Morocco - Second Agricultural Credit Project : Credit 0338 - Credit Agreement - Conformed

CONFORMED COPY CREDIT NUMBER 338 MOR Development Credit Agreement (Second Agricultural Credit Project) BETWEEN KINGDOM OF MOROCCO AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED OCTOBER 10, 1972 CONFORMED COPY CREDIT NUMBER 338 MOR Development Credit Agreement (Second Agricultural Credit Project) BETWEEN KINGDOM OF MOROCCO AND INTERNATIONAL DEVELOPMENT ASSOCIATION DATED OCTOBER 10, 1972 DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated October 10, 1972 between KINGDOM OF MOROCCO (hereinafter called the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) The Borrower and the Caisse Nationale de CrMdit Agricole, an autonomous agency (etablissement publique autonome) of the Borrower established under Dahir No. 1-60-106 of 25 foumadaI.1381 (December 4, 1961) (hereinafter called CNCA), respectively, have requested the Association and the International Bank for Reconstruction and Development (hereinafter called the Bank) to assist in the financing of the Project described in Schedule 2 to this Agreement; (B) By an agreement of even date herewith between the Bank and CNCA (hereinafter called the Loan Agreement), the Bank has agreed to make a loan to CNCA in an amount in various currencies equivalent to twenty-four million dollars ($24,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition that the Borrower agree to guarantee the obligations of CNCA in respect of such loan; (C) By an agreement of even date herewith between the Borrower and the Bank (hereinafter called the Guarantee Agreement), the Borrower has agreed so to guarantee the obligations of CNCA; (D) The Borrower is willing to make the proceeds of the Credit provided for in this Agreement available to CNCA as a contribution to its capital (dotation) upon the terms and conditions set forth hereinafter; (E) CNCA will carry out the Project upon the terms and conditions set forth in the Loan Agreement and in the Project Agreement of even date herewith between the Association and CNCA (hereinafter called the Project Agreement); and (F) The Association has agreed, on the basis inter alia of the foregoing, to extend the Credit to the Borrower upon the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: 4 ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated January 31, 1969, with the same force and effect as if they were fully set forth herein, subject, however, to the following modifications thereof (said General Conditions Applicable to Development Credit Agreements of the Association, as so modified, being hereinafter called the General Conditions): (a) Section 2.01 (9) is deleted and the following is substituted therefor: "9. The term 'Project' means the project or projects or program or programs for which the Credit is granted, as described in the Development Credit Agreement and as the description thereof shall be amended from time to time by agreement between the Borrower, the Association, the Bank and CNCA." (b) Section 5.01 is deleted; (c) Section 6.02 (b) is deleted and the following is substituted therefor: "(b) The Borrower or CNCA shall have failed to perform any other obligation under the Loan Agreement, the Guarantee Agreement, the Bonds (as such terms are defined in the Development Credit Agreement), or the Development Credit Agreement." (d) Section 6.02 (h) is deleted and Section 6.02 (i) becomes 6.02 (h); (e) Section 7.01 (c) is amended to read as follows: "(c) A default shall occur in the performance of any other obligation on the part of the Borrower or CNCA under the Loan Agreement, the Guarantee Agreement, or the Bonds (as such terms are defined in the Development Credit Agreement), or the Development Credit Agreement, or under any other loan agreement between CNCA and the Bank or any guarantee agreement between the Borrower and the Bank guaranteeing a loan to CNCA, or under any bond issued pursuant to any such agreement, and such default shall continue for a period of 60 days after notice thereof shall have been given by the Bank to the Borrower and CNCA, or the Association to the Borrower, as the case may be." 5 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) "Loan Agreement" means the agreement of even date herewith between the Bank and CNCA for the purpose of the Project, as such agreement may be amended from time to time; and such term includes the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated January 31, 1969, as made applicable to such agreement, all agreements supplemental to the Loan Agreement and all schedules to the Loan Agreement. (b) "Project Agreement" means the agreement between the Association and CNCA of even date herewith, as the same may be amended from time to time, and such term includes all schedules to the Project Agreement. (c) "Guarantee Agreement" means the agreement of even date herewith between the Borrower and the Bank guaranteeing the obligations of CNCA to the Bank under the Loan Agreement, as the same may be amended from time to time. (d) "Loan" means the loan provided for in the Loan Agreement. (e) "Loan Account" means the account established pursuant to Section 2.02 of the Loan Agreement. (f) "dirhams" means the currency of the Borrower. (g) "Sub-loan" means a medium- or long-term credit made or proposed to be made by CNCA to a Beneficiary in accordance with the procedures and the lending and operating policies set forth in the Schedule to the Project Agreement and to be financed out of the proceeds of the Credit or the Loan. (h) "Beneficiary" means any individual farmer, group of farmers, cooperative, contractor, agricultural enterprise, or other person or group eligible to receive a Sub-loan under the Project. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equivalent to ten million dollars ($10,000,000). 6 Section 2.02. The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule I to this Agreement, as such Schedule shall be amended from time to time, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed under the Development Credit Agreement; provided, however, that, except as the Association 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 August 31, 1974 or such other date as shall be agreed between the Borrower and the Association. Section 2.04. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.05. Service charges shall be payable semi-annually on Ma 1 and November 1 in each year. Section 2.06. The Borrower shall repay the principal amount of the Credit in semi-annual installments payable on each May I and November 1 commencing November 1, 1982 and ending May 1, 2022, each installment to and including the installment payable on May 1, 1992 to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.07. The currency of the United Kingdom of Great Britain and Northern Ireland is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.08. CNCA is designated as the repr antative of the Borrower for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) Without any limitation or restriction upon any of its other obligations under the Development Credit Agreement, the Borrower shall take or 7 cause to be taken all action necessary or appropriate to enable CNCA to perform in accordance with the provisions of the Project Agreement and Loan Agreement all its obligations as 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 CNCA to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall make available to CNCA the proceeds of the Credit as a contribution to its capital (dotation) under terms and conditions which shall have been approved by the Association. Section 3.02. Sections 2.03, 2.04, 2.05 and 3.05 of the Guarantee Agreement are hereby incorporated into this Agreement with the same force and effect as if they were fully set forth herein; provided, however, that, for the purposes of this Development Credit Agreement: (i) all references to the Guarantor in such Sections or in any of them shall be deemed to be references to the Borrower, (ii) all references to the Bank in such Sections or in any of them shall be deemed to be references to the Association, and (iii) all references to the Borrower in such Sections or in any of them shall be deemed to be references to CNCA. ARTICLE IV Consultation, Information and Inspection Section 4.01. The Borrower and the Association shall cooperate fully to assure that the purposes of the Credit will be accomplished. To that end, the Borrower and the Association shall from time to time, at the request of either party: (a) exchange views through their representatives with regard to the performance of their respective obligations under the Development Credit Agreement, the performance by CNCA of its obligations under the Project Agreement, the administration, operations and financial condition of CNCA and, in respect of the Project, the performance of the departments or agencies of the Borrower responsible for carrying out any part of the Project, and other matters relating to the purposes of the Credit; and (b) furnish to the other all such information as it shall reasonably request with regard to the general status of the Credit. On the part of the Borrower, such information shall include information with respect to financial and economic conditions in the territories of the Borrower, including its balance of payments, 8 and the external debt of the Borrower, of any of its political subdivisions and of any agency of the Borrower or of any such political subdivision. Section 4.02. (a) The Borrower shall furnish or cause to be furnished to the Association all such information as the Association shall reasonably request concerning the administration, operations and financial condition of CNCA and, in respect of the Project, the performance of the departments or agencies of the Borrower responsible for carrying out any part of the Project. (b) The Borrower and the Association shall promptly inform each other of any condition which interferes with, or threatens to interfere with, the accomplishment of the purposes of the Credit, the maintenance of the service thereof, the performance by either of them of its obligations under the Development Credit Agreement or the performance by CNCA of its obligations under the Project Agreement. Section 4.03. The Borrower shall afford all reasonable opportunity for accredited representatives of the Association to visit any part of the territories of the Borrower for purposes related to the