Loan Number 4035 RU
LOAN AGREEMENT
(LEGAL REFORM PROJECT)
BETWEEN RUSSIAN FEDERATION AND INTERNATIONAL
BANK FOR RECONSTRUCTION AND DEVELOPMENT
(Washington, 21.VI.1996)
Agreement, dated June 21, 1996 between Russian Federation (the
Borrower) and International Bank for Reconstruction and
Development (the Bank).
Whereas (A) the Borrower, having satisfied itself as to the
feasibility and priority of the Project described in Schedule 2 to
this Agreement, has requested the Bank to assist in the financing
of the Project;
(B) the Project will be carried out by the Russian Foundation
for Legal Reform (the RFLR) with the Borrower's assistance and, as
part of such assistance, the Borrower will make available to the
RFLR the proceeds of the Loan as provided in this Agreement; and
Whereas the Bank has agreed, on the basis, inter alia, of the
foregoing, to extend the Loan to the Borrower upon the terms and
conditions set forth in this Agreement and in the Project
Agreement of even date herewith between the Bank and the RFLR;
Now therefore the parties hereto hereby agree as follows:
Article I
General Conditions; Definitions
Section 1.01. The "General Conditions Applicable to Loan and
Guarantee Agreements" of the Bank, dated January 1, 1985, with the
modifications set forth below (the General Conditions) constitute
an integral part of this Agreement:
(a) The last sentence of Section 3.02 is deleted.
(b) The second sentence of Section 5.01 is modified to read:
"Except as the Bank and the Borrower shall otherwise agree, no
withdrawals shall be made: (a) on account of expenditures in the
territories of any country which is not a member of the Bank or
for goods produced in, or services supplied from, such
territories; or (b) for the purpose of any payment to persons or
entities, or for any import of goods, if such payment or import,
to the knowledge of the Bank, is prohibited by a decision of the
United Nations Security Council taken under Chapter VII of the
Charter of the United Nations."
(c) In Section 6.02, sub-paragraph (k) is re-lettered as sub-
paragraph (1) and a new sub-paragraph (k) is added to read:
"(k) An extraordinary situation shall have arisen under which
any further withdrawals under the Loan would be inconsistent with
the provisions of Article III, Section 3 of the Bank's Articles of
Agreement."
Section 1.02. 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) "Project Agreement" means the agreement between the Bank
and the RFLR of even date herewith, as the same may be amended
from time to time, and such term includes all schedules and
agreements supplemental to the Project Agreement;
(b) "RFLR" means the Russian Foundation for Legal Reform, a
noncommercial state foundation established by the Borrower
pursuant to Directive No. 81-RP of the President of the Borrower
of February 22, 1996 and Decree No. 230-R of the Government of the
Borrower of February 23, 1996;
(c) "Statutes" means the decrees, acts, charter and other
instruments relating to the creation and operation of the RFLR,
and any legislation and decrees upon which the statutes or the
legal reform program of the Borrower are based, including Decree
No. 673 of the President of the Borrower of July 6, 1995, as the
same may have been amended to the date of this Agreement;
(d) "Special Account" means the account referred to in Section
2.02 (b) of this Agreement;
(e) "Fiscal Year" means January 1 to December 31; and
(f) "Subprojects" means the activities carried out under Part E
of the Project.
Article II
The Loan
Section 2.01. The Bank agrees to lend to the Borrower, on the
terms and conditions set forth or referred to in the Loan
Agreement, various currencies that shall have an aggregate value
equivalent to the amount of fifty eight million dollars
(58,000,000 USD), being the sum of withdrawals of the proceeds of
the Loan, with each withdrawal valued by the Bank as of the date
of such withdrawal.
Section 2.02. (a) The amount of the Loan may be withdrawn from
the Loan Account in accordance with the provisions of Schedule 1
to this Agreement for expenditures made (or, if the Bank shall so
agree, to be made) in respect of the reasonable cost of goods and
services required for the Project described in Schedule 2 to this
Agreement and to be financed out of the proceeds of the Loan.
(b) The Borrower may, for the purposes of the Project, open and
maintain in dollars a special deposit account in a commercial bank
on terms and conditions satisfactory to the Bank, including
appropriate protection against set-off, seizure or attachment.
Deposits into, and payments out of, the Special Account shall be
made in accordance with the provisions of Schedule 4 to this
Agreement.
Section 2.03. The Closing Date shall be December 31, 2000 or
such later date as the Bank shall establish. The Bank shall
promptly notify the Borrower of such later date.
