MODEL IDB LOAN AGREEMENT FOR USE WITH MODEL COMMON TERMS
AGREEMENT FOR CORPORATE LOANS AND LOANS TO FINANCIAL INSTITUTIONS
(SHORT FORM)
(VERSION WITH FOOTNOTES)
CONFIDENTIAL
Loan Number [___________]
LEG MODEL as of December 1, 2013
LOAN AGREEMENT
Dated [_________]
between
[Name of Borrower]
and
INTER-AMERICAN DEVELOPMENT BANK
Loan Agreement
Note: This draft document is not a contract or an offer to enter into a contract. It has not been
approved by IDB and is subject to change. Only the document as executed by the parties will contain
the terms that bind them. Until the document is executed by the parties, neither of them intends to be
bound.
WAS:181932.16
CONFIDENTIAL
Loan Number [___________]
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS; INTERPRETATION .......................................................................................... 1
SECTION 1.1
SECTION 1.2
DEFINITIONS ............................................................................................................... 1
INTERPRETATION AND CONSTRUCTION ..................................................................... 1
ARTICLE 2 PART 1: THE IDB LOAN ........................................................................................................ 1
SECTION 2.1
SECTION 2.2
SECTION 2.3
SECTION 2.4
SECTION 2.5
SECTION 2.6
SECTION 2.7
SECTION 2.8
SECTION 2.9
SECTION 2.10
SECTION 2.11
SECTION 2.12
SECTION 2.13
SECTION 2.14
SECTION 2.15
SECTION 2.16
SECTION 2.17
SECTION 2.18
SECTION 2.19
SECTION 2.20
SECTION 2.21
THE IDB LOAN AMOUNT ........................................................................................... 1
DISBURSEMENT PROCEDURE...................................................................................... 1
REPAYMENT. .............................................................................................................. 2
IDB’S DETERMINATION FINAL. .................................................................................. 4
VOLUNTARY AND MANDATORY PREPAYMENTS........................................................ 4
APPLICATION OF PREPAYMENTS ................................................................................ 4
CHARGES AND FEES. .................................................................................................. 4
CURRENCY AND PLACE OF PAYMENT. ....................................................................... 5
ALLOCATION OF PARTIAL PAYMENTS ....................................................................... 6
LATE CHARGES. ......................................................................................................... 6
TAXES. ........................................................................................................................ 6
COSTS, EXPENSES OR LOSSES. ................................................................................... 7
SUSPENSION OR CANCELLATION OF DISBURSEMENTS. .............................................. 7
INCREASED COSTS ...................................................................................................... 7
ILLEGALITY. ............................................................................................................... 7
REIMBURSEMENT OF EXPENSES. ................................................................................ 7
A LOAN INTEREST. ..................................................................................................... 8
B LOAN INTEREST. ..................................................................................................... 9
MARKET DISRUPTION............................................................................................... 10
FIXED RATE PREPAYMENT COSTS FOR PREPAYMENT OF A LOAN. ......................... 10
NOTES. ...................................................................................................................... 11
ARTICLE 3 REPRESENTATIONS AND WARRANTIES .............................................................................. 12
SECTION 3.1
SECTION 3.2
REPRESENTATIONS AND WARRANTIES. ................................................................... 12
ACKNOWLEDGMENT AND WARRANTY. ................................................................... 12
ARTICLE 4 CONDITIONS PRECEDENT TO DISBURSEMENT................................................................... 12
SECTION 4.1
SECTION 4.2
SECTION 4.3
SECTION 4.4
CONDITIONS PRECEDENT TO FIRST DISBURSEMENT. ............................................... 12
CONDITIONS PRECEDENT TO ALL DISBURSEMENTS ................................................ 12
CONDITIONS FOR IDB BENEFIT. ............................................................................... 13
B LOAN DISBURSEMENTS. ........................................................................................ 13
ARTICLE 5 COVENANTS ......................................................................................................................... 13
SECTION 5.1
SECTION 5.2
COMMON TERMS AGREEMENT COVENANTS............................................................ 13
ADDITIONAL COVENANTS. ....................................................................................... 13
ARTICLE 6 EVENTS OF DEFAULT ........................................................................................................... 14
ARTICLE 7 MISCELLANEOUS ................................................................................................................. 14
SECTION 7.1
SECTION 7.2
NOTICES. .................................................................................................................. 14
SUCCESSORS AND ASSIGNS. ..................................................................................... 14
i
CONFIDENTIAL
SECTION 7.3
SECTION 7.4
SECTION 7.5
SECTION 7.6
SECTION 7.7
SECTION 7.8
SECTION 7.9
SECTION 7.10
Loan Number [___________]
COUNTERPARTS. ....................................................................................................... 14
AMENDMENT. ........................................................................................................... 14
SEVERABILITY. ......................................................................................................... 14
APPLICABLE LAW AND JURISDICTION. ..................................................................... 14
ENTIRE AGREEMENT ................................................................................................ 14
SURVIVAL ................................................................................................................. 15
TERM OF AGREEMENT .............................................................................................. 15
IMMUNITIES. ............................................................................................................. 15
ARTICLE 8 [PAYING AGENT].................................................................................................................. 15
SECTION 8.1
SECTION 8.2
SECTION 8.3
[IDB AS PAYING AGENT.] ........................................................................................ 15
[LIABILITY OF IDB; HOLD HARMLESS.]................................................................... 18
[USA PATRIOT ACT NOTICE.] .................................................................................. 18
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CONFIDENTIAL
Loan Number [___________]
LIST OF ANNEXES, SCHEDULES AND EXHIBITS
LIST OF EXHIBITS:
EXHIBIT 1
FORM OF A LOAN PROMISSORY NOTE1
EXHIBIT 2
FORM OF B LOAN PROMISSORY NOTE
GUIDANCE TO MODEL IDB LOAN AGREEMENT FOR USE WITH MODEL COMMON
TERMS AGREEMENT FOR CORPORATE LOANS AND LOANS TO FINANCIAL
INSTITUTIONS (SHORT FORM)
ATTACHMENT 1
1
MODEL PROVISIONS FOR INTEREST RATE OPTIONS AVAILABLE FOR
USD LOANS
If part of the IDB Loan will be uncommitted, see Attachment 5 to the CTA and include the following exhibits (in the case
of Exhibits 1-1 and 1-2 in lieu of Exhibit 1):
EXHIBIT 1-1
FORM OF PROMISSORY NOTE COMMITTED DOLLAR LOAN
EXHIBIT 1-2
FORM OF PROMISSORY NOTE UNCOMMITTED DOLLAR LOAN
EXHIBIT 3
FORM OF IDB LOAN COMMITMENT INCREASE NOTICE
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CONFIDENTIAL
Loan Number [___________]
LOAN AGREEMENT
LOAN AGREEMENT (together with all Annexes, Schedules and Exhibits hereto, the Agreement), dated
[________] between: (1) [Name of Borrower], a [specify type of entity] organized and existing under
the laws of [host country] (the Borrower); and (2) INTER-AMERICAN DEVELOPMENT BANK, an
international organization established by the Agreement Establishing the Inter-American Development
Bank among its member countries (IDB), as lender of record [and in its separate capacity as the Paying
Agent (as defined below)].1
ARTICLE 1
DEFINITIONS; INTERPRETATION
Section 1.1
Definitions. In this Agreement except as defined in the introductory clause hereto, all
capitalized terms shall have the respective meanings assigned thereto in Annex 1 of this Agreement.
Capitalized terms used herein and not defined herein or in Annex 1 hereto shall have the meanings
assigned to them in the Common Terms Agreement dated as of the date hereof by and among IDB,
[IIC][,][Co. Lender No. 1] and the Borrower (the Common Terms Agreement).
Section 1.2
Interpretation and Construction. The principles of interpretation and construction set
forth in Sections 1.2, 1.3 and 1.4 of the Common Terms Agreement shall apply to this Agreement.
1.2.1 In this Agreement, phrases such as “satisfactory to IDB”, “approved by IDB”, “acceptable to
IDB” and phrases of similar import authorize and permit IDB to approve, disapprove, act or decline to
act in its sole discretion.
1.2.2 In the case of any conflict between the terms and conditions of this Agreement and the terms
and conditions of the Common Terms Agreement and any other Financing Document, the terms of this
Agreement, as between the Borrower and IDB, shall control.
ARTICLE 2
PART 1: THE IDB LOAN2
Section 2.1
The IDB Loan Amount. Subject to the terms and conditions of this Agreement and the
Common Terms Agreement, IDB agrees to lend to the Borrower, and the Borrower agrees to borrow from
IDB, a loan consisting of the IDB A Loan (the A Loan) and the IDB B Loan (the B Loan and together
with the A Loan, the Loan). The A Loan and (if applicable) the B Loan shall be pari passu, one with the
other. The A Loan will be funded by IDB from its ordinary capital resources.
