Mexico - 4th Fonei Project : Loan 1712 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUNBER 1712 ME Loan Agreement (Fourth Industrial Equipment Fund Project - FONEI) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and NACIONAL FINANCIERA, S.A. Dated July 30, 1979 LOAN NUMBER 1712 ME LOAN AGREEMENT AGREEMENT, dated July 30, 1979, 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 March 15, 1974, 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 this Agreement (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank, 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 General Conditions have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Trustee" means Banco de Mexico, S.A., as trustee of FONEI; (b) "FONEI" means Fondo de Equipamiento Industrial, a special fund entrusted by the Guarantor to the Trustee pursuant to the Trust Agreement; and such term includes the technical and administrative organization, resources, staff and facilities used or to be used by the Trustee to operate FONEI; (c) "Trust Agreement" means the Contrato de Fideicomiso, dated October 29, 1971, between the Guarantor and the Trustee, whereby the Fondo de Equipamiento Industrial has been entrusted to the Trustee; (d) "Project Agreement" means the agreement between the Bank and the Trustee of even date herewith, as such agreement may be amended from time to time; and such term includes all agreements supplemental to the Project Agreement and the Schedule thereto; f2- (e) "Participating Intermediary" means a credit or leasing institution approved by the Trustee for participating in carrying out the Project in accordance with the Operatirg Regulations; (f) "Operating Regulations" means the Reglas Generales de Operaciones approved by FONEI's Comite Tecnico, as amended to the Effective Date; (g) "FONEI Loan" means a loan made or proposed to be made by the Trustee, out of FONEI's resources, to a Participating Inter- m-diary, for financing a sub-loan, and to be partially or fully financed out of the proceeds of the Loan; (h) "sub-loan" means a loan made or proposed to be made by a Participating Intermediary to an Investment Enterprise for an Investment Project and to be financed out of FONEI's resources by means of a FONEI loan; and "free-limit sub-loan" means a sub-loan, as so defined, which qualifies as a free-limit sub-loan pursuant to the provisions of Section 2.02 (b) of this Agreement; (i) "Investment Enterprise" means an enterprise to which a Participating Intermediary proposes to make or has made a sub- loan; (j) "Investment Project" means a specific development project carried out or to be carried out by an Investment Enter- prise which complies with the requirements set forth in the Operating Regulations; (k) "Technology Project" means an Investment Project con- sisting of: (i) research, design or engineering for new or improved product and production methods or materials processing, new or improved equipment design, including fabrication and testing of prototypes, experimentation with new industrial materials, and improvement in quality control or product testing; (ii) related technical services, such as training of Mexican rersonnel abroad, visits to Mexico by foreign engineers or techni- f ans, and technology audits; and (iii) such other matters as may be agreed between the Bank, the Borrower and the Trustee; (1) "Industrial Pollution Control Project" means an Invest- ment Project consisting of the acquisition and installation of pollution control equipment or provision of technical assistance on pollution control matters to Investment Enterprises; -3- (m) "Service Project" means: (i) an Investment Project located in areas in the vicinity of the northern international boundary of Mexico and consisting of construction and equipping of: (A) commercial centers, (B) factory buildings for leasing to industrial enterprises, and (C) facilities for selling repair and maintenance services, or (ii) an Investment Project for the provision of such other services as the Bank and the Trustee shall agree; (n) "Peso" means the currency unit of the Guarantor; (o) "Foreign currency" means any currency other than the currency of the Guarantor; and (p) "Prior Loans" means the loan provided for in the Loan Agreement (Industrial Equipment Fund Project - FONEI) between the Bank and the Borrower, dated June 2, 1972; the loan provided for in the Loan Agreement (Second Industrial Equipment Fund Project - FONEI) between the Bank and the Borrower, dated April 30, 1976; and the loan provided for in the Loan Agreement (Third Industrial Equipment Fund Project - FONEI) between the Bank and the Borrower, dated September 27, 1978. 