model loan agreement - fis - inter-american investment corporation

UPDATED MAY 2013

CONFIDENTIAL – [FIRST DRAFT]

OPERATION No. [operation number]

MODEL AGREEMENT FOR LOANS TO BANKS1

between/among

[Borrower’s name]

as Borrower,

[Guarantor’s name]

[as Guarantor,]2

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 [the Guarantor] and the IIC shall contain the terms that legally bind them. Until the document is executed by the Borrower, [the Guarantor] 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. 2 This model includes provisions for operations with Guarantors. In case no Guarantor is part of the operation, delete the corresponding provisions.


Subject to IIC external counsel review

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INDEX

ARTICLE I DEFINITIONS ......................................................................................................... 3

Section 1.01 General Definitions. ................................................................................ 3

Section 1.02 Financial Definitions ............................................................................... 9

ARTICLE II TERMS AND CONDITIONS OF THE LOAN ................................................. 11

Section 2.01 Amount, Term, and Currency. .............................................................. 11

Section 2.02 Place of Payment................................................................................... 11

Section 2.03 Payments on Business Days.................................................................. 11

Section 2.04 Repayment. ........................................................................................... 11

Section 2.05 Application of Payments. ...................................................................... 11

Section 2.06 Interest Rate. ......................................................................................... 11

Section 2.07 Fees. ...................................................................................................... 12

Section 2.08 Charge for Delay in Providing Information. ......................................... 12

Section 2.09 Voluntary Prepayment. ......................................................................... 12

Section 2.10 Mandatory Prepayment. ........................................................................ 13

Section 2.11 Late Payment Fee. ................................................................................. 13

Section 2.12 Reinvestment......................................................................................... 13

Section 2.13 Use of Idle Funds. ................................................................................. 14

Section 2.14 Promissory Notes. ................................................................................. 14

Section 2.15 [Security.].............................................................................................. 14

Section 2.16 Assignment [or Pledge] of the Loans to Eligible Enterprises. .............. 14

ARTICLE III DISBURSEMENTS ............................................................................................ 15

Section 3.01 Disbursement Timing and Availability. ................................................ 15

Section 3.02 Cancellation of Disbursements by the IIC. ........................................... 15

Section 3.03 Cancellation of Disbursements at the Request of the Borrower. .......... 15

ARTICLE IV LOAN DISBURSEMENT CONDITIONS ....................................................... 15

Section 4.01 Disbursement Period. ............................................................................ 15

Section 4.02 Disbursement Requirements. ................................................................ 16

Section 4.03 Specific Requirements for the First Disbursement. .............................. 16

Section 4.04 Supporting Documentation. .................................................................. 17

ARTICLE V REPRESENTATIONS AND WARRANTIES ................................................... 17



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Section 5.01 Corporate Existence. Legal Powers. Binding Effect. ........................... 17

Section 5.02 Authorization; No Contravention. ........................................................ 17

Section 5.03 Financial Information............................................................................ 17

Section 5.04 Litigation and Disputes. ........................................................................ 17

Section 5.05 Full Disclosure. ..................................................................................... 18

Section 5.06 Reliability of Representations and Warranties. .................................... 18

Section 5.07 Survival of Representations and Warranties. ........................................ 18

ARTICLE VI OBLIGATIONS OF THE BORROWER ......................................................... 18

Section 6.01 Affirmative Covenants. ......................................................................... 18

Section 6.02 Negative Covenants. ............................................................................. 23

ARTICLE VII [PERSONAL GUARANTEE] .......................................................................... 24

Section 7.01 [Joint and Several Guarantors. .............................................................. 24

Section 7.02 Guaranteed Obligations. ....................................................................... 24

Section 7.03 Payment................................................................................................. 24

Section 7.04 Waiver. .................................................................................................. 24

Section 7.05 Express Acceptance. ............................................................................. 25

ARTICLE VIII EVENTS OF LOAN ACCELERATION ....................................................... 25

Section 8.01 Events of Acceleration .......................................................................... 25

ARTICLE IX MISCELLANEOUS PROVISIONS.................................................................. 26

Section 9.01 Interpretation. ........................................................................................ 26

Section 9.02 References. ............................................................................................ 26

Section 9.03 Headings. .............................................................................................. 26

Section 9.04 Exchange Rate. ..................................................................................... 26

Section 9.05 Accounting Principles. .......................................................................... 26

Section 9.06 Notices. ................................................................................................. 26

Section 9.07 Domicile. ............................................................................................... 27

Section 9.08 Compliance with Contractual Obligations. ........................................... 27

Section 9.09 Waiver of Immunity. ............................................................................. 28

Section 9.10 Severability of Provisions. .................................................................... 28

Section 9.11 No assignments. .................................................................................... 28

Section 9.12 No Waiver. ............................................................................................ 28



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Section 9.13 Governing Law. .................................................................................... 28

Section 9.14 Jurisdiction. ........................................................................................... 28

Section 9.15 Effectiveness. ........................................................................................ 28

EXHIBIT I LIST OF EXCLUDED ACTIVITIES ..................................................................... 1

EXHIBIT II RECEIPT ................................................................................................................. 3

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

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];

(ii) [Guarantor's name], a [company/financial institution] domiciled at [Guarantor's address] (hereinafter, the “Guarantor”), represented by Mr./Ms. [name of the Guarantor's representative], with sufficient powers to execute this type of acts and agreements pursuant to a power of attorney granted in his/her favor as agent of the above-mentioned company; and

[In the event that the guarantor is an individual, replace with the following:

[Guarantor's name] domiciled at [Guarantor's address] (hereinafter, the “Guarantor”), with sufficient powers to execute this type of acts and agreements; and

(iii) 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 1.01 General 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:



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“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 dates of 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.

“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, [the Guarantor] 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



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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%)]3; nor do the aforementioned Persons collectively have a direct or indirect participation in the EE’s share capital exceeding [twenty percent (20%)]4;

(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 I;

(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)]5 [ten million Dollars (US$10,000,000)]6, and 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 I of this Agreement;

(ii) it will use the financing for [the acquisition of fixed assets or machinery originating from member countries of the IIC] or [working capital]7;

(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)]8 [five

3 To be determined by the IIC Project Team and in accordance with the local laws. 4 To be determined by the Project Team of the IIC and in accordance with the local laws. 5 To be applied in the cases of Argentina, Brazil, Mexico, Venezuela, Chile, Colombia and Peru. 6 To be applied in the cases of Bahamas, Barbados, Costa Rica, Jamaica, Panama, Surinam, Trinidad & Tobago, Uruguay, Belice, Bolivia, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Haiti, Honduras, Nicaragua and Paraguay. 7 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]).” 8 To be applied in the cases of Argentina, Brazil, Mexico, Venezuela, Chile, Colombia and Peru.



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hundred thousand Dollars (US$500,000)]9 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; 10 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 III.

“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. For example, if the first disbursement date for the Loan is June 25, then the applicable dates would be those referenced in subsection (iii) above.11

9 To be applied in the cases of Bahamas, Barbados, Costa Rica, Jamaica, Panama, Surinam, Trinidad & Tobago, Uruguay, Belice, Bolivia, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Haiti, Honduras, Nicaragua and Paraguay. 10 To be determined by the IIC Project Team. 11 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



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“Interest Period” means each [three (3)] [six (6)] month period commencing on an Interest Payment Date and ending on the day immediately prior to the following Interest Payment Date, provided that the first Interest Period applicable to each disbursement shall commence on the date of such disbursement and end on the day immediately prior to the next Interest Payment Date.

“Investment Period” means, with respect to each disbursement of the Loan, the period of time commencing on the date on which the IIC makes such disbursement and ending [one hundred and eighty] [(180)]12 days thereafter.

“Lien” means, albeit not exclusively, any mortgage, pledge, charge, security interest, entitlement, or obligation of any kind, or, in general, any preferential arrangement that has the practical effect of constituting a security interest with respect to any assets, revenues, assets, or the proceeds from the sale thereof, and/or restricting the marketability thereof.

“Loan” means the loan to be made by the IIC to the Borrower hereunder.

“Loan Agreement,” or “Agreement,” means this document and its exhibits, executed among the Parties.

“Loans to Eligible Enterprises” means the loans denominated in or indexed to the Dollar that the Borrower grants to the EEs to finance Eligible Projects pursuant to the terms and conditions hereof.

“Material Adverse Change” means, with respect to the Borrower, [and/or the Guarantor] any fact, event or circumstance that materially affects or may reasonably be expected to have a significant adverse impact on:

(i) business, activities, property, or situation (financial or otherwise) of the Borrower[and/or the Guarantor]; and/or

(ii) the ability of the Borrower [and/or the Guarantor]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

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.” 12 To be defined by the Project Team of the IIC.



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(ii) acts intended to materially impede the exercise of the IIC's inspection and audit rights provided for under this Agreement.

“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)]13 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.

“Significant Shareholder” means any Person (or group of Persons acting in cooperation, pursuant to a formal or informal agreement):

(i) who controls, directly or through its Subsidiaries or Related Entities, or has the indirect control of twenty percent (20%) or more of the voting shares of the Borrower and/or the

13 To be defined by the Project Team of the IIC.



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Guarantor; or

(ii) who can effectively appoint or remove twenty percent (20%) or more of the members of the Borrower’s board.