Section 2.2
Disbursement Procedure. Subject to the satisfaction of the conditions set forth in
Sections 4.1 (Conditions Precedent to First Disbursement) and 4.2 (Conditions Precedent to All
Disbursements) of the Common Terms Agreement, the Borrower may request Disbursements of the
1
Insert bracketed text if there will be an IDB B Loan and IDB will act in its separate capacity as the Paying Agent under
Article 8.
2
If the IDB Loan contains an uncommitted amount, use the provisions in Attachment 5 of the CTA where applicable
throughout this Agreement.
1
CONFIDENTIAL
Loan Number [___________]
Loan in accordance with this Agreement and Section 2.2 (Disbursement Procedure) of the Common
Terms Agreement. 3
2.2.2 [Disbursement of the B Loan, if applicable shall be made in a whole Dollar amount of not
less than [___________] Dollars ($[____]) and whole multiples of one million Dollars ($1,000,000)
in excess thereof.]4
2.2.3 [IDB is not obligated to make any B Loan Disbursement unless and until all Participants
shall have made available to [IDB, as the Paying Agent,]5 [the Paying Agent] in immediately
available funds their proportionate share of such Disbursement in accordance with the Participation
Agreement(s).]6
2.2.4 [Disbursements of the B Loan shall be made pro rata from Disbursements of the A Loan.]
[Disbursements of the B Loan need not be made pro rata with Disbursements of the A Loan;
[provided, however, that at all times between the Effective Date and the Commitment Termination
Date, after giving effect to any Disbursement Request, the ratio of the outstanding principal balance
of the A Loan to the outstanding principal balance of the B Loan is not less than ten percent (10%).]7
2.2.5 The Borrower may request in the Disbursement Request that the A Loan bear interest at
either the A Loan Variable Interest Rate (as set forth in Section 2.17.2) or the A Loan Fixed Interest
Rate (as set forth in Section 2.17.3), in each case pursuant to the procedure set forth in Section 2.2
(Disbursement Procedure) of the Common Terms Agreement.8
Section 2.3
Repayment.
2.3.1 The Borrower shall repay the A Loan [in equal semi-annual installments of principal on each
Interest Payment Date commencing with the first Interest Payment Date following the [_______]
anniversary of the Effective Date and ending on the [A Loan Final Maturity Date]9 (each, an A Loan
Repayment Date).] OR [on the following Interest Payment Dates (each, an A Loan Repayment Date)
and in amounts resulting from the application of the following percentages:
Interest Payment Date
Percentage of Principal Amount Due
[_________________]
[_________________]
[_________________]
[_________________]
[____]%
[____]%
[____]%
[____]%
3
Insert bracketed text if there will be a B Loan.
4
Insert bracketed text if there will be a B Loan.
5
Insert bracketed text if there will be a B Loan and IIC will act as Paying Agent.
6
Insert bracketed text if there will be a B Loan.
7
Bracketed text may be included (in lieu of the preceding pro rata requirement of Section 2.2.4) subject to prior review and
confirmation by SYN.
8
Include this section only if the Borrower will be granted an option to request either a variable or a fixed interest rate at
Disbursement. If no such option is granted at Disbursement, delete this section. To the extent that the Borrower will also
have this option with respect to the B Loan (if any), include appropriate references to the B Loan and B Loan Interest Rate
provisions.
9
If used, define and include in Defined Terms section.
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CONFIDENTIAL
Loan Number [___________]
[_________________]
[_________________]
[_________________]
[_________________]
[_________________]
[_________________]
[_________________]
[_________________]
[_________________]
[_________________]
[_________________]
[____]%
[____]%
[____]%
[____]%
[____]%
[____]%
[____]%
[____]%
[____]%
[____]%
[____]%]10
The entire outstanding principal amount of the A Loan shall be due and payable on the A Loan Final
Maturity Date.
2.3.2 The Borrower shall repay the B Loan [in equal semi-annual installments of principal on each
Interest Payment Date commencing with the first Interest Payment Date following the [_______]
anniversary of the Effective Date and ending on the [B Loan Final Maturity Date]11 (each, a B Loan
Repayment Date).] OR [on the following Interest Payment Dates (each, a B Loan Repayment Date)
and in amounts resulting from the application of the following percentages:
Interest Payment Date
Percentage of Principal Amount Due 12
[_________________]
[_________________]
[_________________]
[_________________]
[_________________]
[_________________]
[_________________]
[_________________]
[_________________]
[_________________]
[____]%
[____]%
[____]%
[____]%
[____]%
[____]%
[____]%
[____]%
[____]%
[____]%]13
The entire outstanding principal amount of the B Loan shall be due and payable on the B Loan Final
Maturity Date.
2.3.3
Principal amounts repaid pursuant to this Section 2.3 may not be reborrowed.14
10
Use the applicable alternative (equal, semi-annual installments or schedule) based on the term sheet for the specific loan.
11
If used, define and include in Defined Terms section.
12
If the date of the execution of this Agreement results in the final maturity date of the Loan falling on a date other than an
Interest Payment Date, then the final Interest Payment Date for any B Loan must be the Interest Payment Date immediately
preceding the final maturity date of the Loan (as most B Lenders will not have received approval to extend the tenor of
their B Loan beyond the final maturity date of the Loan).
13
Use the applicable alternative (equal, semi-annual installments or schedule) based on the term sheet for the specific loan.
14
Re-borrowing of amounts repaid is never permitted except in the case of revolving lines of credit (which are documented
under separate loan documents).
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CONFIDENTIAL
Loan Number [___________]
2.3.4 All payments by the Borrower of principal and accrued interest on the Loan shall be made in
Dollars.
Section 2.4
IDB’s Determination Final. IDB’s internal records regarding payments made on
account of the Obligations owed to it shall be final and conclusive and bind the Borrower unless the
Borrower proves to IDB’s satisfaction that the determination involved manifest error; provided that the
failure of IDB to maintain such accounts or any error therein shall not in any manner reduce or limit the
obligation of the Borrower to repay the Loan in accordance with the terms of this Agreement.
Section 2.5
Voluntary and Mandatory Prepayments.15
2.5.1 Voluntary Prepayments. The Borrower may prepay the Loan in accordance with the
provisions of Section 2.5.1 (Voluntary Prepayments) of the Common Terms Agreement subject to
the payment of a prepayment fee in accordance with Section 2.5.3 (Prepayment Fee) of the Common
Terms Agreement, if applicable.
2.5.2 Mandatory Prepayments. The Borrower shall prepay the Loan in accordance with the
provisions of Section 2.5.2 (Mandatory Prepayments) of the Common Terms Agreement subject to
the payment of a prepayment fee in accordance with Section 2.5.3 (Prepayment Fee) of the Common
Terms Agreement, if applicable.
Section 2.6
Application of Prepayments. Amounts of principal prepaid under Section 2.5 shall: (a)
first, be allocated by IDB pro rata between the A Loan and the B Loan in proportion to their respective
principal amounts outstanding and (b) then, be applied by IDB pro rata to all the respective outstanding
installments of principal of the A Loan and the B Loan in inverse order of maturity.
Section 2.7
Charges and Fees. The Borrower shall pay to IDB in Dollars the following fees:16
2.7.1 a commitment fee [in an amount in Dollars equal to [__________] percent [(____%)] per
annum of the undisbursed and uncancelled portion of the Loan[. The commitment fee shall: (a) begin to
accrue from day to day, [in respect of the A Loan,] [on the Effective Date OR thirty (30) days after the
Effective Date] [, and in respect of the B Loan, on the date of execution of the respective Participation
Agreement] until the Commitment Termination Date; (b) be calculated on the basis of a 360-day year
for the actual number of days elapsed; and (c) be payable in arrears on the Interest Payment Dates in
each year, the first such payment to be due on the first Interest Payment Date occurring after the date on
which the commitment fee begins to accrue; provided that, if any Disbursement is made less than ten
(10) Business Days before an Interest Payment Date, the commitment fee due on the undisbursed and
uncancelled portion of the Loan during such ten (10)-day period shall be payable on the second Interest
15
Consider any necessary changes to the prepayment provision in case IDB were to reinsure its exposure on a specific deal.
16
A list of all fees (including front-end fees, structuring fees, commitment fees and IDB’s administration fees) payable to
IDB in respect of a particular transaction must be specified in this fees section. Front-end fees, Arranger fees and
Structuring fees should always be documented in a separate Fee Letter to facilitate the future addition of B Loans and
potential sale of A Loans and all Fee Letters must be signed by IDB. (Please see the LEG/NSG website for examples of fee
letters). Depending on the deal’s structure, other fees and/or Fee Letters may apply. If there is initially only an A Loan with
a B Loan to be syndicated later, once the B Loan terms are agreed, such additional fees may be set forth in one or more
additional Fee Letter(s) between IDB and the Borrower specifying the payment by the Borrower to IDB of such fees (for
the account of the Arranger(s) or Participant(s) under the Participation Agreements). If there are differences in the fees
payable in respect of the A Loan and the B Loan, then distinct provisions in respect of each should be added in the Fee
Letter. The terms of all Fee Letters must be consistent with this Section 2.7, the mandate letter and the final term sheet.
