OFFICIAL DOCUMUIrT( LOAN NUMBER 2277 IND Loan Agreement (Fifth BAPINDO Project) between REPUBLIC OF INDONESIA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated , 1983 LOAN NUMBER 2277 IND LOAN AGREEMENT AGREEMENT, dated k1 Y 3e , 1983, between REPUBLIC OF INDONESIA (hereinafter cal ed the Borrower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated October 27, 1980, with the same force and effect as if they were fully set forth herein, subject, however, to the modifications thereof set forth in Schedule 3 to this Agreement (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "BAPINDO" means Bank Pembangunan Indonesia; (b) "BAPINDO Act" means the Undang--Undang No. 21 Prp of 1960, as amended by Undang-Undang No. 17 Prp of 1962 and Presidential Decree No. 2 of 1966 and as further amended from time to time; (c) "foreign currency" means any currency other than the currency of the Borrower; (d) "Investment" means an investment, other than a Sub- loan, made or proposed to be made by BAPINDO out of the proceeds of the Loan relent to BAPINDO under the Subsidiary Loan Agree- ment, in an Investment Enterprise for an Investment Project; (e) "Investment Enterprise" means an enterprise to which BAPINDO proposes to make or has made a Sub-loan or in which it proposes to make or has made an Investment; -2- (f) "Investment Project" means a specific development project to be carried out by an Investment Enterprise utilizing the proceeds of a Sub-loan or an Investment; (g) "Policy Statement" means the statement of lending and investment policy adopted by the Board of Managing Directors, and approved by the Supervisory Board of BAPINDO on December 31, 1975, as amended to the date of this Agreement; (h) "Prior Credit" means any credit provided for in a Prior Credit Agreement; (i) "Prior Credit Agreement" means any outstanding credit agreement between the Borrower and the Association dated before the date of this Agreement; (j) "Prior Loan" means any loan provided for in a Prior Loan Agreement; (k) "Prior Loan Agreement" means any outstanding loan agreement between the Borrower and the Bank dated before the date of this Agreement; (1) "Project Agreement" means the agreement of even date herewith between the Bank and BAPINDO, as the same may be amended from time to time, and such term includes all agreements supple- mental to the Project Agreement; (m) "Rupiah" and "Rp" mean the currency of the Borrower; (n) "Sub-luan" means a loan or credit made or proposed to be made by BAPINDO out of the proceeds of the Loan relent by BAPINDO under the Subsidiary Loan Agreement to an Investment Enterprise for an Investment Project and "free-limit Sub-loan" means a Sub-loan, as so defined, which qualifies as a free-limit Sub-loan pursuant to the provisions of Section 2.02 (c) of this Agreement; (o) "Subsidiary" means any company of which a majority of the outstanding voting stock or other proprietary interest is owned or effectively controlled by BAPINDO or by any one or more subsidiaries of BAPINDO or by BAPINDO and one or more of its subsidiaries; and (p) "Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and BAPINDO pursuant - 3 - to Section 3.01 (a) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Loan Agreement. ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in this Agreement set forth or referred to, an amount in various currencies equivalent to two hundred eight million nine hundred thousand dollars ($208,900,000). Section 2.02. (a) An amount of the Loan up to an aggregate equivalent of eight million three hundred thousand dollars ($8,300,000), may be withdrawn from the Loan Account in accor- dance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower, the Bank and BAPINDO, 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 Parts A.2 and B of the Project described in Schedule 2 to this Agreement and to be financed out of the proceeds of the Loan. (b) Except as the Bank may otherwise agree and subject as set forth hereinafter and in Section 2.03 of the Project Agree- ment, BAPINDO shall, acting as representative of the Borrower pursuant to Section 2.11 of this Agreement, be entitled to withdraw from the Loan Account the amount of the Loan set forth in Category (5) in the table in paragraph 1 of Schedule 1 to this Agreement in respect of the reasonable cost of goods or services required for: (i) the Investment Project in respect of which withdrawal is requested, (A) 100% of foreign currency expendi- tures made (or, if the Bank shall so agree, to be made) for goods procured, or services supplied from, outside the territories of the Borrower, (B) the equivalent of sixty per cent (60%) of such amounts as shall have been expended for machinery and equipment (other than vehicles) procured in the territories of the Bor- rower, which percentage represents the estimated foreign exchange component of such machinery and equipment, and (C) the equivalent of fifty per cent (50%) of such amounts as shall have been expended for civil works which percentage represents the estimated foreign exchange component of such works; provided, however, that no withdrawal shall be