Model Loan Agreement - FIs.doc

UPDATED OCTUBRE 2007 CONFIDENTIAL FIRST DRAFT OPERATION No operation number MODEL AGREEMENT FOR LOANS TO BANKS1 between among Borrower s name as Borrower and the INTER AMERICAN INVESTMENT CORPORATION as Lender Agreement signing date This draft does not constitute an agreement or an offer to participate in an agreement Only the document executed by the Borrower and the IIC shall contain the terms that legally bind them Until the document is executed by the Borrower and the IIC none of them professes to be legally bound 1 If financing is granted to other types of financial intermediaries this model will need to be modified in order to accommodate matters specific to them CONFIDENTIAL FIRST DRAFT i INDEX ARTICLE I DEFINITIONS 1 Section 1 01General Definitions 1 Section 1 02Financial Definitions 5 ARTICLE II TERMS AND CONDITIONS OF THE LOAN 7 Section 2 01Amount Term and Currency 7 Section 2 02Place of Payment 7 Section 2 03Payments on Business Days 7 Section 2 04Repayment 7 Section 2 05Application of Payments 7 Section 2 06Interest Rate 8 Section 2 07Fees 8 Section 2 08Charge for Delay in Providing Information 8 Section 2 09Voluntary Prepayment 8 Section 2 10Mandatory Prepayment 8 Section 2 11Late Payment Fee 9 Section 2 12Reinvestment 9 Section 2 13Use of Idle Funds 9 Section 2 14Promissory Notes 10 Section 2 15 Security 10 Section 2 16Assignment or Pledge of the Loans to Eligible Enterprises 10 ARTICLE III DISBURSEMENTS 10 Section 3 01Disbursement Timing and Availability 10 Section 3 02Cancellation of Disbursements by the IIC 11 Section 3 03Cancellation of Disbursements at the Request of the Borrower 11 ARTICLE IV LOAN DISBURSEMENT CONDITIONS 11 Section 4 01Disbursement Period 11 Section 4 02Disbursement Requirements 11 Section 4 03Specific Requirements for the First Disbursement 12 Section 4 04Supporting Documentation 12 ARTICLE V REPRESENTATIONS AND WARRANTIES 13 CONFIDENTIAL FIRST DRAFT ii Section 5 01Corporate Existence Legal Powers Binding Effect 13 Section 5 02Authorization No Contravention 13 Section 5 03Financial Information 13 Section 5 04Litigation and Disputes 13 Section 5 05Full Disclosure 13 Section 5 06Reliability of Representations and Warranties 13 Section 5 07Survival of Representations and Warranties 14 ARTICLE VI OBLIGATIONS OF THE BORROWER 14 Section 6 01Affirmative Covenants 14 Section 6 02Negative Covenants 18 ARTICLE VII EVENTS OF LOAN ACCELERATION 19 Section 7 01Events of Acceleration 19 ARTICLE VIII MISCELLANEOUS PROVISIONS 20 Section 8 01Interpretation 20 Section 8 02References 20 Section 8 03Headings 20 Section 8 04Exchange Rate 20 Section 8 05Accounting Principles 20 Section 8 06Notices 20 Section 8 07Domicile 21 Section 8 08Compliance with Contractual Obligations 21 Section 8 09Waiver of Immunity 21 Section 8 10Severability of Provisions 21 Section 8 11No assignments 21 Section 8 12No Waiver 21 Section 8 13Governing Law 21 Section 8 14Jurisdiction 21 Section 8 15Effectiveness 22 EXHIBIT I LIST OF EXCLUDED ACTIVITIES 1 EXHIBIT II RECEIPT 3 CONFIDENTIAL FIRST DRAFT iii EXHIBIT III CORE ELEMENTS OF THE ENVIRONMENTAL MANAGEMENT SYSTEM 4 EXHIBIT IV REINVESTMENT REQUEST 5 EXHIBIT V PROJECT ELIGIBILITY REPORT 7 EXHIBIT VI PROMISSORY NOTE 8 EXHIBIT VII DISBURSEMENT REQUEST 9 EXHIBIT VIII QUARTERLY SEMIANNUAL TRANSACTION REPORT 11 CONFIDENTIAL FIRST DRAFT Subject to IIC external counsel review 1 LOAN AGREEMENT i Borrower s name a financial institution of country domiciled at address hereinafter the Borrower represented by name of representative with sufficient powers to execute this agreement pursuant to document granting representation capacity and ii Inter American Investment Corporation an international organization with headquarters at 1350 New York Av N W Washington D C 20577 United States of America hereinafter IIC represented by name of representative with sufficient powers to execute this agreement pursuant to document granting representation capacity jointly the Parties agree as follows ARTICLE I DEFINITIONS Section 1 01General Definitions The following terms shall have the meanings indicated below wherever they appear in this Agreement or in the exhibits hereto except as the context otherwise requires Annual Environmental Performance Report means a written report to be prepared by the Borrower describing how the Environmental Management System has been integrated into its transaction approval process Business Day means any day other than i a Saturday ii a Sunday iii