Credit. ARTICLE V Taxes and Restrictions Section 5.01. The principal of, alid service charges on, the Credit shall be paid without deduction for, and free from, any taxes imposed under the laws of the Borrower or laws in effect in its territories. Section 5.02. The Development Credit Agreement and the Project Agreement shall be free from any taxes on or in connection with the execution, delivery or registration thereof, imposed under the laws of the Borrower or laws in effect in its territories. Section 5.03. The payment of the principal of, and service charges on, the Credit shall be free from all restrictions, regulations, controls and moratoria of any nature imposed under the laws of the Borrower or laws in effect in its territories. ARTICLE VI Remedies of the Association Section 6.01. If any event specified in Section 7.01 of the General Conditions or in Section 6.03 of this Agreement shall occur and shall continue for the period, 9 if any, therein set forth, then at any subsequent time during the continuance thereof, the Association, at its option, may by notice to the Borrower declare the principal of the Credit then outstanding to be due and payable immediately together with the service charges thereon and upon any such declaration such principal and service charges shall become due and payable immediately, anything to the contrary in the Development Credit Agreement notwithstanding. Section 6.02. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified: (a) CNCA shall have failed to perform any covenant, agreement or obligation of CNCA under the Loan Agreement or the Project Agreement. (b) Dahir No. 1-60-106 of 25 jounada 17 1381 (December 4, 1961) shall have been amended, suspended, abrogated, repealed or waived in such a way as to materially -d adversely affect the ability of CNCA to carry out the covenants, agreements and obligations set forth in the Loan Agreement or the Project Agreement. (c) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablishment of CNCA or for the suspension of its operations. (d) Any part of the principal amount of any loan to CNCA having an original maturity of one year or more shall, in accordance 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. (e) An extraordinary situation shall have arisen which shall make it improbable that CNCA will be able to perform its obligations under the Loan Agreement or the Project Agreement. Section 6.03. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified: (a) The event specified in paragraph (a) of Section 6.02 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Association to the Borrower and CNCA. (b) Any event specified in paragraph (b), (c) or (d) of Section 6.02 of this Agreement shall occur. 10 ARTICLE VII Effective Date; Termination Section 7.01. The following events are specified as additional conditions to the effectiveness of the Development Credit Agreement within the meaning of Section 10.01 (b) of the General Conditions: (a) The execution and delivery of the Project Agreement on behalf of CNCA have been duly authorized or ratified by all necessary corporate and governmental action; (b) The Loan Agreement and Guarantee Agreement have become effective in accordance with their terms. Section 7.02. The following is specified as an additional matter, within the meaning of Section 10.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association, namely, that the Project Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, CNCA, and constitutes a valid and binding obligation of CNCA in accordance with its terms. Section 7.03. The date February 7, 1973 is hereby specified for the purposes of Section 10.04 of the General Conditions. Section 7.04. The obligations of the Borrower under Section 3.02 of this Agreement and the provisions of Sections 6.02 and 6.03 of this Agreement shall cease and determine on the date on which the Development Credit Agreement shall terminate or on a date 15 years after the date of this Agreement, whichever shall be the earlier. ARTICLE VIII Representative of the Borrower; Addresses Section 8.01. Subject to Section 2.08 of this Agreement, the Minister of Finance of the Borrower is designated as representative of the Borrower for the purposes of Section 9.03 of the General Conditions. Section 8.02. The following addresses are specified for the purposes of Section 9.01 of the General Conditions: 11 For the Borrower: Ministere des Finances Rabat, Morocco Cable address: Ministere Finances Rabat For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Indevas Washington, D.C. 