made from the Loan Account in respect of an Investment Project unless the Sub-loan or Investment for such Investment Project shall have been approved by the Bank, or the Sub-loan for such Investment Project shall be a free-limit Sub-loan for which the Bank shall have authorized withdrawals from the Loan Account; provided further, that no withdrawals in excess of $60,000,000 shall be made with respect to specific development projects under Part A.1 of the Project for ships. (c) A free-limit Sub-loan shall be a Sub-loan for an Investment Project in an amount to be financed out of the pro- ceeds of the Loan which shall not exceed the sum of: (i) $2,000,000 equivalent, when added to any other outstanding amounts financed or proposed to be financed out of the proceeds of the Loan or of any Prior Credit or Prior Loan for such Invest- ment Project; or (ii) $80,000,000 equivalent, when added to all other free-limit Sub-loans financed or proposed to be financed out of the proceeds of the Loan, the foregoing amounts being subject to change from time to time as determined by the Bank. (d) Except as the Borrower, the Bank and BAPINDO shall otherwise agree, no withdrawals shall be made on account of: (i) expenditures before the date of this Agreement; or (ii) expendi- tures made by an Investment Enterprise in respect of a Sub-loan subject to the Bank's approval, or in respect of an Investment, if such expenditures shall have been made more than ninety days prior to the date on which the Bank shall have received in respect of such Sub-loan or Investment the application and information required by Section 2.03 (b) of the Project Agree- ment, or in respect of a free-limit Sub-loan, more than ninety days prior to the date on which the Bank shall have received in respect of such free-limit Sub-loan the request and information required by Section 2.03 (c) of the Project Agreement. Section 2.03. Except as the Bank shall otherwise agree, procurement of the goods and services required for: (i) Part A.1 of the Project and to be financed out of the proceeds of the Loan shall be governed by the provisions of Section 3.01 (a) (ii) of the Project Agreement; and (ii) Part A.2 of the Project and to be financed out of the proceeds of the Loan shall be governed by the provisions of the Schedule to the Project Agreement. Section 2.04. The Closing Date shall be June 30, 1988 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower and BAPINDO of such later date. -5- Section 2.05. (a) The Borrower shall pay to the Bank a fee equivalent to five hundred twenty thousand nine hundred forty- eight dollars ($520,94*). (b) On or promptly after the Effective Date, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and pay to itself the amount of the said fee in such currency or currencies as the Bank shall specify. Section 2.06. The Borrower shall pay to the Bank a commit- ment 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 2.07. (a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time at a rate per annum for each Interest Period equal to one half per cent per annum above the Cost of Qualified Borrowings for the last Semester ending prior to the commencement of such Interest Period. (b) For the purposes of this Section: (i) "Interest Period" means the six-month period com- mencing on each date specified in Section 2.08 of this Agreement, including the Interest Period in which this Agreement is signed. (ii) "Cost of Qualified Borrowings" means the cost, expressed as a percentage per annum, as reasonably determined by the Bank, provided that the amount of $8,520.5 million referred to in (iii) (B) here- under shall be reckoned at a cost of 10.93% per annum. (iii) "Qualified Borrowings" means: (A) outstanding bor- rowings of the Bank drawn down after June 30, 1982; and (B) until July 1, 1985, the amount of $8,520.5 million (representing borrowings of the Bank between July 1, 1981 and June 30, 1982) less any part thereof repaid earlier than July 1, 1985. (iv) "Semester" means the first si> months or the second six months of a calendar year. -6- (c) As soon as practicable after the end of each Semester, the Bank shall notify the Borrower of the Cost of Qualified Bor- rowings for such Semester. Section 2.08. Interest and other charges shall be payable semiannually on February 1 and August 1 in each year. Section 2.09. (a) The Borrower shall repay the principal amount of the Loan withdrawn for the purposes of Part A.1 of the Project in accordance with the amortization schedule set forth in Schedule 4 to this Agreement as such Schedule 4 shall be amended from time to time by the Bank to the extent required to: (i) conform in relevant part substantially to the aggregate of the amortization schedules applicable to Sub-loans and the schedules of repayment to the Bank in respect of Investments referred to in Section 2.03 (d) of the Project Agreement, which have been approved or authorized for withdrawals from the Loan Account under Section 2.03 (b) of this Agreement; and (ii) take into account any cancellation pursuant to Article VI of the General Conditions and any repayments made by the Borrower