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CONFIDENTIAL
Loan Number [___________]
Payment Date following the date of that Disbursement] OR [due and payable to IDB in accordance with
the IDB Fee Letter dated on or about the Effective Date];17
2.7.2 a front-end fee [in an amount in Dollars equal to (i) [________] percent ([____]%) of the
committed aggregate principal amount of the Loan, due and payable to IDB upon the earlier of (x)
the date which is thirty (30) days after the Effective Date and (y) the First Disbursement Date; the
Front-End Fee (with respect to the Loan) shall be earned in full as of the Effective Date;] OR [due
and payable to IDB in accordance with the Fee Letter dated on or about the Effective Date]; 18
2.7.3 [a structuring fee due and payable to IDB in accordance with the [B Loan]19 Fee Letter dated
on or about the Effective Date;]20
2.7.4 an annual administration fee [equal to five thousand Dollars ($5,000) per Participant payable
to IDB (i) upon the earlier of (A) the date that is thirty (30) days after the Effective Date and (B) the
first Disbursement Date; and (ii) thereafter, on each anniversary of the first Interest Payment
Date;]21] OR [due and payable to IDB in accordance with the B Loan Fee Letter dated on or about
the Effective Date];22
2.7.5 [if applicable, an arranger’s fee due and payable to IDB in accordance with the B Loan Fee
Letter dated on or about the Effective Date;23]
2.7.6 [if applicable, a Paying Agent fee due and payable to IDB to be agreed upon among IDB,
the Borrower and the Paying Agent;]24 [and]
2.7.7 [an annual debt domain fee due and payable to IDB in accordance with the B Loan Fee
Letter[;][.][and]25
2.7.8 [such other fees, to be agreed upon, if applicable, between IDB and the Borrower after the
Effective Date, in each case as agreed in writing by IDB and the Borrower.]26
Section 2.8
Currency and Place of Payment.
17
Alternative bracketed text may be used if the description of the commitment fee will be set out in a Fee Letter instead of in
the Agreement.
18
Alternative bracketed text may be used if the description of the front end fee will be set out in a Fee Letter instead of in the
Agreement.
19
The structuring fee is typically only charged when a B Loan exists; however, for commercial reasons, such fee may also be
charged even if there is no B Loan. If a B Loan exists, delete brackets.
20
Delete if there is no B Loan and if no structuring fee will be charged.
21
The following bracketed language may be inserted in large syndications if negotiated with the Borrower and after
consultation with the SCF Division Chief/OMJ Manager/SYN: [“(subject to a maximum aggregate amount of [_____]
Dollars ($_____) per annum)”.]
22
Include if there will be a B Loan.
23
Include if there will be a B Loan.
24
Include if there will be a B Loan.
25
Include if there will be a B Loan.
26
Include if there will be a B Loan.
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CONFIDENTIAL
Loan Number [___________]
[Payments of all Obligations due to IDB shall be made in accordance with Section 2.8.1 (Currency and
Place of Payment) of the Common Terms Agreement and shall be subject to Section 2.8.2 (Currency and
Place of Payment) of the Common Terms Agreement.]
2.8.1 Payments of all Obligations due to IDB shall be made in Dollars, in immediately available
funds to [IDB] [IDB, in its capacity as the Paying Agent] [the Paying Agent], 27 at the New York
office of [_________], Account No. [________] (ABA # [_________]) Swift [____________] (the
Receipt Account) by no later than 11:00 a.m. New York City time, or at such other bank or banks, in
such place or places, as IDB shall from time to time designate. IDB may deem any payment, or part
thereof, relating to the Loan that is received after that time as made on the next Business Day.
Accordingly, with respect to the B Loan, interest shall accrue on the Participant(s)’ pro rata share of
that payment with respect to which IDB is unable to make same day remittance to the Participant(s).
2.8.2 The payment obligations of the Borrower under this Agreement shall be discharged or
satisfied only to the extent that (and as of the date when) IDB actually receives funds in the Loan
Currency in the Receipt Account, notwithstanding the tender or payment (including by way of
recovery under a judgment) of any amount in any currency other than the Loan Currency.
Accordingly, the Borrower shall, as a separate obligation or by way of indemnity, as the case may
be, pay such additional amount as is necessary to enable IDB to receive, after conversion to the Loan
Currency at a market rate and transfer to the Receipt Account, the full amount due to IDB under this
Agreement in the Loan Currency and in the Receipt Account. Notwithstanding the foregoing, IDB
may require the Borrower to pay (or reimburse IDB) in any currency other than the Loan Currency
for (a) any Taxes and other amounts payable under Section 2.11 and Section 2.11 (Taxes) of the
Common Terms Agreement; and (b) any fees, costs and expenses payable under Section 2.7 or
Section 2.12 and Section 2.12 (Costs, Expenses and Losses) of the Common Terms Agreement; and
in each case to the extent such amounts are payable in such other currency.]28
Section 2.9
Allocation of Partial Payments. If IDB at any time receives less than the full amount
then due to it in respect of the Obligations, IDB shall have the right (as between IDB and the Borrower) to
allocate and apply such payment in any way or manner and for such purpose or purposes under this
Agreement or any other Financing Document as IDB determines, notwithstanding any instruction that the
Borrower may give to the contrary.
Section 2.10
Late Charges.
The Borrower shall pay late charges on overdue Obligations in accordance with Section 2.10 (Late
Charges) of the Common Terms Agreement.
Section 2.11
Taxes.
The Borrower acknowledges that under the Agreement Establishing the Inter-American Development
Bank dated December 30, 1959, IDB and its properties, assets, income and transactions are immune from
all taxes imposed by IDB Members. Notwithstanding such immunity, the provisions of Section 2.11
(Taxes) of the Common Terms Agreement shall apply, mutatis mutandis, to this Agreement (and to
27
Insert the reference to “IDB” only in the case of an A Loan when there is no Paying Agent. Insert the reference to “IDB, in
its capacity as Paying Agent” only if there is a B Loan and IDB will serve as Paying Agent. Insert the reference to “Paying
Agent” only if there is a B Loan and a third party Paying Agent is selected.
28
Include only bracketed text after Section Heading if payment provisions are included in Section 2.8.1 and 2.8.2 of the
Common Terms Agreement. Otherwise, include Section 2.8.1 and 2.8.2 in the Loan Agreement as proposed.
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CONFIDENTIAL
Loan Number [___________]
payments made by IDB to the Participants under the respective Participation Agreements entered into
with such Participants) as if set forth in full herein.
Section 2.12
Costs, Expenses or Losses.
The Borrower shall pay the aggregate amount of costs, expenses or losses incurred by IDB or any
Participant as set forth in Section 2.12 (Costs, Expenses or Losses) of the Common Terms Agreement.
Section 2.13
Suspension or Cancellation of Disbursements.
2.13.1 The Loan is subject to cancellation, suspension and/or reduction as set forth in Section 2.13
(Suspension or Cancellation of Disbursements) of the Common Terms Agreement. Any portion of
the Loan, once cancelled or reduced, as provided thereunder, may not be reinstated unless otherwise
agreed by IDB.
2.13.2 The commitment fee applicable pursuant to Section 2.7.1 to any undisbursed and
uncancelled portion of the Loan shall continue to accrue and be payable during any suspension of
IDB’s obligation to make Disbursements pursuant to Section 2.13 (Suspension or Cancellation of
Disbursements) of the Common Terms Agreement but shall cease to accrue as of the effective date
of any cancellation of the Loan with respect to the portion of the Loan so cancelled.
2.13.3 The undisbursed portion of the Loan shall be automatically reduced by the portion of the
Loan cancelled under Section 2.13 (Suspension or Cancellation of the Disbursements) of the
Common Terms Agreement. Such reduction shall be applied pro rata to the A Loan and[, if
applicable,] the B Loan.
Section 2.14 Increased Costs. The Borrower shall pay the aggregate Increased Costs of IDB or the
Participant(s) in accordance with Section 2.14 (Increased Costs) of the Common Terms Agreement.
Section 2.15 Illegality. Upon the occurrence of any Relevant Change, the Borrower’s right to request
a Disbursement of the undisbursed portion of the Loan affected by the Relevant Change shall terminate,
and the Borrower shall, upon request by IDB, prepay the Loan in accordance, and otherwise comply, with
Section 2.15 (Illegality) of the Common Terms Agreement.
Section 2.16 Reimbursement of Expenses. The Borrower shall pay to IDB, or as IDB may direct, the
fees and expenses of IDB and the Consultants as set forth in Section 2.16 (Reimbursement of Expenses)
of the Common Terms Agreement.
