CONFORMED COPY LOAN NUMBER 1410 CR Loan Agreement (Agricultural Credit and Development Project) between REPUBLIC OF COSTA RICA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated June 2, 1977 LOAN AGREEMENT AGREEMENT, dated June 2, 1977, between REPUBLIC OF COSTA RICA (hereinafter called the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). WHEREAS (A) the Borrower has requested the Bank to assist in the financing of the project described in Schedule 2 to this Agreement by making the Loan as hereinafter provided; (B) the Project will be carried out by the Executing Agencies with the Borrower's assistance and, as part of such assistance, the Borrower will make available to the Executing Agencies the proceeds of the Loan as hereinafter provided; and WHEREAS the Bank has agreed, on the basis inter alia of the foregoing, to make the Loan available to the Borrower upon the terms and conditions set forth hereinafter and in a project agreement of even date herewith between the Bank and Banco Central de Costa Rica; NOW THEREFORE the parties hereto hereby agree as follows: - 2 - ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings.: (a) "Participating Banks" means Banco Nacional de Costa Rica, Banco Anglo-Costarricense, Banco de Costa Rica, and Banco de Cr6dito Agricola de Cartago, or any of them; (b) "Banco Central" means the Banco Central de Costa Rica; (c) "DCD" means Development Credit Department of Banco Central; (d) "MAG" means the Ministry of Agriculture and Livestock of the Borrower; (e) "CNP" means the National Production Council, an agency of the Borrower established by Ley No. 2035 of July 17, 1956; -3- (f) "IFAM" means Institute for Promotion and Assistance to Municipalities, an agency of the Borrower established by Ley No. 4716 of February 9, 1971; (g) "OFIPLAN" means the Oficina de Planificaci6n Nacional y Politica Econ6mica, an agency of the Borrower; (h) "Project Agreement" means the agreement between the Bank and Banco Central of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supplemental to the Project Agreement; (i) "Banco Central Agreement" means the agreement to be entered into between the Borrower and Banco Central pursuant to Section 3.01 (d) of this Agreement, as the same may be amended from time to time; (j) "Executing Agencies" means collectively the agencies referred to in Sub-sections (d), (e), (f) and (g) of this Section; (k) "Subsidiary Loan" means a loan in the currency of the Borrower, included under the Project and made by Banco Central to a Participating Bank in accordance with the Lending and Operating Policies and Procedures set forth in Schedule 1 to the Project Agreement, as such Schedule may be amended from time to time, to be relent to a Beneficiary; (1) "Subsidiary Loan Agreement" means the agreement for any Subsidiary Loan; (m) "Beneficiary" means any person, legal entity, or group of persons to which a Participating Bank proposes to make or has made a Sub-loan; (n) "Sub-loan" means a loan in the currency of the Borrower made by a Participating Bank to a Beneficiary in accordance with the Lending and Operating Policies and Procedures set forth in Schedule 1 to the Project Agreement, as such Schedule may be amended from time to time; (o) "Sub-loan Agreement" means the Agreement for any Sub-loan; (p) "Project Account" means any account or sub-account created pursuant to Section 2.02 of the Project Agreement; (q) "Agency Project Account" means any account or sub-account created pursuant to Section 3.01 (g) of this Agreement; (r) "Sub-loan Account" means any account or sub-account created by any Participating Bank pursuant to Section 2.03 of the Project Agreement; (s) "Colones" and the sign "4" mean the currency of the Borrower; (t) "small farmer" means any person whose income is derived principally from farming or ranching, and whose net income does not exceed the amount established in Part II, paragraph 2 (a), of Schedule 1 to the Project Agreement; and (u) "Subsidiary contracts" means the contracts to be entered into pursuant to Section 3.02 of this Agreement. - 5 - ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various c-Irrencies equivalent to eighteen million dollars ($18,000,000). Section 2.02. The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Bank, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project described in Schedule 2 to this Agreement. Section 2.03. Except as the Bank shall otherwise agree, contracts for the purchase of goods or for civil works to be financed out of the proceeds of the Loan, shall be procured in accordance with the provisions of Schedule 5 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1983 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower and Banco Central of such later date. - 6 - Section 2.05. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.06. The Borrower shall pay interest at the rate of eight and two-tenths per cent (8.20%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semi-annually on February 15 and August 15 in each year. Section 2.08. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. Section 2.09. Banco Central is designated as representative of the Borrower for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. - 7 - ARTICLE III Execution of the Project Section 3.01. (a) The Borrower shall cause the following agencies to carry out the Project with due diligence and efficiency and in conformity with sound administrative, financial, engineering, agricultural and other relevant technical practices, namely: (i) Part A of the Project (Sub-loans) shall be carried out by Banco Central; (ii) Part B of the Project (Extension Service) shall be carried out by MAG; (iii) Part C of the Project (Seed Program) shall be carried out by MAG and by CNP; (iv) Part D of the Project (Feeder Roads) shall be carried out by IFAM, and by the Municipalidad de P6rez Zeled6n; and (v) Part E of the Project (Regional Development Study) shall be carried out by OFIPLAN. (b) The Borrower shall provide, promptly as needed, the funds, facilities, services and other resources required by each agency for the purpose of carrying out the Project as required by paragraph (a) of this Section. - 8 - (c) The Borrower shall cause Banco Central to perform, in accordance with the provisions of the Project Agreement, all the obligations therein set forth, shall take and cause to be taken all action necessary or appropriate to enable Banco Central to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (d) The Borrower shall relend the proceeds of the Loan under Category (1) of Schedule 1 to this Agreement to Banco Central under the Banco Central Agreement to be entered into between the Borrower and Banco Central, under terms and conditions approved by the Bank. (e) The Borrower shall exercise its rights under the Banco Central Agreement in such manner as to protect the interests of the Borrower and the Bank and to accomplish the purposes of the Loan, and except as the Bank shall otherwise agree, the Borrower shall not assign, nor amend, abrogate or waive the Banco Central Agreement or any provision thereof. (f) The Borrower shall make available to the Executing Agencies the proceeds of the Loan to be used for the purpose of carrying out Parts B, C, D and E of the Project, such proceeds to be provided to the Executing Agencies through Project Accounts maintained by Banco Central in accordance with Section 2.02 of the Project Agreement. - 9 - (g) The Borrower shall cause each Executing Agency to maintain an Agency Project Account, and to record therein all receipts and payments for or in connection with that Part of the Project to be carried out by it, including amounts withdrawn from the Project Accounts, amounts received from other sources, and all disbursements from the Agency Project Account. Section 3.02. For the purpose of causing CNP to carry out Part C (2) of the Project, and of causing IFAM and the Municipalidad de P6rez Zeled6n to carry out Part D of the Project, the Borrower shall enter into subsidiary contracts with such entities which shall provide, on terms and conditions satisfactory to the Bank, for the matters listed in Schedule 4 to this Agreement. Section 3.03. In order to assist the Executing Agencies in carrying out the civil works and the installation and maintenance of equipment for Parts C and D of the Project, and to assist OFIPLAN in carrying out Part E of the Project, the Borrower shall cause the Executing Agencies to employ engineering, agricultural, and rural development consultants whose qualifications, experience, terms of reference, and terms and conditions of employment shall be satisfactory to the Bank. Section 3.04. The Borrower shall cause the Executing Agencies to insure, or make adequate provision for the insurance - 10 - of, the imported goods to be financed out of the proceeds of the Loan under Categories (2), (3), (4) and (5) of Schedule 1 of this Agreement, against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. Section 3.05. The Borrower shall cause MAG: (a) to increase, by September 1, 1978, the number of workers employed in the extension service of MAG to at least 400; and (b) to provide funds and personnel sufficient to operate the Enrique Jim6nez Fnez experimental station. Section 3.06. The Borrower shall cause IFAM to employ, no later than December 1, 1977, for the purpose of carrying out Part D of the Project: (a) a qualified road engineer, acceptable to the Bank, to serve as manager of the County Road Improvement Office; and (b) an engineering consultant, acceptable to the Bank, specialized in feeder road construction and maintenance. Section 3.07. The Borrower shall cause CNP to employ a qualified manager to supervise the operations of each seed storage warehouse to be built under Part C (2) of the Project. - 11 - Section 3.08. The Borrower shall, no later than September 1, 1978, begin to carry out a National Seed Program acceptable to the Bank, according to a timetable which shall be satisfactory to the BAnk. Section 3.09. The Borrower shall cause the Executing Agencies: (a) to maintain, and to make available to OFIPLAN, records adequate to record the progress of Parts B, C, D and E of the Project (including the cost thereof) and to identify the goods and services financed out of the proceeds of the Loan, and to disclose the use thereof in the Project; (b) to enable the Bank's accredited representatives to visit the facilities and construction sites included in