Mexico - Second Power Project : Loan 0186 - Guarantee Agreement - 2 - Conformed

Indenture of Guarantee BETWEEN UNITED MEXICAN STATES NATIONAL TRUST COMPANY, LIMITED Indenture of Guarantee BETWEEN * UNITED MEXICAN STATES ANC NATIONAL TRUST COMPANY, LIMITED INDENTURE OF GUARANTEE dated January 15, 1958, be- tween UNITED MEXICAN STATES (hereinafter called the Guar- antor), party of the first part, and NATIONAL TRUST COM- PANY, LIMITED, a corporation duly organized and existing under the laws of the Province of Ontario, Canada, as trustee (hereinafter called the Trustee), party of the sec- ond part. WHEREAS pursuant to an Indenture of Mortgage dated as of February 1, 1950, and executed by The Mexican Light and Power Company, Limited (hereinafter called the Com- pany) and certain of its subsidiaries in favor of the Trustee, the Company has executed with the Trustee a Supplemental Indenture dated January 15, 1958 (such Indenture and Supplemental Indenture being hereinafter together called the Indenture), which Indenture provides, among other things, for the issuance, authentication and delivery of First Mortgage and Collateral Trust Bonds of Series E of the Company; and WHEREAS by a guarantee agreement (hereinafter called the Guarantee Agreement) dated January 14, 1958 be- tween the Guarantor and International Bank for Recon- struction and Development (hereinafter called the Bank), a copy of which Guarantee Agreement has been lodged with the Trustee, the Guarantor has agreed, among other things, to guarantee the due and punctual payment of the principal of and the interest on all First Mortgage and Collateral Trust Bonds of Series E issued and authenticated under the Indenture and delivered to the Bank pursuant to an agree- ment (hereinafter called the Loan Agreement) dated January 14, 1958 between the Bank and the Company, a copy of which Loan Agreement has been lodged with the Trustee; and WHEREAS by said Guarantee Agreement, the Guarantor has further agreed, among other things, to execute an in- 2 denture of guarantee substantially in the form of this Indenture of Guarantee; Now THEREFORE the parties hereto hereby agree as fol- lows: FIRST: Wherever used in this Indenture of Guarantee, unless the context shall otherwise require, the term First Mortgage and Collateral Trust Bonds or First Mortgage and Collateral Trust Bond means First Mortgage and Col- lateral Trust Bonds or a First Mortgage and Collateral Trust Bond of Series E issued and authenticated pursuant to the Indenture; and the term Guaranteed Bonds or Guar- anteed Bond means First Mortgage and Collateral Trust Bonds or a First Mortgage and Collateral Trust Bond of Series E entitled to the benefit of this Indenture of Guar- antee as in Article Ninth hereof provided. SECOND: Without limitation or restriction upon any of the other covenants on its part in this Indenture of Guar- antee contained, the Guarantor hereby unconditionally guarantees, as primary obligor and not as surety merely, the due and punctual payment of the principal of and inter- est on the Guaranteed Bonds and the premium, if any, on the redemption thereof, all as provided in the Loan Agree- ment, in the Guaranteed Bonds and in the Indenture. THIRD: The Guarantor hereby covenants as follows: SECTION 1. The principal of and interest on the Guaran- teed Bonds, and the premium, if any, on the redemption thereof, shall be paid without deduction for, and free from, any taxes or fees imposed under the laws of the Guarantor or by any taxing or fiscal authority thereof or therein; pro- vided however that the provisions of this Section shall not apply to taxation of or fees upon, payments under any Guar- anteed Bond to a holder thereof other than the Bank when such Guaranteed Bond is beneficially owned by an individual or corporate resident of the Guarantor. 3 SECTION 2. This Indenture of Guarantee, the Indenture and the Guaranteed Bonds shall be free from any taxes or fees that shall be imposed under the laws of the Guarantor or by any taxing or fiscal authority thereof or therein on or in connection with the execution, issue, delivery, registra- ti)on, recording, filing or protocolization thereof. SECTION 3. The principal of and interest on the Guar- anteed Bonds, and the premium, if any, on the redemption thereof, shall be paid free from all restrictions imposed by the Guarantor, its political subdivisions or agencies. FOURTH: If the Guarantor shall default in the perform- ance of any agreement on its part in the Guarantee Agree- ment contained and if the Bank, at its option, shall by notice to the Guarantor as provided therein require that the Guarantor pay the principal amount of all the Guarnn- teed Bonds which shall then be outstanding and unpaid, and the interest accrued and unpaid thereon to the date of pay- ment thereof, then forthwith upon the giving of such notice such principal and interest shall become immediately due and payable