Loan number 4184 RU
LOAN AGREEMENT
(ENTERPRISE RESTRUCTURING SERVICES PROJECT)
BETWEEN RUSSIAN FEDERATION AND INTERNATIONAL BANK
FOR RECONSTRUCTION AND DEVELOPMENT
(Washington, 6.X.1997)
Agreement, dated October 6, 1997, between Russian Federation
(the Borrower) and International Bank for Reconstruction and
Development (the Bank).
Whereas (A) In order to encourage the economically efficient
restructuring of privatized enterprises on the territory of the
Borrower, the Government of the Borrower has adopted a program
(the Enterprise Restructuring Program) designed to support the
restructuring of such enterprises through the carrying out, by
specific enterprises, of qualifying enterprise restructuring plans
adopted by the enterprises for purposes consistent with the
objectives of such program, and containing specific measures,
including the measures described in Schedule 2 to this Agreement,
to facilitate such restructuring;
(B) 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;
(C) the Project will be carried out by the Borrower with the
assistance of the Privatization Center (as hereinafter defined) in
accordance with the provisions of the Implementation Agreement (as
hereinafter defined) to be entered into between the Borrower and
the Privatization Center, as provided in this Agreement; and
whereas the Bank has agreed, on the basis, inter alia, of the
foregoing, to extend the Loan to the Borrower upon the terms and
conditions set forth in this Agreement and in the Project
Agreement of even date herewith between the Bank and the
Privatization Center;
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 for Single Currency Loans" of the Bank, dated
May 30, 1995 (the General Conditions) with the modifications set
forth in Schedule 4 to this Agreement constitute an integral part
of this Agreement.
Section 1.02. Unless the context otherwise requires, the
several terms defined in the General Conditions and in the
Preamble to this Agreement have the respective meanings therein
set forth and the following additional terms have the following
meanings:
(a) "Bank-Guarantor" means a commercial bank guaranteeing a Sub-
loan pursuant to the provisions of sub-paragraph 5 (c) of Part B
of the Annex to Schedule 5 to this Agreement;
(b) "Beneficiary Enterprise" means an enterprise, qualifying
under the appropriate guidelines established for such purposes, as
referred to in paragraph B.2 of Schedule 5 to this Agreement, to
which the Borrower proposes to make or has made a Sub-loan;
(c) "Enterprise Restructuring Services Credit Facility" means
the facility established pursuant to Part A of the Project;
(d) "Evaluation Committee" means the committee referred to in
paragraph A.2 of Schedule 5 to this Agreement;
(e) "Free-limit Sub-loan" means a Sub-loan (as so defined),
which qualifies as a free-limit Sub-loan pursuant to the
provisions of paragraph 1 (b) of Part A of the Annex to Schedule 5
to this Agreement;
(f) "Implementation Agreement" means the agreement governing
the relationship between the Borrower and the Privatization
Center, to be entered into between the MOF and the MOE (both as
hereinafter defined), representing the Borrower, and the
Privatization Center, which agreement shall have been concluded
pursuant to Paragraph B.4 of Schedule 5 this Agreement, and such
term shall include any amendments to such agreement as may be made
from time to time;
(g) "LERC" means the Leontief Economic Research Center, a non-
profit municipal organization organized and existing pursuant to
Decision N. 30p of January 14, 1994, of the Property Committee of
the Government of the City of St. Petersburg and registered in the
records of the City of St. Petersburg under Registration N. 6424,
dated February 17, 1994;
(h) "MOE" means the Borrower's Ministry of the Economy;
(i) "MOF" means the Borrower's Ministry of Finance;
(j) "Privatization Center" means the Russian Privatization
Center, a state social foundation established by the Borrower
pursuant to Decree No. 716 of the President of the Borrower of
November 23, 1992 and the Founders' Agreement dated October 26,
1992;
(k) "Project Agreement," means the agreement between the Bank
and the Privatization Center of even date herewith, as the same
may be amended from time to time, and such term includes all
schedules and agreements supplemental to the Project Agreement;
(l) "Qualifying Expenditures" means expenditures made or
incurred by a Beneficiary Enterprise in respect of consultants'
services rendered pursuant to a Restructuring Services Contract
under a Sub-loan approved in accordance with the criteria and
procedures referred to in paragraph 2 of Part A of the Annex to
Schedule 5 to this Agreement, subject to the applicable maximum
amount of such expenditures which are eligible for financing in
accordance with the provisions of paragraph 2 of Part B of such
Annex;
(m) "Restructuring Services Contract" means the contract or
other arrangements entered into between the Beneficiary Enterprise
and any consultants providing for the rendering of specific
enterprise restructuring services by such consultants in
connection with a Sub-project;
(n) "Special Account" means the account referred to in Section
2.02 (b) of his Agreement;
(o) "Statutes" means the charter, statutes, articles of
incorporation, founders' agreement, license, regulations, or
special laws or decrees relating to the establishment, or
governing the operations of LERC, or the Privatization Center, as
the case may be;
(p) "Sub-loan" means a loan, made or proposed to be made by the
Borrower, through the Privatization Center, out of the proceeds of
the Loan, to a Beneficiary Enterprise for purposes of financing
all or a portion of the costs required for the carrying out of a
Sub-project;
(q) "Sub-loan Agreement" means the agreement entered into
between the Borrower, through the Privatization Center, and a
Beneficiary Enterprise, providing for a Sub-loan, as referred to
in paragraph (c) of Section 3.02 of this Agreement; and
(r) "Sub-Project" means an enterprise restructuring project of
a specific Beneficiary Enterprise qualifying under the Enterprise
Restructuring Program and meeting the criteria applicable to the
Project, which has been selected by the Privatization Center
pursuant to the provisions of the Implementation Agreement and is
proposed to be carried out by a Beneficiary Enterprise in whole or
in part through the utilization of the proceeds of a Sub-loan.
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, an amount equal to eighty-five million dollars
(85,000,000 USD).