any day on which commercial banks operating in New York New York United States of America are authorized or required by law to be closed for business and iv for the purpose of the definition of Interest Determination Date any day on which commercial banks operating in the Eurodollar Interbank market in London England are authorized or required by law to be closed for business Commitment Fee Payment Date means prior to the Loan disbursement the quarterly dates of payment to be made each year on i January 15 April 15 July 15 and October 15 or ii February 15 May 15 August 15 and November 15 or iii March 15 June 15 September 15 and December 15 as determined by the IIC based on which of such dates occurs closest prior to the date on which the Commitment Fee began to accrue For example if the Effective Date is June 25 then the applicable set of dates would be those referenced in subsection iii above Once the first disbursement of the Loan has been made it means the payments to be made on the pertinent Interest Payment Date continuing until the Loan has been disbursed in full or has been declared due and payable Corporate Documents means the Borrower s current articles of incorporation by laws authorizations and powers of attorney granted by the Borrower as well as the shareholders agreements and any and all agreements executed and resolutions adopted by the Borrower in relation to the IIC Loan and this Agreement Corrective Action Plan means a corrective or mitigation action plan including a cost breakdown and an implementation schedule which once initiated will enable the Borrower to ensure each EE carries out its operations in accordance with the National and Local Requirements and the IIC s Environmental and Labor Review Procedure Dollars and the sign US mean the lawful currency of the United States of America CONFIDENTIAL FIRST DRAFT Subject to IIC external counsel review 2 Economic Group means collectively any group of two or more Persons which shall include at least one EE that are interrelated on account of any of such Persons i having a direct or indirect interest exceeding fifty percent 50 of the share capital of one or more other such Persons and or ii having the majority voting control in any such Person Effective Date means the date on which this Agreement shall have been duly signed by the Borrower and the IIC In the event that said parties sign this Agreement on different dates the Effective Date shall be the last of such dates Eligible Enterprise or EE shall mean an enterprise that meets all of the following criteria i is organized and validly exits under the laws of country and has its principal assets and business in that country ii is owned or controlled by private shareholders iii neither the Borrower nor any Subsidiary or Related Entity of the Borrower or any of their respective shareholders directors or employees has individually a direct or indirect participation in the EE s share capital exceeding five percent 5 2 nor do the aforementioned Persons collectively have a direct or indirect participation in the EE s share capital exceeding twenty percent 20 3 iv its voting capital is neither directly nor indirectly controlled by the Borrower by a Subsidiary of the Borrower or by any shareholder thereof v does not carry out any of the activities described in EXHIBIT IX vi as of the end of the latest Fiscal Year the EE had total assets or net sales of less than twenty million Dollars US 20 000 000 4 ten million Dollars US 10 000 000 5 or its total assets or net sales consolidated with those of its Economic Group and or Subsidiaries was less than fifty million Dollars US 50 000 000 vii it complies with National and Local Requirements and the IIC s Environmental and Labor Review Procedure and viii is not in default on any obligation owed to the Borrower or the IIC Eligible Project or EP is a project presented by an EE that upon technical financial and operating evaluation by the Borrower is viable under the Borrower s credit policies and in addition meets all of the following criteria i in the judgment of the IIC it fosters a foreign exchange earnings and or savings in the country b job creation or c savings and use of capital for productive investments provided that this does not involve any of the activities specified in EXHIBIT IX of this Agreement ii it will use the financing for the acquisition of fixed assets or machinery originating from 2 To be determined by the IIC Project Team and in accordance with the