (A) a reasonable revenue to smallholders under Part C of the Project from their oil palm plantings, and (B) the recovery by SOCAPALM of the cost of collection and processing of such fruit bunches and of its other expenses related to the smallholder development program under Part C of the Project; and (ii) consult with the Bank prior to any changes of such producer prices. - 16 - ARTICLE V Remedies of the Bank Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) SOCAPALM shall have failed to perform any covenant, agreement or obligation of SOCAPALM under the Project Agreement. (b) A default shall occur in the performance of any covenant, agreement or obligation under the Credit Administration Agreement. (c) CEC shall have failed to perform any covenant, agreement or obligation of CEC under the CEC Subsidiary Loan Agreement. (d) An extraordinary situation shall have arisen which shall make it improbable: (i) that SOCAPALM will be able to perform its obligations under the Project Agreement; or (ii) that FONADER will be able to perform its obligations under the Credit Administration Agreement; or (iii) that CEC will be able to perform its obligations under the CEC Subsidiary Loan Agreement. (e) A representation made by SOCAPALM in or pursuant to the Project Agreement, or any statement furnished in connection therewith, and intended to be relied upon by the Bank in making the Loan, shall have been incorrect in any material respect. - 17 - (f) SOCAPALM shall have become unable to pay its debts as they mature or any action or proceeding shall have been taken by SOCAPALM or by others whereby any of the assets of SOCAPALM shall or may be distributed among its creditors. (g) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of SOCAPALM or for the suspension of its operations. (h) Any provision of the Borrower's Law No. 68/LF/9 dated June 11, 1968, Decree No. 68/DF/275 dated July 15, 1968, Decree No. 68/DF/451 dated November 23, 1968, Decree No. 72/DF/4 dated January 3, 1972, or Decree No. 73/32 dated January 29, 1973, shall have been amended, suspended, terminated or repealed so as to materially and adversely affect SOCAPALM's ability to carry out the covenants, agreements and obligations set forth in the Project Agreement. (i) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of FONADER or for the suspension of its operations without prior arrangements satisfactory to the Bank having been made by the Borrower for the transfer to another department or agency of the Borrower of the functions of FONADER with respect to the smallholder development program to be established under Part C of the Project. - 18 - (j) Any provision of the Borrower's Ordinance No. 73/24 dated May 29, 1973, or Decree No. 73/496 dated August 28, 1973, shall have been amended, suspended, abrogated, repealed or waived so as to materially and adversely affect the ability of FONADER to assist in carrying out Part C of the Project in accordance with the Credit Administration Agreement. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) any event specified in paragraphs (a), (b) or (c) of Section 5.01 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 SOCAPALM, CEC or FONADER, as the case may be; and (b) any event specified in paragraphs (f), (g), (h) or (i) of Section 5.01 of this Agreement shall occur. - 19 - ARTICLE VI Effective Date; Termination Section 6.01. 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: (a) the execution of the Project Agreement on behalf of SOCAPALM has been duly authorized or ratified by all necessary corporate and governmental action; (b) the execution of the SOCAPALM Financing Agreement on behalf of the Borrower and SOCAPALM, respectively, has been duly authorized or ratified by all necessary corporate and governmental action; (c) all conditions precedent to the effectiveness of the Intermediate Term Loan Agreement, except for the effectiveness of this Agreement, have been fulfilled; (d) the Chief Accountant and the Estate Manager for the Kienk6 Estate referred to in Section 3.01 (b) (i) of the Project Agreement have been appointed by SOCAPALM in accordance with the provisions of said Section; (e) SOCAPALM shall have established a shortlist of candidates for the position of Executive Controller referred to in Section 3.01 (b) of the Project Agreement; and - 20 - (f) all such land and rights in respect of land as are required for carrying out Part A of the Project have been made available to SOCAPALM in accordance with Section 3.05 (a) of this Agreement. Section 6.02. The following are specified as additional matters, within the meaning of Section 12.02 (c) of the General Conditions, to be included in the opinion or opinions to be furnished to the Bank: (a) that the Project Agreement has been duly authorized or ratified by SOCAPALM, and is legally binding upon SOCAPALM in accordance with its terms; and (b) that the SOCAPALM Financing Agreement has been duly authorized or ratified by the Borrower and SOCAPALM, respectively, and is legally binding upon the Borrower and SOCAPALM in accordance with its terms. Section 6.03. The date November 23, 1977, is hereby specified for the purposes of Section 12.04 of the General Conditions. - 21 - ARTICLE VII Representatives of the Borrower; Addresses Section 7.01. The Minister of the Borrower responsible for planning is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministry of Economic Affairs and Planning Yaoundg United Republic of Cameroon Cable address: Telex: MINEP 8268 KN Yaoundg For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) - 22 - IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, 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. UNITED REPUBLIC OF CAMEROON By /s/ Benott Bindzi Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Roger Chaufournier Regional Vice President Western Africa - 23 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan and of the Intermediate Term Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan and of the Intermediate Term Loan, the allocation of amounts of such proceeds to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan and of the Intermediate Term Loan % of Allocated (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Vehicles, equip- 7,400,000 67% ment and machi- nery for Parts A and B of the Project (2) Civil works 3,800,000 67% under Parts A and B of the Project (3) Field develop- 6,700,000 67% ment under Parts A and B of the Project (includ- ing land clear- ing, fertilizer, planting mate- rials and other supplies, and palm planting and maintenance) Amount of the Loan and of the Intermediate Term Loan % of Allocated (Expressed in Expenditures Category Dollar Equivalent) to be Financed (4) Administrative 1,100,000 67% cost of Kienkd Estate (5) Civil works, 600,000 67% vehicles, equip- ment and operat- ing costs of SOCAPALM under Part C (i) of the Project (6) Vehicles and 200,000 67% equipment for Part D of the Project (7) Civil works 1,200,000 67% under Part D of the Project (8) Unallocated 4,000,000 TOTAL 25,000,000 - 25 - 2. The proceeds of the Loan and of the Intermediate Term Loan shall be disbursed pro rata on the basis of an 18:7 ratio. 