“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.

Section 1.02 Financial Definitions14

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],15 less Provisions, plus Payments in Kind, on such date, by its Net Worth.

“Lending Operations” means all banking and loan transactions involving placement of funds with the general public, including:

(i) offering discounts;

(ii) granting loans;

(iii) issuing credit cards;

(iv) undertaking obligations on behalf of third parties based on loans or acceptances granted or loan instruments endorsed; or

(v) granting all kinds of guarantees, such as issuing stand-by letters of credit.

“Liquidity Gap Ratio” means, as of any date, the ratio obtained by dividing the 90-day (ninety day) liquidity gap on such date by its Net Worth on the same date.

14 These Financial Definitions need to be adapted to the applicable banking laws or accounting practices in [country] 15 Reference risk categories as per local law.



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“London Interbank Offered Rate” or “LIBOR” means the British Bankers Association (“BBA”) Interbank offered rate for deposits in dollars that appears on the Bloomberg Financial Markets Service (currently, the BBAMI page) at 11:00 a.m. London, England time, or any other service that displays the BBA rates (the “Service Provider”) on an Interest Determination Date for one (1) week, one (1) month, two (2) months, three (3) months or six (6) months, whichever period is closest to the duration of the relevant Interest Period (or, if two (2) periods are equally close to the duration of the relevant Interest Period, the longer one). The offered rate shall be rounded upward, if necessary, to one sixteenth (1/16th) of one percent (1%) or the decimal equivalent thereof. If for any reason LIBOR is not provided by BBA and published by a Service Provider on any Interest Determination Date, the IIC shall notify the Borrower and shall instead determine LIBOR as of an Interest Determination Date:

(i) by calculating the arithmetic mean (rounded upward, if necessary, to one sixteenth (1/16th) of one percent (1%) or the decimal equivalent thereof) of such offered rates quoted by four (4) major commercial banks active in the London Eurodollar Interbank market selected by the IIC;

(ii) if fewer than four (4) quotations are received, the IIC may rely on the quotations so received if not fewer than two (2);

(iii) or if fewer than two (2) quotations are received from the banks in London, the IIC may rely on the offered rates advised to IIC on or around 11:00 a.m., New York time, for loans in Dollars by a major bank or banks in New York, New York, United States of America, selected by the IIC.

Subject to IIC’s funding requirements and prior written notice by the IIC to the Borrower, all calculations of arithmetic means by IIC may be rounded upward to the nearest three (3) decimal points. All determinations of LIBOR by the IIC shall be conclusive in the absence of manifest error.

“Net Worth” means the part of the Borrower’s assets belonging to the shareholders or to holders of subordinated bonds (subject to applicable regulations regarding subordinated liabilities), including paid-in capital, share premium, accumulated profits, profit for the year, reserves of any kind, asset valuations and revaluations, inflation adjustments and subordinated liabilities.

“Past-Due Portfolio” means the sum of the credit operations in payment arrears for more than [________].

“Past-Due Portfolio Ratio” means, as of any date, the ratio obtained by dividing the Borrower’s Past due Portfolio on such date by its Total Portfolio before Provisions on the same date.

“Payments in Kind” means the sum of all movable and immovable assets received by a financial institution as payment for a loan or as a consequence of legal proceedings for recovery.

“Provisioning Coverage Ratio” means, as of any date, the ratio obtained by dividing the Borrower’s Provisions on such date by its Past-Due Portfolio on the same date.

“Provisions” means the charges or amounts reflected in the Borrower’s balance sheet to account for potential portfolio losses that the Borrower anticipates.

“Risk-Weighted Assets” means the product of the Borrower’s assets (including its contingencies) and the risk ratio approved by the appropriate Governmental Authority.

“Technical Net Worth” means the sum of all the accounts that comprise Net Worth, after adjustment by the ratios established by the local banking regulations.

“Total Portfolio” means the sum of all of the Borrower’s Lending Operations, net of Provisions.



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ARTICLE II TERMS AND CONDITIONS OF THE LOAN

Section 2.01 Amount, Term, and Currency.

The total amount of the Loan shall be up to [loan amount in letters] million Dollars (US$[Loan amount in numbers], for a maximum term of [Loan term in letters] years ([Loan term in numbers]) from the date of the first loan disbursement, including a grace period of up to [grace period in letters] [(grace period in numbers)] years from such first Loan disbursement date. The Borrower and the IIC agree that any and all disbursements and payments to be made under this Agreement and the other Principal Documents shall be made in Dollars.

Section 2.02 Place of Payment. The Loan, plus the applicable interest, fees, charges and any other amounts due shall be paid in cash and in Dollars, with immediately available funds, no later than 11:00 am (New York time) on the relevant due date, to IIC’s account No. 323 373844, Ref. OPR# [insert PMSYS number]16 at JP Morgan Chase Bank, New York, New York, United States of America, or at such other bank or banks, and in such other place or places, as the IIC shall from time to time designate at its sole discretion with at least five (5) Business Days’ prior notice to the Borrower.

Section 2.03 Payments on Business Days. If the due date for any payment under this Agreement shall not be a Business Day, then such payment shall be made on the next succeeding Business Day, and interest shall continue to accrue thereon for the period from such due date to said Business Day.

Section 2.04 Repayment. The Loan shall be repaid in up to [number of payments in letters] ([number of payments in numbers]) consecutive, and substantially equal [quarterly][semiannual] installments starting on the Interest Payment Date immediately prior to the date when [grace period in letters and in months/years] ([grace period in numbers and in months/years]) months/years have elapsed since the date of the first disbursement of the Loan, unless the IIC declares such principal to be due and payable in advance in accordance with the terms of this Agreement. In case additional disbursements occur after the date in which amortization of principal starts, the amount of the remaining installments shall be recalculated pursuant to outstanding balance of the Loan.

Section 2.05 Application of Payments. All payments received by the IIC in connection with the Loan shall be applied according to the following priority order:

(i) outstanding professional fees, other fees, charges, and expenses;

(ii) accrued interest; and

(iii) outstanding Loan principal.

Section 2.06 Interest Rate. The Loan shall accrue interest on the outstanding balance, at an annual rate equivalent to LIBOR plus [spread in letters] percent ([spread in numbers]%).

[The Loan shall accrue interest on the outstanding balance. Interest shall accrue at:

(i) an annual rate equivalent to LIBOR plus [spread in letters] percent ([spread in numbers]%) (the “Variable Rate”); or

(ii) an annual fixed rate equivalent to the Variable Rate at the moment of disbursement (the “Fixed Rate”).

16 To be provided by the IIC



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In the first Loan Disbursement Request, the Borrower shall irrevocably choose the Variable Rate or the Fixed Rate alternative, which choice shall apply to all disbursements].17

Interest shall be calculated on the basis of a three hundred sixty (360)-day year and paid on each Interest Payment Date based on the actual number of days elapsed.

Section 2.07 Fees.18

(i) Commitment Fee. The Borrower shall pay a commitment fee equivalent to [commitment fee in letters] percent ([commitment fee in numbers]%) per annum on the undisbursed balance of the Loan (the “Commitment Fee”), accruing from the earlier to occur of:

(a) ninety (90) days from the date of the Loan approval by the IIC Board of Executive Directors; or

(b) from the Effective Date.

Such Commitment Fee shall continue to accrue in each case until the Loan is fully disbursed or disbursements have been cancelled. The Commitment Fee shall be payable on the Commitment Fee Payment Date.

(ii) Front-End Fee. The Borrower shall pay a front-end fee equivalent to [front-end fee in letters] percent ([front-end fee in numbers]%) of the principal amount of the Loan (the “Front-End Fee”), to be paid on the earlier to occur of:

(a) thirty (30) days after the Effective Date; or

(b) the date of the first disbursement of the Loan.19

(iii) Supervision Fee. The Borrower shall pay an annual supervision fee of [supervision fee in letters] Dollars (US$[supervision fee in numbers]), payable on the first Interest Payment Date each year commencing on the Effective Date and until full repayment of the Loan.

Section 2.08 Charge for Delay in Providing Information. Should the Borrower fail to comply with the reporting and/or notice obligations under this Agreement and/or the other Principal Documents, then, without prejudice to the provisions of Section 8.01(ii) or any other rights set forth herein, the Borrower shall pay to the IIC as liquidated damages, to the extent permitted by applicable law, five thousand Dollars (US$5,000) for each period of thirty (30) days of continued noncompliance in this respect. Such charge shall accrue from the noncompliance notice date, if the Borrower does not remedy the noncompliance within fifteen (15) days of such notice, and shall be paid on the next Interest Payment Date, unless the IIC considers that the reasons given by the Borrower for such noncompliance are justified.

Section 2.09 Voluntary Prepayment. The Loan may be totally or partially prepaid, provided that the IIC is given irrevocable written notice forty-five (45) days in advance. Any such prepayment shall be made on an Interest Payment Date or on any other date acceptable to the IIC and shall be subject to a surcharge equal to [prepayment fee in letters] percent ([prepayment fee in numbers]%) of the prepaid amount, prorated on the basis of the number of months remaining to the Maturity Date (the “Prepayment Fee”). [Additionally, in the event the Borrower chooses a Fixed Rate, the Prepayment Fee in respect of the Loan shall also include the cost of unwinding the derivative used for fixing such fixed rate; therefore the Borrower shall pay the amount

17 To be added if the Fixed Interest Rate option is included. 18 The fees must be expressed in the same currency as the Loan. 19 At the discretion of the IIC Project Team, a Supervision Fee or any other applicable fee may be added.