Section 2.04. The Borrower shall pay to the Bank a commitment
charge at the rate of three-fourths of one per cent (3/4 of 1%)
per annum on the principal amount of the Loan not withdrawn from
time to time.
Section 2.05. (a) The Borrower shall pay interest on the
principal amount of the Loan withdrawn and outstanding from time
to time, at a rate for each Interest Period equal to the Cost of
Qualified Borrowings determined in respect of the preceding
Semester, plus one-half of one percent (1/2 of 1%). On each of the
dates specified in Section 2.06 of this Agreement, the Borrower
shall pay interest accrued on the principal amount outstanding
during the preceding Interest Period, calculated at the rate
applicable during such Interest Period.
(b) As soon as practicable after the end of each Semester, the
Bank shall notify the Borrower of the Cost of Qualified Borrowings
determined in respect of such Semester.
(c) For the purposes of this Section:
(i) "Interest Period" means a six-month period ending on the
date immediately preceding each date specified in Section 2.06 of
this Agreement, beginning with the Interest Period in which this
Agreement is signed.
(ii) "Cost of Qualified Borrowings" means the cost, as
reasonably determined by the Bank and expressed as a percentage
per annum, of the outstanding borrowings of the Bank drawn down
after June 30, 1982, excluding such borrowings or portions thereof
as the Bank has allocated to fund:
(A) the Bank's investments; and
(B) loans which may be made by the Bank after July 1, 1989
bearing interest rates determined otherwise than as provided in
paragraph (a) of this Section.
(iii) "Semester" means the first six months or the second six
months of a calendar year.
(d) On such date as the Bank may specify by no less than six
months' notice to the Borrower, paragraphs (a), (b) and (c) (iii)
of this Section shall be amended to read as follows:
"(a) The Borrower shall pay interest on the principal amount of
the Loan withdrawn and outstanding from time to time, at a rate
for each Quarter equal to the Cost of Qualified Borrowings
determined in respect of the preceding Quarter, plus one-half of
one percent (1/2 of 1%). On each of the dates specified in Section
2.06 of this Agreement, the Borrower shall pay interest accrued on
the principal amount outstanding during the preceding Interest
Period, calculated at the rates applicable during such Interest
Period."
"(b) As soon as practicable after the end of each Quarter, the
Bank shall notify the Borrower of the Cost of Qualified Borrowings
determined in respect of such Quarter."
"(c) (iii) 'Quarter' means a three-month period commencing on
January 1, April 1, July 1 or October 1 in a calendar year."
Section 2.06. Interest and other charges shall be payable
semiannually on March 15 and September 15 in each year.
Section 2.07. The Borrower shall repay the principal amount of
the Loan in accordance with the amortization schedule set forth in
Schedule 3 to this Agreement.
Article III
Execution of the Project
Section 3.01. (a) The Borrower declares its commitment to the
objectives of the Project as set forth in Schedule 2 to this
Agreement. To this end, without any limitation or restriction upon
any of its other obligations under the Loan Agreement, the
Borrower:
(i) shall act through the RFLR and shall cause the RFLR to
perform in accordance with the provisions of the Project Agreement
all the obligations of the RFLR therein set forth;
(ii) shall take or cause to be taken all action, including the
provision of funds, facilities, services and other resources,
necessary or appropriate to enable the RFLR to perform such
obligations; and
(iii) shall not take or permit to be taken any action which
would prevent or interfere with such performance.
(b) The Borrower shall make the proceeds of the Loan available
to the RFLR on a grant basis under arrangements satisfactory to
the Bank for the sole purpose of carrying out the Project.
Section 3.02. Except as the Bank shall otherwise agree,
procurement of the goods, works and consultants' services required
for the Project and to be financed out of the proceeds of the Loan
shall be governed by the provisions of Schedule 1 to the Project
Agreement.
Section 3.03. The Bank and the Borrower hereby agree that the
obligations set forth in Sections 9.04, 9.05, 9.06, 9.07, 9.08 and
9.09 of the General Conditions (relating to insurance, use of
goods and services, plans and schedules, records and reports,
maintenance and land acquisition, respectively) shall be carried
out by the RFLR pursuant to Section 2.03 of the Project Agreement.