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:
(i) amounts paid (or, if the Bank shall so agree, to be
paid) by the Borrower on account of a withdrawal made by a
Beneficiary Enterprise under a Sub-loan under Part A of the
Project to meet the costs of Qualifying Expenditures
reasonably incurred under a Sub-Project; and
(ii) expenditures made (or, if the Bank shall so agree,
to be made) in respect of the reasonable cost of the services
required for Parts B, C and D of the Project and to be
financed out of the proceeds of the Loan.
(b) The Borrower may, for the purposes of the Project, open and
maintain in dollars a special deposit account in a commercial bank
on terms and conditions satisfactory to the Bank, including
appropriate protection against set-off, seizure or attachment.
Deposits into, and payments out of, the Special Account shall be
made in accordance with the provisions of Schedule 7 to this
Agreement.
Section 2.03. The Closing Date shall be December 31, 2002, or
such later date as the Bank shall establish. The Bank shall
promptly notify the 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 LIBOR Base
Rate plus LIBOR Total Spread.
(b) For the purposes of this Section:
(i) "Interest Period" means the initial period from and
including the date of this Agreement to, but excluding, the
first Interest Payment Date occurring thereafter, and after
the initial period, each period from and including an
Interest Payment Date to, but excluding the next following
Interest Payment Date.
(ii) "Interest Payment Date" means any date specified in
Section 2.06 of this Agreement.
(iii) "LIBOR Base Rate" means, for each Interest Period,
the London interbank offered rate for six-month deposits in
dollars for value the first day of such Interest Period (or,
in the case of the initial Interest Period, for value the
Interest Payment Date occurring on or next preceding the first
day of such Interest Period), as reasonably determined by the
Bank and expressed as a percentage per annum.
(iv) "LIBOR Total Spread" means, for each Interest Period:
(A) one-half of one percent (1/2 of 1%);
(B) minus (or plus) the weighted average margin, for
such Interest Period, below (or above) the London
interbank offered rates, or other reference rates, for
six-month deposits, in respect of the Bank's outstanding
borrowings or portions thereof allocated by the Bank to
fund single currency loans or portions thereof made by it
that include the Loan; as reasonably determined by the
Bank and expressed as a percentage per annum.
(c) The Bank shall notify the Borrower of LIBOR Base Rate and
LIBOR Total Spread for each Interest Period, promptly upon the
determination thereof.
(d) Whenever, in light of changes in market practice affecting
the determination of the interest rates referred to in this
Section 2.05, the Bank determines that it is in the interest of
its borrowers as a whole and of the Bank to apply a basis for
determining the interest rates applicable to the Loan other than
as provided in said Section, the Bank may modify the basis for
determining the interest rates applicable to the Loan upon not
less than six (6) months' notice to the Borrower of the new basis.
The basis shall become effective on the expiry of the notice
period unless the Borrower notifies the Bank during said period of
its objection thereto, in which case said modification shall not
apply to the Loan.
Section 2.06. Interest and other charges shall be payable March
5 and September 15 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 the Project through
the Privatization Center as set forth in Schedule 5 to this
Agreement, all with due diligence and efficiency in accordance
with sound economic standards and in conformity with appropriate
administrative and financial practices, and shall provide, or
cause to be provided, promptly as needed, the funds, facilities,
services and other resources required for purposes of the Project.
Section 3.02. Without limitation or restriction upon any of its
other obligations under the Loan Agreement, the Borrower shall,
for purposes of Part A of the Project:
(a) cause the Privatization Center to perform in accordance
with the provisions of this Agreement, the Project Agreement, the
Implementation Agreement and its Statutes, all the obligations and
activities of the Privatization Center therein set forth relating
to the Project; and take or cause to be taken all action,
including the provision of funds, facilities, services and other
resources, necessary or appropriate to enable the Privatization
Center to perform such obligations; and not take or permit to be
taken any action which would prevent or interfere with such
performance (provided, however, that if any provision of the
Implementation Agreement or the Statutes is inconsistent with a
provision of this Agreement or the Project Agreement, the
provision of the Loan Agreement or Project Agreement, as the case
may be, shall govern);
(b) exercise its rights under the Implementation Agreement in
such a manner as to protect the interests of the Borrower and the
Bank, to comply with the provisions of this Agreement, and to
accomplish the purposes of the Loan, and, except as the Bank shall
otherwise agree, not assign, amend, abrogate or waive the
Implementation Agreement or any provision thereof;
(c) relend to the Beneficiary Enterprises the equivalent of the
proceeds of the Loan allocated from time to time to Category 1 of
the table set forth in paragraph 1 of Schedule 1 to this
Agreement, under agreements to be entered into between the
Borrower (acting through the Privatization Center in accordance
with the provisions of the Implementation Agreement) and each such
Beneficiary Enterprise (the Sub-loan Agreements), under terms and
conditions which shall include, without limitation, those set
forth in the Annex to Schedule 5 of this Agreement;
(d) exercise its rights under the Sub-loan Agreements in such
manner as to protect the interests of the Bank and the Borrower
and to achieve the purposes of the Project; and except as the Bank
shall otherwise agree, not assign, amend, abrogate or waive any
Sub-loan Agreement or any provision thereof; and
(e) coordinate the overall execution of the Project and monitor
the carrying out by the Beneficiary Enterprises of their
respective obligations under the Sub-loan Agreements in accordance
with policies and procedures satisfactory to the Bank.
Section 3.03. Without limitation upon the provisions of
Sections 3.01 and 3.02 of this Agreement, and except as the
Borrower and the Bank shall otherwise agree, the Borrower shall
carry out, or cause to be carried out, the Project in accordance
with the Implementation Program set forth in Schedule 5 to this
Agreement.
Section 3.04. Except as the Bank shall otherwise agree,
procurement of the consultants' services required for Parts B, C
and D of the Project and to be financed out of the proceeds of the
Loan shall be governed by the provisions of Schedule 6 to this
Agreement.
Article IV
Financial Covenants
Section 4.01. The Borrower shall maintain or cause to be
maintained procedures and records adequate to monitor and record
the progress of the Project and of each Sub-Project (including its
cost and the benefits to be derived from it) and to reflect in
accordance with consistently maintained sound accounting practices
the operations, resources and expenditures of the departments or
agencies of the Borrower responsible for carrying out the Project
or any part thereof.