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. KINGDOM OF MOROCCO By /s / Badreddine Senoussi Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s / Munir P. Benjenk Vice President Europe, Middle East & North Africa 12 SCHEDULE 1 Withdrawal of the Proceeds of the Credit and of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit and of the Loan, the allocation of amounts of such proceeds to each Category and the percentage of eligible expenditures so to be financed in each Category: Amount of the Credit and of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed I. Sub-loans for grain farm 18,000,000 70% of disburse- equipment under Part A ments actually of the Project made by CNCA (A) tractors and at- tachments (B) grain harvesters and balers II. Development of citrus and 11,500,000 70% of disburse- vegetable production ments actually made by CNCA (A) Sub-loans for citrus and other tree fruit plantation develop- ment under Part B of the Project (B) Sub-loans for winter vegetable production under Part C of the Project 13 Amount of the Credit and of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed III. Livestock Development 3,500,000 70% of disburse- ments actually made by CNCA (A) Sub-loans for dairy farm development under Part D of the Project (B) Sub-loans for beef and Sheep fattening under Part E of the Project IV. Sub-loans for marketing 1,000,000 70% of disburse- facilities under Part F ments actually of the Project made by CNCA TOTAL 34,000,000 2. The amount of the Credit shall be withdrawn from the Credit Account as provided under Article II of this Agreement, and shall be applied to expenditures incurred under any Category hereof until the total withdrawals and commitments in respect of such expenditures shall have reached the equivalent of $10,000,000. 3. The amount of the Loan may be withdrawn from the Loan Account as provided under Article II of the Loan Agreement and shall be applied to expenditures incurred under any Category hereof, provided, however, that such withdrawals shall be made only after the proceeds of the Credit shall have been fully withdrawn or committed. 4. Notwithstanding the provisions of paragraphs 1, 2 and 3 above, no withdrawals shall be made in respect of: 14 (a) expenditures prior to September 1, 1972; (b) payments for taxes imposed under the laws of the Borrower 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 represented by the percentage set forth in the third column of the table in paragraph I 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 proceeds of the Credit or of the Loan will be withdrawn on account of payments for such taxes; (c) disbursements by CNCA for Sub-loans for tractors, combines or balers made at a rate of interest of less than 8% per annum; (d) disbursements by CNCA for Sub-loans (for purposes other than those referred to in sub-paragraph (c)) made at a rate of interest of less than eight per cent (8%) per annum, if such withdrawals would exceed in the aggregate an amount equivalent to 20% of the total amount of the Loan and the Credit; and (e) disbursements by CNCA under Category IV in respect of any Sub-loan exceeding the equivalent of $110,000, unless the Association and the Bank or, after the proceeds of the Credit have been fully withdrawn or committed, the Bank, shall have approved the making of such Sub-loan. 5. Notwithstanding the allocation of an amount of the proceeds of the Credit and of the Loan set forth in the second column of the table in paragraph I above, if the estimate of the expenditures under any Categoty or Sub-category shall decrease, the amount of the proceeds of the Credit and of the Loan then allocated to such Category or Sub-category and no longer required therefor will be reallocated, at the request of CNCA, to any other Category or Sub-category, subject, however, to the requirements in the other Categories, as determined by the Association and by the Bank or, after the proceeds of the Credit have been fully withdrawn or committed, by the Bank, in respect of any other expenditures. 15 SCHEDULE 2 Description of the Project The Project is part of the Borrower's lending program to finance agricultural development in Morocco over a period of three years commencing September 1, 1972, and consists of the following parts: Part A. Grain Farm Equipment The provision of Sub-loans to grain farmers and farmer groups to finance investments in tractors and attachments, grain harvesters, balers and other farm machinery, and related farm investments, primarily in rainfed areas. Part B. Citrus Plantation Development The provision of Sub-loans to citrus and other tree fruit farmers to finance the expansion of existing orchards and the establishment of new plantations, including land and groundwater development, tractors and equipment, planting materials, fertilizer, pesticides and labor during the establishment period. Part C. Winter Vegetable Production The provision of Sub-loans to vegetable farmers to finance land and groundwater development and mechanized equipment for intensive, export-oriented vegetable production. Part D. Dairy Farm Development The provision of Sub-loans to farmers to finance investments in land and groundwater development, barn construction, forage-harvesting attachments for tractors, watering and milk-handling facilities, and the purchase of heifers. Part E. Beef Cattle and Sheep The provision of Sub-loans to farmers to finance construction or improvement of fattening stables, including watering facilities but not including purchase of feeder cattle and sheep. Part F. Marketing Facilities The provision of Sub-loans to individuals, cooperatives and commercial packers to finance investments in pre-packaging, packaging, handling and storage 16 facilities and related equipment, primarily to expand capacity for sorting, grading and packaging of citrus and other tree fruits, tomatoes and other vegetables.