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equivalent to the usual or reasonable losses and/or expenses incurred by the IIC, including the margin losses incurred after the prepayment, resulting from, among others, the execution, amendment or termination of a swap agreement or any other agreement arising in respect thereof and in each case.].20 Any such prepayment shall not be less than [minimum prepayment in letters] Dollars (US$[minimum prepayment in numbers]). All prepayments shall be applied towards the outstanding Loan principal installments in reverse chronological order.

Section 2.10 Mandatory Prepayment.

(i) On any Interest Payment Date or on any other date upon IIC’s request, the Borrower shall prepay to the IIC:

(a) the amounts disbursed under the Loan that have not been used within the applicable Investment Period to finance Loans to Eligible Enterprises;

(b) the portion of the principal of the Loan pertaining to repayments or prepayments made on Loans to Eligible Enterprises that have not been reinvested as new Loans to Eligible Enterprises within the applicable Reinvestment Period;

(ii) The Borrower shall provide written notice to the IIC indicating the portion of principal amount of the Loan to which the mandatory prepayment pertains in accordance with the provisions of subsection (i) above. Once notice of mandatory prepayment has been delivered, the Borrower shall be obliged to make such prepayment, which shall be applied towards the outstanding Loan principal installments in reverse chronological order. Additionally, the Prepayment Fee provided in Section 2.09 will be applied.

Section 2.11 Late Payment Fee. Without prejudice to the interest payments set forth in Section 2.06 and the provisions of applicable law, if the Borrower fails to meet its payment obligations hereunder, the Borrower shall pay to the IIC a fee equal to [late payment fee in letters] percent ([late payment fee in numbers]%)21 per annum on the amounts of any payment due and unpaid; this fee shall accrue on a daily basis from the date of default, and shall be paid on the next Interest Payment Date, unless a prepayment is made or requested. The late payment fee is calculated on the amount past due, on a three hundred sixty (360) day basis for the actual number of days the amounts are past due.22

Section 2.12 Reinvestment. Upon receiving a principal payment on a Loan to an Eligible Enterprise, the IIC may at its discretion authorize the Borrower to grant additional Loans to Eligible Enterprises provided that the following conditions have been met to the full satisfaction of the IIC:

(i) for each Loan to Eligible Enterprise, the Borrower shall have delivered to the IIC a

20 In case the option for Fixed Interest Rate is included. 21 To be defined by the IIC Project Team and the applicable local laws. 22 In accordance with applicable law in the country in question, the Late Payment Fee (as stated in the Agreement) may be replaced with Default Interest in accordance with the following clause: "Default Interest. Without prejudice to the provisions of Section 2.06 or to any other right provided for herein, if [and for as long as] the Borrower fails to comply with the payment obligations hereunder, the interest rate established under Section 2.06 will be increased by [increase in letters] percent ([increase in numbers]%) and shall accrue from the first day in arrears with no need for a prior resolution, request, or demand for payment. Should the late payment interest exceed the maximum allowed by [name of the country] laws, the maximum interest rate allowed by said laws shall apply."



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reinvestment request pursuant to the specimen attached as EXHIBIT IV (the “Reinvestment Request”); each such request must be approved in writing by the IIC. The Reinvestment Request must also include proof of compliance with all of the conditions for reinvestment and must be accompanied by a project eligibility report (the “Project Eligibility Report”) for each Eligible Project that the Borrower seeks to finance with reinvested Loan proceeds pursuant to the specimen attached as EXHIBIT V;

(ii) the Loan to Eligible Enterprise shall be made within the applicable Reinvestment Period;

(iii) the Borrower shall be in compliance with all of the obligations hereof and of the other Principal Documents.

Section 2.13 Use of Idle Funds. During each of the Investment and Reinvestment Periods, the Borrower will be allowed to invest any Loan funds not disbursed to Eligible Enterprises in Dollar-denominated or Dollar-indexed (at a rate reflecting the market) short-term marketable securities or investment-grade negotiable credit instruments acquired solely to give temporary employment to such idle resources.

Section 2.14 Promissory Notes. Upon the IIC making each Loan disbursement hereunder, the Borrower shall issue and deliver a Promissory Note in favor of the IIC, (the “Promissory Note”). The Promissory Note shall accrue interest at a rate equal to that of the Loan and shall be substantially in the form of EXHIBIT VI.23

During the term of the Loan, the Borrower will ensure that the Promissory Note is valid, binding and enforceable, and it shall confer to the IIC the right to implement executory proceedings under applicable local legislation. The Borrower shall also renew the Promissory Note before it expires if this is required by law.

The issuance and delivery to the IIC of any Promissory Note shall not constitute a novation or a payment under the Loan. The Borrower’s payment of any Promissory Note to the IIC or of any amount on account of a Promissory Note shall release the Borrower from having to pay the amount covered by said Promissory Note.

Section 2.15 [Security.]24

Section 2.16 Assignment [or Pledge]25 of the Loans to Eligible Enterprises.26 If the Borrower’s financial position deteriorates, or if an Event of Acceleration occurs or is imminent, the Borrower undertakes to assign without restrictions [or pledge] to the IIC, [or to the person the IIC designates,] at the IIC’s request, all the receivables derived from Loans to Eligible Enterprises, as well as all personal and real guarantees and any other ancillary rights or instruments established in relation with said loans. Such assignment [or pledge] shall not cause the Borrower’s payment obligations to cease, and it shall constitute an alternative payment source thereof. Should the IIC receive any payment under the assigned [pledged] Loans to Eligible Enterprises, the amount shall be applied towards the outstanding balance of the Borrower’s Loan, in accordance with the provisions of Section 2.09.

23 Alternative text if required by applicable local law: “Upon the IIC making any Loan disbursement hereunder, the Borrower shall issue and deliver two (2) Promissory Notes in favor if the IIC (collectively, the “Promissory Note”). Each Promissory Note, one for the total principal amount disbursed and one for the approximate amount of interest that will accrue, shall be substantially in the form of EXHIBIT VI.” 24 The IIC Project Team will decide whether the Borrower will be requested to provide security. 25 Based on the applicable laws, it will be determined whether an assignment or a pledge will be requested. 26 This provision will be deleted if the Project requires security to be provided by the Borrower.



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The Borrower shall perform the assignment [or pledge] within ten (10) days of IIC’s request. The Borrower undertakes to identify all Loans to Eligible Enterprises, as well as the appertaining personal and real guarantees and ancillary rights, and to keep them within its Net Worth.

If the IIC chooses to exercise this right, this shall not impair IIC’s entitlement to exercise any other right appertaining to the IIC under this Agreement, including the right to declare an Event of Acceleration as provided in Section 8.01.

ARTICLE III DISBURSEMENTS

Section 3.01 Disbursement Timing and Availability. Subject to compliance with the conditions precedent for disbursement set out in Article IV, the IIC shall make disbursements of the Loan in accordance with the relevant Disbursement Request submitted pursuant to the specimen attached as EXHIBIT VII (the “Disbursement Request”). This Request shall be submitted to the IIC no less than five (5) Business Days before the proposed disbursement date. Each disbursement shall be made by bank transfer to the Borrower’s account in the [country] designated in the relevant Disbursement Request. The Borrower may change such account, provided it notifies the IIC accordingly ten (10) Business Days in advance of a disbursement and it provides the IIC with the confirmation of the new bank to which the proceeds of the relevant Loan disbursement shall be remitted.

Unless otherwise indicated in writing by the IIC:

(i) The Loan shall be made in one (1) or more disbursements of not less than [______] Dollars (US$________), e.g., five hundred thousand Dollars (US$500,000)] each, except for the final disbursement.

(ii) The IIC’s obligation to make the first Loan disbursement for any reason shall expire [______ (__), e.g.: six (6)] months after the Effective Date, without the need for any notice or action by the IIC.

(iii) The IIC’s obligation to make the last Loan disbursement for any reason shall expire [______ (__) this period, expressed in months, should be the same as the grace period for the loan, e.g., twenty-four (24)] months after the Effective Date, without the need for any notice or action by the IIC.

Section 3.02 Cancellation of Disbursements by the IIC. The IIC’s obligation to make Loan disbursements shall cease, by means of a written notice by the IIC to the Borrower, in any of the following instances:

(i) if the IIC declares an Event of Acceleration.

(ii) if [country] ceases to be a member in good standing of the IIC.

Upon service of written notice, the undisbursed balance of the Loan shall be cancelled immediately and the Commitment Fee will cease to accrue as of the date of said notice.

Section 3.03 Cancellation of Disbursements at the Request of the Borrower. The Borrower may request the cancellation of Loan disbursements by giving the IIC at least forty-five (45) days’ written notice; the Commitment Fee shall cease to accrue on the effective date of the cancellation of disbursements.

ARTICLE IV LOAN DISBURSEMENT CONDITIONS

Section 4.01 Disbursement Period. In accordance with Section 3.01, the IIC will make the requested Loan disbursement within ten (10) Business Days of compliance with all the conditions



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set forth in this Article IV, to the total satisfaction of the IIC.