under Section 2.10 of this Agreement, provided that any such amendments to the amortization schedule permitted hereunder shall not authorize repayments of the principal amount of the Loan beyond the latest repayment date set forth in such Schedule 4. Repayments due hereunder shall be made on February 1 and August 1 in each year. Such amendments of said Schedule 4 shall include amendments to the table of premiums on prepayments, if necessary. (b) The Borrower shall repay the principal amount of the Loan withdrawn for the purposes of Parts A.2 and B of the Project in accordance with the amortization schedule set forth in Sched- ule 5 to this Agreement. Section 2.10. Unless the Bogrower and the Bank shall other- wise agree: (a) If a Sub-loan or any part thereof shall be repaid to BAPINDO, in advance of maturity or if a Sub-loan or an Investment or any part thereof shall be sold, transferred, assigned or otherwise disposed of for value by BAPINDO, the Borrower shall promptly notify the Bank and shall repay to the Bank on the next following interest payment date, together with the premiums specified in Schedule 4 to this Agreement or in any amendment thereof under Section 2.09 (a) of this Agreement, the amount withdrawn from the Loan Account in respect of such Sub-loan or -7- Investment or part thereof and not theretofore repaid to the Bank. (b) Any amount so repaid by the Borrower shall be applied by the Bank as follows: (i) in the case of a Sub-loan, to the maturity or maturities of the Loan in amounts corresponding to the outstanding amounts of the maturity or maturities of the Sub-loan so repaid or disposed of; and (ii) in the case of an Investment, pro rata to the maturity or maturities of the Loan reflecting amounts to be repaid on account of such Investment. (c) Paragraph (b) of Section 3.04 of the General Conditions shall not apply to any repayment made under paragraph (a) of this Section. Section 2.11. BAPINDO is designated as representative of the Borrower in respect of Parts A.1 and A.2 of the Project for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 (b) of this Agreement and Article V of the General Conditions, and for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 (a) of this Agreement with respect to withdrawals under Categories (1), (2) (a), (3) (a) and (5) of the table set forth in paragraph I of Schedule 1 to this Agreement. ARTICLE III Execution of the Froject; Use of Proceeds of the Loan Section 3.01. (a) The Borrower shall relend the proceeds of the Loan required for Parts A.1 and A.2 of the Project to BAPINDO under a Subsidiary Loan Agreement to be entered into between the Borrower and BAPINDO under terms and conditions which shall have been approved by the Bank. (b) The Borrower shall carry out Part B of the Project through its Ministry of Finance with due diligence and efficency and in conformity with appropriate administrative, financial and investment practices and shall provide, promptly as needed, the funds (as budgetary transfers), facilities, services and other resources required for the purpose. (c) The Borrower shall exercise its rights under the Subsidiary Loan Agreement in such manner as to protect the -8- interests of the Borrower and the Bank and to accomplish the purposes of the Loan, and except as the Bank shall otherwise agree, the Borrower shall not assign, nor amend, abrogate or waive the Subsidiary Loan Agreement or any provision thereof. Section 3.02. In order to assist the Borrower in carrying out Part B of the Project, the Borrower shall employ consultants whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Bank, such consultants to be selected in accordance with the principles and procedures described in the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. ARTICLE IV Other Covenants Section 4.01. Without any limitation or restriction upon any of its other obligations under the Loan Agreement, the Borrower shall cause BAPINDO to perform in accordance with the provisions of the Project Agreement and the Subsidiary Loan Agreement all the obligations therein* set forth, shall take and cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable BAPINDO to perform such obligations, and shall not take or permit any of its administrative subdivisions or any of its agencies or instrumentality or any agency or instrumentality of any admini- strative subdivision to take any action which would prevent or interfere with such performance. Section 4.02. (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, in normal circumstances, special security from the member concerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distribution of foreign exchange held under the control or for the benefit of such member. To that end, if any lien shall be created on any public assets (as hereinafter defined), as security for any external debt, which will or might result in a priority for the benefit of the creditor of such external debt in the allocation, realization or distribution of foreign exchange, such lien shall, unless the Bank shall otherwise agree, ipso facto and at no cost to the Bank, equally and ratably