Mexico - Bajo Rio Bravo-Bajo Rio San Juan Irrigation Rehabilitation II Project : Loan 2100 - Loan Agreement - Conformed

ICIAL OUM S LOAN NUMEBR 2100 HE Loan Agreement (Bajo Rio Bravo/Bajo Rio San Juan Irrigation Rehabilitation II Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and NACIONAL FINANCIERA, S.A. Dated - ,1982 LOAN NUMBER 2100 NE LOAN AGREEMENT AGREEMENT, dated 4 & , 1982, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter 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 October 27, 1980, with the same force and effect as if they were fully set forth herein, subject, however, to the following modification thereof (said Geineral Conditions Applicable to Loan and Guarantee Agreements of the Bank, as so modified, being hereinafter called the General Conditions): Paragraph 11 of Section 2.01 shall read as follows: "The term 'Project' means the project for which the Loan is granted as described in Schedule 1 to the Guarantee Agreement and as the description thereof shall be amended from time to time by agreement between the Guarantor, the Bank and the Borrower." Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Condtions have the respective meanings therein set forth and the term SARH means Secretaria de Agricultura y Recursos Hidraulicos of the Guarantor. 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 equivalent to one hundred eighty million dollars ($180,000,000). Section 2.02. The amount of the Loan may be withdrawn from the Loan Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Bank, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required -2- for the Project described in Schedule 1 to the Guarantee Agreement and to be financed out of the proceeds of the Loan. Section 2.03. Except as the Bank shall otherwise agree, procurement of the goods and civil works to be financed out of the proceeds of the Loan shall be governed by the provisions of Schedule 2 to the Guarantee Agreement. Section 2.04. The Closing Date shall be December 31, 1988 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower and the Guarantor of such later date. Section 2.05. Not later than the Effective Date, the Borrower shall pay to the Bank a fee equivalent to one and one-half per cent (1-1/2%) of the amount of the Loan. The fee shall be payable in such currency or currencies as the Baak shall spe-ify. In the event that the Bank shall not have received full payment of the fee by the Effective Date, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and pay to itself the amount required for the full payment of the fee in the currency or currencies specified for the purposes. Section 2.06. 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 2.07. The Borrower shall pay interest at the rate of eleven and three-fifths per cent (11-3/5%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.08. Interest and other charges shall be payable semiannually on April 1 and October 1 in each year. Section 2.09. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 2 to this Agreement. ARTICLE III Transfer of Loan Proceeds Section 3.01. The Borrower shall make contractual arrange- ments, satisfactory to the Bank, with the Guarantor, providing, -3- inter alia, (i) for the transfer to the Guarantor of the proceeds of the Loan for the purpose of carrying out the Project, and (ii) for the transfer by the Guarantor to the Borrower of such funds as the Borrower shall *be required to pay to the Bank on account of principal, interest and other charges on the Loan. Except as the Bank may otherwise agree,.the Borrower shall not change or fail to enforce any provision of such arrangements. ARTICLE IV Financial Covenants Section 4.01. (a) The Borrower represents that at the date of this Agreement no lien exists on any of its assets as security for any external debt. (b) 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 in the creation of any such lien express provision will be made to that effect, at no cost to the Bank; provided, however, that the foregoing provisions of this paragraph shall not apply to: (A) any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property; or (B) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after the date on which it is originally incurred. ARTICLE V Effective Date; Termination Section 5.01. The following are specified as additional matters, within the meaning of Section 12.02 (c) of the General Conditions, to be included in the opinion or opinions to be furnished to the Bank: (a) that the contractual arrangements referred to in Section 3.01 of this Agreement are legally binding upon the parties thereto; and (b) that all necessary acts, consents and approvals to be performed or given by the Guarantor, its political subdivisions or -4- agencies or by any agency of any political -subdivision or otherwise to be performed or given in. order ,to authorize the carrying out of the Project and to enable the Borrower and the Guarantor to perform all the covenants, agreements and obligations in the Loan Agreement and the Guarantee 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 5.01. The date o Qe b-/$$ is hereby specified for the purpose of Section 12.04 of the General Conditions. ARTICLE VII Addresses Section 6.01. The following addresses are specified for the purposes of Section 11.01 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 Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For the Borrower: Nacional Financiera, S.A. Isabel la Catolica 51 Mexico 1, D.F. Mexico Cable address: Telex: NAFIN NAFIN 383-1775765 Mexico City Mexico City -5- IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the City of Toronto, Canada, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Regional Vice President. Latin America and the Caribbean NACIONAL FINANCIERA, S.A. By Authorized Representative -6- SCHEDULE 1 Withdrawal of the Prodeeds 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 the amounts of the Loan to each Category and the percentage of expenditures.for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Civil works 90,000,000 45% (other than land leveling) and engineering services (2) Land leveling 25,000,000 30% (3) Equipment 10,000,000 90% (4) Technical assistance, 25,000,000 30% agricultural research and studies (5) Fee pursuant to 2,700,000 Amount due Section 2.05 of the Loan Agreement (6) Unallocated 27,300,000 TOTAL 180,000,000 2. The disbursement percentages have been calculated in compliance with the policy of the Bank that no proceeds of the Loan shall be disbursed on account of payments for taxes levied by, or in the territory of, the Guarantor on goods or services, or on the importation, manufacture, procurement or supply -7- thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Loan decreases or increases, the Bank may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Bank. 3. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for: (i) expenditures prior to the date of this Agreement, except that withdrawals in an aggregate amount not exceeding the equivalent of $5,000,000, may be made in respect of Categories (1) and (2) on account of payments made for such expenditures before that date but after May 1, 1981; and (ii) amounts retained in respect of guarantees for civil works contracts under the Project. 4. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph 1 above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Bank, after consultation with the Borrower, may by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank are not needed to meet othe.,: expenditures; and (ii) if such reallocation cannot fully meet the estimated short- fall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 5. If the Bank, after consultation with the Borrower, shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the 4 Borrower, cancel such amount of the Loan as, in the Bank's reason- able opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan. 8- SCHEDULE 2 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each April 1 and October 1 beginning October 1, 1985 through April 1, 1997 7,500,000 * The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal; see General Conditions, Section 3.04. -9- Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any purtion of the principal amount of the Loan pursuant to Section 3.04 (b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 2.30% More than three years but not more than six years before maturity 4.65% More than six years but not more than eleven years before maturity 8.50% More than eleven years but not more than thirteen years before maturity 10.05% More than thirteen years before maturity 11.60% INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Bank for Reconstruction and Develop- ment. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Bank thereunto this - ' day of 198 Z. FOR SECRETARY