Section 4.02. (a) The Borrower shall:
(i) have the records referred to in Section 4.01 of this
Agreement, its accounts and financial statements (balance
sheets, statements of income and expenses and related
statements) and records and accounts for the Special Account
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 six months after the end of each such
year, (A) certified copies of said financial statements for
such year as so audited and (B) the report of such audit by
said auditors, of such scope and in such detail as the Bank
shall have reasonably requested; and
(iii) furnish to the Bank such other information
concerning said records, accounts and financial statements and
the audit thereof as the Bank shall from time to time
reasonably request.
(b) For all expenditures with respect to which withdrawals from
the Loan Account were made on the basis of statements of
expenditure, the Borrower shall:
(i) maintain, or cause to be maintained, in accordance
with Section 4.01 of this Agreement, records and accounts
reflecting such expenditures;
(ii) retain, or cause to be retained until at least one
year after the Bank has received the audit report for the
fiscal year in which the last withdrawal from the Loan Account
was made, all records (contracts, orders, invoices, bills,
receipts and other documents) evidencing such expenditures;
(iii) enable the Bank's representatives to examine such
records; and
(iv) ensure that such records and accounts are included in
the annual audit referred to in paragraph (a) of this Section
and that the report of such audit contains a separate opinion
by said auditors as to whether the statements of expenditure
submitted during such fiscal year, together with the
procedures and internal controls involved in their
preparation, can be relied upon to support the related
withdrawals.
Section 4.03. Except as the Bank shall otherwise agree, the
Borrower shall, in respect of any payment of interest and
repayments of principal to be made by the Beneficiary Enterprises
under their respective Sub-loans:
(a) open, by the date on which it shall receive the first such
payment or repayment, and thereafter maintain, in a bank
acceptable to the Bank, a separate account, on terms and
conditions satisfactory to the Bank; and
(b) upon receipt of each such payment or repayment, credit the
same to said separate account. All amounts to be so credited shall
be utilized, to the extent that are not yet required to meet the
Borrower's payment or repayment obligations under this Agreement,
exclusively to finance other enterprise restructuring service
contracts on similar terms and conditions as those applicable to
the Sub-loans so repaid and credited to the said separate account.
Article V
Remedies of the Bank
Section 5.01. Pursuant to Section 6.02 (1) of the General
Conditions, the following additional events are specified:
(a) The Enterprise Restructuring Program shall have been
amended, suspended, abrogated, repealed or waived so as to affect
materially and adversely the ability of the Borrower to carry out
the Project or to perform any of its obligations under this
Agreement.
(b) The Privatization Center shall have failed to perform any
of its obligations under the Project Agreement or the
Implementation Agreement.
(c) As a result of events which have occurred after the date of
the Loan Agreement, an extraordinary situation shall have arisen
which shall make it improbable that the Privatization Center will
be able to perform its obligations under the Project Agreement or
the Implementation Agreement.
(d) The Statutes of the Privatization Center shall have been
amended, suspended, abrogated, repealed or waived so as to affect
materially and adversely the ability of the Privatization Center
to perform any of its obligations under the Project Agreement or
the Implementation Agreement.
(e) The Borrower or any other authority having jurisdiction
shall have taken any action for the dissolution or
disestablishment of the Privatization Center or for the suspension
of its operations.
(f) The Privatization Center shall have become insolvent, or
any action or proceeding shall have been taken by the
Privatization Center or by others acting under official claim of
right or having a cause of action against the Privatization
Center, whereby any of the assets of the Privatization Center
shall or may be distributed among its creditors or in accordance
with legislation of the Borrower pertaining to instances of
insolvency.
(g) The Privatization Center shall have taken any of the
actions specified in Section 4.03 (a) to (f) of the Project
Agreement, so as to affect materially and adversely the operations
or the financial condition of the Privatization Center or its
ability to carry out the Project or perform any of its obligations
under the Project Agreement or the Implementation Agreement.
Section 5.02. Pursuant to Section 7.01 (h) of the General
Conditions, the following additional events are specified:
(a) Any event specified in paragraph (b) of Section 5.01 of
this Agreement shall occur and shall continue for a period of
sixty (60) days after notice thereof shall have been given by the
Bank to the Borrower.
(b) Any event specified in paragraphs (d), (e), (f), or (g), of
Section 5.01 of this Agreement shall occur.
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 Implementation Agreement has been concluded between the
Borrower and the Privatization Center;
(b) the Evaluation Committee has been established with terms of
reference and operating procedures acceptable to the Bank; and
(c) the roster of consultants, рrе-qualified pursuant to
paragraph 1 of Part C of Schedule 6 to this Agreement, has been
established acceptable to the Bank.
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 the Privatization Center and is legally binding upon
the Privatization Center in accordance with its terms; and
(b) that the Implementation Agreement has been duly authorized
by the Borrower and the Privatization Center, respectively, and is
legally binding upon the Borrower and the Privatization Center,
respectively, in accordance with its terms.
Section 6.03. The date ninety (90) days after the date of this
Agreement is hereby specified for the purposes of Section 12.04 of
the General Conditions.
Article VII
Representative of the Borrower; Addresses
Section 7.01. The Minister of Finance of the Borrower or the
Deputy Minister of Finance responsible for international economic
affairs 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 Bank:
International Bank for
Reconstruction and Development
1818 H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address: Telex: 248423 (MCI) or
INTBAFRAD 64145 (MCI)
Washington, D.C.
For the Borrower:
Ministry of Finance
103097 Moscow
Ilyinka Street, 9
Russian Federation
Telex: 112008
In witness whereof, the parties hereto, acting through their
duly authorized representatives, have caused this Agreement to be
signed in their respective names in the District of Columbia,
United States of America, as of the day and year first above
written.