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 seventy-five million dollars ($175,000,000). Section 2.02. (a) The amount of the Loan may be withdrawn from the Loan Account for amounts expended (or, if the Bank shall so agree, required to meet expenditures to be made) by the Trustee: (i) under FONEI Loans in respect of sub-loans for (A) Investment Projects other than Technology Projects, to finance: (I) the c.i.f. cost of imported goods or 70% of the cost of imported goods purchased in Mexico where the c.i.f. cost of such goods cannot be ascertained, (II) 25% of expenditures made by FONEI for the reasonable cost of civil works and of goods manu- factured in Mexico, and (III) the reasonable foreign currency cost of services, required under a sub-loan for the Investment Project in respect of which the withdrawal is requested, and (B) Technology Projects to finance 40% of the cost of goods and A5_ _ _ _ _ _ _ _ _ __-_ _ __ . II4- services therefor; (ii) in respect of 50% of the cost of training under Part B of the Project; and (iii) in respect of 47% of the cost of services under Part C of the Project; provided, however, that no withdrawal shall be made in respect of a sub-loan unless it shall have been approved by the Bank or it shall be a free- limit sub-loan in respect of which the Bank shall have authorized withdrawals from the Loan Account. (b) A free-limit sub-loan shall be: (i) a sub-loan for a Technology Project other than the first three sub-loans made to finance this type of Investment Project in an amount to be financed out of the proceeds of the Loan which shall not exceed the sum of $500,000 equivalent for each Technology Project; (ii) a sub-loan for an Industrial Pollution Control Project other than the first three sub-loans made to finance this type of Investment Project in an amount to be financed out of the proceeds of the Loan which shall not exceed the sum of $750,000 equivalent for each Industrial Pollution Control Project; and (iii) a sub-loan for any other Investment Project other than a Service Project in an amount to be financed out of the proceeds of the Loan which shall not exceed the sum of $2,000,000 equivalent when added to any other outstanding amounts financed or proposed to be financed out of the proceeds of the Loan or any Prior Loans for such Investment Project; all the foregoing amounts being subject to change from time to time as determined by the Bank and the Trustee. (c) Except as the Bank and the Borrower shall otherwise agree, no withdrawals shall be made on account of: (i) expenditures before the date of this Agreement, or (ii) expenditures by an Investment Enterprise in respect of a sub-loan subject to the Bank's approval if such expenditures shall have been made more than 180 days prior to the date on which the Bank shall have received in respect of such sub-loan the application and information required by Section 2.03 (a) of the Project Agreement or, in respect of a free-limit sub- loan, more than 180 days prior to the date on which the Bank shall have received in -5- respect of such free-limit sub-loan the request and information required by Section 2.03 (b) of the Project Agreement, or (iii) expenditures for a Service Project if such expen- ditures when added to all other expenditures for Service Projects financed out of the proceeds of the Loan exceed $10,000,000 equivalent, or (iv) expenditures for a Technology Project if such expenditures when added to all other expenditures for Technology Projects financed out of the proceeds of the Loan exceed $5,000,000 equivalent, or (v) expenditures for an Industrial Pollution Control Project if such expenditures when added to all other expenditures for Industrial Pollution Control Projects financed out of the proceeds the Loan exceed $5,000,000 equivalent, or (vi) expenditures for an Investment Project, if such expenditures when added to all other expenditures for such Investment Project financed out of the proceeds of sub-loans exceed $5,000,000 equivalent, or (vii.) expenditures for training under Part B of the Project in excess of $250,000 equivalent, or (viii) expenditures for services under Part C of the Project until the Borrower has made the contractual arrangements referred to in Section 3.01 (a) (i) of this Agreement or in excess of $2,000,000 equiva- lent. Section 2.03. The Closing Date shall be June 30, 1984 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower, the Guarantor and the Trustee of such later date. 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 nine-tenths per cent (7.90%) per annum on the -6- principal amount of the Loan withdrawn and outstanding from time to time. Section 2.06. Interest and other charges shall be payable semiannually on May 1 and November 1 in each year. Section 2.07. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 1 to this Agreement. ARTICLE III Transfer of Loan Proceeds Section 3.01. (a) The Borrower shall make the following contractual arrangements, satisfactory to the Bank: (i) with the Guarantor providing, inter alia, for the transfer to the Guarantor of the proceeds of the Loan allocated to Part C of the Project; and (ii) with the Trustee providing, inter alia, for the transfer to the Trustee, for the account of FONEI, of the proceeds of the Loan allocated to Parts A and B of the Project, and except as the Bank shall otherwise agree, the Borrower shall not amend, assign, abrogate or waive any provision of such arrangements. (b) The arrangements referred to in subparagraph (ii) above shall, inter alia, provide for the non-repayment by FONEI to the Borrower of the principal of the Loan and for payment by FONEI to the Borrower of the equivalent in pesos of the amounts to be paid by the Borrower to the Bank on account of interest and other charges on the Loan. 