Section 3.04. The Borrower shall, with the assistance of the
RFLR:
(a) maintain policies and procedures adequate to enable it to
monitor and evaluate on an ongoing basis, in accordance with
indicators satisfactory to the Bank, the carrying out of the
Project and the achievement of the objectives thereof;
(b) prepare, or cause to be prepared, under terms of reference
satisfactory to the Bank, and furnish to the Bank, on or about
September 30, 1998, a report integrating the results of the
monitoring and evaluation activities performed pursuant to
paragraph (a) of this Section, on the progress achieved in the
carrying out of the Project during the period preceding the date
of said report and setting out the measures recommended to ensure
the efficient carrying out of the Project and the achievement of
the objectives thereof during the period following such date; and
(c) review with the Bank and the RFLR, by October 31, 1998, or
such later date as the Bank shall request, the report referred to
in paragraph (b) of this Section, and thereafter, take all
measures required to ensure the efficient completion of the
Project and the achievement of the objectives thereof, based on
the conclusions and recommendations of the said report and the
Bank's views on the matter.
Article IV
Financial Covenants
Section 4.01. (a) For all expenditures with respect to which
withdrawals from the Loan Account were made on the basis of
statements of expenditure, the Borrower shall:
(i) maintain or cause to be maintained in accordance with sound
accounting practices, records and accounts reflecting such
expenditures;
(ii) ensure that all records (contracts, orders, invoices,
bills, receipts and other documents) evidencing such expenditures
are retained until at least one year after the Bank has received
the audit report for the fiscal year in which the last withdrawal
from the Loan Account was made; and
(iii) enable the Bank's representatives to examine such
records.
(b) The Borrower shall, or shall cause to:
(i) have the records and accounts referred to in paragraph (a)
(i) of this Section and those for the Special Account for each
fiscal year audited, in accordance with appropriate auditing
principles consistently applied, by independent auditors
acceptable to the Bank;
(ii) furnish to the Bank as soon as available, but in any case
not later than six (6) months after the end of each such year the
report of such audit by said auditors, of such scope and in such
detail as the Bank shall have reasonably requested, including a
separate opinion by said auditors as to whether the statements of
expenditure submitted during such fiscal year, together with the
procedures and internal controls involved in their preparation,
can be relied upon to support the related withdrawals; and
(iii) furnish to the Bank such other information concerning
said records and accounts and the audit thereof as the Bank shall
from time to time reasonably request.
Article V
Remedies of the Bank
Section 5.01. Pursuant to Section 6.02 (1) of the General
Conditions, the following additional events are specified:
(a) The RFLR shall have failed to perform any of its
obligations under the Project Agreement.
(b) As a result of events which have occurred after the date of
the Loan Agreement, an extraordinary situation shall have arisen
which shall make it improbable that the RFLR will be able to
perform its obligations under the Project Agreement.
(c) The Statutes shall have been amended, suspended, abrogated,
repealed or waived so as to affect materially and adversely the
ability of the RFLR to perform any of its obligations under the
Project Agreement.
(d) The Borrower or any other authority having jurisdiction
shall have taken any action for the dissolution or
disestablishment of the RFLR or for the suspension of its
operations.
Section 5.02. Pursuant to Section 7.01 (h) of the General
Conditions, the following additional events are specified:
(a) the event specified in paragraph (a) of Section 5.01 of
this Agreement shall occur and shall continue for a period of
sixty (60) days after notice thereof shall have been given by the
Bank to the Borrower; and
(b) the events specified in paragraphs (c) and (d) of Section
5.01 of this Agreement shall occur.
Article VI
Effective Date; Termination
Section 6.01. The following is specified as an additional
matter, within the meaning of Section 12.02 (c) of the General
Conditions, to be included in the opinion or opinions to be
furnished to the Bank, namely, that the Project Agreement has been
duly authorized or ratified by RFLR, and is legally binding upon
the RFLR in accordance with its terms.
Section 6.02. The date ninety (90) days after the date of this
Agreement is hereby specified for the purposes of Section 12.04 of
the General Conditions.
Article VII
Representatives of the Borrower; Addresses
Section 7.01. The Minister of Finance or the Deputy Minister of
Finance 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:
Ministry of Finance
Ilyinka Street 9
103009 Moscow
Russian Federation
Telex:
112008
For the Bank:
International Bank for
Reconstruction and Development
1818H Street, N.W.
Washington, D.C. 20433
United States of America
Cable address: Telex:
INTBAFRAD 197688 (TRT),
Washington, D.C. 248423 (RCA),
64145 (WUI) or
82987 (FTCC)
In witness whereof, the parties hereto, acting through their
duly authorized representatives, have caused this Agreement to be
signed in their respective names in the District of Columbia,
United States of America, as of the day and year first above
written.