Section 4.02 Disbursement Requirements. The IIC’s obligation to make any disbursement under the Loan shall be subject to compliance with each of the following conditions, to the total satisfaction of the IIC:

(i) The Borrower shall have honored all the obligations, conditions, and covenants set forth herein and in the other Principal Documents;

(ii) No Material Adverse Change shall have occurred.

(iii) No Event of Acceleration and no event which, with lapse of time, notice, or both, would become an Event of Acceleration shall have happened, be continuing or happen as a result of the disbursement;

(iv) The Borrower shall have provided the IIC with the following documentation to the total satisfaction of the IIC:

(a) the Disbursement Request;

(b) the Project Eligibility Reports;

(c) the Promissory Note issued as provided in Section 2.14;

(d) the most recent audited and unaudited financial statements of the Borrower [and the Guarantor];

(e) except for the first Loan disbursement, the Receipt for the previous disbursement pursuant to the form attached as EXHIBIT II(the “Receipt”);

(f) true and faithful copies of the Corporate Documents of the Borrower with regard to the Loan, the Principal Documents and any modifications made to them; and

(g) any change to the information in the certification from the bank to which the proceeds of the disbursement shall be sent, as required in Section 4.03(ii), issued for any previous disbursement; [and]

(h) [the documents evidencing the establishment, perfecting, and [recording] [first priority] [filing in the register]27 of the Security].

Section 4.03 Specific Requirements for the First Disbursement. The IIC’s obligation to make the first disbursement under the Loan shall be subject to the Borrower’s compliance with the applicable conditions set forth in Section 4.02 and the delivery of the following documentation to the IIC, to its the total satisfaction:

(i) This Agreement duly subscribed and perfected by the Parties in such way that it is binding and enforceable under the applicable legislation;

(ii) A certificate issued by the bank to which the disbursement is to be remitted, certifying that the Borrower is the holder of the account indicated in the Disbursement Request. This Certificate shall be sent directly by the bank to the IIC;

(iii) The legal opinion of the external counsel of the IIC with regard to this Agreement, the other Principal Documents, the transactions provided for therein, the Project, and any other aspects requested by the IIC, at the IIC’s satisfaction; and

27 To the discretion of the IIC Project team any of these options could be considered if permitted by the applicable legislation provided IIC interests are not in risk.



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(iv) [The Security duly formalized, perfected and [recorded] [filed with first priority] [filed]28

(v) [NOTE: Include any clauses that apply exclusively to this particular transaction].

Section 4.04 Supporting Documentation. The Borrower shall provide any documents or additional information requested by the IIC to substantiate any disbursement, regardless of whether such request is made before or after disbursement.

ARTICLE V REPRESENTATIONS AND WARRANTIES

Section 5.01 Corporate Existence. Legal Powers. Binding Effect. The Borrower represents and warrants that:

(i) it is a duly incorporated and validly existing [financial institution] in [country]; and its Corporate Documents are in full force and effect as of the date of execution of this Agreement;

(ii) it holds the licenses, authorizations, consents, and registrations required by the laws of [country], and that it has the power and authority to own its assets and to conduct its banking business as presently conducted, and that the amount of the Loan requested is within the Borrower’s available borrowing power; and

(iii) this Agreement and all the other Principal Documents are valid and binding on the Borrower and are enforceable pursuant to the terms hereof and thereof.

[The Guarantor declares that is a duly organized and validly existing corporation, that it holds the licenses, authorizations, consents, approvals or recordations required by applicable law, and that they have full power and capacity to own its property and to conduct its business as presently conducted or contemplated. The Guarantor declares that it is fully authorized to appear and execute this Agreement and all the other Principal Documents, and to agree to be bound under the terms thereof.]

Section 5.02 Authorization; No Contravention. The Borrower represents and warrants that:

(i) the execution, delivery and formalization of this Agreement and all the other Principal Documents have been duly authorized and, if necessary, shall be recorded with the relevant Governmental Authority and do not require any consent from third parties under any agreement, judgment, injunction, mandate, decree or order or any applicable statute, rule or regulation; and

(ii) the execution of this Agreement has not breached nor will breach any of the provisions or terms of the Corporate Documents or of any other agreement entered into by the Borrower with third parties.

Section 5.03 Financial Information. The Borrower [and the Guarantor] represents and warrants that its most recent audited and unaudited financial statements present fairly its financial position as of the latest Fiscal Year or applicable period, in conformity with the generally accepted Accounting Principles, as provided in Section 9.05, or as otherwise required by the applicable rules and laws in [country].

Section 5.04 Litigation and Disputes. The Borrower [and the Guarantor] represents and warrants that there is no suit, action or procedure pending before any court or arbitrator or any

28 At the discretion of IIC Project team.



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governmental body, agency or official affecting the Borrower, nor does the Borrower [or the Guarantor] know of any threat of suit, action or procedure before any court or arbitrator or any governmental body, agency or official, that might materially and adversely affect the Borrower’s [and/or the Guarantor]financial position, the results of its operations, or its ability to perform any of its obligations under this Agreement, or that may affect in any way the validity and effectiveness of this Agreement.

Section 5.05 Full Disclosure. The Borrower [and the Guarantor] represents and warrants that for the purposes hereof and of the other Principal Documents:

(i) all information that it has furnished to the IIC is true, accurate and complete and that there are no material omissions that could render the disclosure misleading;

(ii) it has disclosed to the IIC in writing any and all facts that may materially and adversely affect its financial position or its ability to perform its obligations hereunder and under the other Principal Documents; and

(iii) it will hold the IIC harmless from any and all liabilities (in tort, contract, or otherwise) relating to any information provided to the IIC.

Section 5.06 Reliability of Representations and Warranties. The Borrower [and the Guarantor]acknowledges that the representations and warranties herein were made with the purpose of inducing the IIC to enter into this Agreement, and that the IIC has agreed to enter into this Agreement on the basis of, and in full reliance on, each of such representations and warranties.

Section 5.07 Survival of Representations and Warranties. The representations and warranties in this Agreement shall survive the execution of this Agreement and shall remain in full force until termination of the transactions contemplated hereunder, except for any amendments in respect of such representations and warranties that are timely provided to the IIC by the Borrower [and/or the Guarantor] and expressly consented by the IIC.

ARTICLE VI OBLIGATIONS OF THE BORROWER

Section 6.01 Affirmative Covenants. Unless previously authorized in writing by the IIC, and notwithstanding all other obligations established under this Agreement, the Borrower [and the Guarantor] shall comply with the obligations set forth below:

(i) Due Diligence and Use of Loan Proceeds. Use all of the disbursed Loan funds to finance Eligible Projects of Eligible Enterprises and shall manage the Loans to Eligible Enterprises diligently and efficiently and in accordance with safe and sound financial practices.

(ii) Compliance with Eligibility Criteria. Ensure that, during the term of the Loan, the Eligible Enterprises and the Eligible Projects comply, and remain in compliance with, the eligibility requirements and conditions established in this Agreement, and that each of the Eligible Enterprises use the funds under the relevant Loan to Eligible Enterprises exclusively for the Eligible Projects approved by the IIC.

(iii) Accounting, Financial, and Operating Information. Provide the IIC with the following accounting, financial, and operating information, which shall be true, accurate, and complete:

(a) within one hundred twenty (120) days of the close of each Fiscal Year, the Borrower’s [and the Guarantor’s]complete and audited annual unconsolidated



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and consolidated financial statements as of the end of the applicable Fiscal Year;

(b) within forty-five (45) days of the close of each quarter in each Fiscal Year, the Borrower’s [and the Guarantor’s] unaudited quarterly financial statements;

(c) on each Interest Payment Date, a [quarterly] [semiannual]29transaction report (the “[Quarterly] [Semiannual] Transaction Report”) substantially in the form of EXHIBIT VIII;

(d) within forty-five (45) days of the close of each Fiscal Year, the Annual Environmental Performance Report as provided in subsection (xii)(a)(H);

(e) immediately, a report on any fact or circumstance that, in the Borrower’s [and the Guarantor’s] reasonable opinion, affects or may affect its operations and its financial situation on an adverse and material basis; and

(f) as soon as possible upon the request of the IIC, any reasonable additional information (including, for example, the auditors’ report and a report by the Regulatory Authority) on the activities, assets, operational aspects, financial position, operating results or prospects of the Borrower, the Eligible Enterprises or the Project.

(iv) Ownership. The Borrower shall inform the IIC at least thirty (30) days prior to the admission of any Significant Shareholder (and of any sale, disposal, or transfer of any nature whereby a shareholder or beneficial owner of the Borrower’s property becomes a Significant Shareholder) of the Borrower [and/or Guarantor]. The IIC may, within thirty (30) days of receiving notification from the Borrower or of learning of such change in shareholding, demand the prepayment of the Loan subject to the applicable provisions of Section 2.10, whenever, in IIC’s opinion:

(a) the admission of that Significant Shareholder may result in noncompliance with the financial ratios set forth in Section 6.01(xi); or

(b) the new Significant Shareholder fails to meet the net worth (credit), reputational, or professional qualities ensuring, to the satisfaction of the IIC, the Borrower’s capacity to continue its operations in the manner in which it has been operating and comply with all its obligations.

