Peru - Third Agricultural Credit Project : Loan 0257 - Loan Agreement - Conformed

LOAN NUMBER 257 P" Loan Agreement (Third Agricultural Credit Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND BANCO DE FOMENTO AGROPECUARIO DEL PERU DATED JUNE 1, 1960 LOAN NUMBER 257 PE Loan Agreement (Third Agricultural Credit Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND BANCO DE FOMENTO AGROPECUARIO DEL PERU DATED JUNE 1, 1960 AGREEMENT, dated June 1, 1960, between INTERNA- TIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (here- inafter called the Bank) and BANCO DE FOMENTO AGRO- PECUARIO DEL PERU (hereinafter called the Borrower). ARTICLE I Loan Regulations SECTION 1.01. The parties to this Loan Agreement ac- cept all the provisions of Loan Regulations No. 4 of the Bank dated June 15, 1956, subject, however, to the modifi- cations thereof set forth in Schedule 3 to this Agreement (said Loan Regulations No. 4 as so modified being herein- after called the Loan Regulations), with the same force and effect as if they were fully set forth herein. ARTICLE II The Loan SECTION 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in this Agreement set forth or referred to, an amount in various currencies equivalent to five million dollars ($5,000,000). SECTION 2.02. (a) The Bank shall open a Loan Account on its books in the name of the Borrower and shall cred,t to such Account the amount of the Loan. The amount of the Loan may be withdrawn from the Loan Account as provided in, and subject to the rights of cancellation and suspension set forth in, the Loan Regulations. (b) Except as the Bank shall otherwise agree, no with- drawals shall be made from the Loan Account in respect of goods to be incorporated into processing or storage plants until the use of the goods in the particular plant shall have been approved by the Bank. 4 SECTION 2.03. 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charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not so withdrawn from time to time. Such commitment charge shall accrue from a date sixty days after the date of this Agreement to the respective dates on which amounts shall be withdrawn by the Borrower from the Loan Account as provided in Article IV of the Loan Regulations or shall be cancelled pursuant to Article V of the Loan Regulations. SECTION 2.04. The Borrower shall pay interest at the rate of six per cent (6%) per annum on the principal amount of the Loan so withdrawn and outstanding from time to time. SECTION 2.05. Except as the Bank and the Borrower shall otherwise agree, the charge payable for special com- nitments entered into by the Bank at the request of the Borrower pursuant to Section 4.02 of the Loan Regula- tions shall be at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of any such special commitments outstanding from time to time. SECTION 2.06. Interest and other charges shall be pay- able semi-annually on February 1 and August 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 1 to this Agreement. ARTICLE III Use of Proceeds of the Loan; Lending Program of the Borrower Section 3.01. (a) The Borrower shall apply the pro- ceeds of the Loan exclusively to financing the cost of goods required to carry out the Project described in Schedule 2 to this Agreement. The specific goods to be financed out of the proceeds of the Loan and the methods and procedures for procurement of such goods shall be determined by agreement between the Bank and the Bor- rower, subject to modification by further agreement be- tween them. (b) The program of loans for periods in excess of one year to be made by the Borrower in connection with the Project, including allocation of available resources of the Borrower for such program, shall also be determined by agreement between the Bank and the Borrower, subject to modification by further agreement between them. SECTION 3.02. Except as the Bank and the Borrower shall otherwise agree, the Borrower shall cause all goods financed out of the proceeds of the Loan to be imported into the territories of the Guarantor and there to be used exclusively in the carrying out of the Project. ARTICLE IV Bonds SECTION 4.01. The Borrower shall execute and deliver Bonds representing the principal amount of the Loan as provided in the Loan Regulations. SECTION 4.02. The Gerente General and the Gerente of the Borrower, or such other person or persons as the Directorio of the Borrower shall appoint in writing, are designated as authorized representatives of the Borrower for the purposes of Section 6.12 (a) of the Loan Regula- tions. ARTICLE V Particular Covenants SECTION 5.01. (a) The Borrower shall carry out the Project with due diligence and efficiency and in conformity with sound financial practices. 