3. The disbursement percentages have been calculated in compliance with the policy of the Bank that no proceeds of the Loan and of the Intermediate Term Loan shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Loan and of the Intermediate Term Loan decreases or increases, the Bank may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Bank. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made: (a) in respect of payments made for expenditures prior to the date of this Agreement; (b) in respect of expenditures under Category (5), until evidence satisfactory to the Bank shall have been furnished to the Bank: (i) that the Credit Administration Agreement has been duly signed on behalf of FONADER and SOCAPALM, respectively; (ii) that the execution of said Agreement on behalf of FONADER and SOCAPALM - 26 - has been duly authorized or ratified by all necessary corporate and governmental action; (iii) that said Agreement is legally binding upon FONADER and SOCAPALM in accordance with its terms; and (iv) that the Manager of the Smallholder Development Program referred to in Section 3.01 (b) (i) of the Project Agreement has been appointed by SOCAPALM in accordance with the provisions of said Section; and (c) in respect of expenditures under Categories (6) and (7), until evidence satisfactory to the Bank shall have been furnished to the Bank: (i) that CEC has been legally established; (ii) that the CEC Subsidiary Loan Agreement has been duly signed on behalf of the Borrower and CEC, respectively; (iii) that the execution of said Agreement on behalf of the Borrower and CEC has been duly authorized or ratified by all necessary governmental and corporate action; and (iv) that said Agreement is legally binding upon the Borrower and CEC in accordance with its terms. 5. Notwithstanding the allocation of an amount of the Loan and of the Intermediate Term Loan or the disbursement percentages set forth in the table in paragraph 1 above, if the Bank has reasonably estimated that the amount of the Loan and of the Intermediate Term Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Bank may, by notice to the Borrower: (i) reallocate to such - 27 - Category, to the extent required to meet the estimated shortfall, proceeds of the Loan and of the Intermediate Term Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Bank shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Loan and of the Intermediate Term Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement and the Intermediate Term Loan Agreement, by notice to the Borrower, cancel such amount of the Loan and of the Intermediate Term Loan as, in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan and of the Intermediate Term Loan. -28 - SCHEDULE 2 Description of the Project The Project consists of the following Parts: Part A: Kienkf Estate First phase of the establishment of an oil palm estate located between the Kienk6 and Ni6t6 Rivers in the Oceanic Division during the years 1977 through 1981, comprising: (i) Clearing of about 6,850 ha of land, planting of about 6,000 ha with high-yield oil palms and maintenance of such plantings. (ii) Provision of estate infrastructure, including offices, stores, housing, an infirmary, a school, social facilities, utilities and about 360 km of plantation roads. (iii) Provision of vehicles, agricultural machinery and equipment. (iv) Construction of facilities for a palm oil processing mill with a capacity of 40 tons per hour and installation of related oil milling equipment with an initial capacity of 20 tons per hour. Part B: M'Bongo and Eseka Estates (i) Clearing of about 1,000 ha of land, planting of about 1,330 ha with high-yield oil palms and maintenance of such plantings through 1981 at the M'Bongo Estate. - 29 - (ii) Provision of staff housing and of harvesting and processing equipment for the M'Bongo and Eseka Estates, including construction of an additional production line for the palm oil processing mill at M'Bongo Estate to bring its capacity up to 40 tons per hour. Part C: Smallholder Development (i) Establishment of smallholder programs in the Sanaga Maritime and the Nyong and Kellf Divisions, each covering the planting of oil palms on about 1,000 ha of land cleared by smallholders, including extension services to such smallholders. (ii) Financial assistance to smallholders under Part C (i) of the Project, partly in cash and partly through provision, on credit, of the inputs required for the establishment of their oil palm plantings. Part D: Common Services Center for Estate Companies in Douala Construction, equipping and furnishing of a common services center in Douala to serve SOCAPALM and other oil palm and rubber estate companies, including offices, vehicles, garage facilities and warehouses. The Project is expected to be completed by December 31, 1981. - 30 - SCHEDULE 3 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each March 1 and September 1 beginning March 1, 1982 through September 1, 1996 580,000 On March 1, 1997 600,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equiva- lents determined as for purposes of withdrawal. - 31 - Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 1.25% More than three years but not more than six years before maturity 2.55% More than six years but not more than eleven years before maturity 4.65% More than eleven years but not more than sixteen years before maturity 6.80% More than sixteen years but not more than eighteen years before maturity 7.65% More than eighteen years before maturity 8.50% -32- SCHEDULE 4 Procurement A. International Competitive Bidding 1. Except as provided in Parts B and D hereof, contracts for the purchase of goods or for civil works shall be procured in accordance with procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in August 1975 (hereinafter called the Guidelines), on the basis of international competitive bidding as described in Part A of the Guidelines. 