2.16.2 In addition, the Borrower shall pay to IDB, or as IDB may direct:
2.16.2.1
the out-of-pocket expenses (including travel and subsistence expenses) incurred by
IDB in relation to IDB’s portfolio management and its annual Loan supervision
review, payable upon receipt of a statement of those expenses from IDB and in an
amount up to [ten thousand Dollars] ($[10,000]) per annual supervision site visit,
provided that no limitation on such amount shall apply if a Default shall then be in
existence;
2.16.2.2
the fees and expenses incurred by IDB in relation to its efforts to preserve, enforce
or protect its rights under any Financing Document, including with respect to IDB’s
rights under this Section 2.16 and Section 2.16 (Reimbursement of Expenses) of the
Common Terms Agreement and any corresponding terms in any of the other
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CONFIDENTIAL
Loan Number [___________]
Financing Documents, or the exercise of its rights or powers consequent upon or
arising out of the occurrence of any Default, including legal and other professional
consultants’ fees on a fully indemnity basis; [and
2.16.2.3
the fees and expenses of the Paying Agent as provided in this Agreement].29
Part 2: A Loan and B Loan Interest Rate Terms and Conditions30
Section 2.17
A Loan Interest.
2.17.1 General Provisions. Subject to Section 2.10 of this Agreement and Section 2.10 (Late
Charges) of the Common Terms Agreement, the Borrower shall pay interest on the outstanding
principal amount of the A Loan from time to time in accordance with this Section 2.17.31
2.17.1.1
Interest on the A Loan shall accrue from day to day for any Interest Period
from and including the first day of such Interest Period to, but excluding, the
last day of such Interest Period computed on the basis of actual number of
days elapsed and a year of three hundred and sixty (360) days and be payable
in arrears on the Interest Payment Date falling at the end of that Interest
Period; provided that with respect to any A Loan Disbursement made less than
ten (10) Business Days before an Interest Payment Date, interest on that
Disbursement shall be payable commencing on the second Interest Payment
Date following the date of that Disbursement.
2.17.1.2
IDB’s determination, from time to time, of the A Loan Interest Rate shall be
final and conclusive and shall bind the Borrower unless the Borrower proves
to IDB’s satisfaction that the determination involved manifest error.
2.17.2 A Loan Variable Interest Rate. [If the A Loan is to bear interest at the A Loan Variable
Interest Rate pursuant to Section 2.2.5, the following terms shall apply:]32
2.17.2.1
During each Interest Period, the A Loan (or, with respect to the first Interest
Period for the A Loan Disbursement, the amount of that Disbursement) shall
bear interest at the A Loan Variable Interest Rate for that Interest Period.
29
If no IDB B Loan is contemplated, a Paying Agent is not required and this section may be deleted.
30
IDB’s local counsel should confirm that interest rate terms do not raise any concerns under local laws relating to usury or
other limits on interest. New York law usury provisions will not be an issue because, among other things, there are no New
York law usury limits for loans in excess of $2,500,000 made to corporations. Note, in this regard, that the IDB model loan
agreement no longer includes provisions automatically reducing the applicable interest rate to the maximum rate permitted
by law (in the event the agreement’s rate is in excess thereof). See, as a reference, Section 3.11 of the TFFP model loan
agreement (or the TFCFA).
31
Section 2.17 sets forth provisions for a fixed or variable interest rate (elected by Borrower at Disbursement). If the A Loan
is intended to bear interest at a fixed interest rate or if the Borrower will have the option to elect a fixed or variable rate at
commitment or to convert the interest rate, this Part 2 should be amended following Attachment 2 (“Model Provisions for
Interest Rate Options Available for USD Loans”).
32
If no interest rate option (for fixed or variable rates) at Disbursement is to be provided and the A Loan will bear interest at a
variable rate, delete bracketed text (retaining subsections 2.17.2.1 through 2.17.2.3) and delete Section 2.17.3 (i.e., the A
Loan fixed interest rate provision) in its entirety.
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CONFIDENTIAL
Loan Number [___________]
2.17.2.2
The variable interest rate applicable to each Disbursement of the A Loan for
any Interest Period shall be the rate that is the sum of (a) the Applicable
LIBOR on the Interest Rate Determination Date for that Interest Period; plus
(b) the Applicable Spread (A Loan Variable Interest Rate).
2.17.2.3
For so long as any amounts outstanding under the A Loan accrue interest at
the A Loan Variable Interest Rate, on each Interest Rate Determination Date
for any Interest Period, IDB shall determine the A Loan Interest Rate
applicable to that Interest Period and promptly notify the Borrower of such
rate.
2.17.3 A Loan Fixed Interest Rate. If the A Loan is to bear interest at the A Loan Fixed Interest
Rate pursuant to Section 2.2.35, the following terms shall apply:
Section 2.18
2.17.3.1
The A Loan Disbursement shall bear interest on and after such Disbursement
Date at the A Loan Fixed Interest Rate.
2.17.3.2
The A Loan fixed interest rate applicable to the Disbursement for any Interest
Period shall be the rate that is the sum of the Disbursement Swap Market
Fixed Rate as of the relevant Interest Rate Determination Date plus the
Applicable Spread (the A Loan Fixed Interest Rate).
B Loan Interest.
2.18.1 General Provisions. Subject to Section 2.10 and Section 2.10 (Late Charges) of the
Common Terms Agreement, the Borrower shall pay interest on the outstanding principal amount of
the B Loan[, if any,] from time to time in accordance with this Section 2.18.
33
2.18.1.1
Interest on the B Loan shall accrue from day to day for any Interest Period
from and including the first day of such Interest Period to, but excluding, the
last day of such Interest Period computed on the basis of actual number of
days elapsed in such Interest Period and a year of three hundred and sixty
(360) days and be payable in arrears on the Interest Payment Date falling at
the end of that Interest Period; provided that with respect to any B Loan
Disbursement made less than ten (10) Business Days before an Interest
Payment Date, interest on that Disbursement shall be payable commencing on
the second (2nd) Interest Payment Date following the date of that
Disbursement.
2.18.1.2
During each Interest Period, the B Loan (or, with respect to the first Interest
Period for each B Loan Disbursement, the amount of that Disbursement) shall
bear interest at the B Loan Interest Rate for that Interest Period.
2.18.1.3
[The B Loan Interest Rate for any Interest Period shall be the rate that is the
sum of: (a) the Applicable LIBOR on the Interest Rate Determination Date for
that Interest Period; plus (b) the Applicable Spread.]33
If the Loan is for an A Loan with a B Loan tranche to be syndicated at a future date, delete the bracketed text.
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CONFIDENTIAL
Loan Number [___________]
2.18.1.4
On each Interest Rate Determination Date, IDB shall determine the B Loan
Interest Rate applicable to the relevant Interest Period and promptly notify the
Borrower of such rate.
2.18.1.5
IDB’s determination, from time to time, of the B Loan Interest Rate shall be
final and conclusive and shall bind the Borrower unless the Borrower proves
that the determination involved manifest error.
Section 2.19 Market Disruption.34 If (a) no quotations are received from banks in London or New
York in accordance with subclauses (a) or (b) of the definition of LIBOR in Annex 1, or (b) with respect
to the Loan, IDB determines (on its own or at the request of the Required Participants) that LIBOR for
any Interest Period will not adequately reflect the cost of making, funding or maintaining the Loan (each
of the situations described in (a) or (b) above, a Market Disruption Event), IDB shall notify the Borrower
of the Alternate Base Rate applicable to the Loan for such Interest Period, and such Alternate Base Rate
shall be used in place of Applicable LIBOR in calculating the A Loan Interest Rate and B Loan Interest
Rate for such Interest Period. Any Alternate Base Rate applied pursuant to this Section 2.19 shall cease
to be used in place of Applicable LIBOR for any Interest Period following notice from IDB to the
Borrower that the Market Disruption Event no longer exists. Upon the occurrence of a Market Disruption
Event, notwithstanding the foregoing, IDB may elect to use Applicable LIBOR, rather than the Alternate
Base Rate, in calculating the A Loan Interest Rate applicable to the A Loan or the relevant Disbursement
thereof (as applicable).
Section 2.20 Fixed Rate Prepayment Costs for Prepayment of A Loan.35 If at any time while the
amounts outstanding under the A Loan bear interest at the A Loan Fixed Interest Rate, all or any portion
of the A Loan is prepaid, in accordance with Section 2.5 (Voluntary and Mandatory Prepayments) of the
Common Terms Agreement, Section 2.15 (Illegality) of the Common Terms Agreement or Section 6.1
(General Acceleration Provisions) of the Common Terms Agreement then, on the date of such
prepayment, the Borrower shall pay IDB an amount (the Fixed Rate Prepayment Costs) equal to: (a) in
the case of a prepayment of the outstanding Loan in full, an amount in Dollars equal to the cost of
breakage of funds, termination costs and other unwinding costs incurred by IDB, if positive, as
determined by IDB on the basis of the most favorable costs to the Borrower out of at least three (3) firm
quotations from dealers in the Dollar swap market selected by IDB in good faith, taking into account the
principal repayment schedule, the first scheduled A Loan Repayment Date and the final maturity date for
the A Loan (with any necessary determinations being made by IDB); or (b) in the case of a partial
prepayment of the A Loan, a proportion of such costs determined in accordance with subclause (a) above
equal to the proportion that the amount of the relevant Loan being prepaid bears to the amount of such
relevant Loan then outstanding. IDB’s determination of the Fixed Rate Prepayment Costs shall be final
and conclusive and bind the Borrower unless the Borrower proves to IDB’s satisfaction that the
determination involved manifest error.