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 princi- pal of, and interest and other charges on, the Loan, and in the creation of any such lien express provision will be made to that - 7 - -7- effect, at no cost to the Bank; provided, however, that the foregoing provisions of this paragraph 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 prop- erty; or (ii) 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 Remedies of the Bank Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (k) thereof: (a) the Trustee shall have failed to perform any of its obligations under the Project Agreement; (b) a change shall have been made in the Trust Agreement which shall adversely and materially affect the ca rying out of the Project or the financial Position, organization or other resources of FONEI; and (c) a change shall have been made in the Operating Regula- tions which shall materially and adversely affect the carrying out of the Project. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: (a) the event specified in paragraph (a) of Section 5.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Bank to the Guarantor and the Borrower; aid (b) the event specified in paragraph (b) or (c) of Section 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following event is specified as an addi- tional condition to the effectiveness of the Loan Agreement within -8- the meaning of Section 12.01 (c) of the General Conditions, namely, that the Operating Regulations have been amended in a manner satisfactory to the Bank. Section 6.02. 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 Project Agreement has been duly authorized or ratified by the Trustee, and is legally binding upon the Truste' in accordance with its terms; (b) that the arrangements referred to in Section 3.01 (a) (ii) of this Agreement are legally binding on the parties thereto; and (c) that all necessary acts, consents and approvals to be performed or given by the Guarantor, its political subdivisions or agencies or by any agency of any political subdivision or other- wise to be performed or given in order to authorize the carrying out of the Project and to enable the Borrower to perform all of the covenants, agreements and obligations of the Borrower in the Loan Agreement contained, and the Trustee to perform all of the covenants, agreements and obligations of the Trustee in 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 6.03. The date October 30, 1979, is heteby speci- fied for the purpose of Section 12.04 of the General Conditions. ARTICLE VII Addresses Section 7.01. 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 -9- Cable address: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For the Borrower: Nacional Financiera, S.A. Isabel la Católica 51 México 1, D.F. I México Cable address: Telex: NAFIN NAFIN 383-1775765 BMXME Mexico City 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 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 Is/ Nicolås Ardito Barletta Regional Vice President Latin America and the Caribbean NACIONAL FINANCIERA, S.A. By Is/ Alfonso Garcia Maclas Authorized Representative - 10 - SCHEDULE 1 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each May 1 and November 1 beginning November 1, 1983 through November 1, 1995 6,730,000 On May .1, 1996 6,750,000 * To the extent that any portion 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. - 11 - Premiums on Prepayment- The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount c the Loan pursuant to Section 3.05 (b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 1.40% More than three years but not more than six years before maturity 2.80% More than six years but not more than eleven years before maturity 5.10% More than eleven years but not more than fifteen years before maturity 6.95% More than fifteen years before maturity 7.90% ItF 121 - 12 - SCHEDULE 2 Modifications of General Conditions For the purpose of this Agreement, the provisions of the General Conditions are modified as follows: (1) Paragraph 11 of Section 2.01 is amended to read: "The term 'Project' means the project for which the Loan is granted, as described in the Project Agreement and as such description may be amended from time to time by agree- ment between the Guarantor, the Bank, the Borrower and the Trustee." (2) The words "and the Investment Projects" are added after the words "the Project" at the end of Section 5.03. (3) Section 6.03 is deleted and replaced by the following new Section: "Section 6.03. Cancellation by the Bank. If (a) the right of the Borrower to make withdrawals from the Loan Account shall have been suspended with respect to any amount of the Loan for a continuous period of thirty days, or (b) by the date specified in Section 2.03 (c) of the Project Agree- ment no applications or requests referred to in paragraph (a) thereof shall have been received by the Bank in respect of any portion of the Loan, or having been so -ceived, shall have been denied, or (c) after the Closing Dc an amount of thle Loan shall remain unwithdrawn from the Loan Account, or (d) the Bank shall have received notice from the Guarantor pursuant to Section 6.07 with respect to an amount of the Loan, the Bank may by notice to the Guarantor and the Bor- rower terminate the right of the Trustee or the Borrower to deliver such applications or requests or to make withdrawals from the Loan Account, as the case may be, with respect to such amount or portion of Lhe Loan. Upon the giving of such notice such amount or portion of the Loan shall be can- celled."