SCHEDULE 1
WITHDRAWAL OF THE PROCEEDS OF THE LOAN
1. The table below sets forth the Categories of items to be
financed out of the proceeds of the Loan, the allocation of the
amounts of the Loan to each Category and the percentage of
expenditures for items so to be financed in each Category:
--------------------------T------------------T-------------------¬
¦ Category ¦ Amount of the ¦ % of ¦
¦ ¦ Loan Allocated ¦ Expenditures ¦
¦ ¦ (Expressed in ¦ to be Financed ¦
¦ ¦Dollar Equivalent)¦ ¦
+-------------------------+------------------+-------------------+
¦(1) Enterprise ¦ 75,000,000 ¦100% of amounts ¦
¦ restructuring ¦ ¦disbursed for ¦
¦ services ¦ ¦Qualifying ¦
¦ Under Sub-projects ¦ ¦Expenditures under ¦
¦ under ¦ ¦Sub-loans ¦
¦ Part A of the Project¦ ¦ ¦
¦ ¦ ¦ ¦
¦(2) Consultants' services¦ 680,000 ¦100% ¦
¦ for ex-post ¦ ¦ ¦
¦ evaluation of ¦ ¦ ¦
¦ Sub-projects ¦ ¦ ¦
¦ under Part A ¦ ¦ ¦
¦ of the Project ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(3) Consultants' services¦ ¦100% ¦
¦ for: ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(a) Part B of the Project¦ 600,000 ¦ ¦
¦ ¦ ¦ ¦
¦(b) Part C of the Project¦ 700,000 ¦ ¦
¦ ¦ ¦ ¦
¦(4) Incremental Operating¦ 6,420,000 ¦100% ¦
¦ Expenses of the ¦ ¦ ¦
¦ Privatization Center ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(5) Unallocated ¦ 1,600,000 ¦ ¦
¦ ¦ ¦ ¦
¦ TOTAL ¦ 85,000,000 ¦ ¦
L-------------------------+------------------+--------------------
2. For the purposes of this Schedule:
(a) the term "foreign expenditures" means expenditures in the
currency of any country other than that of the Borrower for goods
or services supplied from the territory of any country other than
that of the Borrower;
(b) the term "local expenditures" means expenditures in the
currency of the Borrower for goods or services supplied from the
territory of the Borrower; and
(c) the term "Incremental Operating Expenses" means Project-
related operating costs and expenses, including incremental
staffing costs, rental, communications, utilities, office
equipment and supplies, travel and subsistence allowance,
interpretation and translation, audit, and such other incremental
office operational costs and expenses as may be agreed by the
Bank.
3. Notwithstanding the provisions of paragraph 1 above, no
withdrawals shall be made:
(a) in respect of a Sub-loan unless the Sub-loan has been made
in accordance with the procedures and on the terms and conditions
set forth or referred to in the Annex to Schedule 5 to this
Agreement;
(b) in respect of payments made for expenditures prior to the
date of this Agreement; and
(c) in respect of payments made for expenditures under Category
(4) of this Schedule for any year during the implementation of the
Project, prior to the adoption by the Privatization Center of the
annual operational budget for project implementation, as described
in Section 4.02 of the Project Agreement for the year concerned,
satisfactory to the Bank.
4. The Bank may require withdrawals from the Loan Account to be
made on the basis of statements of expenditure for: (a)
Incremental Operating Expenses of the Privatization Center; and
(b) expenditures for enterprise restructuring services under Sub-
projects under Part A of the Project, under contracts not
exceeding 300,000 USD equivalent, under such terms and conditions
as the Bank shall specify by notice to the Borrower.
SCHEDULE 2
DESCRIPTION OF THE PROJECT
The objectives of the Project are:
(i) to assist in financing the provision of such business
advisory and managerial consultant services to private enterprises
in the Russian Federation as will contribute to the improvement of
the economic viability and efficiency of the selected enterprises
and the economic and social development of the country; and
(ii) to facilitate the further development of the quality and
the competitiveness of the financial and management consulting
industry in the Russian Federation.
The Project consists of the following Parts, subject to such
modifications thereof as the Bank and the Borrower may agree upon
from time to time to achieve such objectives.
Part A
Enterprise Restructuring Services Credit Facility
1. The provision of Sub-loans by the MOF, through the
Privatization Center, for the financing of specific enterprise
restructuring services to selected private enterprises which are
engaged in specific enterprise restructuring projects.
2. Evaluation of the outcomes and impacts of the enterprise
restructuring projects carried out pursuant to paragraph 1 of Part
A hereof.
Part B
Marketing Information Improvement
Development, maintenance and updating by the Privatization
Center of a database of consulting firms offering various
restructuring services to enterprises, the promotion of equal
opportunity for participation in the Enterprise Restructuring
Program by identified local consulting firms having the
appropriate expertise and skills, and the provision of access to
information about such consulting firms to private enterprises.
Part C
Restructuring Promotion
The provision of marketing and public relations services
(including workshops, training and broad public awareness
campaign) to the potential Beneficiary Enterprises, local
consulting firms, enterprise shareholders and affiliates, and
interested groups, under the general coordination of the
Privatization Center, to help promote the Enterprise Restructuring
Program and to strengthen the linkages between the banks,
investors, enterprises, consultants and other market agents in the
area of the restructuring services support.
Part D
Project Implementation
Provision of technical assistance, consisting of managerial,
advisory and technical services, to the Privatization Center to
strengthen the capacity of the Privatization Center to implement
the Project.
* * *
The Project is expected to be completed by June 30, 2002.
SCHEDULE 3
AMORTIZATION SCHEDULE
-----------------------------------T-----------------------------¬
¦ Date Payment Due ¦ Payment of Principal ¦
¦ ¦ (Expressed in Dollars) <*> ¦
+----------------------------------+-----------------------------¦
¦On each March 15 and September 15 ¦ ¦
¦ ¦ ¦
¦ beginning September 15, 2002 ¦ ¦
¦ through September 15, 2013 ¦ 3,540,000 ¦
¦ ¦ ¦
¦On March 15, 2014 ¦ 3,580,000 ¦
L----------------------------------+------------------------------
--------------------------------
<*> The figures in this column represent the amount in dollars
to be repaid, except as provided in Section 4.04 (d) of the
General Conditions.