Upon written request of the IIC, the Borrower shall deliver from time to time to the IIC, or to whomever the IIC may designate, documentation evidencing the shareholding and control structure of the Borrower and the Guarantor, including documentation evidencing the actual beneficial owners of the shares and the Significant Shareholders of the Borrower and the Guarantor, in a manner that enables the IIC, to its entire satisfaction, to verify compliance with the obligation set forth herein.

(v) Monitoring and Inspection Visits. Allow the IIC or the person who the IIC designates to visit and inspect the Borrower’s offices and premises; examine the applicable business records, accounting books, and tax returns; and request from the Borrower’s officials information about the Borrower’s activities, portfolios, operations, financial position, operating results and outlook, at times and with frequency as determined by the IIC. Additionally, if requested by the IIC, the Borrower shall obtain permission for IIC representatives to visit and inspect any Eligible Enterprise and hold meetings with the latter’s managers and auditors and have access to its financial information.

29 To be determined by the IIC Project team.



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(vi) Loans to Eligible Enterprises. Ensure that:

(a) Loans to Eligible Enterprises are approved in accordance with the Borrower’s internal credit policies and procedures, which will at all times include, without limitation, the requirement that each EE be financially sound and well-managed and have appropriate insurance;

(b) the interest rate, maturity and other terms and conditions of the Loans to Eligible Enterprises are on arm’s length terms;

(c) each Loan to Eligible Enterprise is evidenced by documents conferring upon the Borrower valid and enforceable rights and imposing upon the relevant EE valid and enforceable obligations;

(d) each Loan to Eligible Enterprise is denominated in Dollars or in its Equivalent in Local Currency; and

(e) [each Loan to Eligible Enterprise is duly backed by security acceptable to the IIC.]30

(vii) Auditors. Appoint and maintain independent auditors of recognized standing in [country]. Any proposed change in such appointment shall be notified to the IIC in writing, at least thirty (30) days prior to the proposed change. Any such change of Auditors shall have to be previously authorized by the IIC in writing.

(viii) Licenses, Approvals or Permits. Maintain in full force and effect all licenses, approvals, and permits necessary for the execution of the Loan and the carrying out of the Borrower’s business and operations, as well as comply with and observe all the conditions and restrictions contained in or imposed by any such licenses, approvals, or permits.

(ix) Laws, Rules, and Regulations. Comply with all applicable laws, rules and regulations of [country], particularly any such laws relating to capitalization, transactions and banking soundness, and any such rules enforced by any Governmental Authority that regulates the Borrower’s activities.

(x) Legal Costs, Duties, Fees, and other Charges. Legal Costs, Duties, Fees, and other Charges. The Borrower hereby agrees to pay the IIC all legal fees and expenses incurred in connection with the execution and enforcement of this Agreement and the Principal Documents, including but not limited to:

(a) the preparation and review of the documents necessary for the formalization of this Agreement and the Principal Documents;

(b) the drafting of the legal opinions required by the IIC; (c) any disbursement of the Loan;

(c) any amendment, modification, restructuring, renewal and/or ratification [of the Security and] the Promissory Note, and the exercise of IIC’s rights; and

(d) all expenses, costs or fees incurred for the enforcement of the Loan and applicable court fees.

The Borrower shall pay such legal fees and expenses within five (5) Business Days following receipt of the relevant invoice, whether or not any disbursement of the Loan

30 To be defined by the IIC Project team.



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has been made. At the Borrower’s request, the IIC may consider making direct payment of such invoices. If the IIC decides to advance payment of any such charges, the Borrower shall promptly reimburse the IIC for any such amounts paid by the IIC.

(xi) Ratios. Maintain the following financial ratios during the term of the Agreement:

(a) Past-Due Portfolio Ratio of [__];

(b) Provision Coverage Ratio of [__];

(c) Equity Exposure Ratio of [__];

(d) Liquidity Gap Ratio of [__]; and

(e) Capital Adequacy Ratio of [__].

(xii) Environmental Covenants. Borrower shall comply with the following covenants:

(a) As promptly as possible:

(A) have at least two (2) of its employees attend the next scheduled IIC-sponsored or approved environmental training seminar. All costs associated with attending the environmental and labor training seminars shall be borne by the Borrower;

(B) establish and implement an Environmental Management System (EMS) satisfactory to the IIC within six (6) months of attendance to the environmental training seminar, and ensure that such EMS remains in full force and effect;

(C) designate at least one (1) of the employees who attended the training seminar to implement and supervise the EMS, and/or to act as an environmental and labor coordinator to conduct reviews of Eligible Enterprises with respect to National and Local Requirements and the IIC Environmental and Labor Review Procedure, or hire consultants to perform such reviews;

(D) promptly notify the IIC if the persons set forth above no longer perform such duties;

(E) appoint new persons to replace them;

(F) ensure that such new persons attend the next scheduled IIC-sponsored or approved environmental and labor training seminar;

(G) refrain from amending, modifying, or rescinding the EMS without the approval of IIC; and

(H) deliver to IIC the Annual Environmental Performance Report within forty-five (45) days of the close of each Fiscal Year.

(b) Environmental Information. Supply the IIC, included in the Project Eligibility Report, the environmental information appertaining to each Eligible Project, including each Eligible Project’s level of environmental risk (high, medium or low) and compliance with National and Local Requirements and of IIC’s Environmental and Labor Review Procedure.

(c) Corrective Action Plan. Make every reasonable effort to ensure that each Eligible Enterprise continues to comply with all applicable National and Local Requirements, as well as with the IIC’s Environmental and Labor Review



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Procedure. As promptly as possible after becoming aware of any EE activity that does not comply with the applicable National and Local Requirements or the IIC’s Environmental and Labor Review Procedure, the Borrower shall:

(A) take reasonable steps to cause said Eligible Enterprise to implement a Corrective Action Plan; and

(B) shall take reasonable steps to replace the Eligible Project at said Eligible Enterprise on reasonable financial terms, taking into consideration liquidity, market limitations, and fiduciary responsibilities in the event the Eligible Enterprise does not implement a Corrective Action Plan.

(xiii) Taxes. Pay all Taxes pursuant to applicable law as well as those in connection with the execution, recordation, and notarization of this Agreement, the other Principal Documents, and any other document related thereto and to the Project now in effect or that may be established in the future, with regard to any of the payments to be made hereunder. All payments due hereunder shall be made without any deduction for, or on account of, any taxes, fees or other charges; provided, however, that if the Borrower is required by operation of applicable law or other provisions to withhold such Taxes, duties, fees, or other charges, then the principal, the interest or any other amounts that remain due under this Agreement shall be increased by the amount necessary to enable the creditor to receive the full amount it would have received had such payments been made without deducting the applicable taxes, duties, fees or other charges. In any such case, the Borrower shall deliver to the IIC, within thirty (30) days following the relevant period, an official receipt or other official document evidencing payment of the deduction or the withholding in question.

(xiv) Additional Costs. IIC Expenses or Losses. Should the IIC incur any costs, expenses or losses on account of:

(a) any modifications to the applicable laws or regulations, or in the interpretation thereof by any Governmental Authority, that may affect the IIC Loan;

(b) compliance with any request or requirement established by the Regulatory Authority or any other monetary or other authority; or

(c) the failure of the Borrower to comply with any obligation under this Agreement or the other Principal Documents, then the Borrower shall pay to the IIC, on the Interest Payment Date immediately following receipt from the IIC of a notice concerning the occurrence of any of the above-mentioned costs, expenses or losses, the total amount of any such costs, expenses and losses.

(xv) Change of Circumstances. Promptly notify the IIC of any significant fact or circumstance relating to the Project, business or operations of the Borrower [and/or the Guarantor] that constitutes or may constitute an Event of Acceleration and/or a Material Adverse Change.

(xvi) Indemnification. Indemnify and hold the IIC and its executives, directors, agents, and employees harmless from and against any claims, damages, liabilities, costs or expenses (including, without limitation, fees and other legal or professional service expenses) incurred by or imposed on the IIC with relation to or as a result of any claim, investigation, litigation, or legal procedure undertaken in connection with the Project, this Agreement or any of the other Principal Documents, the negotiation thereof, the preparation of the relevant documentation or the enforcement by the IIC of any right or recourse conferred to it thereunder, regardless of whether or not the IIC is one of the



23

parties involved in said claim, investigation, litigation or legal procedure, unless said claim or cost is the result of gross negligence or willful misconduct on the part of the IIC or its authorized representative.

(xvii) Explanations to IIC Management in Washington, D.C. At the request of the IIC, if an Event of Acceleration has occurred or is imminent, provide in person and for the account of the Borrower, appropriate explanations and information and set forth the steps taken to remedy the situation. This presentation shall take place at IIC headquarters in Washington, D.C., United States of America or at such other venue as the IIC may indicate. Such explanations and/or information shall in no way limit or condition the IIC’s rights under this Agreement.

(xviii) Receipts. Submit to the IIC a receipt (the “Receipt”) pursuant to the specimen attached as EXHIBIT II, as an acknowledgement of receipt of the disbursed funds, within five (5) days of receipt.