SCHEDULE 1
WITHDRAWAL OF THE PROCEEDS OF THE LOAN
1. The table below sets forth the Categories of items to be
financed out of the proceeds of the Loan, the allocation of the
amounts of the Loan to each Category and the percentage of
expenditures for items so to be financed in each Category:
--------------------------T------------------T-------------------¬
¦ Category ¦ Amount of the ¦ % of ¦
¦ ¦ Loan Allocated ¦ Expenditures ¦
¦ ¦ (Expressed in ¦ to be Financed ¦
¦ ¦Dollar Equivalent)¦ ¦
+-------------------------+------------------+-------------------+
¦(1) Consultants' services¦ 12,000,000 ¦100% ¦
¦ under Part A of the ¦ ¦ ¦
¦ Project ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(2) Consultants' services¦ 8,000,000 ¦100% ¦
¦ under Part B of the ¦ ¦ ¦
¦ Project ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(3) Part C of the Project¦ ¦ ¦
¦ ¦ ¦ ¦
¦(a) Law school programs ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(i) Consultants' ¦ 2,000,000 ¦100% ¦
¦ services ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(ii) Training programs ¦ 2,000,000 ¦100% ¦
¦ ¦ ¦ ¦
¦(iii) Equipment and ¦ 1,000,000 ¦100% of foreign ¦
¦ materials ¦ ¦expenditures, 100% ¦
¦ ¦ ¦of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦ex-factory cost) ¦
¦ ¦ ¦and 80% of local ¦
¦ ¦ ¦expend itures for ¦
¦ ¦ ¦other items ¦
¦ ¦ ¦procured locally ¦
¦ ¦ ¦ ¦
¦(b) Public education ¦ 12,500,000 ¦100% ¦
¦ programs ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(4) Part D of the Project¦ ¦ ¦
¦ ¦ ¦ ¦
¦(a) Consultants'services ¦ 7,000,000 ¦100% ¦
¦ and training ¦ ¦ ¦
¦ programs ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(b) Equipment and ¦ 500,000 ¦100% of foreign ¦
¦ materials ¦ ¦expenditures, 100% ¦
¦ ¦ ¦of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦ex-factory cost) ¦
¦ ¦ ¦and 80% of local ¦
¦ ¦ ¦expend itures for ¦
¦ ¦ ¦other items ¦
¦ ¦ ¦procured locally ¦
¦ ¦ ¦ ¦
¦(5) Sub-projects ¦ ¦ ¦
¦ under Part E ¦ 4,000,000 ¦ ¦
¦ of the Project ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(a) Consultants'services ¦ ¦100% ¦
¦ ¦ ¦ ¦
¦(b) Equipment and ¦ ¦100% of foreign ¦
¦ materials ¦ ¦expenditures, 100% ¦
¦ ¦ ¦of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦ex-factory cost) ¦
¦ ¦ ¦and 80% of local ¦
¦ ¦ ¦expend itures for ¦
¦ ¦ ¦other items ¦
¦ ¦ ¦procured locally ¦
¦ ¦ ¦ ¦
¦(c) Small works ¦ ¦100% of foreign ¦
¦ ¦ ¦expenditures and ¦
¦ ¦ ¦80% of local ¦
¦ ¦ ¦expenditures ¦
¦ ¦ ¦ ¦
¦(6) Incremental Operating¦ 5,000,000 ¦100% ¦
¦ Cost ¦ ¦ ¦
¦ ¦ ¦ ¦
¦(7) Unallocated ¦ 4,000,000 ¦ ¦
¦ ¦ ¦ ¦
¦ TOTAL ¦ 58,000,000 ¦ ¦
L-------------------------+------------------+--------------------
2. For the purposes of this Schedule:
(a) the term "foreign expenditures" means expenditures in the
currency of any country other than that of the Borrower for goods
or services supplied from the territory of any country other than
that of the Borrower;
(b) the term "local expenditures" means expenditures in the
currency of the Borrower or for goods or services supplied from
the territory of the Borrower; and
(c) the term "Incremental Operating Costs" means Project
related operating costs and expenses, including incremental
staffing costs, rental, communications, utilities, office
equipment and supplies, travel and subsistence allowance,
interpretation and translation, and such other incremental office
operational costs and expenses as may be agreed by the Bank.
3. Notwithstanding the provisions of paragraph 1 above, no
withdrawals shall be made in respect of payments made for
expenditures prior to the date of this Agreement.