Part 3: Promissory Notes
34
These market disruption provisions and their related definitions (e.g., definition of Alternate Base Rate) may not be
removed and are not optional. The only modifications which may be made are with respect to the definition of Alternate
Base Rate and the election of the TED Spread (to be used for A Loans) or weighted cost of funding (to be used for A/B
Loans). See footnotes to these defined terms in Annex 1.
35
If the Loan will bear interest at a variable rate and Borrower will not have the option to request a fixed or variable interest
rate at Disbursement or to convert the Interest Rate from a variable rate to a fixed rate, delete this section related to “Fixed
Rate Prepayment Costs” and renumber references to the following section on Notes. Refer to Attachment 2 (“Model
Provisions for Interest Rate Options Available for USD Loans”).
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CONFIDENTIAL
Section 2.21
Loan Number [___________]
Notes.
2.21.1 To further evidence its obligation to repay the Loan, with interest accrued thereon, at the
request of IDB, the Borrower shall issue and deliver to IDB, on or prior to each Disbursement Date,
promissory notes substantially in the form of, as applicable, Exhibit 1 and Exhibit 2 in the respective
principal amount of each of the A Loan Disbursement and the B Loan Disbursement (collectively,
the Notes).36 At IDB’s request, the Borrower shall promptly execute and deliver one or more new
Notes satisfactory to IDB to substitute for one or more Notes previously delivered to IDB. 37 The
issuance, execution and delivery of any Note pursuant to this Agreement shall not be or be construed
as a novation hereunder or any other agreement between IDB and the Borrower and shall not limit or
otherwise affect the obligations or rights of the Borrower hereunder, and the rights and claims of
IDB under any Note shall not replace or supersede its rights and claims hereunder.38
2.21.2 [INSERT IF THE LOAN WILL BE DISBURSED IN MULTIPLE DISBURSEMENTS:]
At the time of the last Disbursement of the A Loan and the B Loan, the Borrower shall deliver to
IDB: (a) a Note in the total amount of all Disbursements of the A Loan (including the amount of
such last Disbursement), such Note due and payable on the final maturity date of the A Loan, and
(b) in the case of any B Loan, if applicable, a Note in the total amount of all Disbursements of the B
Loan (including the amount of such last Disbursement), such Note due and payable on the final
maturity date of the B Loan, in each case in exchange for all Notes previously executed and
delivered by the Borrower for Disbursements of the A Loan and the B Loan, respectively.
36
IDB no longer requires that the governing law of the Notes be New York law. Consult with IDB’s local counsel whether
promissory notes (pagarés) are required, whether executory enforcement procedures will be available to IDB if local law is
utilized for the Notes and the proper form and documentation of the Notes. A typical requirement in many Civil Code
jurisdictions to ensure the availability of such executory proceedings for the enforcement of promissory notes (pagarés) is
that the amount of interest in the Notes be capable of being ascertained at the time of their execution. In the case of a
variable interest rate, it may only be possible to calculate the amount of interest due each six month period at a time; as a
result the Borrower may need to issue new replacement Notes to ensure that IDB continues to be entitled to executory
proceedings for enforcement. Separate Notes for interest and principal may be necessary to minimize such
unenforceability risk under many local laws. Other options may be preferred, depending on advice of IDB’s local counsel
(e.g., in lieu of requiring the issuing of new notes for interest on each Interest Rate Determination Date, it may be desirable
to consider a single note for interest in a flat amount equal to 20% of the Loan -- an option that has been utilized in Brazil).
To be reviewed with IDB’s local counsel under applicable host country laws.
37
Please refer to Attachment 4 (Model Provisions for Brazilian Loans) for options when separate promissory notes for
principal and interest are required in the case of loans to Brazilian borrowers.
38
If IDB will require local law governed Notes, and the Borrower negotiates to include text to minimize any perceived risk of
two concurrent enforcement proceedings (one under the Notes in the Borrower’s Country and the second in New York
courts) consider including the following additional subsections: “Payment of the principal amount of any Note shall pro
tanto discharge the obligation of the Borrower to repay that portion of the A Loan [and/or B Loan] to which such Note
relates; and payment of interest accrued on any Note shall pro tanto discharge the obligation of the Borrower to pay such
amount of interest on that portion of the A Loan [and/or B Loan] to which such Note relates. Payment of the principal
amount of the A Loan [and/or B Loan] shall pro tanto discharge the obligation of the Borrower to repay the principal
amount of the Note or Notes relating to that portion of the A Loan [and/or B Loan]; and payment of interest accrued on the
A Loan [and/or B Loan] shall pro tanto discharge the obligation of the Borrower to pay such amount of interest in respect
of the Note or Notes relating to the A Loan [and/or B Loan] to which such interest relates.”
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CONFIDENTIAL
Loan Number [___________]
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.1
Representations and Warranties.Each of the representations and warranties set forth in
Article 3 (Representations and Warranties) of the Common Terms Agreement shall be deemed to be
made herein, mutatis mutandis, as if set forth in full herein for the benefit of IDB.
Section 3.2
Acknowledgment and Warranty. The Borrower acknowledges that it makes the
representations and warranties contained in Section 3.1 with the intention of inducing IDB to enter into
this Agreement and the other Financing Documents [(and the Participant(s) to enter into the Participation
Agreement(s))] and that IDB has entered into this Agreement and the other Financing Documents [(and
the Participant(s) has entered or will enter, as the case maybe, into the Participation Agreement(s))] on the
basis of, and in full reliance on, each such representation and warranty.
ARTICLE 4
CONDITIONS PRECEDENT TO DISBURSEMENT
Section 4.1
Conditions Precedent to First Disbursement. The obligation of IDB to make the first
Disbursement (including the first A Loan Disbursement) is subject to the fulfilment, in a manner
satisfactory to IDB, not later than [three (3)]39[five (5)]40[ten (10)]41 Business Days prior to or on the first
Disbursement Date (or on the first Disbursement Date if so specified), of each of the conditions set forth
in Section 4.1 (Conditions Precedent to First Disbursement) of the Common Terms Agreement, which
conditions shall apply, mutatis mutandis, to this Agreement as if set forth in full herein, and each of the
following conditions:42
4.1.1
[add any additional IDB-specific conditions].
Section 4.2
Conditions Precedent to All Disbursements. The obligation of IDB to make any
Disbursement (including the first Disbursement) is subject to the fulfilment, in a manner satisfactory to
IDB, of each of the conditions set forth in Section 4.2 (Conditions Precedent to all Disbursements) of the
Common Terms Agreement, which conditions shall apply, mutatis mutandis, to this Agreement as if set
forth in full herein.
39
Use text in first set of brackets if there is no B Loan and IIC is not a Co-Lender.
40
Use text in second set of brackets if there is a B Loan and IIC is not a Co-Lender.
41
Use text in third set of brackets if IIC is a Co-Lender.
42
This section is drafted for a loan with multiple Disbursements. If a single Disbursement is contemplated, Section 4.1 should
be renamed “Conditions Precedent to Disbursement”, Sections 4.1 and 4.2 should be merged into a single section, the word
“first” in all references to the “first” Disbursement Date should be deleted and the first paragraph of Section 4.1 should be
replaced with “The obligation of IDB to make the Disbursement is subject to the fulfilment, in a manner satisfactory to
IDB, not later than three (3) Business Days prior to or on the Disbursement Date (or on the Disbursement Date, as specified
below), of each of the conditions set forth in Section 4.2 (Conditions Precedent to all Disbursements) of the Common
Terms Agreement, and each of the following conditions:”
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CONFIDENTIAL
Loan Number [___________]
Section 4.3
Conditions for IDB Benefit. The conditions in Section 4.1 and Section 4.2 are for the
benefit of IDB and may be waived only by IDB.43
Section 4.4
B Loan Disbursements.
Notwithstanding anything to the contrary herein or in the Common Terms Agreement, IDB shall not be
obligated to make any Disbursement of the B Loan except to the extent that the Participants provide funds
for such Disbursement under the Participation Agreement.
ARTICLE 5
COVENANTS
Section 5.1
Common Terms Agreement Covenants. The Borrower hereby agrees to comply with
each of the covenants set forth in Article 5 (Covenants) of the Common Terms Agreement and to
otherwise perform and observe all of the obligations undertaken by it in the Common Terms Agreement,
the terms of which shall apply, mutatis mutandis, to this Agreement as if set forth in full herein.
Section 5.2
Additional Covenants.