(xix) Effectiveness of Agreements with Third Parties. Ensure that the making of any disbursement will not have the effect of violating any agreement, contract, or other type of document to which the Borrower is a party, or any statute, ruling, or court or administrative order to which it is subject.

(xx) Disclosure. The Borrower [and the Guarantor] recognizes and agrees that the IIC has the right to disclose, by any means, information on the Borrower‘s [and the Guarantor’s] situation with regard to this Agreement. Likewise, the Borrower [and the Guarantor] recognize and agree that the IIC has the right to disclose, by any means, information about any complaints, claims, and procedures initiated by the IIC through judicial or administrative means, arbitration, litigation or any other similar avenues to exercise or enforce its rights hereunder, and with regard to any compliance or noncompliance with the obligations hereunder by the Borrower [and/or the Guarantor].

(xxi) Supporting Documents. Furnish all supporting documents and additional information as the IIC shall request to cover any disbursement and/or to prove Borrower compliance with any obligation.

(xxii) Prevention of Money Laundering and Other Illicit Activities. Implement and maintain satisfactory internal procedures and control systems as required, in accordance with local law and generally accepted international guidelines, to facilitate adequate knowledge of its clients and operations in order to keep the Borrower from being used by third parties as instrument for money laundering, financing terrorist activities, and committing fraud or other forms of corruption or illicit activity.

Section 6.02 Negative Covenants. Unless previously authorized in writing by the IIC, the Borrower [and the Guarantor] shall not:

(i) Corporate Structure and Asset Disposal. Modify its share capital structure or the nature of its current banking operations, or dispose of, surrender, sell or lease a significant portion of its assets, or embark on a process of merger, division, consolidation, transfer of a significant portion of their assets, spin-off, transformation, change of corporate name, or any other significant modification of its legal status or structure.

(ii) Benefits, Exemptions, and Immunities. Take any action that may affect the benefits, exemptions or immunities conferred upon the IIC by [country].

(iii) Liens and Pari Passu Conditions.

(a) Create, or allow the existence of, a Lien on any of its assets, other than the usual



24

Liens in connection with the business; provided that they do not exceed the limit established in the applicable laws; and

(b) take or allow any action which would cause the Loan to rank less than pari passu with other unsecured debts of the Borrower.

(iv) Prohibited and Obstructive Practices. Carry out any Prohibited Practice or engaging in any Obstructive Practice or authorizing or allowing that any Prohibited Practice or any Obstructive Practice is carried out by any Subsidiary, Related Entity or other Person. In addition, the Borrower and each of the Co-Borrowers agree that if the IIC notifies any of them of the IIC's concern as to a possible violation of this Section, the Borrower and the Co-Borrowers shall cooperate in good faith with the IIC and its representatives to determine whether said violation has occurred. The Borrower and the Co-Borrower shall respond in reasonable detail to any notice from the IIC, and shall provide -at the IIC's request- any documentation in support of that response.

(v) Dividends. Declare, approve or pay any dividend, or distribute any type of retribution to its shareholders, whether provisional or final, direct or indirect, unless each one of the following conditions is met:

(a) the net income for the Fiscal Year in which dividends are declared is positive (no accrued and retained earnings shall be considered to this effect), and such dividends are paid out of such Fiscal Year’s earnings; and

(b) the Borrower is in compliance with its obligations hereunder and under the other Principal Documents, both before and after the distribution.

ARTICLE VII [PERSONAL GUARANTEE]

Section 7.01 [Joint and Several Guarantors.

The Guarantor hereby unconditionally and irrevocably undertakes to act as unlimited guarantor primarily liable for all of the obligations assumed by the Borrower hereunder and under the Promissory Notes and the other Principal Documents. In this capacity, the Guarantor shall be jointly, severally, and unlimitedly liable as the primary debtor, with express waiver of the benefit of excursion and division, for timely compliance with each and every one of the Borrower's obligations under the Principal Documents. To this end, the Guarantor engages to endorse any Promissory Notes that the Borrower may issue hereafter. This personal guarantee (the “Personal Guarantee”) is established with no time limit and with no cap as to amount.

Section 7.02 Guaranteed Obligations. The obligations secured by the Personal Guarantee include the principal, penalty and compensatory interest, fees, charges, litigation costs, legal fees and expenses, and any other expense incurred by the IIC in order to collect from the Borrower or the Guarantor. This is without prejudice to any compensation for damage or loss (the “Guaranteed Obligations”).

Section 7.03 Payment.

In the event of noncompliance on the part of the Borrower, the Guarantor agrees to pay, at the IIC's request, in United States dollars and at the place specified in Section 2.02, any and all amounts claimed by the IIC. All payments made under the Personal Guarantee shall be made without any withholding or deduction, including for any present or future tax or duty. If the IIC must pay any such tax or duty directly, the Guarantor shall reimburse the IIC for the amounts paid, as soon as the IIC so requests in writing.

Section 7.04 Waiver. The Guarantor hereby waives: (i) the right to be notified of the



25

acceptance of the Personal Guarantee; (ii) presentation or protest with relation to the Guaranteed Obligations; (iii) demands for payment or notice of late payment or nonpayment; (iv) any other notice of any kind served on the Borrower with relation to the Guaranteed Obligations; (v) the right of subrogation as long as any Guaranteed Obligation remains in effect; (iv) the benefit of termination of the Personal Guarantees, as the case may be, if for any reason they cannot be subrogated in the rights, guarantees, and privileges of the IIC; (vii) the right to assert defenses against the IIC in matters that are incumbent on the Borrower and are inherent to the Loan; (viii) the right to demand release or discharge of the Personal Guarantees in cases provided for by law; and (ix) the right for legal action to be taken against the Borrower before it is served with a demand for payment.

Section 7.05 Express Acceptance. The IIC hereby accepts the unconditional, irrevocable Personal Guarantee made in its favor by the Guarantor.]

ARTICLE VIII EVENTS OF LOAN ACCELERATION

Section 8.01 Events of Acceleration If any of the events or circumstances indicated in this Section (each an “Event of Acceleration”) occurs, such occurrence shall trigger the acceleration of the Loan’s payment terms and the principal balance of the Loan (together with interest, any other amounts accrued or payable thereon and any other charges relating thereto) then outstanding shall thereupon become immediately due and payable, without any presentation, demand, protest or notice requirements, all of which requirements are hereby unconditionally and irrevocably waived by the Borrower. An Event of Acceleration shall occur if:

(i) the Borrower [and/or the Guarantor] shall have failed to pay when due any principal of, interest or other amount owed under the Loan or the Principal Documents;

(ii) the Borrower [and/or the Guarantor] shall have failed to perform any of its covenants or obligations under the terms and conditions set forth in this Agreement or any of the other Principal Documents, other than those indicated in subsection (i) above, and such failure to perform shall not have been remedied within thirty (30) days following written notice thereof from the IIC to the Borrower;

(iii) the IIC indicates in writing that it has credible information that one or more of the statements made or part of the information provided by the Borrower [and/or the Guarantor] in this Agreement, any of the other Principal Documents, or any certificate, financial statement or other document submitted to the IIC in connection therewith, was false and/or incorrect when made;

(iv) the IIC indicates in writing that it has credible information of a fact or circumstance that may result in the acceleration of any debt incurred by the Borrower [and/or the Guarantor], or which could allow the applicable creditor to declare such debt to be due;

(v) the IIC indicates in writing that it has credible information of the existence of a procedure, suit or action against the Borrower or any of the Eligible Enterprises that may endanger and/or substantially affect the Project or the ability of the Borrower [and/or the Guarantor] to comply with its obligations under this Agreement;

(vi) the IIC indicates in writing that it has credible information of the existence of:

(a) any process or action initiated by the Borrower or by third parties or by any Governmental Authority to place the Borrower [and/or the Guarantor] under the care of administrators, call a meeting of creditors, enter bankruptcy or insolvency



26

proceedings, wind up or liquidate its affairs, appoint a receiver, liquidator or trustee, cease operations, enter restructuring proceedings, suspend its payments, enter into an arrangement or a compromise with creditors, whether judicial or extrajudicial, or enter reorganization proceedings affecting the Borrower [and/or the Guarantor] or its liabilities as provided by the applicable laws or any other action that in any way may impede the Borrower [and/or the Guarantor] or its officers from carrying out all or a substantial part of its operations; or

(b) a resolution of any Governmental Authority to condemn, nationalize, seize, or otherwise expropriate, or assume control or custody of, all or any substantial part of the business, operations, property or other assets of the Borrower [and/or the Guarantor] or of its equity;

(vii) the IIC indicates in writing that it has credible information that the Borrower [and/or the Guarantor] has ceased to pay its debts upon their maturity or suspended payment thereof; or made a general assignment for the benefit of its creditors, or abandoned its assets; and/or ceased to meet its payment obligations in a manner that would significantly affect its ability to comply with its obligations under the Loan; or

(viii) the IIC indicates in writing that it has credible information of the occurrence of a fact, condition or circumstance that constitutes or may constitute a Material Adverse Change with regard to the Borrower [and/or the Guarantor], the Project or any of the Eligible Enterprises, or a fact, condition or circumstance that may endanger the Project, or the Borrower’s ability to meet its obligations hereunder or under the other Principal Documents.

