Resolution 167/2004 — BCB — BO

BOARD RESOLUTION NO. 167/2004
SUBJECT: FINANCIAL ENTITIES MANAGEMENT –
ONE-YEAR EXTENSION OF THE ADMINISTRATION MANDATE CONTRACT AND MODIFICATIONS.

HAVING VIEWED:
Law No. 1670 of October 31, 1995.
Supreme Decree No. 26688 of July 5, 2002.
Supreme Resolution No. 218899 of October 15, 1999.

Board Resolutions No. 093/99 of October 15, 1999, No. 101/99 of November 23, 1999, No. 077/2002 of July 16, 2002, No. 093/2004 of June 29, 2004, and No. 117/2004 of August 10, 2004.

The Administration Mandate Contract of December 1, 1999, signed between the BCB and Banco Mercantil S.A.
The proposal from Banco Mercantil S.A. presented with note MDT.ADM.E. 1769/2004 of November 8, 2004.

The Report from the Financial Entities Management GEF No. 333/2004 of November 9, 2004.

The report from the Legal Affairs Management SAJU No. 163/2004 of November 9, 2004.

CONSIDERING:
That according to Article 54, paragraph a) of Law 1670, the Board has the authority to issue norms and adopt general decisions necessary for the BCB to fulfill the functions, competencies, and powers assigned to it by that legal provision.

That Board Resolution No. 093/99 approves the Terms and Conditions of the Direct Invitation No. 001/99 for the administration mandate of the assets received in dation in payment from the BBA. The BCB awarded the service to Banco Mercantil S.A. through BCB Presidency Resolution No. 09/99 of November 5, 1999.

That Supreme Resolution No. 218899 establishes the rules by which the Central Bank of Bolivia shall govern the administration of assets resulting from financial support granted for the strengthening, intervention, or liquidation of financial entities.

That Supreme Decree No. 26688 in its Article 10 provides that all operations initiated in application of Supreme Resolution No. 218899 that are in the process of execution will continue under the protection of said provision as well as the decisions taken by the BCB Board, until their final conclusion.

That through the Administration Mandate Contract signed between the Central Bank of Bolivia and Banco Mercantil S.A. with a validity of five (5) years from its signing, the package of assets (credit portfolio and movable and immovable property) received in dation in payment from the former BBA was transferred to Banco Mercantil S.A. for recovery and sale.

That the validity of the Administration Mandate Contract concludes on December 1, 2004, and the parties may extend it for annual periods.

That Banco Mercantil S.A. through note MDT.ADM. 1769/2004, presented its proposal for the extension of the Administration Mandate Contract for one year.

That the Financial Entities Management, in its report GEF No. 333/2004, recommends signing the Addendum to the Administration Mandate Contract for its extension for one year and authorizing modifications to said contract to streamline operational processes without relieving the corresponding responsibility of the parties.

That the Legal Affairs Management in its report SAJU No. 163/2004, states that the BCB Board is empowered to determine modifications to the current contractual conditions and terms with Banco Mercantil S.A., which allow for agile administration of the assets provided for by Supreme Decree No. 26688, Supreme Resolution No. 218899, and without departing from its object.

THEREFORE:
THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA RESOLVES:

Article 1.- Authorize the President of the BCB to sign with Banco Mercantil S.A., an Addendum to the Administration Mandate Contract for its extension for one year starting from December 1, 2004, incorporating the modifications indicated in Articles 2, 3, and 4 of this Resolution, as well as making necessary modifications to streamline operational processes, without relieving the corresponding responsibility of the parties.

Article 2.- Authorize the modification of the fixed commission agreed upon in the Administration Mandate Contract signed with Banco Mercantil S.A., to a fixed monthly commission of $us22,000.00 (Twenty-two thousand 00/100 United States Dollars).

Article 3.- Authorize the modification of the fixed commissions for cash recovery of the portfolio in judicial collection agreed upon in the Administration Mandate Contract signed with Banco Mercantil S.A. and its payment method, to a single commission for judicial recovery of twelve percent (12%) which incorporates judicial costs and all other additional collection expenses, in addition to the supervision of the lawyers responsible for the lawsuits, to be effected in the following manner:

When the cash recovery of the portfolio in judicial collection enters the BCB.
When the recovery of the portfolio in judicial collection is carried out through the judicial adjudication of movable and immovable property, the 12% judicial commission will be paid on the value of the cash sale as follows:
i. 33% of the judicial commission (12%), with respect to the value of the adjudication of the assets, including assets adjudicated from the beginning of the mandate, once the Mandatary has obtained the real estate title of the asset in the name of the BCB free of all encumbrances.
ii. The balance of the judicial commission (12%) will be paid on the value of the cash sale of the asset, deducting for this calculation the payment indicated in the previous point.
For cases in which the payment of 33% of the judicial commission (12%) indicated in point i is greater than 12% of the judicial commission with respect to the value of the cash sale of the assets adjudicated by the BANK, the BANK will pay the BCB within 24 hours of the sale being made, the excess amount paid by the BCB.

Article 4.- Authorize the incorporation of a two percent (2%) commission for the sale of assets adjudicated during the administration of the Mandatary Banco Mercantil S.A., starting from the signing of the Addendum to the Administration Mandate Contract.

Article 5.- The Presidency and the General Management are entrusted with the execution and compliance of this Resolution.

La Paz, November 9, 2004

Juan Antonio Morales A.

Juan Medinaceli V. Enrique Ackermann A.

José Luis Evia V. Fernando Paz B.