Parts B, C, D and E of the Project and to examine the goods financed out of the proceeds of the Loan and any relevant records and documents; (c) to furnish to the Bank, through OFIPLAN, all such information as the Bank shall reasonably request concerning Parts B, C, D and E of the Project, the expenditure of the proceeds of the Loan and the goods and services financed out of such proceeds; and (d) to enable the Bank's representatives to examine all plants, installations, sites, works, buildings, property and equipment of the Executing Agencies relating to the Project, and any relevant records and documents. - 12 - Section 3.10. The Borrower shall cause OFIPLAN: (a) to assist the Executing Agencies in the procirement of goods and services in accordance with Schedule 5 to this Agreement; (b) to furnish to the Bank, promptly upon their preparation by the Executing Agencies, the plans, specifications, reports, contract documents and construction and procurement schedules for Parts B, C, D and E of the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request; (c) (i) to establish, no later than March 1, 1978, and to maintain thereafter until the completion of the Project, a monitoring system, acceptable to the Bank, to collect and analyze data related to the carrying out of Parts B, C, D and E of the Project, and (ii) to furnish to the Bank, within 60 days after the end of each quarter, a progress report on each such part of the Project; and (d) by September 1, 1977 to employ a senior staff member of OFIPLAN to assist in carrying out the requirements of this Section. Section 3.11. The Borrower shall cause MAG and CNP to take all such action as shall be necessary to acquire all such land and rights in respect of land as shall be required for the construction of the facilities included in Part C of the Project, - 13 - and shall furnish to the Bank, promptly after such acquisition, evidence satisfactory to the Bank that such land and rights in respect of land are available for purposes related to the Project. Section 3.12. Except as the Bank shall otherwise agree, all goods and services financed out of the proceeds of the Loan shall be used exclusively for the Project until its completion. Section 3.13. The Borrower shall, no later than March 1, 1978: (a) select a region or regions, satisfactory to the Bank, to be the subject of the regional development study under Part E of the Project; and (b) furnish to the Bank the terms of reference, satisfactory to the Bank, for the consultants to carry out Part E of the Project. Section 3.14. The Borrower shall afford the Bank a reasonable opportunity to exchange views with the Borrower concerning price policies, and any proposed changes therein, with the objective of assuring that such policies will promote agricultural production under economically sound conditions. - 14 - ARTICLE IV Other Covenants Section 4.01. (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, in normal circumstances, special security from the member concerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distribution of foreign exchange held under the control or for the benefit of such member. To that end, if any lien shall be created on any public assets (as hereinafter defined), as security for any external debt, which will or might result in a priority for the benefit of the creditor of such external debt in the allocation, realization or distribution of foreign exchange, such lien shall, unless the Bank shall otherwise agree, ipso facto and at no cost to the Bank, equally and ratably secure the principal of, and interest and other charges on, the Loan, and the Borrower, in creating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on assets of any of its political or administrative subdivisions, the Borrower shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, the Loan by an equivalent lien on other public assets satisfactory to the Bank. - 15 - (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (c) As used in this Section, the term "public assets" means assets of the Borrower, of any political or administrative subdivision thereof and of any entity owned or controlled by, or operating for the account or benefit of, the Borrower or any such subdivision, including gold and other foreign exchange assets held by any institution performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Borrower. Section 4.02. The Borrower shall: (a) cause each of the Executing Agencies to: (i) have its Agency Project Account for each fiscal year audited, in accordance with sound auditing principles consistently applied, by independent auditors acceptable to the Borrower and the Bank; (ii) furnish to OFIPLAN as soon as available, but in any case not later than three months after the end of each such year, (A) certified copies of the Agency Project Accounts for such year as so audited and (B) the reports of such audits by said auditors, of such scope and in such detail - 16 - as the Bank shall have reasonably requested from OFIPLAN; and (iii) furnish to OFIPLAN such other information concerning the Agency Project Accounts and the audits thereof as the Bank shall from time to time reasonably request from OFIPLAN; and (b) cause OFIPLAN to furnish to the Bank as soon as available, but in any case not later than one month after receipt from the Executing Agencies, the certified copies, reports and information referred to -in sub-section (a) hereof. Section 4.03. The Borrower undertakes to assume all risk of loss resulting from changes in the rates of exchange between the currencies (including colones) used in the Project. - 17 - ARTICLE V Remedies of the Bank Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional event is specified pursuant to paragraph (k) thereof, namely, that Banco Central shall have failed to perform any covenant, agreement or obligation of Banco Central under the Project Agreement. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified pursuant to paragraph (h) thereof, namely, that the event specified in Section 5.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Bank to the Borrower and Banco Central. - 18 - ARTICLE VI Effective Date Termination Sectin 6.01. The following event is specified as an additional condition to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (b) of the General Conditions, namely, that the execution and delivery of the Banco Central Agreement on behalf of the Borrower and Banco Central have been duly authorized or ratified by all necessary corporate and governmental action. Section 6.02. The following is specified as an additional matter, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Bank, namely, that the Banco Central Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, the Borrower and Banco Central, and is legally binding upon the Borrower and Banco Central in accordance with its terms. Section 6.03. The date of October 4, 1977, is hereby speci- fied for the purposes of Section 12.04 of the General Conditions. - 19 - ARTICLE VII Representatives of the Borrower; Addresses Section 7.01. The Ministro de Hacienda of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministerio de Hacienda San Jos6 Costa Rica Cable address: MINHACIENDA San Jos6 For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INTBAFRAD Washington, D.C. - 20 - IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have riused this Agreement to be signed in their respective names in the city of San Jos6, Republic of Costa Rica, as of the day and year first above written. REPUBLIC OF COSTA RICA By /s/ Porfirio Morera Batres Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ A. Krieger Regional Vice President Latin America and the Caribbean - 21 - SCHEDULE 1 'Ithdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Sub-loans: (a) for small farm- 5,000,000 ) 60% of amounts ers under Part ) disbursed under A (1) of the ) Sub-loans (repre- Project ) senting the es- ) timated foreign (b) for other Bene- 8,000,000 ) expenditures ficiaries under ) component) Part A (1) of ) the Project ) (c) under Part A (2) 800,000 ) of the Project (2) Vehicles and equipment: (a) for Part B 500,000 ) 100% of foreign of the ) expenditures Project ) or 75% of local ) expenditures (b) for Part C 200,000 ) (representing of the ) the estimated Project ) foreign expendi- ) tures component) (c) for Part D 700,000 ) of the Project - 22 - Amount of the Loan Allocated % of (Expressed in ExpendiL res Category Dollar Equivalent) to be Financed (3) Civil works: (a) for Part C 600,000 ) 30% of the ) Project ) (b) for Part D 300,000 ) of the Project (4) Technical assistance and training: (a) Technical 70,000 100% of foreign assistance expenditures and training for Part B of the Project (b) for Part D 30,000 ) 75% (represent- of the ) ing the esti- Project ) mated foreign ) expenditures (c) for Part E 300,000 ) component) of the Project (5) Unallocated 1,500,000 TOTAL 18,000,000 - 23 - 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than the Borrower and for goods or services supplied from the territory of any country other than the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower and for goods or services supplied from the territory of the Borrower. 3. The disbursement percentages have been calculated in compliance with the policy of the Bank that no proceeds of the Loan shall be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Loan decreases or increases, the Bank may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Bank. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made: (a) in respect of payments for Part A of the Project until Banco Central has concluded a subsidiary loan agreement, satisfactory to the Bank, with at least one Participating Bank; - 24 - (b) in respect of payments for Part C of the Project, until (i) the Bank has approved (A) a National Seed Program proposed by the Bozrower, and (B) a timetable for carrying out such Program, and (ii) the Borrower has concluded with CNP a subsidiary contract in accordance with Section 3.02 of this Agreement; and (c) in respect of payments for Part D of the Project, until the Borrower, IFAM, and the Municipalidad de P6rez Zeled6n, have concluded a subsidiary contract in accordance with Section 3.02 of this Agreement. 