ARTICLE IX MISCELLANEOUS PROVISIONS

Section 9.01 Interpretation. In the event of a conflict between the original English version of this Agreement and a translation thereof into a different language, the English version shall prevail.

Section 9.02 References. In this Agreement, unless otherwise required by the context, words denoting the singular include the plural and vice versa, and references to a specific Article, Section, or Exhibit shall be construed as a reference to that Article, Section, or Exhibit of this Agreement. All capitalized terms shall have the meaning set forth in this Agreement.

Section 9.03 Headings. The Article and Section headings used in this Agreement are not a part of this Agreement; they are included for convenience of reference only and shall not be used to define, interpret or limit in any way any of the provisions of this Agreement.

Section 9.04 Exchange Rate. Unless otherwise required by the IIC, the exchange rate to be used to express the Borrower’s financial statements in Dollars shall be the one published by the applicable Governmental Authority, or else the average rate offered by three (3) commercial banks in [country] that operate in the currency exchange market, selected by the IIC and acceptable to the Borrower, and, absent said banks, as reasonably determined by the IIC.

Section 9.05 Accounting Principles. Unless otherwise required by the IIC, the financial calculations related to this Agreement, and those made to prepare the Borrower’s financial statements, shall adhere to the accounting principles generally accepted in [country] (“Accounting Principles”).

Section 9.06 Notices. All notices or communications given hereunder and under the other Principal Documents shall be in writing. Unless otherwise provided herein, said notices and



27

communications shall be regarded as correctly given if delivered by hand, by certified air mail, by courier, or by fax to the obligor or to the person designated to receive them, or if delivered to the address for said party specified below, or to any other address indicated by notice given to the sender of the notice or communication, provided, however, that the notice of change of address shall be effective upon receipt of the applicable notice sent by the relevant party. Also, the Borrower irrevocably agrees to be notified at the domicile indicated in the next Section, in the event of any trial, lawsuit, claim, action, or procedure stemming from this Agreement.

Section 9.07 Domicile. The Parties hereto have respectively designated the following domiciles for any notice or communication to be given hereunder and under the other Principal Documents:

For the Borrower:

[Street address]

[City, ZIP code]

[Country]

Attn.:

Telephone: (___) ____-______

Fax: (___) ____-_____

E-mail: __ @______________

For the Guarantor: [Street address] [City, ZIP code] [Country] Attn.: Telephone: (___) ____-______ Fax: (___) ____-_____ E-mail: __ @______________

For the IIC:

Inter-American Investment Corporation

1350 New York Avenue, N.W.

Washington, D.C. 20577

Attn.: General Manager

Cc: General Counsel

Telephone: (202) 623-3900

Fax: (202) 623-3807

Section 9.08 Compliance with Contractual Obligations. Any efforts by the IIC to compel



28

the Borrower to comply with the obligations hereunder and/or under the other Principal Documents are not intended to, nor shall they be deemed to, result in the IIC’s participation in the administration of the Borrower’s business and/or activities.

Section 9.09 Waiver of Immunity. The Borrower hereby irrevocably waives any and all immunity in any jurisdiction or any other process or legal or judicial remedy to which any of its revenues, assets or properties may be entitled.

Section 9.10 Severability of Provisions. Any provision herein that becomes null, void or unenforceable in a given jurisdiction shall not render null, void or unenforceable in said jurisdiction the remaining provisions hereof, nor shall it affect the validity and enforceability of said provision or of the Agreement in any other jurisdiction.

Section 9.11 No assignments. The Borrower may not assign or otherwise transfer all or any part of its rights or obligations under this Agreement without the prior written consent of the IIC.

Section 9.12 No Waiver. No failure or delay in exercising any right, power, or remedy hereunder shall prejudice the IIC’s rights, powers, or remedies or be interpreted as a waiver thereof. The rights and remedies provided in this Agreement are cumulative and not exclusive of any remedies provided by applicable law.

Section 9.13 Governing Law. This Agreement shall be governed by, construed, and performed in accordance with the laws of [country].

Section 9.14 Jurisdiction. Any dispute, disagreement, or claim arising out of or relating to this Agreement or any of the other Principal Documents, as the case may be, or the execution or performance thereof, shall be brought before the judges and courts of [name of the State or Court District].

Section 9.15 Effectiveness. This Agreement shall enter into force on the Effective Date and shall remain in effect until all the amounts payable hereunder are paid in full to the satisfaction of the IIC.

IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have caused this Agreement to be signed in their respective names on the dates shown below.

[Borrower’s name]

______________________

Name:

Title:

Date:

[Guarantor’s name] ______________________ Name: Title: Date:



29

______________________


Name:

Title:

Date:



1

EXHIBIT I LIST OF EXCLUDED ACTIVITIES

Production or activities involving harmful or exploitative forms of forced labor,1 or harmful child labor, or practices that are discriminatory or prevent employees from freely exercising their right to association and collective bargaining.2

Production or trade in any product or activity deemed illegal under host country laws or regulations or ratified international conventions and agreements.

Production or trade in weapons and munitions.

Production or trade in tobacco.3

Gambling, casinos, and other similar activities.3

Trade in endangered species of wildlife or wildlife products regulated under CITES,4 or products derived thereof.

Production or trade in radioactive materials.5

Production or trade in or use of unbonded asbestos fibers.6

Production or trade in wood or other forestry products from forests that lack sustainable management.

Plantation projects that would require the removal of existing non-degraded natural forest.

Production or trade in products containing PCBs.7

Production, trade, storage, or transport of significant volumes of hazardous chemicals, or commercial scale usage of hazardous chemicals.8

Transboundary trade in waste or waste products,9 except for non-hazardous waste destined for recycling.

Production or trade in pharmaceuticals subject to international phase-out or bans.10

Production or trade in pesticides/herbicides subject to international phase-out or bans11

and persistent organic pollutants (POPs).12

Production or trade in ozone depleting substances subject to international phase-out.13

Drift net fishing in the marine environment using nets in excess of 2.5 km in length.

Production or activities that impinge on the lands owned, or claimed under adjudication, by indigenous peoples, without full documented consent of such peoples.

1 Forced labor means all work or service not voluntarily performed that is extracted from an individual under threat of force or penalty. 2 Harmful child labor means the employment of children that is economically exploitive, or is likely to be hazardous to, or to interfere with, the child’s education, or to be harmful to the child’s health, or physical, mental, spiritual, moral, or social development. Discriminatory practices mean those involving official or unofficial discrimination against individuals, particularly, but not limited to, discrimination based on ethnicity, gender, or sexual orientation.

Some employers might also harass employees who are exercising their right to association and collective bargaining by attempting to create trade unions or employee associations in accordance



2

with the laws. 3 This does not apply to sponsors of subprojects not substantially involved in these activities. “Not substantially involved” means that the activity in question is ancillary to the main activities of the subproject sponsor. 4 CITES: Convention on International Trade in Endangered Species of Wild Fauna and Flora. www.cites.org. 5 This does not apply to the purchase of medical equipment, quality control (measurement) equipment, and any equipment where IIC considers the radioactive source to be trivial and/or adequately shielded. 6 This does not apply to the purchase and use of bonded asbestos cement sheeting where the asbestos content is less than 20%. 7 PCBs: Polychlorinated biphenyls, a group of highly toxic chemicals. PCBs are likely to be found in oil-filled electrical transformers, capacitors, and switchgear dating from 1950-1985. 8 A listing of hazardous chemicals is available at the IIC’s Environmental Unit. These include gasoline, kerosene, and other petroleum derivatives. 9 Defined by the Basel Convention (www.basel.int). 10 Pharmaceuticals subject to phase-out or bans in the United Nations are listed in , Banned Products: Consolidated List of Products Whose Consumption and/or Sale Have Been Banned, Withdrawn, Severely Restricted or not Approved by Governments. (Latest version: 2005, www.who.int/medicines/publications/restrictions/en/). 11 Pesticides and herbicides subject to phase-out or bans included in both the Rotterdam Convention (www.pic.int) and the Stockholm Convention. 12 Defined by the International Convention on the reduction and elimination of persistent organic pollutants (POPs) (September 1999) and presently include the pesticide aldrin, chlordane, dieldrin, endrin, heptachlor, mirex, and toxaphene, and the industrial chemical chlorobenzene. (www.pops.int). 13 Ozone Depleting Substances (ODSs): Chemical compounds that react with and deplete stratospheric ozone resulting in the widely publicized “ozone holes.” The Montreal Protocol lists ODS, and their target reduction, and phase-out dates for the signatory countries. The chemical compounds regulated by the Montreal Protocol include aerosols, refrigerants, foaming agents, and fire extinguishers. (http://ozone.unep.org/Treaties_and_Ratification/2B_montreal_protocol.asp).

http://www.basel.int/

http://www.who.int/medicines/publications/restrictions/en/

http://www.pic.int/

http://www.pops.int/



3

EXHIBIT II RECEIPT

[Borrower’s Letterhead]

THE UNDERSIGNED, [Borrower’s name], hereby acknowledges having received on [__] of [_____], 201[__], from the INTER-AMERICAN INVESTMENT CORPORATION (the “IIC”), the sum of [disbursed amount] United States Dollars (US$[disbursed amount in numbers]), as Disbursement Number [_____] pursuant to the provisions of the Loan Agreement dated [__] of ____, 201_, between the undersigned and the IIC (the “Agreement”).