SCHEDULE 4
MODIFICATIONS OF GENERAL CONDITIONS
For the purposes of this Agreement, the provisions of the
General Conditions are modified as follows:
Section 6.03 is modified to read:
"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 (30) days, or (b) at any time, the
Bank determines, after consultation with the Borrower, that an
amount of the Loan will not be required to finance the Project's
costs to be financed out of the proceeds of the Loan, or (c) at
any time the Bank determines, with respect to any contract to be
financed out of the proceeds of the Loan, that corrupt or
fraudulent practices were engaged in by representatives of the
Borrower or of a beneficiary of the Loan during the procurement or
the execution of such contract, without the Borrower having taken
timely and appropriate actions satisfactory to the Bank to remedy
the situation, and establishes the amount of expenditures in
respect of such contract which would otherwise have been eligible
for financing out of the proceeds of the Loan, or (d) at any time,
the Bank determines that the procurement of any contract to be
financed out of the proceeds of the Loan is inconsistent with the
procedures set forth or referred to in the Loan Agreement and
establishes the amount of expenditures in respect of such contract
which would otherwise have been eligible for financing out of the
proceeds of the Loan, or (e) after the Closing Date, an amount of
the Loan shall remain unwithdrawn from the Loan Account, or (f) by
the date specified in paragraph 3 (c) of Part A of the Annex to
Schedule 5 to the Loan Agreement, the Bank shall, in respect of
any portion of the Loan: (i) have received no applications or
requests under subparagraphs (a) or (b) of said paragraph 3; or
(ii) have denied any such applications or requests, the Bank may,
by notice to the Borrower, terminate the right of the Borrower to
submit such applications 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."
SCHEDULE 5
IMPLEMENTATION PROGRAM
The provisions of this Schedule shall apply for the purposes of
Section 3.03 of this Agreement:
A. Overall Coordination and Management of the Project
1. The MOE shall be responsible for coordinating and monitoring
the overall implementation of the Project in accordance with the
objectives of the Enterprise Restructuring Program.
2. The Borrower shall establish an interagency Evaluation
Committee to advise and assist on various matters related to the
Sub-projects under Part A of the Project. The Evaluation Committee
shall have a composition and terms of reference acceptable to the
Bank.
3. The MOF, in agreement with the MOE, shall, not later than
November 30 of each year during the implementation of the Project,
approve the annual operational budget for Project implementation
prepared by the Privatization Center.
4. The Borrower shall:
(a) maintain policies and procedures adequate to enable it to
monitor and evaluate on an ongoing basis, in accordance with
indicators acceptable to the Bank, the carrying out of the Project
and the achievement of the objectives thereof;
(b) prepare, under terms of reference satisfactory to the Bank,
and furnish to the Bank, on or about February 28, 1999, a report
integrating the results of the monitoring and evaluation
activities performed pursuant to subparagraph (a) of this
paragraph, on the progress achieved in the carrying out of the
Project during the period preceding the date of said report and
setting out the measures recommended to ensure the efficient
carrying out of the Project and the achievement of the objectives
thereof during the period following such date; and
(c) review with the Bank, by April 30, 1999, or such later date
as the Bank shall request, the report referred to in subparagraph
(b) of this paragraph, and, thereafter, take all measures required
to ensure the efficient completion of the Project and the
achievement of the objectives thereof, based on the conclusions
and recommendations of the said report and the Bank's views on the
matter.
В. Implementation
of Enterprise Restructuring Services Credit Facility
1. Responsibility for overall management of Part A of the
Project, shall be vested with the MOE and MOF.
2. The eligibility of Beneficiary Enterprises shall be
determined in accordance with guidelines promulgated by MOE and
MOF, acceptable to the Bank.
3. The MOF shall be the lender of record in respect of Sub-
loans made to Beneficiary Enterprises, acting through the
Privatization Center, pursuant to the provisions of the
Implementation Agreement.
4. Responsibility for specific administrative and supervision
functions relating to the Enterprise Restructuring Services Credit
Facility, including specific matters relating to the coordination
and support of Sub-project preparation, the administration of Sub-
loans, procurement, disbursements, financial and other reporting
and auditing, shall be delegated to the Privatization Center
pursuant to the provisions of an agreement (the Implementation
Agreement) to be entered into between the MOF and MOE on the one
hand, and the Privatization Center on the other, satisfactory to
the Bank.
5. The Borrower, through the Privatization Center, shall select
the commercial bank in which the Special Account is to be opened
and shall require it to perform such other specific operational
responsibilities under the Project as it deems fit.
6. Except as may be otherwise agreed between the Borrower and
the Bank, applications by Beneficiary Enterprises for Sub-loans
under Part A of the Project shall be subject to approval by the
Evaluation Committee, in accordance with financial guidelines and
criteria specified for such purpose and acceptable to the Bank.
7. Procedures for the accounting of obligations under Sub-
loans, and for the transfers to, and receipt of payment from, the
respective Beneficiary' Enterprises, as well as for the remittance
of amounts due on such Sub-loans to the MOF, shall be established
by MOF using practices and arrangements satisfactory to the Bank,
including, inter alia, arrangements whereby such payments may be
carried out under the administration of the respective Bank-
Guarantors under terms and conditions acceptable to the Bank.
8. Evaluation of the outcomes and impact of the enterprise
restructuring Sub-projects shall be provided by LERC or other
entity selected or designated by the Borrower and acceptable to
the Bank.
C. Implementation of Parts B and C of the Project
Specific programs and activities shall be carried out in
accordance with a budget, schedule and work plan satisfactory to
the Bank.
