Supreme Court E-Library
Information At Your Fingertips

May 11, 1982

On the basis of the agreement dated February 18, 1982 between the Government of the Federal Republic of Germany and the Government of the Republic of the Philippines on Financial Cooperation ("Government Agreement"), the Recipient and Kreditanstalt hereby conclude the following Financing Agreement.

ARTICLE 1
Amount and Purpose of the Financial Contribution

1.1 Kreditanstalt undertakes to extend to the Recipient a financial contribution not exceeding

DM 3,000,000.--
(in words; three million Deutsche Mark).

This financial contribution shall not be returned except as otherwise provided for in Article 4.2.

1.2 The Recipient shall use the financial contribution exclusively to finance the costs of consultant services for Project Studies, Detailed Engineering and Consulting Services for Projects of Financial Cooperation ("Project") and primarily to pay the foreign exchange cost. The utilization of funds for the individual Project Components shall be agreed upon between the Recipient and Kreditanstalt in due time. By separate agreement, the Recipient and Kreditanstalt shall determine the details of the Project as well as the goods and services to be financed from the financial contribution.

1 .3 The counterpart obligations for the individual Project Components shall be determined in detail in a separate agreement between the Recipient and Kreditanstalt.

1.4 Taxes and other public charges to be borne by the Recipient and import duties shall not be financed from the financial contribution.

ARTICLE 2
Channeling of the Financial Contribution

2.1 In case of Project Components implemented by legally independent Project Sponsors the Recipient shall channel the funds to be provided from the financial contribution for these Project Components to the respective Project Sponsors under a subsidiary agreement which shall determine the amount to be provided from the financial contribution and the conditions of the channeling and which shall be submitted to Kreditanstalt for approval.

2.2 Prior to the first disbursement from the financial contribution for the respective Project Components, the Recipient shall furnish Kreditanstalt with a certified version of the subsidiary agreement specified in Article

ARTICLE 3
Disbursement

3.1 Kreditanstalt shall disburse the financial contribution upon the Recipient's request in accordance with the progress of the Project. By separate agreement, the Recipient and Kreditanstalt shall agree on the disbursement procedure, in particular on the evidence to be furnished by the Recipient for the disbursement of the financial contribution, proving the use of the financial contribution for the purpose stipulated in this Agreement.

3.2 Kreditanstalt shall have the right to refuse to make disbursements after December 31, 1985.

ARTICLE 4
Suspension of Disbursement and Repayment

4.1 Kreditanstalt shall be entitled to suspend disbursements if

(a) the Recipient shall not be able to prove the use of the financial contribution for the purpose stipulated in this Agreement;

(b) any other obligations under this Agreement shall not have been duly performed; (c) any extraordinary situation shall have arisen which shall preclude or seriously jeopardize the accomplishment of the purpose of this financial contribution, the execution of the Project or the performance of the obligations assumed by the Recipient, under this Agreement.

4.2 Kreditanstalt shall be entitled to demand immediate repayment of the financial contribution if any of the events specified in Article 4.1 (a) and (b) shall have occurred and shall continue for a period to be specified by Kreditanstalt which shall, however, not be less than 30 days. If Article 4.1 (a) shall apply only such amounts shall be repaid as the Recipient is unable to prove to have been used for the purpose stipulated in this Agreement.

ARTICLE 5
Public Charges

The Recipient shall bear all taxes and other public charges imposed by the Republic of the Philippines accruing in connection with the conclusion and implementation of this Agreement.

ARTICLE 6
Validity of this Agreement and Power of Attorney

6.1 The Director General of the National Economic and Development Authority (NEDA) and such persons as designated by him to Kreditanstalt and authorized by specimen signature authenticated by him shall represent the Recipient in the implementation of this Agreement. In the event that a change in the representation shall occur the person authorized to represent the Recipient shall notify Kreditanstalt of the newly-designated representative and of his address. The power of attorney shall expire only when its express revocation by the representative authorized at the time shall have been received by Kreditanstalt.

6.2 Amendments and additions to this Agreement as well as statements or notifications which shall be made or given under this Agreement by the contracting parties shall be in writing. Any such statement or notification shall be deemed to have been received as soon as it shall have been delivered at the following address of the contracting party or at such other address as notified to the other contracting party:

For Kreditanstalt:
Postal address:	Kreditanstalt fur Wiederaufbau
	Postfach 11 11 41
	Palmengartenstrasse 5-9
	D - 6000 Frankfurt am Main
	Federal Republic of Germany
For the Recipient:
Postal address:	National Economic and
	Development Authority
	Padre Faura St.
	Metro Manila
	Republic of the Philippine

Any change in the above addresses shall be effective only when notification thereof shall have been received by the other contracting party.

ARTICLE 7
The Project

7.1 The Recipient shall

(a) prepare, or cause to be prepared, and carry out, or cause to be carried out, the Project with due regard to ordinary financial and engineering practices and essentially in accordance with the plans and data submitted to Kreditanstalt;

(b) assign the preparation and implementation of the Project upon prior public tender to independent qualified consulting engineers domiciled in the German part of the area of validity of the Government Agreement, subject to any provision to the contrary for the particular case.

(c) secure the full financing of the Project and, upon request of Kreditanstalt, furnish it with evidence proving that all costs not to be paid from the financial contribution are covered;

(d) maintain, or cause to be maintained, books and records unequivocally showing all costs of services required for the Project and the services financed from the financial contribution;

(e) enable the representatives of Kreditanstalt at any time to inspect such books and records as well as any other documentation relevant to the execution of the Project;

(f) supply any information and reports on the Project and its further progress which Kreditanstalt may request and

(g) of his own accord promptly inform Kreditanstalt of any circumstances seriously affecting or jeopardizing the accomplishment of the purpose of this Agreement, above all the execution of the Project.

7.2 The Recipient and Kreditanstalt shall determine the details pertaining to Article 7.1 by separate agreement.

7.3 Immediately upon completion of the Project Studies and the Detailed Engineering awarded, Kreditanstalt shall be furnished with such number of copies as it shall request. Kreditanstalt shall be entitled to make use of such studies.

ARTICLE 8
Miscellaneous Provisions

8.1 The invalidity of one provision of this Agreement shall not affect the validity of the other provisions. Any gap resulting in consequence shall be filled by a provision consistent with the purpose of this Agreement.

8.2 The Recipient shall not assign or transfer, pledge or mortgage any rights under this Agreement.

8.3 This Agreement shall be governed by the law of the Federal Republic of Germany. The place of performance shall be Frankfurt am Main. In the event of doubts as to the interpretation of this Agreement, the German text shall be controlling.

DONE in four originals, two in German and two in English

at Frankfurt am Main	at Bonn
this 1 2 MAY 1982	this 1 1 MAY 1982
KREDITANSITALT FUR WIEDERAUFBAU	REPUBLIC OF THE PHILIPPINES
(Sgd.)	(Sgd.)