IN WITNESS WHEREOF, I have signed and delivered this Receipt, for all applicable legal and contractual purposes, in one (1) original, in the city of [name of city], [country], on [_________], 201[__].

For and on behalf of:

[Borrower’s name]

_________________________

Name:

Title:

Date:

Note: This signature must be [notarized/authenticated] by a Notary Public, in accordance with applicable laws and regulations.



4

EXHIBIT III CORE ELEMENTS OF THE ENVIRONMENTAL MANAGEMENT SYSTEM

Below are the basic requirements for proper handling by the Borrower of all environmental matters and risks:

1. High level policy commitment by Borrower to promote sustainable development and to consider environmental, health and safety (EHS) issues in its business and operations in accordance with the EMS (e.g. in policy statement, founding charter, investment policy, etcetera).

2. Adoption and implementation of a systematic environmental review procedure, which should include, at a minimum:

Screening of transactions against eligibility criteria (e.g. environmental/ social exclusions), and establishing their level of environmental risk.

Obtaining satisfactory assurance that all customers/use of proceeds comply, at a minimum, with host country EHS regulations and standards [additional performance standards may be specified for cases where there are no relevant local environmental regulations or for projects with significant environmental impact].

Additional environmental review procedures for transactions above a given threshold of environmental risk.

Inclusion of environmental review findings in overall loan/investment decision making.

Use of contractual requirements to ensure customer compliance with host country EHS requirements, and any other actions to be taken by the customer to mitigate environmental risk.

Environmental monitoring of transactions.

3. Appointment of at least one employee to conduct or coordinate environmental review of transactions.

4. Designation of one member of senior management with ultimate responsibility for implementation of the EMS.

5. Setting of specific performance indicators and targets for the implementation of the Borrower’s policy and review procedures.

6. Provision of regular training of staff in the application of the policies and procedures.

7. Regular monitoring and reporting on the implementation of the EMS, particularly on performance in a number of key areas, and verification against targets in order to inform the Board of Directors and other interested parties about aspects of the policies and procedures that work well and those requiring improvement.

8. Redefinition of objectives and targets based on the outcome of monitoring activities.



5

EXHIBIT IV REINVESTMENT REQUEST


[TO BE SUPPLIED TOGETHER WITH THE APPROPRIATE ELIGIBLE ENTERPRISE AND PROJECT ELIGIBILITY REPORTS]

[Place and Date]


1350 New York Avenue, N.W.


United States of America

Reference: OPR # [operation number]

Please refer to the Loan Agreement (the “Agreement”) dated [Agreement Date] between [Borrower’s name] (the “Borrower”), [Guarantor’s name] (the “Guarantor”)] and the Inter-American Investment Corporation (the “IIC”). The terms defined in the Agreement are used herein as therein defined.

The Borrower hereby requests to reinvest Loan funds in the amount of [amount of the reinvestment request] Dollars (US$[amount of the reinvestment request in numbers]) and states that, if the Reinvestment is authorized, it will be carried out on or before [date], which date is within the applicable Reinvestment Period.

Attached hereto is a Project Eligibility Report for each of the Eligible Projects for which the Borrower intends to provide financing with the funds obtained with the Reinvestment requested.

In accordance with the provisions of Section 2.12 of the Agreement, the Borrower hereby certifies as follows:

(i) The Loans to Eligible Enterprises appertaining to this Reinvestment Request have been or will be carried out within the applicable Reinvestment Period;

(ii) No Event of Acceleration and no event which, with lapse of time, notice, or both, would become or could become an Event of Acceleration, has happened;

(iii) Nothing has occurred which might materially and adversely affect the carrying out of the Project or the business prospects or financial condition of the Borrower or the Eligible Enterprises, or which would make it improbable for the Borrower to be able to fulfill any of its obligations under the Agreement or any other Principal Documents;

(iv) It is in compliance of all its obligations under the Agreement.

The certifications contained in this Reinvestment Request are effective as of the date hereof and will continue to be effective as of the date of the Reinvestment. If any of these certifications is no longer valid as of or prior to the date of the Reinvestment, the Borrower shall notify the IIC immediately and shall immediately repay the amount disbursed by the IIC if the reimbursement



6

was made before the notice was received.

IN WITNESS WHEREOF, the undersigned, a duly authorized officer of the Borrower, has executed and delivered this Reinvestment Request on behalf of the Borrower on [date of signature].

[Borrower’s name]

_________________________

Name:

Title:

Date:



7

EXHIBIT V PROJECT ELIGIBILITY REPORT


This report shall be submitted for each Eligible Project contained in a Disbursement Request or a Reinvestment Request:

(i) Name and address of the Eligible Enterprise

(ii) Total amount of the Loan to an Eligible Enterprise to be granted to the Eligible Enterprise

(iii) Main terms of the Loan to an Eligible Enterprise, including

(a) Interest rate

(b) Maturity and repayment terms

(c) Security provided by the Eligible Enterprise

(iv) Description of the Eligible Project, including

(a) Costs of the Eligible Project, with a breakdown of the main cost categories

(b) Employment generation following completion of the Eligible Project

(c) Assets included in the Eligible Project, and countries of origin of said assets

(v) Description of the Eligible Enterprise, including

(a) Main activities.

(b) Total assets, aggregate annual income from sales, number of employees (prior to the Eligible Project.)

(c) Environmental Information: As set forth in Section 6.01(xii) of the Loan Agreement.

If required by the IIC, the Borrower shall provide the credit assessment made for each Eligible Project.



8

EXHIBIT VI PROMISSORY NOTE

THE IIC’S EXTERNAL COUNSEL WILL PROVIDE THE SPECIMEN PROMISSORY NOTE PURSUANT TO THE FOLLOWING PROVISIONS:

* The form and content must mirror the specimen provided in this Exhibit, to the IIC’s entire satisfaction

* It must comply with all legal requirements established under the laws of [country] to allow collection action to be brought through executory proceedings

* It must be payable in Dollars

* It must be payable without any protest obligation, unless the latter is an enforceability requirement

* It must be a negotiable and transferable instrument

* [It must be payable on demand]



9

EXHIBIT VII DISBURSEMENT REQUEST

[Place and Date]


1350 New York Avenue, NW


United States of America


Pursuant to Section 4.02(iv)(a) of the Loan Agreement (the “Agreement”) dated [agreement date] among [Borrower’s name] (the “Borrower”) and the Inter-American Investment Corporation (the “IIC”), the Borrower hereby irrevocably requests that the IIC make a disbursement with Loan funds no later than [______] in the amount of [______] Dollars (US$[_____]) (the “Disbursement”). Terms defined in the Agreement are used herein as therein defined.

[THE FOLLOWING PARAGRAPH WILL BE INCLUDED ONLY IF, FOR THE FIRST DISBURSEMENT, THE FRONT-END FEE WILL BE DEDUCTED FROM THE AMOUNT TO BE DISBURSED.]

We hereby authorize the IIC to deduct from the Disbursement the amount of [________] dollars (US$[_________]), corresponding to the Front-End Fee per Section 2.07 of the Loan Agreement.

The proceeds of this Disbursement [less the abovementioned deduction] shall be deposited according to the following instructions:

Beneficiary Bank: [name of the bank]

[address of the bank]

[SWIFT# ________or indicate if not applicable]

[Beneficiary Bank’s account number in the Intermediary Bank_____]

Final Beneficiary: [name of the Borrower]

Final Beneficiary Account number [__________]

Intermediary Bank: [name of the bank]

[address of the bank]

[ABA # [_______] or Swift #[___________]



10

Attention: Mr./Ms. [name of the Borrower's agent in charged of the disbursement].

Attached hereto is a Project Eligibility Report for each of the Eligible Projects for which the Borrower intends to make a Loan to an Eligible Enterprise.

By signing this request, the Borrower hereby certifies that to date it has honored and observed all obligations, conditions and covenants set forth in the Agreement and in the other Principal Documents:

IN WITNESS WHEREOF the undersigned, a duly authorized officer of the Borrower, has executed and delivered this Disbursement Request on the Borrower’s behalf, on this [_____] day of [________], 201[__].

Name: [___________]

Position: [_____________]

Date: [_____________]



11

EXHIBIT VIII [QUARTERLY] [SEMIANNUAL] TRANSACTION REPORT


[THIS REPORT MUST BE SUBMITTED ON EVERY INTEREST PAYMENT DATE]

[Place and Date]


Unless otherwise stated, the terms defined in the Loan Agreement (the “Agreement”) executed on [Agreement signing date] between [Borrower’s name] (the “Borrower”) and the Inter-American Investment Corporation (the “IIC”) are used herein as therein defined. The capitalized terms not defined herein shall have the meaning assigned to them in the Agreement.

As per Section 6.01(iii)(c) of the Agreement, the Borrower reports that to date:

Name of the EE/EP

DISBURSEMENT DATE

AMOUNT DISBURSED

CURRENT BALANCE

RISK CATEGORY31

1. US$ ______________

US$ ______________

2. US$ ______________

US$ ______________

3. US$ ______________

US$ ______________

4. US$ ______________

US$ ______________

TOTAL US$ ______________

US$ ______________

31 This column shall only be used where the collateral is assigned or pledged in favor of the IIC.