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph 1 above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Bank may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures, and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. - 25 - 6. If the Bank shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan. - 26 - SCHEDULE 2 Description of the Project The Project consists of the following Parts: Part A: Sub-loans 1. Sub-loans for, or complementary to, comprehensive farm development projects, such Sub-loans to be used to help finance capital and other expenditures, including expenditures for technical assistance, designed to improve or expand the production of livestock and annual or perennial crops. A minimum of 25% of the total amount of such Sub-loans will be made to small farmers. 2. Sub-loans for industrial enterprises related to farm production (including the processing and packaging of agricultural products) and Sub-loans to assist in financing machinery, vehicles and equipment used by enterprises which carry out contract work for farmers. Part B: Extension Services Strengthening the National Extension Service of MAG, especially in regions where Participating Banks provide Sub-loans to Beneficiaries, by providing goods and services therefor, including employment of additional extension workers, provision of vehicles and equipment, technical assistance for staff training, and training abroad. - 27 - Part C: Seed Program Construction of, and installation of equipment for, the physical infrastructure needed to implement a National Seed Program, including: 1. Construction of, and the installation of equipment for, two foundation seed storage facilities with a capacity of about 100 tons each, to be carried out by MAG. 2. Construction of, and installation of equipment for, commercial seed storage warehouses in five regions, consisting of about 26 units with an aggregate capacity of about 6,000 tons, for storage and distribution of certified or improved seed, to be carried out by CNP. Part D: Feeder Roads A pilot project for the selection, construction and maintenance of about 107 Kilometers of third class roads as listed in Appendix 1 of this Schedule, to be carried out by IFAM and the Municipalidad de Pdrez Zeled6n. Part E: Regional Development Study A regional development study, including preparation of a rural development project, to be carried out by OFIPLAN. The Project is expected to be completed by June 30, 1983. - 28 - APPENDIX 1 TO SCHEDULE 2 Third-class Roads in the Cant6n de P6rez Zeled6n to be Constructed and Maintained Under Part D of the Project Proposed Road Approximate No. Name Length (kmn) 1. Interamericana-Pavone 21.0 Esperanza - El Ceibo 2. La Palma - Rosario de Pacuar 6.0 Toledo - Paso Esperanza 3. La Linda - San Blas General 8.0 Viejo 4. Quizara - San Francisco - 11.0 Sta. Maria - Interamericana 5. Caj6n - Pueblo Nuevo - San Pedrito 7.0 6. San Pedro - San Rafael - 6.0 San Ger6nimo 7. Interamericana - Uni6n Guaria 6.0 8. San Gabriel - Santa Luisa 3.0 9. Pejibaye - Gibre 5.0 10. Pejibaye - Barrio Nuevo - 7.0 Desamparado 11. Barrio Nuevo - San Miguel 8.0 Bolivia 12. Bolivia - San Gerardo - 12.0 La Sierra 13. San Rafael - Vista del Mar 4.0 14. San Rafael - Socorro 3.0 Total: 107.0 - 29 - SCHEDULE 3 Amorization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each February 15 and August 15 beginning February 15, 1981 through August 15, 1993 665,000 On February 15, 1994 710,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equiva- lents determined as for purposes of withdrawal. - 30 - Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 1.45% More than three years but not more than six years before maturity 2.90% More than six years but not more than eleven years before maturity 5.30% More than eleven years but not more than fifteen years before maturity 7.25% More than fifteen years before maturity 8.20% - 31 - SCHEDULE 4 Matters to be provided for in subsidiary contracts between the Borrower and CNP, and between the Borrower, IFAM and the Municipalidad de Pfrez Zeled6n. 1. Between the Borrower and CNP (a) Provision of proceeds of the Loan by the Borrower to CNP. (b) Contribution to be provided by CNP for Part C (2) of the Project. (c) Maintenance of a Project Account of CNP with Banco Central in accordance with Section 2.02 of the Project Agreement, and an Agency Project Account in accordance with Section 3.01 (g) of the Loan Agreement. (d) Compliance by CNP with Sections 3.03, 3.04, 3.07, 3.09, 3.11 and 3.12 of the Loan Agreement. (e) Cooperation by CNP with OFIPLAN in fulfilling the obligations set forth in Sections 3.05 and 3.10 of the Loan Agreement. (f) Provision by CNP of adequate staff and funds to each of the 26 seed storage warehouses under Part C (2) of the Project. 