[add any additional IDB-specific covenants]
43
If a single Disbursement is contemplated, all conditions are to be included in Section 4.1; delete the text “and Section 4.2”,
and modify this sentence accordingly to reflect a single section.
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CONFIDENTIAL
Loan Number [___________]
ARTICLE 6
EVENTS OF DEFAULT
The occurrence of any of the Events of Default set forth in Section 6.2 (Events of Default) of the Common
Terms Agreement, the terms of which are hereby incorporated by reference in this Agreement, shall
constitute an Event of Default under this Agreement. If any Event of Default shall occur and be
continuing (whether it is voluntary or involuntary, or results from operation of any applicable law or
pursuant to or as a result of any act or failure to act by any Authority or otherwise), IDB may, by notice to
the Borrower, exercise each of the remedies to which it is entitled under the Common Terms Agreement
and the other Financing Documents (in addition to any and all other available remedies at law and in
equity), including taking any or all of the actions described in Section 6.1 (General Acceleration Terms
and Conditions) of the Common Terms Agreement. The provisions of Sections 6.1 (General
Acceleration Terms and Conditions) and 6.3 (Bankruptcy) of the Common Terms Agreement shall apply,
mutatis mutandis, to this Agreement as if set forth in full herein.
ARTICLE 7
MISCELLANEOUS
Section 7.1
Notices. Any notice, request, demand or other communication to be made under this
Agreement shall be in writing and given and deemed effective as provided in Section 7.1 (Notices) of the
Common Terms Agreement.
Section 7.2
Successors and Assigns. This Agreement binds and benefits the respective successors
and assignees of the parties. However, the Borrower may not assign or delegate any of its rights or
obligations under this Agreement without the prior written consent of IDB. IDB may, without the need of
any notice, consent or other action to or from any party, assign, participate or otherwise allot to one or
more banks or other entities all or a portion of all of its rights and obligations under this Agreement, the
Notes and the other Financing Documents.
Section 7.3
Counterparts. This Agreement may be executed in several counterparts, each of which
is an original, but all of which together shall constitute one and the same agreement.
Section 7.4
Amendment. Any amendment, or waiver of, or any consent given under, any provision
of this Agreement shall be in writing and, in the case of any amendment, signed by the Borrower and IDB
or their permitted successors and assigns.
Section 7.5
Severability. Any provision hereof that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof and without affecting the validity or enforceability of any
provision in any other jurisdiction.
Section 7.6
Applicable Law and Jurisdiction.
This Agreement shall be governed by, and construed in accordance with, the law of the State of New
York. The provisions of Section 7.9 (Applicable Law and Jurisdiction) of the Common Terms
Agreement shall apply, mutatis mutandis, to this Agreement as if set forth in full herein.
Section 7.7
Entire Agreement. This Agreement and the other Financing Documents represent the
final and complete agreement of the parties hereto with respect to the financing of the Loan, and all prior
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CONFIDENTIAL
Loan Number [___________]
negotiations, representations, understandings, writings and statements of any nature with respect thereto
are hereby superseded in their entirety by the terms of this Agreement and the other Financing
Documents.
Section 7.8
Survival. The provisions of Section 7.13 (Survival) of the Common Terms Agreement
shall apply, mutatis mutandis, to this Agreement as if set forth in full herein.
Section 7.9
Term of Agreement. This Agreement shall continue in force until the date on which
IDB is satisfied that all amounts outstanding under the Financing Documents have been indefeasibly paid
and discharged in full and IDB is under no obligation to make any further Disbursement under this
Agreement or any other Financing Document.
Section 7.10
Immunities.
The Borrower hereby acknowledges that IDB shall be entitled under applicable law, including the terms
of the International Organizations Immunities Act of 1945 (22 U.S.C. §288), to immunity from a trial by
jury in any action, suit or proceeding arising out of or relating to this Agreement or any other Financing
Document to which the Borrower is a party or the transactions contemplated hereby or thereby, brought
against IDB in any court of the United States of America. TO THE MAXIMUM EXTENT PERMITTED
BY APPLICABLE LAW, THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY IN ANY ACTION, SUIT OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT
TO WHICH THE BORROWER IS A PARTY OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, AND FOR ANY COUNTERCLAIM THEREON, BROUGHT BY OR
AGAINST IDB IN ANY FORUM IN WHICH IDB IS NOT ENTITLED TO IMMUNITY FROM
TRIAL BY JURY. The Borrower agrees that the waivers set forth above shall have the fullest extent
permitted under the Foreign Sovereign Immunities Act of 1976 of the United States of America (28
U.S.C. §§1602-1611) and are intended to be irrevocable and not subject to withdrawal for purposes of
such Act.
ARTICLE 8
[PAYING AGENT]
Section 8.1
[IDB as Paying Agent.]44
8.1.1 Paying Agent. IDB shall act as Paying Agent and shall take all such actions to exercise all such
powers as have been specifically delegated to it under the terms of this Section 8.1.1, together with such
other powers as are reasonably incidental thereto. Prior to or upon the execution by the Participants of
the Participation Agreement, IDB shall notify the Borrower advising that the Participation Agreement
will be, or has been, executed. Such notice shall be delivered pursuant to Section 7.1, and shall take
effect on the Paying Agent Effective Date.
8.1.2 No Implied Responsibilities. Nothing in this Section 8.1 shall be construed to impose upon
IDB, in its separate capacity as Paying Agent, any obligations other than those provided expressly in
this Article 8, and IDB, in its capacity as Paying Agent, shall not be liable except for the performance of
such obligations as are set forth in such Article 8. Nothing in this Section 8.1 shall require IDB, in its
separate capacity as Paying Agent, to expend, advance or risk its own funds or otherwise incur financial
44
Include this Article 8 only if IDB will act in its separate capacity as Paying Agent and provisions are not included in
Common Terms Agreement.
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CONFIDENTIAL
Loan Number [___________]
liability in the performance of any of its obligations or in the exercise of any of its rights or powers.
IDB, in its separate capacity as Paying Agent, may consult with counsel and any advice or opinion of
such counsel shall (subject to this Section 8.2) be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by IDB, in its separate capacity as Paying
Agent, in good faith and in accordance with such advice or opinion of counsel. IDB, in its separate
capacity as Paying Agent, shall not be deemed to have knowledge of any Default or of the event or
events that give or may give rise to any Default unless and until the Borrower shall have given notice to
IDB, in its separate capacity as Paying Agent, describing such Default or such event or events.
8.1.3 Agreements by the Borrower. From the Paying Agent Effective Date, the Borrower agrees to
furnish to IDB, in its separate capacity as Paying Agent, a copy of each notice, instrument or other
document sent to IDB that affects the IDB’s obligations under this Section 8.1.1, including each
Disbursement Request delivered to IDB by the Borrower pursuant to this Agreement.
8.1.4
Disbursements; Interest Rate Determinations.
8.1.4.1
Upon its receipt of any Disbursement Request, IDB shall promptly, but no
later than 2:00 p.m., New York City time, seven (7) Business Days after its
receipt of such Disbursement Request, prepare and distribute a disbursement
notice to each Participant that allocates to each of IDB and each Participant
the principal portion of the Loan to be disbursed by each such party on the
Disbursement Date (based upon the Participation held by each Participant),
and instructs to each such Participant to make such funds available to IDB in
accordance with the terms of this Agreement and the Participation Agreement.
8.1.4.2
No later than 2:00 p.m., New York City time, on the Disbursement Date and
assuming (x) timely receipt by IDB of the Disbursement Request, and (y)
deposit of funds in the amount of the Disbursement by IDB and each
Participant into the Receipt Account prior to 11:00 a.m., New York City time,
on the Disbursement Date, IDB shall transfer the amount of the Disbursement
made under the Loan, in immediately available funds, in Dollars, in
accordance with the applicable Disbursement Request. In addition, from the
Paying Agent Effective Date on any date on which this Agreement requires
IDB to determine or establish an interest rate applicable to the Loan, IDB shall
compute such interest rate in accordance with this Agreement, and shall
provide notice of such determination to each Participant.
8.1.4.3
If IDB, in its separate capacity as Paying Agent, is unable to disburse the full
amount of the Disbursement Request due to a failure of any Participant to
remit the amount specified in the relevant disbursement notice into the Receipt
Account in a timely manner, then IDB, in its capacity as Paying Agent, shall,
subject to the satisfaction of all other conditions applicable thereto, make
available to the Borrower in immediately available funds in accordance with
the applicable Disbursement Request such funds as IDB, in its separate
capacity as Paying Agent, shall have so received from the Participants and an
equivalent pro rata portion of the requested Disbursement of the A Loan or, at
IDB’s election, the full amount of the Disbursement of the A Loan.
