Mexico - Third Livestock And Agricultural Project : Loan 0747 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 747 ME Loan Agreement (Third Livestock and Agricultural Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND NACIONAL FINANCIERA S.A. DATED JUNE 9, 1971 CONFORMED COPY LOAN NUMBER 747 ME Loan Agreement (Third Livestock and Agricultural Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND NACIONAL FINANCIERA S.A. DATED JUNE 9, 1971 AGREEMENT, dated June 9, 1971, between INTERNA- TIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (here- inafter called the Bank) and NACIONAL FINANCIERA, S. A. (hereinafter called the Borrower). 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 Jan- uary 31., 1969, with the same force and effect as if they were fully set forth herein, subject, however, to the modi- fications thereof set forth in Schedule 3 to this Agreement (said General Conditions Applicable to Loan and Guaran- tee Agreements of the Bank, as so modified, being herein- after called the General Conditions). SECTION 1.02. Wherever used in the Loan Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective mean- ings therein set forth and the following additional terms have the following meanings: (a) "Banxico" means Banco de Mexico, S.A., as trustee of Fondo; (b) "Project Agreement" means the agreement between the Bank and Banxico of even date herewith, as such agree- ment may be amended from time to time; and such term includes all agreements supplemental to the Project Agree- ment and all schedules thereto; (c) "Law" means the law of the Guarantor published in the Diario Oficial of December 31, 1954 creating the Fondo de Garantia y Fomento para la Agricultura, Gana- deria y Avicultura, and includes its Reglamento of May 6, 1955; 4 (d) "Trust Agreement" means the Contrato de Fideico- miso dated June 24, 1955 between the Government of United Mexican States and Banxico whereby the Fondo de Garan- tia y Fomento para la Agricultura, Ganaderia y Avicultura was entrusted to Banxico pursuant to the Law. (e) "Fondo" means the technical and administrative organization, resources, staff and facilities used or to be used by Banxico to operate the Fondo de Garantia y Fomento para la Agricultura, Ganaderia y Avicultura and the Special Trust Fund. (f) "Special Trust Agreement" means the Contrato de Fideicomiso dated August 26, 1965 between the Government of United Mexican States and Banxico; and "Special Trust Fund" means the Fondo Especial de Financiamientos Agropecuarios established by the Special Trust Agreement; (g) "Prior loan agreements" means the loan agree- ments dated October 1, 1965 and June 12, 1969, respectively, between the Bank and the Borrower; "prior guarantee agreements" means the guarantee agreements of even date therewith between the Guarantor and the Bank; "prior project agreements" means the project agreements of even date therewith between the Bank and Banxico; and "prior loans" means the loans provided for therein; and (h) "Prior projects" means the projects described in Schedule 1 to the prior project agreements. ARTICLE II The Loan SECTION 2.01. The Bank agrees to lend to the Borrower on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equiv- alent to seventy-five million dollars ($75,000,000). SECTION 2.02. The amount of the Loan may be with- drawn from the Loan Account in accordance with the pro- visions of Schedule 1 to this Agreement, as such Schedule 5 shall be amended from time to time, 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 the Project described in Schedule 1 to the Project Agreement and to be financed under the Loan Agreement; provided, however, that, except as the Bank shall otherwise agree, no withdrawal shall be made on account of expenditures in the territories of any country which is not a member of the Bank (other than Switzerland) or for goods produced in, or services supplied from, such territories. SECTION 2.03. The Closing Date shall be September 30, 1975 or such other date or dates as shall be agreed between the Bank and the Borrower. SECTION 2.04. The Borrower shall pay to the Bank a commitment 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 2.05. The Borrower shall pay interest at the rate of seven and one-fourth per cent (71/4%) per annum on the principal amount of the Loan withdrawn and out- standing from time to time. SECTION 2.06. Interest and other charges shall be pay- able semi-annually on April 1 and October 1 in each year. SECTION 2.07. The Borrower shall repay the principal of the Loan in accordance with the amortization schedule set forth in Schedule 2 to this Agreement. SECTION 2.08. If and as the Bank shall from time to time request, the Borrower shall execute and deliver Bonds representing the principal amount of the Loan as provided in Article VIII of the General Conditions. SECTION 2.09. The Director General of the Borrower and such other person or persons as he shall appoint in writing 6 are designated as authorized representatives of the Bor- rower for the purposes of