Annex
to Schedule 5
ENTERPRISE RESTRUCTURING SERVICES
CREDIT FACILITY: ELIGIBILITY, APPROVAL PROCEDURES
AND TERMS AND CONDITIONS OF SUB-LOANS
Part A
Qualifying Preconditions to Sub-loans
and Approval Procedures
1. No expenditures for enterprise restructuring services under
any Sub-Project shall be eligible for financing out of the
proceeds of the Loan unless the Sub-loan for such Sub-project:
(a) shall have been approved by the Bank and such expenditures
shall have been made not earlier than ninety (90) days prior to
the date on which the Bank shall have received the application and
information required under this Annex to Schedule 5 in respect of
such Sub-loan; or
(b) shall be a free-limit Sub-loan (as hereinafter defined) for
which the Bank has authorized withdrawals from the Loan Account
and such expenditures shall have been made not earlier than ninety
(90) days prior to the date on which the Bank shall have received
the request and information required under sub-paragraph 3 (a) of
this Section in respect of such free-limit Sub-loan. For the
purposes of this Agreement, a "free-limit Sub-loan" shall be any
Sub-loan, other than the first five such Sub-loans, and other than
any Sub-loan to a Beneficiary Enterprise in an amount exceeding
the sum of $600,000 USD equivalent (when added to all other free-
limit Sub-loans financed or proposed to be financed out of the
proceeds of the Loan to the same Beneficiary Enterprise), the
foregoing amount being subject to change from time to time as
determined by the Bank.
2. Any Sub-loan proposed to be made for the financing of a Sub-
project shall be eligible for financing out of the Enterprise
Restructuring Services Credit Facility described under Part A of
the Project only upon selection, appraisal, and credit application
processing of the Beneficiary Enterprise and the proposed Sub-
project in accordance with such specific criteria and procedures
applicable to such credit facility, as shall have been established
by the Borrower for such purpose, satisfactory to the Bank, which
shall include without limitation, the selection and appraisal
criteria and procedures set forth or referred to in paragraph 4 of
this Part A of this Schedule.
3. (a) When presenting a Sub-loan (other than a free-limit Sub-
loan) to the Bank for approval, the Privatization Center shall
furnish to the Bank the application of the Beneficiary Enterprises
concerned, in form satisfactory to the Bank, together with:
(i) a description of the Beneficiary Enterprise and the
proposed Sub-project, including a description of the
enterprise restructuring services proposed to be financed out
of the proceeds of the Sub-loan and the specific terms by
which the costs of such services are to be determined;
(ii) the draft Sub-loan Agreement containing the proposed
terms and conditions of the Sub-loan, including the schedule
of amortization of the Sub-loan,;
(iii) the appraisal report and recommendation of the
Privatization Center concerning the Sub-project; and
(iv) the decision of the Evaluation Committee concerning
the Sub-loan; and (v) such other information as the Bank shall
reasonably request.
(b) For authorization to make withdrawals from the Loan Account
in respect of a free-limit Sub-loan, the Privatization Center
shall furnish to the Bank:
(i) the appraisal report and its recommendation concerning
the Sub-project; and
(ii) the decision of the Evaluation Committee concerning
the Sub-loan.
(c) Applications and requests made pursuant to the provisions
of subparagraphs (a) and (b) of this paragraph shall be presented
to the Bank on or before June 30, 2002.
4. In addition to the procedures set forth in paragraphs 1
through 3 of Part A of this Annex to Schedule 5, the following
procedures shall be followed in connection with the selection and
appraisal of Beneficiary Enterprises:
(a) The prospective Beneficiary Enterprise shall first prepare
an application in form satisfactory to the Privatization Center,
together with a description of the proposed enterprise
restructuring plan, in accordance with guidelines satisfactory to
the Borrower and the Bank.
(b) The Privatization Center shall appraise the proposed Sub-
project, and the Evaluation Committee shall review each such Sub-
loan, on the basis of the evaluation criteria developed for such
purposes by the Privatization Center and approved by the Borrower,
satisfactory to the Bank.
(c) Until at least five Sub-loans shall have been made to
Beneficiary Enterprises, and thereafter, in the case of Sub-loans
proposed to be made in an amount greater than 600,000 USD, the
Privatization Center shall ensure that each qualifying Sub-Project
for which a Sub-loan is proposed to be made is submitted in
advance to the Bank for approval, such approval to be based on a
review and appraisal of the proposed Sub-project in such manner
and of such scope as the Bank shall determine to be reasonably
necessary. The Privatization Center may enter into the Sub-loan
Agreement with the Beneficiary Enterprise after the Bank has
expressed its concurrence with respect to the financing of the Sub-
project.
(d) Once the first five Sub-loans shall have been made to
Beneficiary Enterprises, and unless otherwise specified by the
Bank, the Privatization Center shall, in the case of a free-limit
Sub-loan, enter into the respective Sub-loan Agreement with the
Beneficiary Enterprise within a reasonable period following the
decision of the Evaluation Committee to approve the Sub-loan
therefor. Authorization to withdraw from the Loan Account shall be
deemed to have been given once the Evaluation Committee decision
is made, and the Privatization Center shall be required to submit
for the Bank's authorization, on an ex-post basis, only the
information referred to in sub-paragraph 3 (b) of this Part A of
this Annex.
(e) The Sub-loan Agreement with the Beneficiary Enterprise
shall give the MOF legal rights adequate to protect the interests
of the Bank and the Borrower, and shall contain, inter alia, the
terms and conditions enumerated in Part B of this Annex to
Schedule 5.
Part B
Terms and Conditions of Sub-loans
1. The principal amount of each Sub-loan made out of the
proceeds of the Loan allocated from time to time to Category (1)
of the table set forth in paragraph 1 of Schedule 1 to this
Agreement shall:
(a) be denominated in Dollars; and
(b) be equivalent, in Dollars as of the date or respective
dates of withdrawal from the Loan Account or payment out of the
respective Special Account, of the value of the currency or
currencies so withdrawn or paid out on account of the Qualifying
Expenditures made or incurred by the Beneficiary Enterprise for
the enterprise restructuring services rendered under the Sub-
project, to the extent that such amounts are eligible for
financing out of the proceeds of the Sub-loan in accordance with
the provisions of paragraph 2 of this Part B of this Annex to
Schedule 5.
2. The maximum amount of any Sub-loan shall be determined by
the Evaluation Committee in accordance with the particular
enterprise financing plan submitted as part of each Beneficiary
Enterprise's Sub-loan application. Such amount many not exceed the
equivalent of the contract amount payable in respect of
expenditures made or incurred for consultants' services under the
Restructuring Services Contract for the Sub-project concerned,
less any amount payable by the Beneficiary Enterprise on account
of taxes for such services; provided, however, that the amount of
expenditures to be financed under a Sub-loan shall not in any
event exceed eighty-five percent (85%) of the total costs of such
Sub-project.