4. The Bank may require withdrawals from the Loan Account to be
made on the basis of statements of expenditure for expenditures
for:
(a) goods under contracts costing less than 100,000 USD
equivalent; and
(b) services under contracts, in case of firms, costing less
than 100,000 USD equivalent and, in case of individual, costing
less than 50,000 USD equivalent, under such terms and conditions
as the Bank shall specify by notice to the Borrower.
SCHEDULE 2
DESCRIPTION OF THE PROJECT
The objective of the Project is to assist the Borrower to
improve the legal framework in Russia by inter alia:
(a) strengthening the preparation of legislation needed to
support economic reforms;
(b) improving legal information;
(c) enhancing legal training and education; and
(d) strengthening dispute settlement machinery, including
courts and alternative dispute settlement mechanisms.
The Project consists of the following parts, subject to such
modifications thereof as the Borrower and the Bank may agree upon
from time to time to achieve such objectives.
Part A
Law-Making
1. Preparation of draft laws and regulations needed to support
economic reforms in subjects agreed with the Bank through
provision of technical assistance.
2. Improving the drafting process for laws and regulations at
the national level by carrying out a study to identify changes and
needs and implementation of the recommendations thereof.
3. Improving federal-regional law drafting by carrying out a
study on ways to better coordinate legislation and implementation
of the recommendations thereof.
4. Improving drafting of priority economic legislation at the
regional level through selection of pilot areas to carry out law-
making activities including training thereon.
Part B
Legal Information
1. Improving the classification and codification of laws and
regulations by carrying out a study and implementing the
recommendations of such study in pilot activities.
2. Improving the legal information system within Russia by
carrying out a needs assessment for official and public legal
information and implementation of the recommendations of such
assessment through demonstration activities.
Part C
Legal Education and Training
1. Carrying out legal education and training programs under
criteria agreed with the Bank aimed at law schools, legal
institutes, legal teachers and students, and officials involved
with the legal system.
2. Improving public education and awareness about changes in
the legal system through provision of advisory services and
information to the public through the media and through public
education materials.
Part D
Court Reform and Alternative Dispute Resolution
1. Improving court administration and facilities by carrying
out a needs assessment.
2. Strengthening training of judges and court personnel through
training programs and facilities.
3. Expanding alternative dispute mechanisms through training,
provision of advisory services, materials and equipment.
4. Carrying out a program of workshops for judges to improve
court functioning, administration and efficiency.
Part E
Sub-projects
Carrying out other high priority legal reform activities and
project preparation actions, under sub-projects agreed with the
Bank.
The Project is expected to be completed by June 30, 2000.
SCHEDULE 3
AMORTIZATION SCHEDULE
------------------------------------T----------------------------¬
¦ Date Payment Due ¦ Payment of Principal ¦
¦ ¦ (expressed in dollars) ¦
+-----------------------------------+----------------------------+
¦On each March 15 and September 15 ¦ ¦
¦ ¦ ¦
¦ beginning September 15, 2001 ¦ ¦
¦ through September 15, 2012 ¦ 2,415,000 ¦
¦ ¦ ¦
¦On March 15, 2013 ¦ 2,455,000 ¦
L-----------------------------------+-----------------------------
SCHEDULE 4
SPECIAL ACCOUNT
1. For the purposes of this Schedule:
(a) the term "eligible Categories" means Categories set forth
in the table in paragraph 1 of Schedule 1 to this Agreement;
(b) the term "eligible expenditures" means expenditures in
respect of the reasonable cost of goods and services required for
the Project and to be financed out of the proceeds of the Loan
allocated from time to time to the eligible Categories in
accordance with the provisions of Schedule 1 to this Agreement;
and
(c) the term "Authorized Allocation" means an amount equivalent
to 2,000,000 USD to be withdrawn from the Loan Account and
deposited into the Special Account pursuant to paragraph 3 (a) of
this Schedule, provided, however, that unless the Bank shall
otherwise agree, the Authorized Allocation shall be limited to an
amount equivalent to 500,000 USD until the aggregate amount of
withdrawals from the Loan Account plus the total amount of all
outstanding special commitments entered into by the Bank pursuant
to Section 5.02 of the General Conditions shall be equal to or
exceed the equivalent of 5,000,000 USD.
2. Payments out of the Special Account shall be made
exclusively for eligible expenditures in accordance with the
provisions of this Schedule.