Section 8.10 of the General Conditions. ARTICLE III The Project SECTION 3.01. The Borrower shall cause the proceeds of the Loan to be applied in accordance with the provisions of the Loan Agreement and the Project Agreement to expenditures on the Project. SECTION 3.02. The Borrower shall cause all goods and services financed out of the proceeds of the Loan to be used exclusively in carrying out the Project. SECTION 3.03. The Borrower shall make contractual arrangements satisfactory to the Bank, providing, inter alia, for the transfer from the Borrower to Banxico of the proceeds of the Loan for the purpose of carrying out the Project and for the repayment of such proceeds, and except as the Bank shall otherwise agree, the Borrower shall not amend, assign, abrogate or waive any provision of such arrangements. ARTICLE IV Financial Covenants SECTION 4.01. The Borrower undertakes that, except as the Bank shall otherwise agree, if any lien shall be created on any assets of the Borrower as security for any external debt, such lien will ipso facto equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan and the Bonds, and that in the crea- tion of any such lien express provision will be made to that effect; provided, however, that the foregoing provisions of this Section shall not apply to: (i) any lien created on property, at the time of pu:rchase thereof, solely as security 7 for the payment of the purchase price of such property or (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. SECTION 4.02. The Borrower shall maintain or cause to be maintained records adequate to reflect in accordance with consistently maintained sound accounting practices the operations and financial condition of the Borrower with respect to the Loan. ARTICLE V Consultation; Information and Inspection SECTION 5.01. The Bank and the Borrower shall cooper- ate fully to assure that the purposes of the Loan will be accomplished. To that end, the Bank and the Borrower shall from time to time, at the request of either party, exchange views through their representatives with regard to the performance of their respective obligations under the Loan Agreement and other matters relating to the purposes of the Loan. SECTION 5.02. The Bank and the Borrower shall promptly inform each other of any condition which inter- feres with, or threatens to interfere with, the accomplish- ment of the purposes of the Loan, the maintenance of the service thereof or the performance by either of them of its obligations under the Loan Agreement. SECTION 5.03. The Borrower shall enable the Bank's representatives to inspect any relevant records and docu- ments. SECTION 5.04. The Borrower shall furnish or cause to be furnished to the Bank all such information as the Bank shall reasonably request concerning the expenditure of the proceeds of the Loan and the operations and financial con- dition of the Borrower with respect to the Loan. 8 ARTICLE VI Taxes SECTION 6.01. The Borrower shall pay or cause to be paid all taxes, if any, imposed on or - coii.. ction with the execution, issue, delivery or registration of the Loan Agree- ment, any instrument made pursuant to Section 4.01 of this Agreement or Section 3.01 of the Guarantee Agreement, the Guarantee Agreement, the Project Agreement or the Bonds, or the payment of principal, interest or other charges thereunder; provided, however, that the provisions of this Section shall not apply to taxation, under the laws of the Guarantor or laws in effect in its territories, of pay- ments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an indi- vidual or corporate resident of the Guarantor. ARTICLE VII Remedies of the Bank SECTION 7.01. If any event specified in Section 7.01 of the General Conditions shall occur and shall continue for the period, if any, therein set forth, or if any event speci- fied in Section 7.02 of this Agreement shall occur and con- tinue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower, then at any subsequent time during the continuance thereof, the Bank, at its option, may by notice to the Borrower and the Guar- antor declare the principal of the Loan and of all the Bonds then outstanding to be due and payable immediately together with the interest and other charges thereon and upon any such declaration such principal, interest and charges shall become due and payable immediately, any- thing to the contrary in the Loan Agreement or in the Bonds notwithstanding. SECTION 7.