secure the principal of, and interest and other charges on, the Loan, and the Borrower, in creating or permitting the creation of such lien, shall make express provision to that effect, provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on assets of any of its administrative subdivisions, the Borrower shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, the Loan by an equivalent lien on other public assets satisfactory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property or as security for payment of debt incurred for the purpose of financing the purchase of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (c) As used in this Section, the term "public assets" means assets of the Borrower, of any administrative subdivision thereof and of any entity owned or controlled by, or operating for the account or benefit of, the Borrower or any such subdivision, including gold and foreign exchange assets held by any institu- tion performing the functions of a central bank or exchange stabilization fund, or similar functions, for the Borrower. Section 4.03. The Borrower shall ensure that the positions of the President and the Managing Directors of BAPINDO are at all times filled by qualified and experienced persons. Section 4.04. (a) The Borrower shall discuss with the Bank each fiscal year of BAPINDO the level, timing and manner of the financial support to be provided by the Borrower, Bank Indonesia and all other sources to BAPINDO for the following fiscal year, taking into account BAPINDO's profitability, development strategy and work program. (b) Without limitation on the foregoing, the Borrower shall provide BAPIDO (i) with additional equity capital in amounts, such that BAPINDO shall at all times be in compliance with Section 4.07 of the Project Agreement, and (ii) with adequate funds to support its projected operations through December 1985. Section 4.05. (a) The Borrower shall maintain or cause to be maintained records and separate accounts adequate to reflect in accordance with consistently maintained sound accounting - 10 - practices the operations, resources and expenditures, in respect of the Project, of the departments or project implementing agencies of the Borrower responsible for carrying out Part B of the Project. (b) The Borrower shall: (i) cause such separate accounts referred to in paragraph (a) above for each fiscal year to be 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 months after the end of each such year, certified copies of the reports of such audit by said auditors, of such scope and in 3uch detail as the Bank shall have reason- ably requested; and (iii) furnish to the Bank such other informa- tion concerning said separate accounts, records and expenditures and the audit thereof as the Bank shall from time to time reason- ably request. ARTICLE V Remedies of the Bank Section 5.01. For the purposes of Section 6.02 of the Gen- eral Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) any part of the principal amount of any loan to BAPINDO having an original maturity of one year or more shall, in accor- dance with its terms, have become due and payable in advance of maturity as provided in the relative contractual instruments, or any security for any such loan shall have become enforceable; (b) the BAPINDO Act shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the carrying out of the Project or the operations of financial condition of BAPINDO or the efficiency of BAPINDO's management or personnel; (c) BAPINDO shall have been unable to pay its debts as they mature or any action or proceeding shall have been taken by BAPINDO or by others whereby any of the property of BAPINDO shall or may be distributed among its creditors; (d) the Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- - 11 - ment of BAPINDO or for the suspension of all or part of BAPINDO's operations; (e) a default shall occur in the performance of any obliga- tion of BAPINDO under the Project Agreement; (f) a default shall occur under any Prior Credit Agreement or Prior Loan Agreement other than in respect of the payment of the principal or any other payment required thereunder; (g) an extraordinary situation shall have arisen which shall make it improbable that BAPINDO will be able to perform its obligations under the Project Agreement; and (h) a subsidiary or any other entity shall have been created or acquired or taken over by BAPINDO, if such creation, acquisition or taking over would adversely affect the conduct of BAPINDO's business or BAPINDO's financial condition or the efficiency of BAPINDO's management and personnel or the carrying out of the Project. Section 5.02. For the purposes of Section 7.01 of the Gen- eral Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) the event specified in paragraph (e) or (h) of Section 5.01 of this Agreement shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower; and (b) the event specified in paragraphs (a), (b), (c), (d) or (g) of Section 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following events are specified as addi- tional conditions to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Condi- tions: (a) the execution and delivery of the Project Agreement on behalf of BAPINDO have been duly authorized or ratified by all necessary governmental and corporate action; and - 12 - (b) the execution of the Subsidiary Loan Agreement on behalf of the Borrower and BAPINDO, respectively, has been duly authorized or ratified by all necessary governmental and corporate action. Section 6.02. The following are specified as additional matters, within the meaning of Section 12.02 (c) of the General Conditions, to be included in the opinion or opinions to be fur- nished to the Bank: (a) that the Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, BAPINDO and is legally binding upon BAPINDO in accordance with its terms; and (b) that the Subsidiary Loan Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, the Borrower and BAPINDO, respectively, and is legally binding upon the Borrower and BAPINDO in accordance with its terms. Section 6.03. The dateOv4d I,/1f3 , is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VII Representatives of the Borrower; Addresses Section 7.01. Subject to the provisions of Section 2.11 of this Agreement, the 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 c/o Director General International Monetary Affairs Jalan Lapangan Banteng Timur 4 Jakarta, Indonesia - 13 - Cable address: Telex: MINISTRY FINANCE DJMLN JKT 45799 Jakarta DITJMON JKT 46415 DEPKEU JKT 44319 For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, 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. REPUBLIC OF INDONESIA By Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By j Regional Vice President East Asia and Pacific - 14 - SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of that part of the proceeds of the Loan available for the Project, the allocation of amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Equipment and 300,000 100% of foreign materials for expenditures, Part A.2 of 60% of local the Project expenditures (2) Consultants' services (a) for Part A.2 1,500,000 100% of the Project (b) for Part B of 5,000,000 100% the Project (3) Overseas training (a) for Part A.2 1,000,000 100% of the Project (b) for Part B of 200,000 100% the Project (4) Fee 520,948 Amount due under Section 2.05 of this Agreement - 15 - Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (5) Sub-loans for 200,000,000 As set forth Part A.1 of in Section the Project 2.02 (b) of the Loan Agreement (6) Unallocated 379,052 TOTAL 208,900,000 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; and (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. 3. The disbursement percentages have been calculated in com- pliance with the policy of the Bank that the proceeds of the Loan shall not be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; on this basis, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Loan decreases or increases, the Bank may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Bank. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of expenditures prior to the date of this Agreement, except that withdrawals in an aggregate amount not exceeding the equivalent of $400,000 may be made in respect of Category (2) (b) on account of expenditures made before that date but after March 1, 1983. - 16 - 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in para- graph 1 above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Bank may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet other expenditures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Bank shall have reasonably determined that the pro- curement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expend- itures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrower, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan. - 17 - SCHEDULE 2 Description of the Project The Project consists of the following Parts: Part A: 1. The provision of financing, through loans to and investments in enterprises in the territories of the Borrower in furtherance of the corporate purposes of BAPINDO, for specific development projects. 2. Strengthening the capabilities of BAPINDO through the provision of technical assistance, overseas training and training equipment. Part B: The provision of technical assistance to the Borrower for sectoral and policy studies, including, inter alia, detailed engineering for export zones and estates, an export quality study, subsector studies for textiles, cement, wood processing and steel, and overseas training. The Project is expected to be completed by December 31, 1987. - 18 - SCHEDULE 3 Modifications of the General Conditions For the purposes of the Loan Agreement, the provisions of the General Conditions are modified as follows: (1) The following subparagraph (d) is added to Section 3.04: "(d) The Bank and the Borrower may from time to time agree upon arrangements for prepayment of the Loan and the application. of such prepayment in addition to, or in substitution for, those set forth in paragraph (b) of Section 3.04." (2) The words "or Investment Projects, as the case may be" are added to the end of Section 5.03. (3) Section 6.03 is