3. After the Bank has received evidence satisfactory to it that
the Special Account has been duly opened, withdrawals of the
Authorized Allocation and subsequent withdrawals to replenish the
Special Account shall be made as follows:
(a) For withdrawals of the Authorized Allocation, the Borrower
shall furnish to the Bank a request or requests for deposit into
the Special Account of an amount or amounts which do not exceed
the aggregate amount of the Authorized Allocation. On the basis of
such request or requests, the Bank shall, on behalf of the
Borrower, withdraw from the Loan Account and deposit into the
Special Account such amount or amounts as the Borrower shall have
requested.
(b) (i) For replenishment of the Special Account, the Borrower
shall furnish to the Bank requests for deposits into the Special
Account at such intervals as the Bank shall specify.
(ii) Prior to or at the time of each such request, the Borrower
shall furnish to the Bank the documents and other evidence
required pursuant to paragraph 4 of this Schedule for the payment
or payments in respect of which replenishment is requested. On the
basis of each such request, the Bank shall, on behalf of the
Borrower, withdraw from the Loan Account and deposit into the
Special Account such amount as the Borrower shall have requested
and as shall have been shown by said documents and other evidence
to have been paid out of the Special Account for eligible
expenditures. All such deposits shall be withdrawn by the Bank
from the Loan Account under the respective eligible Categories,
and in the respective equivalent amounts, as shall have been
justified by said documents and other evidence.
4. For each payment made by the Borrower out of the Special
Account, the Borrower shall, at such time as the Bank shall
reasonably request, furnish to the Bank such documents and other
evidence showing that such payment was made exclusively for
eligible expenditures.
5. Notwithstanding the provisions of paragraph 3 of this
Schedule, the Bank shall not be required to make further deposits
into the Special Account:
(a) if, at any time, the Bank shall have determined that all
further withdrawals should be made by the Borrower directly from
the Loan Account in accordance with the provisions of Article V of
the General Conditions and paragraph (a) of Section 2.02 of this
Agreement;
(b) if the Borrower shall have failed to furnish to the Bank,
within the period of time specified in Section 4.01 (b) (ii) of
this Agreement, any of the audit reports required to be furnished
to the Bank pursuant to said Section in respect of the audit of
the records and accounts for the Special Account;
(c) if, at any time, the Bank shall have notified the Borrower
of its intention to suspend in whole or in part the right of the
Borrower to make withdrawals from the Loan Account pursuant to the
provisions of Section 6.02 of the General Conditions; or
(d) once the total unwithdrawn amount of the Loan allocated to
the eligible Categories, minus the total amount of all outstanding
special commitments entered into by the Bank pursuant to Section
5.02 of the General Conditions with respect to the Project, shall
equal the equivalent of twice the amount of the Authorized
Allocation.
Thereafter, withdrawal from the Loan Account of the remaining
unwithdrawn amount of the Loan allocated to the eligible
Categories shall follow such procedures as the Bank shall specify
by notice to the Borrower. Such further withdrawals shall be made
only after and to the extent that the Bank shall have been
satisfied that all such amounts remaining on deposit in the
Special Account as of the date of such notice will be utilized in
making payments for eligible expenditures.
6. (a) If the Bank shall have determined at any time that any
payment out of the Special Account:
(i) was made for an expenditure or in an amount not eligible
pursuant to paragraph 2 of this Schedule; or
(ii) was not justified by the evidence furnished to the Bank,
the Borrower shall, promptly upon notice from the Bank:
(A) provide such additional evidence as the Bank may request;
or
(B) deposit into the Special Account (or, if the Bank shall so
request, refund to the Bank) an amount equal to the amount of such
payment or the portion thereof not so eligible or justified.
Unless the Bank shall otherwise agree, no further deposit by the
Bank into the Special Account shall be made until the Borrower has
provided such evidence or made such deposit or refund, as the case
may be.
(b) If the Bank shall have determined at any time that any
amount outstanding in the Special Account will not be required to
cover further payments for eligible expenditures, the Borrower
shall, promptly upon notice from the Bank, refund to the Bank such
outstanding amount.
(c) The Borrower may, upon notice to the Bank, refund to the
Bank all or any portion of the funds on deposit in the Special
Account.
(d) Refunds to the Bank made pursuant to paragraphs 6 (a), (b)
and (c) of this Schedule shall be credited to the Loan Account for
subsequent withdrawal or for cancellation in accordance with the
relevant provisions of this Agreement, including the General
Conditions.
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