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified: 9 (a) A default shall have occurred in the performance of any covenant or agreement on the part of Banxico under the Project Agreement or the prior project agreements; (b) A default shall have occurred in the performance of any covenant or agreement on the part of the Borrower or the Guarantor under the prior loan agreements, the prior guarantee agreements, or the bonds provided for therein; and (c) A change shall have been made in the Law or in the Trust Agreement or in the Special Trust Agreement, which shall adversely and materially affect the carrying out of the Project. ARTICLE VIII Effective Date; Termination SECTION 8.01. The following events are specified as addi- tional conditions to the effectiveness of the Loan Agree- ment within the meaning of Section 11.01 (c) of the Gen- eral Conditions: (a) The execution and delivery of the Project Agree- ment on behalf of Banxico have been duly authorized or ratified by all necessary corporate and governmental action; (b) The Borrower has entered into the contractual arrangements referred to in Sections 3.03 of this Agree- ment and 2.02 of the Project Agreement; and (c) Arrangements satisfactory to the Bank have been made in respect of Fondo's organization as provided in paragraph 2 of Schedule 2 to the Project Agreement. SECTION 8.02. The following are specified as additional matters, within the meaning of Section 11.02 (c) of the General Conditions, to be included in the opinion or opin- ions to be furnished to the Bank; (a) that the Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, 10 Banxico and constitutes a valid and binding obligation of Banxico in accordance with its terms; (b) that the arrangements referred to in Section 7.01 (b) of this Agreement are valid and are binding on the parties thereto; and (c) that all necessary acts, consents and approvals to be performed or given by the Guarantor, its political sub- divisions or agencies or by any agency of any political subdivision or by Fondo or by any organ of Fondo created by or pursuant to the Law, the Trust Agreement or the Special Trust Agreement or otherwise to be performed or given in order to authorize the carrying out of the Project and to enable the Borrower and Banxico to perform all of the respective covenants, agreements and obligations of the Borrower and Banxico in the Loan Agreement and the Project Agreement contained, together with all necessary powers and rights in connection therewith, have been duly and validly performed or given and no other such acts, consents and approvals are required to be performed or given for said purpose. SECTION 8.03. The date of August 27, 1971 is hereby specified for the purposes of Section 11.04 of the General Conditions. ARTICLE IX Addresses SECTION 9.01. The following addresses are specified for the purposes of Section 10.01 of the General Conditions: For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America 11 Cable address: Intbafrad Washington, D.C. For the Borrower: Nacional Financiera, S. A. Isabella Cat6lica 51 Metico 1, D. F. Mexico Cable address: Nafin Mexico City IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names and to be delivered in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ J. BURKE KNAPP Vice President NACIONAL FINANCIERA, S. A. By /s/ JOSE J. DE OLLOQUI Authorized Representative 12 SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the categories of items to be financed out of the proceeds of the Loan, the allocation of amounts of the Loan to each category and the percentage of eligible expenditures so to be financed in each category: Amount of the Loan Allocated Percentage (expressed in of expenditures Category dollar equivalent) to be financed A. Medium- and long-term loans f or farm and ranch development: Land improvement and develop- ment; on-farm irrigation works; agricultural machinery and equipment; construction and installation; breeding stock a) Livestock development 42,500,000 56% of Fondo payments b) Annual crops development 18,500,000 made to participating c) Perennial crops development 6,0,000 credit institutions B. Medium- and long-term loans for agroe-industries: Land development and utilities; construction; machinery and 56% of Fondo payments equipment; feasibility studies made to participating and supervision 4,500,000 credit institutions 0. Medium- and long-term loans for ruralworks and infrastructure: Access roads; irrigation canals; drai.nage canals; 56% of Fondo payments intermediate voltage made to participating electrical lines 2,50000 credit institutions D. Technical Services: Technician training program; farmer training centers; farmer training program; 56% of total consultants; foreign travel 1,500,000 expenditures Total: $75,000,000 13 2. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) expenditures prior to the date of this Agreement; and (b) payments for taxes imposed under the laws of the Guarantor or laws in effect in its territories on goods or services, or on the importation, manufacture, procurement or supply thereof. To the extent that the amount repre- sented by the percentage set forth in the third column of the table in paragraph 1 above in respect of any Category would exceed the amount payable net of all such taxes, such percentage shall be reduced to ensure that no pro- ceeds of the Loan will be withdrawn on account of pay- ments for such taxes. 