Conformed Copy - L3258 - Second Petrochemicals Development Project - Loan Agreement

Page 1 CONFORMED COPY LOAN NUMBER 3258 IN Loan Agreement (Second Petrochemicals Development Project) between INDIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated November 7, 1990 LOAN NUMBER 3258 IN LOAN AGREEMENT AGREEMENT, dated November 7, 1990, between INDIA, acting by its President (the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank). WHEREAS: (A) the Borrower, having satisfied itself as to the feasibility and priority of the Project described in Schedule 2 to this Agreement, has requested the Bank to assist in the financing of the Project; (B) by an agreement of even date herewith (hereinafter called the IPCL Loan Agreement), the Bank has agreed to make a loan to the Indian Petrochemical Corporation Limited (IPCL) in an aggregate principal amount of two hundred thirty-three million dollars ($233,000,000) to assist IPCL in the financing of Parts A and B of the Project on the terms and conditions therein set forth; Page 2 (C) Part C of the Project will be carried out by the Central Institute of Plastic Engineering and Technology (CIPET) of the Borrower; 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 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 l, 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, in the Preamble to this Agreement and in Section 1.02 of the IPCL Loan Agreement, have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "IPCL" means the Indian Petrochemical Corporation Limited, a government-owned company registered under the Companies Act 1956, as amended, of the Borrower; (b) "IPCL Loan Agreement" means the loan agreement of even date herewith between the Bank and IPCL; (c) "CIPET" means the Central Institute of Plastic Engineer - ing and Technology of the Borrower; (d) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement; and (e) "tpy" means tons per year . 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 twelve million dollars ($12,000,000), 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 Part C of the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Loan. (b) The Borrower shall, for the purposes of Part G of the Project, open and maintain in dollars a special deposit account in the Reserve 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. Section 2.03. The Closing Date shall be September 30, 1996 or Page 3 such later date as the Bank shall establish . The Bank shall promptly notify ;he Borrower 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 1%) 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 (l/2 of 1%). 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 1%). 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 on January 1, April l, July 1 or October 1 in a calendar year." Page 4 Section 2.06. Interest and other charges shall be payable semi-annually on March l 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 Part C of the Project through CIPET with due diligence and efficiency and in conformity with appropriate administrative, financial, engineering and industry practices, and shall provide, promptly as needed, the funds, facilities, services and other resources required for the Project. Section 3.02. Except as the Bank shall otherwise agree, procurement of the goods required for 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. Overseas training shall be arranged with over- seas institutions satisfactory to the Bank. Placement of fellows in overseas institutions shall be made on the basis of relevance and quality of the programs offered, costs and prior experience and shall be subject to review by the Bank. Section 3.04. (a) The Borrower shall cause CIPET to implement its annual training and extension programs for Financial Year 1990-1993. (b) Not later than June 30 in each calendar year, commencing calendar year 1991, the Borrower shall cause CIPET to furnish to the Bank its rolling annual program. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records and accounts adequate to reflect in accordance with sound accounting practices the operations, resources and expenditures in respect of Part C of the Project of the departments or agencies of the Borrower, including CIPET, responsible for carrying out such Part of the Project. (b) The Borrower shall: (i) have the records and accounts re