deleted and replaced by the following new Section: "Section 6.03. Cancellation by the Bank. If (a) the right of the Borrower to make withdrawals from the Loan Account shall have been suspended with respect to any amount of the Loan for a continuous period of thirty days, or (b) in the case of Part B of the Project, at any time the Bank determines, after consultation with the Borrower, that an amount of the Loan will not be required to finance the costs of Part B of the Project to be financed out of the proceeds of the Loan, or (c) by the date specified in paragraph (f) of Section 2.03 of the Project Agreement no applications or requests permitted under paragraph (a) or paragraph (b) of such Section shall have been received by the Bank in respect of any portion of the Loan, or having been so received, shall have been denied, or (d) after the Closing Date an amount of the Loan shall remain unwithdrawn from the Loan Account, the Bank may by notice to the Borrower terminate the right of the Borrower to submit such applications or requests or to make withdrawals from the Loan Account, as the case may be, with respect to such amount or portion of the Loan. Upon the giving of such notice such amount or portion of the Loan shall be cancelled." - 19 - SCHEDULE 4 Amortization Schedule For Part A.1 of the Project* Payment of Principal Date of Payment Due (Expressed in dollars)** August 1, 1985 960,635 February 1, 1986 1,269,230 August 1, 1986 1,269,230 February 1, 1987 1,269,230 August 1, 1987 2,192,307 February 1, 1988 3,192,307 August 1, 1988 4,007,692 February 1, 1989 4,823,077 August 1, 1989 5,546,154 February 1, 1990 6,261,538 August 1, 1990 6,976,923 February 1, 1991 7,692,307 August 1, 1991 7,692,307 February 1, 1992 7,692,307 August 1, 1992 7,692,307 February 1, 1993 7,692,307 August 1, 1993 7,692,307 February 1, 1994 7,692,307 August 1, 1994 7,692,307 February 1, 1995 7,692,307 August 1, 1995 7,692,307 February 1, 1996 7,692,307 August 1, 1996 7,692,307 February 1, 1997 7,692,307 August 1, 1997 7,692,307 February 1, 1998 7,692,307 August 1, 1998 7,307,692 February 1, 1999 6,423,077 * The Amortization Schedule is subject to amendment pursuant to the provisions of Section 2.09 (a) of the Loan Agreement. ** To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.04), the figures in this column represent dollar equiva- lents determined for purposes of withdrawal. - 20 - SCHEDULE 4 Amortization Schedule For Part A.1 of the Project* Payment of Principal Date of Payment Due (Expressed in dollars)** August 1, 1999 6,423,077 February 1, 2000 6,423,077 August 1, 2000 5,500,000 February 1, 2001 4,500,000 August 1, 2001 3,684,615 February 1, 2002 2,869,230 August 1, 2002 2,146,153 February 1, 2003 1,4305768 August 1, 2003 715,383 * The Amortization Schedule is subject to amendment pursuant to the provisions of Section 2.09 (a) of the Loan Agreement. ** To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.04), the figures in this column represent dollar equiva- lents determined for purposes of withdrawal. - 21 - Premiums on Prepayment The following percentages are specified is the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan withdrawn for the purposes of Part A.1 of the Project pursuant to Section 3.04 (b) of the General Conditions: Time of Prepayment Premium The interest rate (ex- pressed as a percentage per annum) applicable to the balance outstanding on the Loan on the day of prepayment multiplied by: Not more than three years before maturity 0.15 More than three years but not more than six years before maturity 0.30 More than six years but not more than eleven years before maturity 0.55 More than eleven years but not more than sixteen years before maturity 0.80 More than sixteen years but not more than eighteen years before maturity 0.90 More than eighteen years before maturity 1.00 22 - DULE 5 Amortization Schedule For Parts A.2 and B of the Project Payment of Principal Date of Payment Due (Expressed in dollars)* On each February 1 and August 1 beginning February 1, 1989 through February 1,2003 275,000 On August 1, 2003 349,000 * The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal; see General Conditions, Section 3.04. - 23 - Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan withdrawn for the purposes of Part A.2 and B of the Project pursuant to Section 3.04 (b) of the General Conditions: Time of Prepayment Premium The interest rate (ex- pressed as a percentage per annum) applicable to the balance outstanding on the Loan on the day of prepayment multiplied by: Not more than three years before maturity 0.15 More than three years but not more than six years before maturity 0.30 More than six years but not more than eleven years before maturity 0.55 More than eleven years but not more than sixteen years before maturity 0.80 More than sixteen years but not more than eighteen years before maturity 0.90 More than eighteen years 1.00 before maturity INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Bank for Reconstruction and Develop- ment. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Bank thereunto this 3 day of . 198a . FOR SECRETARY