local laws 3 To be determined by the Project Team of the IIC and in accordance with the local laws 4 To be applied in the cases of Argentina Brazil Mexico Venezuela Chile Colombia and Peru 5 To be applied in the cases of Bahamas Barbados Costa Rica Jamaica Panama Surinam Trinidad iii the goods acquired for the project shall be located in country iv the Loans to Eligible Enterprises a may not exceed the amount of one million Dollars US 1 000 000 7 five hundred thousand Dollars US 500 000 8 per EE b may not exceed the amount of Dollars US per Economic Group and c shall have a repayment term of not less than years 9 and v it complies with National and Local Requirements and the IIC s Environmental and Labor Review Procedure Environmental Management System or EMS is a set of management processes and procedures that will allow the Borrower to analyze control and reduce the environmental impact of its activities products and services The core elements of the EMS are set forth in detail in EXHIBIT XI Equivalent in Local Currency means on any date the amount of local currency required to purchase a specific amount of Dollars at the applicable buying or selling exchange rate weighted average selling rate as published by the Central Bank of country or in the absence of an official exchange rate the average of the rates offered by three 3 major commercial banks operating in the exchange market in country Fiscal Year means the accounting year commencing each year on January 1 and ending on December 31 of the same calendar year Governmental Authority means any government or national regional local municipal or other subdivision thereof as well as any municipal local and or federal or official entity with executive legislative or governmental authority in country IIC Environmental and Labor Review Procedure refers to policy CII GP 5 6 http www iic int Policies 042799 projectreview ASP for identification assessment and mitigation of potential environmental impacts and labor issues related to the development of the Project and the implementation of actions or investments required to ensure compliance with Local and National Requirements and with other international standards adopted and required by the IIC Interest Determination Date means the second Business Day immediately prior to the first day of that Interest Period Interest Payment Date means the dates for the quarterly payments to be made each year on i January 15 April 15 July 15 and October 15 or ii February 15 May 15 August 15 and November 15 or iii March 15 June 15 September 15 and December 15 as determined by the IIC based on which of such dates occurs closest prior to the first disbursement date for the Loan 6 To be determined by the IIC Project Team If fixed assets are provided as collateral the IIC may at its own discretion add the following The Fixed Assets shall be new or no more than years old except for goods that have been upgraded which may be up to years old 7 To be applied in the cases of Argentina Brazil Mexico Venezuela Chile Colombia and Peru 8 To be applied in the cases of Bahamas Barbados Costa Rica Jamaica Panama Surinam Trinidad and or ii the ability of the Borrower to meet its obligations under this Agreement any of the other Principal Documents or the laws of country and or iii the Eligible Enterprises Maturity date means the Principal Payment Date that occurs immediately prior to the th this term must coincide with the total Loan term for example eighth 8th anniversary of the date of first disbursement of the Loan when the Borrower must pay the IIC the last installment of the Loan principal National and Local Requirements means the environmental labor and occupational health and safety laws regulations and requirements in effect in country Obstructive Practices means i deliberately destroying falsifying altering or concealing of evidence material to the investigation or making false statements to investigators in order to materially impede an IIC investigation into allegations of Prohibited Practices and threatening harassing or intimidating any party to prevent it from disclosing its knowledge of matters relevant to the investigation or from pursuing the investigation and ii acts intended to materially impede the exercise of the IIC s inspection and audit rights provided for under this Agreement 10 To be defined by the Project Team of the IIC In the event of semiannual payments use the following clause the dates for the semiannual payments to be made each year