Mexico - Pollution Control Project : Loan 2154 - Guarantee Agreement - Conformed

프 LOAN NUMBER 2154 ME GUARANTEE AIGREENENT AGREEMENT, dated 1982, between UNITED MEXICAN STATES (hfieiinfter called the Guarantor) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOP14ENT (herein- after called the Bank). WHEREAS by the Loan Agreement of even date herewith between the Bank and Nacional Financiera, S.A. (hereinafter called the Borrower) the Bank has agreed to make to the Borrower a loan in various currencies equivalent to sixty million dollars ($60,000,000), on the terms and conditions set forth in the Loan Agreement, but only on condition , that the Guarantor agree to guarantee the obligations of the Borrower in respect of such loan as hereinafter provided; WHEREAS by the Project Agreement of even date herewith between the Bank and Banco de Mexico, S.A. (hereinafter called the Trustee), the Trustee has agreed to undertake certain obliga- tions,, including the carrying out of Parts A and B of the Pro- ject, as in said Project Agreement set forth; and WHEREAS the Guarantor, in consideration of the Bank's enter- ing into the Loan Agreement with the Borrower and the Project Agreement with the Trustee, has agreed so to guarantee such obligations of the Borrower; NOW THEREFORE the parties hereto hereby agree as follows: 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 modifications thereof set forth in Schedule 2 to the Loan Agreement (said General Conditions Applic- able to Loan and Guarantee Agreements, as so modified, being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the -2- General Conditions and in Section 1.02 of the Loan Agreement have the respective meanings therein set forth. ARTICLE II Guarantee Section 2.01. Without limitation or restriction upon any of its other obligations under the Guarantee Agreement, the Gua- rantor hereby unconditionally guarantees, as primary obligor and not as surety merely, the due and punctual payment of the princi- pal of, and interest and other charges on, the Loan, and the pre- mium, if any, on the prepayment of the Loan, and the punctual performance of all the other obligations of the Borrower, all as set forth in the Loan Agreement. ARTICLE III Execution of Part C of the Project Section 3.01. (a) The Guarantor shall carry out Part C of the Project through its SSA and its SARH with due diligence and efficiency and in conformity with sound financial and administrative practices and the Project Execution Paper and shall provide, promptly as needed, the funds, facilities, services and other resources required for the purpose. (b) The Guarantor shall carry out the training, studies and programs described in Parts C.1, C.2 and C.3 (i) of the Project in accordance with terms of reference or programs, as the case may be, acceptable to the Bank. Section 3.02. The Guarantor shall enter into the contractual arrangements referred to in Section 3.01 of the Loan Agreement. Except as the Bank shall otherwise agree, the Guarantor shall not change or fail to enforce any provision of such arrangements. Section 3.03. (a) The Guarantor undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan transferred to it by the Borrower against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be pay- able in a currency freely usable by the Guarantor to replace or repair such goods. -3- (b) Except as the Bank shall otherwise agree, the Guarantor shall cause all goods and services financed out of the proceeds of the Loan to be used exclusively for the purposes of the Project. Section 3.04. Except as the Bank shall otherwise agree, pro- curement of the goods, required for Part C of the Project and to be financed out of the proceeds of the Loan shall be governed by the provisions of the Schedule to this Agreement. Section 3.05. (a) The Guarantor shall: (i) at the Bank's request, furnish, or cause to be furnished to the Bank, the plans, reports and contract documents for Part C of the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request; (ii) maintain or cause to be maintained, records adequate to record the progress of Part C of the Project, to identify the goods and services financed out of the proceeds of the Loan transferred to it by the Borrower, and to disclose their use in Part C of the Project; (iii) enable the Bank's accredited representatives to visit the facilities and construction sites included in Part C of the Project and to examine the goods financed out of the proceeds of the Loan transfered to it by the Borrower and any relevant records and documents; and (iv) furnish or cause to be furnished to the Bank such other information as the Bank shall reasonably request concerning Part C of the Project, the expenditure of said proceeds and the goods and services financed out of them. (b) Upon the award by the Guarantor of any contract for goods, works or services to be financed out of the proceeds of the Loan, the Bank may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (c) Within one year following the last withdrawal from the Loan Account or such later date as may be agreed for these purposes between the Guarantor and the Bank, the Guarantor shall prepare and furnish to the Bank a report, on the execution and initial operation of the Project its costs and benefits and on the accomplishment of the purposes of the Loan. Section 3.06. Except as the Guarantor and the Bank shall otherwise agree, the Guarantor shall take all necessary action to carrry out the complementary measures for pollution control set forth in the Project Execution Paper. ARTICLE IV Other Covenants Section 4.01. (a) It is the policy of the Bank, in making loans to, or with the guarantee of, its members not to seek, in normal circumstances, specific security from the member concerned but to ensure that no other external debt shall have priority over its loans in the allocation, realization or distribution of foreign exchange held under the control or for the