3. Each Sub-loan shall be charged interest, on the principal
amount thereof withdrawn and outstanding from time to time, at the
rate determined as the sum of an index rate (representing the rate
determined pursuant to Section 2.05 of the Loan Agreement), plus a
margin of two percent (2%).
4. Sub-loans shall be repayable over a term of up to four
years, including one year of grace, in Dollars or ruble equivalent
valued at the applicable market rate of exchange, established by
the Central Bank of the Borrower for interbank transactions at the
time of the respective due date of each such repayment.
5. Sub-loans shall be made on terms whereby the Borrower shall
obtain, by written contract with the Beneficiary Enterprise or by
other appropriate legal means, rights adequate to protect the
interests of the Bank and the Borrower, including, the right to:
(a) require the Beneficiary Enterprise to carry out the Sub-
Project with due diligence and efficiency and in accordance with
sound technical, financial, managerial and environmental standards
and practices, and to maintain adequate records;
(b) require that:
(i) the consultants' services to be financed out of the
proceeds of the Sub-loan shall be procured at a reasonable
price and, in the case of contracts exceeding the amount of
300,000 USD, on the basis of comparison of at least two
proposals from consultants pre-qualified in accordance with
the provisions of Part C of Schedule 6 to this Agreement; and
(ii) such services shall be used exclusively in the
carrying out of the Sub-Project;
(c) require the Beneficiary Enterprise candidate to provide, at
the time of submitting its Sub-project proposal, confirmation of a
bank guarantee, from a commercial bank acceptable to the MOF, in
an amount adequate to cover the obligations of the Beneficiary
Enterprise to the MOF, for at least fifty percent (50%) of the
risk of loss at maturity of the Sub-loan amount and interest
payments thereon, or other similar securing instrument acceptable
to the MOF as the lender;
(d) inspect, by itself or jointly with representatives of the
Bank if the Bank shall so request, the sites included in the Sub-
Project, the operation thereof, and any relevant records and
documents;
(e) 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
Beneficiary Enterprise and to the benefits to be derived from the
Sub-Project; and
(f) suspend or terminate the right of the Beneficiary
Enterprise to the use of the proceeds of the Loan upon failure by
such Beneficiary Enterprise to perform its obligations under the
Sub-loan Agreement.
SCHEDULE 6
PROCUREMENT OF CONSULTANTS' SERVICES
Part A
General
Consultants' services shall be procured in accordance with the
provisions of the Introduction and Section IV of the "Guidelines:
Selection and Employment of Consultants by World Bank Borrower"
published by the Bank in January 1997 (the Consultant Guidelines)
and the following provisions of this Schedule.
Part B
Quality- and Cost-based Selection
Except as otherwise provided in Part C of this Schedule,
consultants' services shall be procured under contracts awarded in
accordance with the provisions of Section II of the Consultant
Guidelines, paragraph 3 of Appendix 1 thereto, Appendix 2 thereto,
and the provisions of paragraphs 3.13 through 3.18 thereof
applicable to quality- and cost-based selection of consultants.
Part C
Other Procedures for the Selection of Consultants
1. Selection of Consultants to Provide Enterprise Restructuring
Services under Part A of the Project
With respect to the provision of consulting services to
Beneficiary Enterprises under Part A of the Project, a two-stage
selection process shall be followed:
(a) first, a roster of eligible consultants, proposing to offer
services in connection with the enterprise restructuring Sub-
projects, shall be pre-qualified by the Borrower through the
Privatization Center according to criteria and procedures
developed by the Privatization Center for such purpose, acceptable
to the Bank; and
(b) consultants for individual enterprise restructuring Sub-
projects may be selected either:
(i) by the Beneficiary Enterprise from the roster of
pre-qualified consultants developed by the Privatization
Center, in accordance with commercial practices acceptable to
the Bank; or
(ii) by the Privatization Center in accordance with
procedures acceptable to the Bank.
2. Individual Consultants
Services for project management functions of the Privatization
Center under Parts В and D of the Project shall be procured under
contracts awarded to individual consultants in accordance with the
provisions of paragraphs 5.1 through 5.3 of the Consultant
Guidelines.
3. Single Source Selection
Services for the evaluation of the outcomes and impact of the
enterprise restructuring Sub-projects under Part A.2 of the
Project, up to an aggregate amount not to exceed 770,000 USD
equivalent, may, with the Bank's prior agreement, be procured in
accordance with the provisions of paragraphs 3.8 and 3.11 of the
Consultant Guidelines.
Part D
Review by the Bank of Procurement Decisions
1. Prior Review of Contracts for Enterprise Restructuring
Services under Part A of the Project
With respect to the first five contracts for enterprise
restructuring services under Part A of the Project and,
thereafter, each such contract estimated to cost the equivalent of
600,000 USD or more, the procedures set forth in paragraphs 1, 2
(other than the third subparagraph of paragraph 2 (a)) and 5 of
Appendix 1 to the Consultant Guidelines shall apply.
2. Prior Review in Other Cases
Prior review shall also apply to:
(a) the evaluation reports for pre-qualification of consulting
firms to enter the roster referred to in sub-paragraph (1)(a) of
Part C of this Schedule;
(b) the terms of reference, the budget, the short lists, the
evaluation reports and the contracts for consultants proposed to
be selected for Parts B and C of the Project;
(c) the terms of reference, the budget and the contract with
LERC for Part A.2 of the Project; and
(d) the terms of reference, the budget, the evaluation reports
and the contracts with the two long-term consultants for project
management functions of the Privatization Center to be selected
pursuant to the provisions of paragraph C.2 of this Schedule.
3. Post Review
With respect to each contract not governed by paragraph 1 of
this Part D, the procedures set forth in paragraph 4 of Appendix 1
to the Guidelines shall apply.