8.1.4.4
On the same Business Day of the occurrence of a Market Disruption Event
affecting the Required Participants, IDB shall:
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CONFIDENTIAL
8.1.5
Loan Number [___________]
8.1.4.4.1
request that all Participants provide Market Disruption Cost
Certificates within one (1) Business Day of such request;
8.1.4.4.2
on the same Business Day that it receives such Market
Disruption Cost Certificates (and regardless of whether any
Participant fails to submit a Market Disruption Cost
Certificate), calculate the Alternate Base Rate for the
applicable Interest Period for the B Loan; and
8.1.4.4.3
in calculating the Alternate Base Rate, use Applicable LIBOR
for any Participant (whether or not a Required Participant)
that does not submit a Market Disruption Cost Certificate as
that Participant’s cost of funding or maintaining its
Participation; and
8.1.4.4.4
provide notice to the Participants of the Alternate Base Rate
for the applicable Interest Period for the B Loan.
Payment of Principal, Interest and Fees.
8.1.5.1
No later than 2:00 p.m., New York City time, on any date on which any
amount is required to be paid by the Borrower to IDB pursuant to this
Agreement, and assuming timely deposit into the Receipt Account of funds
sufficient to make the payment of principal, interest, fees and other amounts
then due, IDB, in its separate capacity as Paying Agent, will make such funds
available to the holders of the Participations in accordance with the provisions
of this Agreement (and of the Participation Agreement), to the extent the
holders of such Participations are entitled to any principal, interest amount, fee
or other amount, referred to above.
8.1.5.2
If IDB, in its separate capacity as Paying Agent, is unable to make such funds
available to the holders of Participations, as applicable, due to a failure of the
Borrower to deposit such funds into the Receipt Account in a timely manner
pursuant to Section 2.8 hereof, IDB shall, no later than 1:00 p.m., New York
City time, on the date on which any amount is required to be paid, notify the
Borrower, and the Participants; provided, that upon receipt of funds sufficient
to make the payment of principal, interest, fees and other amounts then due,
regardless of the delay in the receipt of such funds, IDB, in its separate
capacity as Paying Agent, will promptly make such funds available to the
holders of the Participations in accordance with the provisions of this
Agreement, the Notes and the Participation Agreement.
8.1.6 Actions in Accordance with Applicable Laws. IDB, in its separate capacity as Paying Agent,
shall carry out its obligations in accordance with the terms of this Agreement; provided that IDB, in
such separate capacity as Paying Agent shall not be required to comply with any terms if, in its
judgment, actions arising from such terms could subject the Paying Agent, IDB or any Participant to any
criminal liability or any civil liability unless, in the case of any such civil liability of IDB, in its separate
capacity as Paying Agent, IDB shall have been indemnified against such liability in a manner
satisfactory to it. Nothing herein shall require or authorize IDB, in its separate capacity as Paying Agent
knowingly to take, or omit to take, any action that is in breach of any applicable law or obligation of
IDB under this Agreement or the Participation Agreement; provided, however, that the foregoing is not
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CONFIDENTIAL
Loan Number [___________]
intended to alter any standard of care otherwise imposed on IDB, in its separate capacity as Paying
Agent.
Section 8.2
[Liability of IDB; Hold Harmless.]
8.2.1 Limitation of IDB’s Liability as Paying Agent. IDB, in its separate capacity as Paying Agent,
shall treat the Receipt Account as a trust account otherwise subject to all applicable rules, regulations
and practices generally followed by IDB, in its separate capacity as Paying Agent, in connection with its
trust activities, and shall have no liability to any Person, including the Participants, for non-compliance
by any of the parties to this Agreement, the Participation Agreement or the Notes with the terms and
conditions thereof or for any delay in the payment of amounts in respect of this Agreement, the
Participation Agreement or the Notes. In the absence of bad faith, gross negligence or willful
misconduct on the part of the IDB, in its separate capacity as Paying Agent, IDB shall not be liable to
any Person, including the Borrower or the Participants, in acting within the scope of Article 8 hereof. In
no event shall IDB, in its separate capacity as Paying Agent, be liable for any indirect, consequential or
punitive damages, regardless of the form of action and whether or not any such damages are foreseeable
or contemplated.
8.2.2 Indemnification by the Borrower. Without intending to modify the provisions addressing the
payment of the fees and expenses of IDB, in its separate capacity as Paying Agent, incurred in the
performance of its obligations, the Borrower agrees to indemnify, protect, save and keep harmless IDB,
in its separate capacity as Paying Agent, and its successors, permitted assigns, directors, officers, agents
and employees (the Indemnified Parties), from and against, any and all claims, liabilities, actions, suits,
judgments, demands, obligations, losses, damages, penalties, costs and expenses, including interest and
reasonable attorney fees and expenses that may be imposed on, incurred by, or asserted against, at any
time, IDB, in its separate capacity as Paying Agent, and in any way relating to or arising out of the
execution, delivery and performance under Section 8.1; except that the Borrower shall not be required to
indemnify, protect, save and keep harmless the Indemnified Parties to the extent that a court of
competent jurisdiction finally determines that the relevant Indemnified Party was grossly negligent or
engaged in willful misconduct.
8.2.3 No Rights to Third Parties. Nothing in Article 8, express or implied, shall give to any Person
(including but not limited to any holder of any Note (other than IDB) or any Participant), other than the
parties hereto and their successors and permitted assigns, any benefit or any legal, equitable or other
right, remedy or claim under this Agreement.
Section 8.3
[USA Patriot Act Notice.]
8.3.1 Pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the Patriot Act) or similar legislation in another country, IDB, in its separate
capacity as Paying Agent, is required to obtain, verify and record information (and, if applicable, to
provide such information to the Participants) that identifies the Borrower and each of its Shareholders,
directors and/or officers, which information includes or may include the name and address of the
Borrower, the organizational documents of the Borrower and such other information that is necessary to
allow IDB, in its separate capacity as Paying Agent, and the Participants to comply with their respective
obligations under the Patriot Act or such similar legislation in another country.
(Signature page follows)
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CONFIDENTIAL
Loan Number [___________]
IN WITNESS WHEREOF, the parties, acting through their duly Authorized Representatives,
have caused this Agreement to be signed in their respective names, on the date first above written.
[NAME OF BORROWER]
By:
Name:
Title:
INTER-AMERICAN DEVELOPMENT BANK
By:
Name:
Title:
45
General Manager, Structured and Corporate Finance Department45
Consult AM-120 for other IDB authorized signatories.
- 19 -
CONFIDENTIAL
Loan Number [___________]
ANNEX 1
DEFINITIONS
General Definitions.
A Loan Fixed Interest Rate means the fixed rate of interest payable on the outstanding principal
amount of the A Loan from time to time, determined in accordance with Section 2.17.3.2.
A Loan Interest Rate means [either of the A Loan Fixed Interest Rate and the A Loan Variable
Interest Rate]1. OR [the rate of interest payable on the outstanding principal amount of the A Loan
from time to time, determined in accordance with Section 2.17.2.] 2.
A Loan Repayment Date has the meaning assigned to that term in Section 2.3.1.
A Loan Variable Interest Rate means the variable rate of interest payable on the outstanding
principal amount of the A Loan from time to time, determined in accordance with Section 2.17.2.2.
[Affiliated Participant means any Participant that directly or indirectly Controls, or is under
common direct or indirect Control with, or directly or indirectly is Controlled by, the Borrower, any
Shareholder or any other Person holding any direct or indirect interest in the capital, assets or
financial results of the Borrower (or any option or other right to acquire the same).] 3
[[Alternate Base Rate4 means, for any Interest Period, an interest rate per annum equal to LIBOR
determined on the Interest Rate Determination Date immediately preceding such Interest Period,
plus the TED Spread Margin for such Interest Period; provided, however, that if no LIBOR is
available on such Interest Rate Determination Date, IDB shall provide the Borrower with written
notice thereof, and negotiate with the Borrower with a view to agreeing on an alternative rate to
replace LIBOR. If an alternative to LIBOR is not agreed within thirty (30) days of the IDB’s notice
to the Borrower, IDB shall determine the alternative rate to replace LIBOR. The alternative to
LIBOR so determined shall apply retroactively and be used in place of LIBOR as of the Interest Rate
Determination Date on which LIBOR was not available.]5
[Alternate Base Rate6 means, for any Interest Period, an interest rate per annum equal to the
weighted average cost of funds of IDB and the Participants as provided to the Paying Agent,
1
This definition should be used for an A Loan where the Borrower may request either a fixed rate or variable rate at
Disbursement, as set forth in Section 2.2.5. If the A Loan is intended to bear interest only at a variable rate or only at a
fixed interest rate, if Borrower will have the option to fix rates at commitment or if Borrower will have the option to
convert the interest rate, this definition should be deleted and replaced with the appropriate definitions. Refer to the “Model
Provisions for Interest Rate Options Available for USD Loans” in Attachment 2.
2
This definition should be used for an A Loan bearing interest only at a variable interest rate (in which case Section 2.2.5
and definitions related to fixed interest rate (including “Fixed Rate Prepayment Costs”) should be deleted). If the A Loan is
intended to bear interest only at a fixed interest rate or if Borrower will have the option to elect fixed or variable rates at
commitment or to convert the interest rate, this definition should be deleted or modified and replaced with the appropriate
definitions. Refer to the “Model Provisions for Interest Rate Options Available for USD Loans” in Attachment 2.