2. To the extent feasible, vehicles, equipment and materials shall be grouped for purposes of bidding so as to permit bulk procurement. B. Other Procurement Procedures Contracts estimated to cost the equivalent of $100,000 or less may be procured on the basis of competitive bidding advertised locally in accordance with local procedures satisfactory to the Bank; provided, however, that the price of the contracts so procured shall, in the aggregate, not exceed the equivalent of $1,500,000. C. Evaluation and Comparison of Bids for Goods; Preference for Domestic Manufacturers 1. For the purpose of evaluation and comparison of bids for the supply of goods except those to be procured in accordance with - 33 - local procedures: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for imported goods, or the ex-factory price for domestically-manufactured goods; (ii) customs duties and other import taxes on imported goods, and sales and similar taxes on domestically-supplied goods, shall be excluded; and (iii) the cost to SOCAPALM or CEC, as the case may be, of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be included. 2. Goods manufactured in Cameroon may be granted a margin of preference in accordance with, and subject to, the following provisions: (a) All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the information required to establish the eligibility of a bid for such preference and the following methods and stages that will be followed in the evaluation and comparison of bids. (b) After evaluation, responsive bids will be classified in one of the following three groups: (1) Group A: bids offering goods manufactured in Cameroon if the bidder shall have established to the satisfaction of SOCAPALM or CEC, as the case may b , and the Bank that the manufacturirp t.c- su-1 goods includes a - 34- value added in Cameroon equal to at least 20% of the ex-factory bid price of such goods. (2) Group B: all other bids offering goods manufactured in Cameroon. (3) Group C: bids offering any other goods. (c) All evaluated bids in each group shall be first compared among themselves, excluding any customs duties and other import taxes on goods to be imported and any sales or similar taxes on goods to be supplied domestically, to determine the lowest evaluated bid of each group. Such lowest evaluated bids shall then be compared with each other, and if, as a result of this comparison, a bid from group A or group B is the lowest, it shall be selected for the award. (d) If, as a result of the comparison under paragraph (c) above, the lowest bid is a bid from group C, all group C bids shall be further compared with the lowest evaluated bid from group A after adding to the c.i.f. bid price of the imported goods offered in each group C bid, for the purpose of this further cc:-parison only, an amount equal to (i) the amount of customs d,--ies and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in such group C bid, or (ii) 15% of the c.i.f. bid price of such goods if said customs duties and taxes exceed 15% of such price. If the - 35 - group A bid in such further comparison is the lowest, it shall be selected for the award; if not, the bid from group C which as a result of the comparison under paragraph (c) is the lowest evaluated bid shall be selected. D. Procurement Without Contracting Civil works consisting of land clearing, construction of roads, estate facilities, and field development works may be carried out by force account by SOCAPALM. E. Review of Procurement Decisions by the Bank 1. Review of invitations to bid and of proposed awards and final contracts. With respect to all contracts estimated to cost the equivalent of $100,000 or more: (a) Before bids are invited, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding shall be furnished to the Bank for its comments, and such modifications shall be made in the said documents or procedures as the Bank shall reasonably request. Any further modification to the bidding documents shall require the Bank's concurrence before it is issued to the prospective bidders. - 36 - (b) After bids have been received and evaluated and before a final decision on the award is made, the Bank shall be informed of the name of the bidder to which the award of the contract is intended to be made, and a detailed report on the evaluation and comparison of the bids received, together with such other information as the Bank shall reasonably request, shall be furnished to the Bank in sufficient time for its review. The Bank shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform SOCAPALM or CEC, as the case may be, and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Bank's concurrence, materially differ from those on which bids were asked or prequalification invited. (d) Two conformed copies of the contract shall be furnished to the Bank promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account and the Intermediate Term Loan Account in respect of such contract. - 37 - 2. With respect to each contract to be financed out of the proceeds of the Loan and of the Intermediate Term Loan and not governed by the preceding paragraph, two conformed copies of such contract, together with the analysis of the respective bids, recommendations for award and such other information as the Bank shall reasonably request, shall be furnished to the Bank promptly after the execution of such contract and prior to the submission to the Bank of the first application for withdrawal of fVnds from the Loan Account and the Intermediate Term Loan Account in respect of such contract. The Bank shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform SOCAPALM or CEC, as the case may be, and state the reasons for such determination.