SCHEDULE 7
SPECIAL ACCOUNT
For the purposes of this Schedule:
(a) the term "eligible Categories" means Categories (1) through
(4) set forth in the table in paragraph 1 of Schedule 1 to this
Agreement;
(b) the term "eligible expenditures" means expenditures
incurred in respect of enterprise restructuring services under Sub-
Projects; and expenditures in respect of the reasonable costs
incurred for Incremental Operating Expenses and consultants'
services under Parts B, C and D of the Project and to be financed
out of the proceeds of the Loan allocated from time to time to the
eligible Categories in accordance with the provisions of Schedule
1 to this Agreement, provided, however, that notwithstanding the
provisions of paragraph 1 (b) of Part A of the Annex to Schedule 5
to this Agreement, payments for expenditures to be financed out of
the proceeds of free-limit Sub-loans may be made out of the
Special Account before the Bank shall have authorized withdrawals
from the Loan Account in respect thereof. Such expenditures,
however, shall qualify as eligible expenditures only if the Bank
shall subsequently authorize such withdrawals; and
(c) the term "Authorized Allocation" means an amount equivalent
to 3,000,000 USD to be withdrawn from the Loan Account and
deposited into the Special Account pursuant to paragraph 3 (a) of
this Schedule, provided, however, that unless the Bank shall
otherwise agree, the Authorized Allocation shall be limited to an
amount equivalent to 1,500,000 USD until the aggregate amount of
withdrawals from the Loan Account plus the total amount of all
outstanding special commitments entered into by the Bank pursuant
to Section 5.02 of the General Conditions shall be equal to or
exceed the equivalent of 10,000,000 USD.
2. Payments out of the Special Account shall be made
exclusively for eligible expenditures in accordance with the
provisions of this Schedule.
3. After the Bank has received evidence satisfactory to it that
the Special Account has been duly opened, withdrawals of the
Authorized Allocation and subsequent withdrawals to replenish the
Special Account shall be made as follows:
(a) For withdrawals of the Authorized Allocation, the Borrower
shall furnish to the Bank a request or requests for deposit into
the Special Account of an amount or amounts which do not exceed
the aggregate amount of the Authorized Allocation. On the basis of
such request or requests, the Bank shall, on behalf of the
Borrower, withdraw from the Loan Account and deposit into the
Special Account such amount or amounts as the Borrower shall have
requested.
b) (i) For replenishment of the Special Account, the
Borrower shall furnish to the Bank requests for deposits into
the Special Account at such intervals as the Bank shall
specify.
(ii) Prior to or at the time of each such request, the
Borrower shall furnish to the Bank the documents and other
evidence required pursuant to paragraph 4 of this Schedule for
the payment or payments in respect of which replenishment is
requested. On the basis of each such request, the Bank shall,
on behalf of the Borrower, withdraw from the Loan Account and
deposit into the Special Account such amount as the Borrower
shall have requested and as shall have been shown by said
documents and other evidence to have been paid out of the
Special Account for eligible expenditures. All such deposits
shall be withdrawn by the Bank from the Loan Account under the
respective eligible Categories, and in the respective
equivalent amounts, as shall have been justified by said
documents and other evidence.
4. For each payment made by the Borrower out of the Special
Account, the Borrower shall, at such time as the Bank shall
reasonably request, furnish to the Bank such documents and other
evidence showing that such payment was made exclusively for
eligible expenditures.
5. Notwithstanding the provisions of paragraph 3 of this
Schedule, the Bank shall not be required to make further deposits
into the Special Account:
(a) if, at any time, the Bank shall have determined that all
further withdrawals should be made by the Borrower directly from
the Loan Account in accordance with the provisions of Article V of
the General Conditions and paragraph (a) of Section 2.02 of this
Agreement;
(b) if the Borrower shall have failed to furnish to the Bank,
within the period of time specified in Section 4.01 (b)(ii) of
this Agreement, any of the audit reports required to be furnished
to the Bank pursuant to said Section in respect of the audit of
the records and accounts for the Special Account;
(c) if, at any time, the Bank shall have notified the Borrower
of its intention to suspend in whole or in part the right of the
Borrower to make withdrawals from the Loan Account pursuant to the
provisions of Section 6.02 of the General Conditions; or
(d) once the total unwithdrawn amount of the Loan allocated to
the eligible Categories, minus the total amount of all outstanding
special commitments entered into by the Bank pursuant to Section
5.02 of the General Conditions with respect to the Project, shall
equal the equivalent of twice the amount of the Authorized
Allocation.
Thereafter, withdrawal from the Loan Account of the remaining
unwithdrawn amount of the Loan allocated to the eligible
Categories shall follow such procedures as the Bank shall specify
by notice to the Borrower. Such further withdrawals shall be made
only after and to the extent that the Bank shall have been
satisfied that all such amounts remaining on deposit in the
Special Account as of the date of such notice will be utilized in
making payments for eligible expenditures.
6. (a) If the Bank shall have determined at any time that any
payment out of the Special Account:
(i) was made for an expenditure or in an amount not
eligible pursuant to paragraph 2 of this Schedule; or
(ii) was not justified by the evidence furnished to
the Bank, the Borrower shall, promptly upon notice from the
Bank:
(A) provide such additional evidence as the Bank may
request; or
(B) deposit into the Special Account (or, if the Bank
shall so request, refund to the Bank) an amount equal to
the amount of such payment or the portion thereof not so
eligible or justified. Unless the Bank shall otherwise
agree, no further deposit by the Bank into the Special
Account shall be made until the Borrower has provided such
evidence or made such deposit or refund, as the case may
be.
(b) If the Bank shall have determined at any time that any
amount outstanding in the Special Account will not be required to
cover further payments for eligible expenditures, the Borrower
shall, promptly upon notice from the Bank, refund to the Bank such
outstanding amount.
(c) The Borrower may, upon notice to the Bank, refund to the
Bank all or any portion of the funds on deposit in the Special
Account.
(d) Refunds to the Bank made pursuant to paragraphs 6 (a), (b)
and (c) of this Schedule shall be credited to the Loan Account for
subsequent withdrawal or for cancellation in accordance with the
relevant provisions of this Agreement, including the General
Conditions.
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