3
Add if there will be a B Loan.
4
The definition of “Alternate Base Rate” is a required provision and may not be deleted.
5
If there is no B Loan, insert this definition of “Alternate Base Rate” (providing for application of the TED Spread
formulation).
6
The definition of “Alternate Base Rate” is a required provision and may not be deleted.
CONFIDENTIAL
Loan Number [___________]
determined on the Interest Rate Determination Date immediately preceding such Interest Period;
provided that, if (a)(i) there is no principal outstanding in respect of a Participant and (ii) the
Borrower has no right to request, and the IDB has no obligation to make, any further Disbursement
of the B Loan , or (b) the Paying Agent has not received information from any of the Participants for
purposes of determining the weighted average cost of funds of IDB and the Participants on the
applicable Interest Rate Determination Date, “Alternate Base Rate,” means, for any Interest Period,
an interest rate per annum equal to LIBOR determined on the Interest Rate Determination Date
immediately preceding such Interest Period, plus the TED Spread Margin for such Interest Period;
provided, however, that if no LIBOR is available on such Interest Rate Determination Date, IDB
shall provide the Borrower with written notice thereof, and negotiate with the Borrower with a view
to agreeing on an alternative rate to replace LIBOR. If an alternative to LIBOR is not agreed within
thirty (30) days of the IDB’s notice to the Borrower, IDB shall determine the alternative rate to
replace LIBOR. The alternative to LIBOR so determined shall apply retroactively and be used in
place of LIBOR as of the Interest Rate Determination Date on which LIBOR was not available.]7]
Applicable LIBOR means the interest rate corresponding to:
(a)
the prevailing one-month LIBOR if the period from and including the relevant Interest
Rate Determination Date to but excluding the next Interest Rate Determination Date is
between one (1) and forty-five (45) days;
(b)
the prevailing two-month LIBOR if the period from and including the relevant Interest
Rate Determination Date to but excluding the next Interest Rate Determination Date is
between forty-six (46) and seventy-five (75) days;
(c)
the prevailing three-month LIBOR if the period from and including the relevant Interest
Rate Determination Date to but excluding the next Interest Rate Determination Date is
between seventy-six (76) and one hundred and thirty-five (135) days;
(d)
the prevailing six-month LIBOR if the period from and including the relevant Interest
Rate Determination Date to but excluding the next Interest Rate Determination Date is
more than one hundred and thirty-five (135) days; or
if for any reason on the relevant Interest Rate Determination Date it is not possible to determine the
LIBOR for the relevant Interest Period in accordance with (a) through (d) of this paragraph, the
prevailing LIBOR for the period that is closest to the duration of the relevant Interest Period (or, if
two periods are equally close, the longer one) rounded upward to the nearest three decimal places.
Applicable Spread means (a) with respect to the A Loan, [______] percent ([_____]%) per annum,
[and (b) with respect to the B Loan, [_______] percent ([_____]%) per annum].8
B Loan [, if and when funded,]9 means the loan specified in Section 2.1 or, as the context may
require, the principal amount thereof from time to time outstanding.
7
For all A/B Loans, insert this definition of “Alternate Base Rate”.
8
Modify if the B Loan is to be agreed separately by substituting for clause (b) the following: “(b) with respect to the B Loan,
to be agreed in writing by IDB and the Borrower after the Effective Date.”
9
If the Loan is for an A Loan with a B Loan tranche to be syndicated at a future date, make appropriate changes to the
definition of “B Loan” and to other references throughout the Loan Agreement, including the definition of B Loan Interest
Rate. (See bracketed text inserts throughout the model loan agreement in regard to the B Loan.)
CONFIDENTIAL
Loan Number [___________]
B Loan Fee Letter means the fee letter agreed or to be agreed between the Borrower and the IDB
setting forth the fees provided in Sections 2.7.[3] through 2.7.[7].
B Loan Interest Rate means the rate of interest [payable on the outstanding principal amount of the
B Loan from time to time, determined in accordance with Section 2.18.]10
B Loan Repayment Date has the meaning assigned to that term in Section 2.3.2
Disbursement Swap Market Fixed Rate means, in respect of the A Loan Disbursement, the fixed
rate quoted in the Dollar swap market on the Interest Rate Determination Date for the initial Interest
Period for such Disbursement as being payable in respect of interest at LIBOR for the amount of
such Disbursement, as determined by IDB on the basis of the most favorable rate to the Borrower
out of three (3) firm quotations from dealers in the Dollar swap market selected by IDB in good
faith, taking into consideration the repayment schedule set forth in Section 2.3 and the final maturity
date for the Loan (with any necessary determinations being made by IDB).11
Fee Letter[s] 12 means the fee letter entered into, or to be entered into, by and between IDB and the
Borrower setting forth the applicable fees described in Sections 2.7.1 through 2.7.[7]] OR [the A
Loan Fee Letter and B Loan Fee Letter].13
Fixed Rate Prepayment Costs has the meaning assigned to that term in Section 2.20. 14
[Indemnified Parties has the meaning assigned to that term in Section 8.2.2.]15
Lien means any mortgage, pledge, charge, assignment, hypothecation, lien, security interest, title
retention, preferential right (arising by operation of law or otherwise), trust arrangement, right of setoff, counterclaim or banker’s lien, privilege or priority of any kind having the effect of security,
including any designation of loss payees or beneficiaries or any similar arrangement under or with
respect to any insurance policy.
10
If the Loan is for an A Loan with a B Loan tranche to be syndicated at a future date, delete the bracketed text and replace
with the following: “[as agreed in writing by the Borrower and IDB after the Effective Date].”
11
Insert if the Borrower will have the right to elect a fixed or variable interest rate at Disbursement pursuant to Section 2.2.5;
delete if the Loan will bear interest only at a variable interest rate.
12
The use of one or more fee letters is optional except if there is a B loan, in which case at least the structuring fee must be
documented in a fee letter. See LEG/NSG website for examples of fee letters. If the other Lenders will also have Fee
Letters, re-name as IDB Fee Letters, [IIC] Fee Letters, etc. for purposes of the CTA and the inclusion in the definition of
“Financing Documents.”
13
Modify section references, as applicable, if other fees in Section 2.7 (e.g., arrangers’ fees) are to apply. Use appropriate
bracketed text as applicable.
14
Insert if the Borrower will have the right to elect a fixed or variable interest rate at Disbursement pursuant to Section
2.2.35; delete if the Loan will bear interest only at a variable interest rate.
15
Insert if there is a B Loan and IDB will act as Paying Agent.
CONFIDENTIAL
Loan Number [___________]
[Market Disruption Cost Certificate shall mean a certificate furnished to IDB by any Participant,
upon IDB’s request, certifying (a) the circumstances giving rise to the Market Disruption Event; (b)
that LIBOR for the relevant Interest Period will not adequately reflect the cost of making, funding or
maintaining its Participation; (c) the cost (expressed as a percentage per annum) of making, funding
or maintaining its Participation for the relevant Interest Period; and (d) that such Participant has
exercised reasonable efforts to minimize or eliminate the effect of the Market Disruption Event.]16
Market Disruption Event has the meaning assigned to that term in Section 2.19.
Notes has the meaning assigned to that term in Section 2.21.
[Receipt Account has the meaning assigned to that term in Section 2.8.1.]17
[Required Participants means Participants, other than Affiliated Participants, whose aggregate
Participations are equal to or exceed thirty percent (30%) of the total amount of the B Loan held by
Participants that are not Affiliated Participants].18
TED Spread means, on any day, the spread between the 3-month London interbank offered rate
administered by the British Bankers’ Association (or any other person which takes over the
administration of that rate) for deposits in Dollars and the 3-month U.S. Treasury bill rate (rounded
upwards, if necessary, to the nearest 1/100 of 1%) that is published as of close of business on any
such day on the Bloomberg Professional Service platform (or on any successor or substitute page of
such service, or any successor to or substitute for such service, providing such a quotation
comparable to that which is currently provided on such page of such service, as determined by IDB
for purposes of providing an equivalent quotation under this definition).
TED Spread Margin means, with respect to any Interest Period, if the TED Spread on the fifth (5 th)
Business Day immediately preceding any such Interest Period (a) is less than 1.00, (zero percent
(0.00%)); (b) is equal to or greater than 1.00 but less than 1.50, (one half of one percent (0.50%)); (c)
is equal to or greater than 1.50 but less than 3.00, (one percent (1.00%)); and (d) is equal to or
greater than 3.00, (one and one-half percent (1.50%)).
16
Insert if there is a B Loan and IDB will act as Paying Agent under Article 8.
17
Include if this term is defined here; delete if defined in the Common Term Agreement.
18
If Affiliated Participants are participating in the Loan, confirm with the SCF Division Chief/OMJ Manager/SYN whether
such Affiliated Participants should be carved out of this provision.