benefit of such member. To that end, if any lien shall be created on any governmental assets (as hereinafter defined), as security for any external debt, which will or might result in a priority for the benefit of the creditor of such external debt in the allocation, realization or distribution of foreign exchange, such lien shall, unless the Bank shall otherwise agree, ipso facto, and at no cost to the Bank, equally and ratably secure the principal of, and interest and other charges on, the Loan, and the Guarantor, in creating or permitting the creation of such lien, shall make express provision to that effect; provided, however, that, if for any constitutional or other legal reason such provision cannot be made with respect to any lien created on assets of any of its political or administrative subdivisions, the Guarantor shall promptly and at no cost to the Bank secure the principal of, and interest and other charges on, the Loan by an equivalent lien on other governmental assets satisfactory to the Bank. (b) The foregoing undertaking shall not apply to: (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; and (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. (c) As used in this Section, the term "governmental assets" means assets of the Guarantor, of any of its political sub- divisions or of any agency; and the term "agency" means any agency or instrumentality of the Guarantor or of any political subdivision of the Guarantor and shall include any institution or organization which is owned or controlled directly or indirectly by the Guarantor or by any political subdivision of the Guarantor or the operations of which are conducted primarily in the interest of or for the account of the Guarantor or any political subdivision of the Guarantor. -5- Section 4.02. The Guarantor covenants that it will not take, or cause or permit any of its political subdivisions or any of its agencies or any such political subdivision to take, any action which would prevent or interfere with the performance by the Borrower or the Trustee of its respective obligations contained in the Loan Agreement and the Project Agreement and will take or cause to be taken all reasonable action necessary or appropriate to enable them to perform such obligations. Section 4.03. The Guarantor shall, at all times, maintain such organizational arrangements as shall be necessary for purposes of coordinating the carrying out of the Project. Section 4.04. Without any limitation or restriction upon any of its other obligations under the Guarantee Agreement, the Guarantor (a) shall cause the Trustee to perform in accordance with the provisions of the Project Agreement all the obligations therein set forth; (b) shall take or cause to be taken all action, including the provision of funds, facilities, services and other resources, necessary or appropriate to enable the Trustee to perform such obligations; and (c) shall not take or permit to be taken any action which would prevent or interfere with such performance. Section 4.05. The Guarantor shall: (a) maintain or caused to be maintained separate accounts adequate to reflect, in accordance with consistently maintained sound accounting practice, the resources and expenditures in respect of the Project of the departments or agencies of the Guarantor responsible for the carrying out of the Project or any part thereof, as provided in Section 3.01 (a) of this Agreement; (b) have the accounts referred. to in paragraph (a) of this Section verified in accordance with the Guarantor's ordinary procedures, as agreed between the Guarantor and the Bank; (c) annually, within one year after the end of the year concerned, furnish to the Bank a summary statement of such accounts; and (d) furnish to the Bank such other pertinent information concerning such accounts and the verification procedures referred to in paragraph (b) of this Section as the Bank shall reasonably request from time to time. -6- ARTICLE V Representative of the Guarantor; Addresses Section 5.01. The Director de Credito Publico of the Secretaria de Hacienda y Credito Publico of the Guarantor is designated as representative of the Guarantor for the purposes of Section 11.03 of the General Conditions. Section 5.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Guarantor: Secretaria de Hacienda y Crfdito Publico Palacio Nacional Mexico DF Telex: HDA-01777 HDA-01313 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) -7- 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 District of Columbia, United States of America, as of the day and year first above written. UNITED MEXICAN STATES By Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By Regional Vice President Latin America and the Caribbean SCHEDULE Procurement 1. Contracts for goods for Part C of the Project shall be awarded following the Guarantor's local procurement procedures, provided, however, that contracts for the procurement of air monitoring network shall be awarded following evaluation and comparison of proposals furnished by at least three suppliers from countries and territories eligible under the current edition of the "Guidelines for Procurement under World Bank Loan and IDA Credits". The evaluation and comparison of such proposals shall be made in accordance with criteria and procedures set forth in Part A of such Guidelines. 2. The Guarantor shall furnish to the Bank, promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of the contracts referred to in paragraph 1 above, two conformed copies of such contracts, together with the analysis of the respective bids or proposals, recommendations for award and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the award of the contract was not consistent with the Guidelines or the Guarantor's procurement procedures, as the case may be, promptly inform the Guarantor and state the reasons for such determination. 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 . FOR SECRETARY