6 (b) The Borrower shall maintain records adequate to identify the goods financed out of the proceeds of the Loan, to disclose the use thereof in the Project, to record the progress of the Project (including the cost thereof) and to reflect in accordance with consistently maintained sound accounting practices the operation and financial condition of the Borrower; shall enable the Bank's repre- sentatives to inspect the Project, the goods and any rele- vant records and documents; and shall furnish to the Bank all such information as the Bank shall reasonably request concerning the expenditure of the proceeds of the Loan, the Project, the goods, and the operations and financial condition of the Borrower. SECTION 5.02. (a) The Bank and the Borrower shall cooperate fully to assure that the purposes of the Loan will be accomplished. To that end, each of them shall furnish to the other all such information as it shall rea- sonably request with regard to the general status of the Loan. (b) The Bank and the Borrower shall from time to time exchange views through their representatives with re- gard to matters relating to the purposes of the Loan and the maintenance of the service thereof. The Borrower shall promptly inform the Bank of any condition which interferes with, or threatens to interfere with, the ac- complishment of the purposes of the Loan or the mainte- nance of the service thereof. SECTION 5.03. Except as the Bank shall otherwise agree, the Borrower shall not incur any debt; provided, however, that the foregoing provision shall not apply to: (i) the incurring of additional debt through utilization, in ac- cordance with the terms of any credit established prior to the date of this Agreement, of any unused amounts avail- able under such credit; or (ii) any debt maturing not more than one year after the date on which it is originally incurred. 7 SECTION 5.04. 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 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 creation of any such lien express provision will be made to that effect; provided, however, that the foregoing pro- visions of this Section shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property; (ii) any lien on commercial goods to secure a debt maturino not more than one year after the date on which it is originally incurred and to be paid out of the proceeds of sale of such commercial goods; or (iii) any lien arising in the ordinary course of banking transac- tions and securing a debt maturing not more than one year after its date. SECTION 5.05. The Borrower shall pay or cause to be paid all taxes or fees, if any, imposed under the laws of the Guarantor or laws in effect in the territories of the Guarantor on or in connection with the execution, issue, delivery or registration of this Agreement, the Guarantee 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 taxa- tion of, or fees upon, payments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual or corporate resident of the Guarantor. SECTION 5.06. The Borrower shall pay or cause to be paid all taxes and fees, if any, imposed under the laws of the country or countries in whose currency the Loan and the Bonds are payable or laws in effect in the territories of such country or countries on or in connection with the 8 execution, issue, delivery or registration of this Agree- ment, the Guarantee Agreement or the Bonds. SECTION 5.07. Except as shall be otherwise agreed be- tween the Bank and the Borrower, the Borrower shall insure or cause to be insured the goods financed out of the proceeds of the Loan against risks incident to their pur- chase, importation and sale. Such insurance shall be consistent with sound commercial practice and shall be payable in dollars or in the currency in which the cost of the goods insured thereunder shall be payable. SECTION 5.08. The Borrower shall make arrangements satisfactory to the Bank to ensure that any agricultural machinery and equipment financed out of the proceeds of the Loan is made available to farmers or others engaged in agricultural production only through dealers who have adequate servicing and repair facilities available for such machinery and equipment. ARTICLE VI Remedies of the Bank SECTION 6.01. (i) If any event specified in paragraph (a), paragraph (b), paragraph (e) or paragraph (f) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of thirty days, or (ii) if any event specified in paragraph (c) of Section 5.02 of the Loan Regulations shall occur and shall continue 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 declare the principal of the Loan and of all the Bonds then outstanding to be due and payable immediately, and upon any such declaration such principal shall become due and payable immediately, anything in this Agree- ment or in the Bonds to the contrary notwithstanding. 