Mexico - Highway Sector Project : Loan 1671 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1671 ME Loan Agreenent (Highway Sector Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and BANCO NACIONAL DE OBRAS Y SERVICIOS PUBLICOS S.A. Dated August 23, 1979 LOAN NUMBER 1671 ME LOAN AGREEMENT AGREEMENT, dated August 23, 1979, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank) and BANCO NACIONAL DE OBRAS Y SERVICIOS PUBLICOS 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 following modifications thereof (said General Conditions Applicable to Loan and Guarantee Agree- ments of the Bank, as so modified, being hereinafter called the General Conditions): (a) The words "and Sub-projects" are added after the words "the Project" at the end of Section 5.03; and (b) 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 paragraph (b) of Section .3.05 of the Guarantee Agreement no Sub-project proposals permitted under such Section shall have been received by the Bank in respect of any portion of the Loan, or having been so received, shall have not been considered acceptable by the Bank, or (c) after the Closing Date an amount of the Loan shall remain unwith- drawn 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 at-' the Borrower terminate the right of the Cuarantor to send such proposals or the right of the Borrower to make withdrawals from the Loan Account, as the case may be, with respect to such amount or portion of the Loan. Upon the giving of such notice such amount or portion of the Loan shall be cancelled." -2- 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 term "Sub-project" means any sub-project included in the Project and to be partially financed out of the proceeds of the Loan. 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 and twenty million dollars ($120,000,000). 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 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. The Closing Date shall be June 30, 1984 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower and the Guarantor of such later date. Section 2.04. 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 per cent (7%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.06. Interest and other charges shall be payable semiannually on June 1 and December 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 2 to this Agreement. -3- ARTICLE III Transfer of Proceeds of the Loan Section 3.01. The Borrower shall enter into contractual arrangements, satisfactory to the Bank, with the Guarantor providing for the transfer to the Guarantor of the proceeds of the Loan for the purpose of carrying out the Project. Except as the Bank shall 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 provi- sions 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 arrangements referred to in Section 3.01 of this Agreement are legally binding on the parties thereto; and -4- (b) 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 otherwise to be performed or given in order to authorize the carrying out of the Project and to enable the Guaranto, and the Borrower to perform all of the respective covenants, agreements and obligations of the Guarantor and the Borrower in the Guar- antee Agreement and the Loan 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 5.02. The date November 27, 1979, is hereby speci- fied for the purposes of Section 12.04 of the General Conditions. ARTICLE VI 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: Banco Nacional de Obras y Servicios P'blicos, S.A. Insu.gentes Norte 423 Mexico 3, D.F. Mexico *- 5 - 5- Cable address: Telex: BANTECARIO 01772619 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 /s/ Eugenio F. Lari Acting Regional Vice President Latin America and the Caribbean BANCO NACIONAL DE OBRAS Y SERVICIOS PUBLICOS S.A. By-/s/ Octavio Hernández Authorized Representative AP,j~ SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The tatl,e 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 88,000,000 47% under Parts A and C of the Project (2) Vehicles and highway 30,000,000 maintenance equipment under Part B of the Project (a) imported 100% of for- eign expen- ditures (b) locally 100% of ex- manufactured factory cost (3) Consulting services 2,000,000 47% TOTAL 120,000,000 2. For purposes of this Schedule the term "foreign expenditures" means expenditures in the currency of any country other than the Guarantor and for goods or services supplied from the territory of any country other than the Guarantor. 3. The disbursement percentages have been calculated in compli- ance with the policy of the Bank that no proceeds of the Loan shall be disbursed on account of payments for taxes levied by, -7- or in the territory of, the Guarantor on goods or services, or on the importation, manufacture, procurement or supply 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. 4. Notwithstanding the provisions of pa-agraph 1 above, no withdrawals shall be made in respect of: (a) payments made for expenditures prior to the date of this Agreement; (b) payments made for expenditures for a Sub-project, unless such Sub-project has been considered acceptable by the Bank; (c) payments made for expenditures for a Sub-project under Parts A or C of the Project, unless the estimated expenditures for such Sub-project shall, on the average, excluding the year of lowest expenditures, exceed 10,000,000 pesos per annum; (d) payments made for expenditures for a Sub-project under Part B of the Project, unless the estimated expenditures for such Sub-project shall, on the average, excluding the year of lowest expenditures, exceed 5,000,000 pesos per annum; and (e) any amounts retained as guarantee of civil works con- tracts. For purposes of this paragraph, "peso" means the currency unit of the Guarantor. 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentagexs 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: (i) the Bank and the Borrower may agree to 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 other expenditures, and (ii) if such reallocation is not agreed or cannot fully meet the estimated shortfall, the Bank may by notice to the Borrower, reduce the disbursement -8- percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. 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 the Guarantee 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 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. I 9 SCHEDULE 2 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* On each June 1 and December 1 beginning December 1, 1983 through December 1, 1995 4,615,000 On June 1, 1996 4,625,000 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. - 10 - 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 of the Loan pursuant to Section 3.05 (b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 1.25% More than three years but not more than six years before maturity 2.45% More than six years but not more than eleven years before maturity 4.55% More than eleven years but not more than fifteen years before maturity 6.20% More than fifteen years before maturity 7.00%