14 SCHEDULE 2 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* October 1, 1975 1,280,000 April 1, 1976 1,325,000 October 1, 1976 1,375,000 April 1, 1977 1,425,000 October 1, 1977 1,475,000 April 1, 1978 1,530,000 October 1, 1978 1,585,000 April 1, 1979 1,640,000 October 1, 1979 1,700,000 April 1, 1980 1,765,000 October 1, 1980 1,825,000 April 1, 1981 1,895,000 October 1, 1981 1,960,000 April 1, 1982 2,030,000 October 1, 1982 2,105,000 April 1, 1983 2,185,000 October 1, 1983 2,260,000 April 1, 1984 2,345,000 October 1, 1984 2,430,000 April 1, 1985 2,515,000 October 1, 1985 2,610,000 April 1, 1986 2,700,000 October 1, 1986 2,800,000 April 1, 1987 2,900,000 October 1, 1987 3,005,000 April 1, 1988 3,115,000 October 1, 1988 3,230,000 April 1, 1989 3,345,000 October 1, 1989 3,465,000 April 1, 1990 3,595,000 October 1, 1990 3,720,000 April 1, 1991 3,865,000 * To the extent that any part of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. 15 Premiums on Prepayment and Redemption The following percentages are specified as the premiums payable on repayment in advance of maturity of any part of the principal amount of the Loan pursuant to Section 3.05 (b) of the General Conditions or on the redemption of any Bond prior to its maturity pursuant to Section 8.15 of the General Conditions. Time of Prepayment or Redemption Premium Not more than three years before maturity 11/4% More than three years but not more than six years before maturity ............. ..2% More than six years but not more than eleven years before maturity ........... 3% More than eleven years but not more than sixteen years before maturity .......... 51/4%7 More than sixteen years but not more than eighteen years before maturity ......... 61/4% More than eighteen years before maturity 714% 16 SCHEDULE 3 Modifications of General Conditions For the purpose of the Loan Agreement, the provisions of the General Conditions are modified as follows: (a) Paragraph 12 of Section 2.01 shall read as follows: "The term 'Project' means the project or projects or program or programs for which the Loan is granted, as described in Schedule 1 to the Project Agreement and as the description thereof shall be amended from time to time by agreement between the Guarantor, the Bank, the Borrower and Banxico." (b) Section 5.01 shall be deleted. (c) Paragraph (i) of Section 6.02 shall read as follows: "Any event specified in paragraph (e) or (f) of Section 7.01 shall have occurred." (d) Section 6.06 shall read as follows: "Effectiveness of Provisions after Suspension or Cancellation. Notwithstanding any cancellation or suspension, all the provisions of these General Condi- tions, the Loan Agreement, the Guarantee Agree- ment and the Project Agreement shall continue in full force and effect except as in this Article specifi- cally provided." (e) Section 9.01 shall read as follows: "Enforceability. The rights and obligations of the Bank, the Borrower and the Guarantor under the Loan Agreement, the Guarantee Agreement, the Project Agreement and the Bonds shall be valid and enforceable in accordance with their terms notwith- standing the law of any state, or political subdivision thereof, to the contrary. Neither the Bank nor the Borrower nor the Guarantor shall be entitled in any proceeding under this Article to assert any claim that any provision of these General Conditions or of the Loan Agreement, the Guarantee Agreement, 17 the Project Agreement or the Bonds is invalid or unenforceable because of any provision of the Arti- cles of Agreement of the Bank or for any other reason." (f) Section 9.02 shall read as follows: "Obligations of the Guarantor. The obligations of the Guarantor under the Guarantee Agreement shall not be discharged except by performance and then only to the extent of such performance. Such obli- gations shall not be subject to any prior notice to, demand upon or action against the Borrower or Banxico or to any prior notice to or demand upon the Guarantor with regard to any default by the Borrower or Banxico, and shall not be impaired by any of the following: any extension of time, for- bearance or concession given to the Borrower or Banxico; any assertion of, or failure to assert, or delay in asserting, any right, power or remedy against the Borrower or Banxico or in respect of any security for the Loan; any modification or ampli- fication of the provisions of the Loan Agreement or the Project Agreement contemplated by the terms thereof; any failure of the Borrower or Banxico to comply with any requirement of any law, regula- tion or order of the Guarantor or of any political subdivision or agency of the Guarantor." (g) Section 9.03 shall read as follows: "Failure to Exercise Rights. No delay in exercising, or omission to exercise, any right, power or remedy accruing to any party under the Loan Agreement or Guarantee Agreement or Project Agreement upon any default shall impair any such right, power or remedy or be construed to be a waiver thereof or an acquiescence in such default; nor shall the action of such party in respect of any default, or any acquiescence in any default, affect or impair any right, power or remedy of such party in respect of any other or subsequent default."