i January 15 and July 15 or ii February 15 and August 15 or iii March 15 and September 15 or iv April 15 and October 15 or v May 15 and November 15 or vi June 15 and December 15 as determined by the IIC based on which of such dates occurs closest prior to the first disbursement date for the Loan For example if the first disbursement date for the Loan is June 25 then the applicable dates would be those referenced in subsection vi above 11 To be defined by the Project Team of the IIC CONFIDENTIAL FIRST DRAFT Subject to IIC external counsel review 5 Person means any individual or any legal entity of a public or private nature Principal Documents means this Agreement the Corporate Documents any other documents to be signed and the Promissory Notes Principal Payment Date means each Interest Payment Date beginning with the first Interest Payment Date to occur immediately prior to the this period should coincide with the Loan grace period anniversary of the first disbursement date and continuing through the Maturity Date Prohibited Practices means i a corrupt practice that is the offering giving receiving or soliciting directly or indirectly anything of value to influence improperly the actions of another party ii a fraudulent practice that is any act or omission including a misrepresentation that knowingly or recklessly misleads or attempts to mislead a party to obtain a financial or other benefit or to avoid an obligation iii a coercive practice that is impairing or harming or threatening to impair or harm directly or indirectly any party or the property of the party to influence improperly the actions of a party or iv a collusive practice that is an arrangement between two or more parties designed to achieve an improper purpose including influencing improperly the actions of another party Project means the financing granted to the Borrower in order for the Borrower to provide financing for Eligible Projects through Loans to Eligible Enterprises Regulatory Authority means any public or private entity that currently is or could become in the future in charge of supervising and or monitoring the activities undertaken by the Borrower pursuant to the laws of country Reinvestment Commencement Date means in respect to any Reinvestment Period the date the Borrower receives from an EE any amount of principal of a Loan to an Eligible Enterprise by way of repayment or prepayment as the case may be for all or part of such loan Reinvestment Period means with respect to any part of the Loan s to Eligible Enterprises the period starting on the Reinvestment Commencement Date and finishing ninety 90 12 days thereafter Related Entity means with respect to the Borrower any Person i holding more than ten percent 10 of the share capital of the Borrower or vice versa or ii directly or indirectly controlled by any of the shareholders of the Borrower Subsidiary means with respect to any Person any other Person that i is over fifty percent 50 owned directly or indirectly by such Person and or ii whose accounts would be consolidated with those of such Person in such Person s financial statements if such financial statements were presented on a consolidated basis and or iii in respect of which such Person may exercise more than half of the voting rights in shareholders meetings and or iv in respect of which such Person has the right to appoint and remove a majority of its directors and or v in respect of which such Person effectively exercises management control according to the laws of country Taxes means any taxes assessments charges levies services obligations withholdings or other deductions stamp and documentary taxes fees duties and payments of any nature imposed by any governmental agency or Governmental Authority in effect as of the Effective Date or entering into effect thereafter 12 To be defined by the Project Team of the IIC CONFIDENTIAL FIRST DRAFT Subject to IIC external counsel review 6 Section 1 02Financial Definitions13 The following terms have the meanings indicated below wherever they appear in this Agreement or in the exhibits to this Agreement except as the context otherwise requires Capital Adequacy Ratio means as of any date the ratio obtained by dividing the Borrower s Technical Net Worth on that date by its Risk Weighted Assets on the same date Equity Exposure Ratio means as of any date the ratio obtained by dividing the sum of the Borrower s C D and E Portfolio 14 less Provisions plus Payments in Kind on such date by its Net Wor