2. Between the Borrower, IFAM and the Municipalid,d de P6rez Zeled6n (a) Provision of proceeds of the Loan by the Borrower to IFAM. - 32 - (b) Contributions by IFAM, by the Municipalidad de P6rez Zeled6n, and by the Borrower for the construction and maintenance of third-class roads under Part D of the Project. (c) Maintenance of a Project Account of IFAM with Banco Central in accordance with Section 2.02 of the Project Agreement, and an Agency Project Account in accordance with Section 3.01 (g) of the Loan Agreement. (d) Compliance by IFAM with Sections 3.03, 3.04, 3.06, 3.09 and 3.12 of this Agreement. (e) Cooperation of IFAM with OFIPLAN in fulfilling the obligations set forth in Sections 3.05 and 3.10 of this Agreement. (f) Establishment and maintenance of a County Road Improvement Office, to be managed by a qualified and experienced road engineer, and to include a technical unit to be responsible for the operation and maintenance of machinery and equipment and to supervise the maintenance of the roads. (g) Establishment of a training program for employees of the County Road Improvement Office. - 33 - SCHEDULE 5 Procurement A. International Competitive Bidding 1. Except as provided in Part B hereof, contracts for the purchase of goods or for civil works shall be procured in accordance with procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by tle Bank in August 1975 (hereinafter called the Guidelines), including the pertinent provisions of the General Ii,troduction thereto, on the basis of international competitive bidding. 2. The construction designs and specifications of all the seed storage warehouses to be constructed under Part C of the Project shall be approved by consultants acceptable to the Bank before invitations to bid are advertised. B. Other Procurement Procedures 1. Contracts for the purchase of materials for Part D of the Project shall be awarded on the basis of competitive bidding advertised locally. 2. Goods financed under Sub-loans to Beneficiaries shall be procured from domestic commercial suppliers. - 34 - C. Evaluation and Comparison of Bids for Goods; Preference for Manufacturers Established in the Territories of the Central American Common Market 1. For the purpose of evaluation and comparison of bids for the supply of goods: (a) bidders shall be required to state in their bid for the c.i.f. (port of entry) price for imported goods, or the ex-factory price for domestically-manufactured goods; (b) customs duties and other import taxes on imported goods, and sales and similar taxes on domestically-supplied goods, shall be excluded; and (c) the cost to the Executing Agencies of inland freight and other expenditures incidental to the delivery of goods to the, place of their use or installation shall be included. 2. Bids shall be compared in accordance with the following rules: (a) the term "Central American Bid" means a bid submitted by a manufacturer established in the territories of the Central American Common Market for goods manufactured or processed to a substantial extent (as reasonably determined by the Bank) in such territories; any other bid will be deemed to be a "Non-Central American Bid"; - 35 - (b) the bid price under a Central American Bid will be the sum of the following amounts: (i) the ex-factory price of such goods; and (ii) freight, insurance and other costs of delivery of such goods to the site designated in the specifications; and (c) for purposes of comparing any Non-Central American Bid with any Central American Bid, the price under a Non-Central American Bid will be the sum of the following amounts: (i) the c. i. f. (port of entry) price of such goods; (ii) insurance costs to the port of entry; (iii) half the amount of any taxes on the importation of such goods into the territories of the Borrower which generally apply to non-exempt importers, or 15% of the amounts specified in (i) and (ii) above, whichever shall be the lower; and (iv) freight insurance and other costs of delivery of such goods from the port of entry to the site designated in the specifications. 3. The bidding documents shall clearly indicate the margin of preference to be granted. - 36 - D. Review of Procurement Decisions by the Bank 1. Review of invitations to bid and of proposed awards and final contracts: With respect to all contracts for goods for Parts B, C, D and E of the Project, and for civil works for Part C of the Project, estimated to cost the equivalent of $75,000 or more: (a) Before bids are invited, the Borrower shall furnish to the Bank, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Bank shall reasonably request. Any further modification to the bidding documents shall require the Bank's concurrence before it is issued to the prospective bidders. (b) After bids have been received and evaluated, the Borrower shall, before a final decision on the award is made, inform the Bank of the name of the bidder to which it intends to award the contract and shall furnish to the Bank, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, and such other information as the Bank shall reasonably request. The Bank shall, if it determines that - 37 - the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Bank's concurrence, materially differ from those on which bids were asked or prequalification invited. (d) Two conformed copies of the contract shall be furnished to the Bank promptly after its execution and prior to delivery to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 3. With respect to each contract to be financed out of the proceeds of the Loan and not governed by the preceding paragraph, the Borrower shall furnish to the Bank, promptly after its execution and prior to delivery to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids, recommendations for award and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform the Borrower and state the reasons for such determination.