9 ARTICLE VII Miscellaneous SECTION 7.01. The Closing Date shall be March 31, 1963. SECTION 7.02. A date sixty days after the date of this Agreement is hereby specified for the purposes of Section 9.04 of the Loan Regulations. SECTION 7.03. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: For the Borrower: Banco de Fomento Agropecuario del Pern Jir6n Carabaya 456 Lima, Pern Alternative address for cablegrams and radiograms: Agribanc Lima, Peri For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington 25, D. C. United States of America Alternative address for cablegrams and radiograms: Intbafrad Washington, D. C. IN WIrNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have 10 caused this Loan Agreement to be signed in their respee- tive names and 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 BANCO DE FOMENTO AGROPECUARIO DEL PERU By /s/ EMILIO FOLEY /s/ C. DE CARDENAS Aut1torized Representatives 11 SCHEDULE 1 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* February 1, 1963 $390,000 August 1, 1963 402,000 February 1, 1964 414,000 August 1, 1964 427,000 February 1, 1965 439,000 August 1, 1965 453,000 February 1, 1966 466,000 August 1, 1966 480,000 February 1, 1967 495,000 August 1, 1967 509,000 February 1, 1968 525,000 * To the extent that any part of the Loan is repayable in a currency other than dollars (see Loan Regulations, Section 3.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. 12 Premiums on Prepayment and Redemption The following percentages are specified as the premiums payaible on repayment in advance of maturity of any part of the principal amount of the Loan pursuant to Section 2.05(1)) of the Loan Regulations or on the redlemiption of any Bond prior to its maturity pursuant to Section 6.16 of the Loan Regulations: Time of Prepayment or Redemption Premium Not more than one year before maturity, . More than one year but not more than three years before maturity ................ 2o More than three years but not more than five years before maturity ............. 31/ o More than five years but not more than seven years before maturity ...... . 5 More than seven years before maturity. . . 6o I 13 SCHEDULE 2 Description of Project The Project is a three-year program of the Borrower for increasing the productivity of Peruvian agriculture through importation of machinery, equipment, materials and livestock and through expansion of credit facilities available to agricultural producers and others engaged in the processing and storage of agricultural commodities. 14 SCHEDULE 3 Modifications of Loan Regulations No. 4 For the purposes of this Agreement the provisions of Loan Regulations No. 4 of the Bank, dated June 15, 1956, shall be deemed to be modified as follows: (a) By the deletion of Section 2.02. (b) By the deletion of the first five lines of Section 5.02 and the substitution therefor of the following lines: "Section 5.02. Suspension by the Bank. If any of the following events shall have happened and be continuing, the Bank may at any time or from time to time by notice to the Borrower suspend in whole or in part the right of the Borrower to make with- drawals from the Loan Account:" (c) By the deletion of the last paragraph of Section 5.02 and the substitution therefor of the following paragraph: "The right of the Borrower to make withdrawals from the Loan Account shall continue to be sus- pended in whole or in part, as the case may be, until the event or events which gave rise to such suspension shall have ceased to exist or until the Bank shall have notified the Borrower that the right to make withdrawals has been restored, whichever is the earlier; provided, however, that in the case of any such notice of restoration, the right to make withdrawals shall be restored only to the extent and subject to the conditions specified in such notice, and no such notice shall affect or impair any right, power or remedy of the Bank in respect of any other or subsequent event described in this Section." 15 (d) By the deletion of Section 9.03 and the substitu- tion therefor of the following section: "Section 9.03. Effective Date. Notwithstanding the provisions of Section 8.01, except as shall be other- wise agreed by the Borrower and the Bank, the Loan Agreement shall come into force and effect on the date upon which the Bank dispatches to the Borrower and the Guarantor notice of its acceptance of the evidence required by Section 9.01." (e) By the deletion of paragraph 14 of Section 10.01 and the substitution therefor of the following para- graph: "14. The term 'external debt' means any debt pay- able in any medium other than currency of the Guarantor, whether such debt is or may become pay- able absolutely or at the option of the creditor in such other medium." 0