by the Guarantor and, in respect of any such Guaranteed Bond, shall be paid at the place designated in such Guaranteed Bond for the payment of principal thereof and interest thereon, upon surrender of such Guaranteed Bond at said place in appropriate form, together with all unpaid coupons (if any) appurtenant thereto; all as, and with such effect as, more fully set forth in the Guarantee Agreement. FIFTH: The Guarantor agrees that its obligations under any agreements on its part contained in this Indenture of Guarantee are not subject to any prior notice to, demand upon or action against the Company or to any prior notice to or demand upon the Guarantor with regard to any default by the Company in respect of any obligations on its part contained in the Indenture or the Guaranteed Bonds and shall not be affected by any enforcement of any mortgage, lien, priority or charge created by the Indenture or by any 4 exercise or enforcement of any right or power thereby con- ferred. No extension of time or forbearance given to the Company in respect of the performance of any of its obli- gations under the Indenture or the Guaranteed Bonds, and no failure of any holder of such Bonds or of the Trustee under the Indenture to give any notice or to make any demand or protest whatsoever, or strictly to assert any right or pursue any remedy against the Company in respect of the Indenture or such Bonds or to enforce any mortgage, lien, priority or charge created by the Indenture or other- wise, and no modification of the provisions of the Inden- ture in accordance with the terms thereof, and no failure of the Company to comply with any requirement of any law, regulation or order of the Guarantor or any of its political subdivisions, shall in any way terminate, diminish or limit the unconditional guarantee of the Guarantor hereunder, or any other obligation of the Guarantor hereunder, it being the intent of the parties hereto that the obligations of the Guarantor shall not be discharged except by performance and then only to the extent of such performance. SIXTH: The Guarantor agrees to endorse its guarantee hereunder upon (a) each First Mortgage and Collateral Trust Bond of Series E issued for delivery to the Bank pur- suant to the Loan Agreement and (b) each First Mortgage and Collateral Trust Bond of Series E issued in exchange for, on transfer of or (subject to the provisions of Article Seventh hereof) in substitution for First Mortgage and Col- lateral Trust Bonds of Series E specified in clause (a) or clause (c) of this Article, and (c) each First Mortgage and Collateral Trust Bond of Series E issued in exchange for, on transfer of or (subject to the provisions of Article Seventh hereof) in substitution for First Mortgage and Col- lateral Trust Bonds of Series E specified in clause (b) of this Article. Such endorsement of guarantee shall be in substantially the following form: The United Mexican States, for value received, as a pri- mary obligor and not as surety merely, hereby absolutely 5 and unconditionally guarantees to the holder of the within bond, and pledges its full faith and credit for, the due and punctual payment of the principal of said bond, the inter- est thereon and the premium, if any, on the redemption thereof, all in accordance with the provisions of the In- denture in said bond mentioned. In the event specified in Article Fourth of an Indenture of Guarantee dated Janu- ary 15, 1958, between the undersigned and National Trust Company, Limited, as Trustee, International Bank for Reconstruction and Development may require the undersigned forthwith to pay the principal of the within bond, together with interest thereon accrued and unpaid to the date of payment, at the place specified in the Indenture for the payment of principal thereof and inter- est thereon, upon surrender of said bond to the Guarantor at said place in bearer form, or accompanied by such in- struments of assignment as shall be necessary to vest in the Guarantor all the right, title and interest of the holder thereof, together with all unpaid coupons, if any, appurte- nant thereto; all in the manner and with the effect pro- vided in said Indenture of Guarantee. UNITED MEXICAN STATES By Countersigned by: Authorized Representative Such endorsement of guarantee shall be executed by Na- cional Financiera, S.A., in the name and on behalf of the Guarantor with the facsimile signature of the Director Gen- eral of Nacional Financiera, S.A., or any successor to any 6 such Director General and shall be countersigned by the authorized representative of the Guarantor. In case any Director General of Nacional Financiera, S.A., or any such successor, whose facsimile signature shall be affixed to any such endorsement of guarantee shall cease to be such Director General, or such successor, before such endorse- ment shall have been authenticated as provided in Article Eighth of this Indenture of