Board Resolution No. 100/98

BOARD RESOLUTION NO. 100/98

SUBJECT: FINANCIAL SYSTEM – APPROVES CONSTITUTION OF ASSET GUARANTEE REQUESTED BY BANCO DE CREDITO DE BOLIVIA S.A. FOR THE ABSORPTION MERGER OF BANCO DE LA PAZ S.A.

HAVING SEEN:

The Law of the Central Bank of Bolivia No. 1670 of October 31, 1995. The Regulation for Support Operations to Strengthen Financial Entities, approved by Board Resolution No. 094/97 of March 25, 1997. The Note from CREDICORP dated July 22, 1998. The Minutes of the Extraordinary Meeting of the Board of Directors of the BCB No. 034/98 of July 22, 1998. The Note from the Presidency of the BCB PRES. No. 270/98 of July 22, 1998. The Report from the Financial System Management GSF No. 147/98 of November 6, 1998. The Report from the Legal Advisory ALEG No. 040/98 of November 10, 1998. The Board Resolution No. 099/98 of November 10, 1998.

CONSIDERING:

That Banco de Crédito de Bolivia S.A., through its parent company CREDICORP, requested in a note dated July 22, 1998, as an essential and definitive condition to finalize its merger with Banco de La Paz S.A., the constitution of a subsidiary guarantee by the BCB for up to $700,000.00 (SEVEN HUNDRED THOUSAND 00/100 DOLLARS OF THE UNITED STATES OF AMERICA),

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to cover contingencies for the recovery of credit extended by Banco de La Paz S.A. destined for the sale of its adjudicated assets.

That in order to preserve and strengthen the stability of the national financial system and to finalize the merger process of the aforementioned banks, the Board of Directors of the BCB authorized: a) in an ordinary meeting on July 7, the purchase of portfolios under the terms established in Board Resolution No. 099/98; and b) in an extraordinary meeting on July 22, 1998, the constitution of a subsidiary guarantee in favor of Banco de Crédito de Bolivia S.A. up to an amount of $700,000.00, which also covers interest and costs, once this financial entity has taken possession of Banco de La Paz S.A. and the BCB has knowledge of the main contract signed with the debtor.

That through note PRES. No. 270/98 of July 22, 1998, the President of the Central Bank of Bolivia communicated to CREDICORP the commitment to constitute the requested guarantee under the conditions established by the Institution's Board.

That to date, Banco de Crédito de Bolivia S.A. has fulfilled all conditions established by the BCB, as it is in possession of Banco de La Paz S.A. and has submitted the documentation of the main contract signed with the debtors and that which supports the merger process.

That the Financial System Management, in its Report GSF No. 147/98, recommends the signing of the aforementioned asset guarantee contract to finalize the merger of the two banks and achieve the corresponding strengthening of the financial system.

That in its Report ALEG No. 040/98, the Legal Advisory states that Article 38, subsection d) of Law No. 1670 of October 31, 1995, and its Regulation, empower the Central Bank of Bolivia to guarantee assets of financial entities for the purpose of preserving a stable and competitive intermediation system.

THEREFORE

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

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Article 1.- Authorize the President of the BCB to sign an asset guarantee contract with Banco de Crédito de Bolivia S.A., under the following conditions:

Modality: Subsidiary guarantee with the benefit of excussion, order, and division in favor of the BCB. This benefit shall remain unaltered until Banco de Crédito de Bolivia S.A. has exhausted the legal execution avenues regarding the assets and the guarantees constituted by both the debtors and the joint guarantors involved in the financing granted by Banco de La Paz S.A., through Public Deed Testimonies Nos. 3832/98 and 3833/98 of October 7, 1998, and 1763/98 of October 19, 1998.

Object: The absorption merger of Banco de La Paz S.A. by Banco de Crédito de Bolivia S.A.

Term: Up to two years, calculated from the date on which the financing matures.

Coverage: Unpaid balances, including interest and execution costs, up to a maximum amount of $700,000.00 (Seven Hundred Thousand 00/100 Dollars of the United States of North America).

Article 2.- The Presidency and the General Management are tasked with the execution and compliance of this Resolution.

La Paz, November 10, 1998

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Juan Antonio Morales A.

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Armando Pinell S. Jaime Ponce G.

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Juan Medinaceli V.