Guarantee, such endorsement may nevertheless be authenticated as provided in said Article Eighth as though such Director General or succes- sor, whose facsimile signature was affixed to such endorse- ment, had not ceased to be such Director General or suc- cessor. In case any such authorized representative of the Guarantor who shall have countersigned any such endorse- ment shall cease to be such authorized representative of the Guarantor before such endorsement shall have been authenticated as provided in said Article Eighth, such en- dorsement may nevertheless be authenticated as provided in said Article Eighth as though such authorized repre- sentative who countersigned such endorsement had not ceased to be such authorized representative of the Guaran- tor and any such endorsement may be so countersigned by any person who at the time of countersigning shall be the authorized representative of the Guarantor although at the date of the Guaranteed Bond bearing such endorsement such person may not have been such authorized representa- tive of the Guarantor. The Guarantor shall furnish to the Trustee from time to time the names and sufficient evidence of the authority of each person by whose signature or fac- simile signature such endorsement of guarantee is to be executed or countersigned as aforesaid, together with the authenticated specimen signature of each such person. SEVENTH: Whenever the Company shall execute a new First Mortgage and Collateral Trust Bond of Series E in substitution for a mutilated, lost, destroyed or stolen Guar- anteed Bond and its coupons, the Guarantor shall not be obligated to endorse its guarantee thereon unless and until the Guarantor shall be indemnified to its satisfaction. 7 EIGHTH: The Trustee shall authenticate the guarantee endorsed upon each First Mortgage and Collateral Trust Bond of Series E pursuant to Article Sixth hereof by coun- tersignature in substantially the following form: Countersigned for authentication: NATIONAL TRUST COMPANY, LIMITED, as Trustee, By Authorized Officer provided, however, that the aggregate principal amount of such First Mortgage and Collateral Trust Bonds of Series E so authenticated outstanding at any time shall not exceed $11,000,000 or the equivalent thereof in other currencies determined as provided in the Loan Agreement, plus the amount of any Guaranteed Bonds issued in substitution for lost, destroyed, stolen or mutilated Guaranteed Bonds. The Trustee shall be entitled to rely upon a certificate signed by the Chairman of the Board or the President or a Vice-President and by the Secretary or an Assistant Secre- tary of the Company that any First Mortgage and Col- lateral Trust Bond of Series E for which such countersig- nature is requested will be delivered to or on the order of the Bank pursuant to the proviions of the Loan Agreement and the Trustee shall not be required, as a condition of executing such countersignature, to satisfy itself otherwise than by such certificate that such First Mortgage and Col- lateral Trust Bond of Series E will be or has been so delivered. NINTH: All First Mortgage and Collateral Trust Bonds of Series E which shall have endorsed thereon the guaran- tee of the Guarantor as provided in Article Sixth hereof authenticated as provided in Article Eighth hereof shall be entitled to the benefit of this Indenture of Guarantee; and d 8 no other First Mortgage and Collateral Trust Bond of Series E shall be entitled to the benefit of this Indenture of Guarantee. TENTH: The Guarantor shall not be liable for any coin- pensation, charges, fees and expenses which the Trustee or any successor trustee from time to time in office under this Indenture of Guarantee shall make for or incur in the performance of its duties hereunder. ELEVENTH: All covenants and agreements on the part of the Guarantor herein contained are made for the benefit of the Trustee, as trustee of an express trust for the several holders from time to time of the Guaranteed Bonds, and for the benefit of such holders. Such covenants and agree- ments shall inure to the benefit of any successor of the Trustee. All covenants and agreements on the part of the Trustee herein contained shall be binding upon any suc- cessor of the Trustee. Any successor trustee duly acting as suc,h under the terms of the Tndenture shall be deemed to be a successor of the Trustee under the provisions of this Indenture of Guarantee. IN WITNESS WHEREOF the Guarantor has caused this In- denture of Guarantee to be signed by its representative thereunto duly authorized, and the Trustee has caused this Indenture of Guarantee to be executed by its corporate officers thereunto duly authorized and its corporate seal to be thereunto affixed and attested, as of the day and year first above written. ITNITED MEXICAN STATES By MANIEL S. VALLADARES NATIONAL TRUST COMPANY, LIMITED By WINSLOW BENSON Mana-r, Corporate Trust Department Trust Officer