Mexico - Road Project : Loan 0268 - Loan Agreement - Conformed

LOAN NUMBER 268 ME Loan Agreement (Road Project) BETWEEN NACIONAL FINANCIERA, S. A. AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED OCTOBER 18, 1960 LOAN NUMBER 268 ME Loan Agreement (Road Project) BETWEEN NACIONAL FINANCIERA, S. A. AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED OCTOBER 18, 1960 AGREEMENT, dated October 18, 1960, between the NACIONAL FINANCIERA, S.A., (hereinafter called the Bor- rower) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (hereinafter called the Bank). ARTICLE I Loan Regulations SECTION 1.01. The parties to this Loan Agreement accept all the provisions of Loan Regulations No. 4 of the Bank dated June 15, 1956, subject, however, to the modifications thereof set forth in Schedule 2 to this Agreement (said Loan Regulations No. 4 as so modified being hereinafter called the Loan Regulations), with the same force and effect as if they were fully set forth herein. ARTICLE II The Loan SECTION 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions in this Agreement set forth or referred to, an amount in various currencies equivalent to twenty-five million dollars ($25,000,000). SECTION 2.02. The Bank shall open a Loan Account on its books in the name of the Borrower and shall credit to such Account the amount of the Loan. The amount of the Loan may be withdrawn from the Loan Account as provided in, and subject to the rights of cancellation and suspension set forth in, the Loan Regulations. SECTION 2.03. Except as the Bank and the Borrower shall otherwise agree: (a) The Borrower shall be entitled, subject to the provi- sions of this Agreement, to withdraw from the Loan Ac- count the equivalent of a percentage to be established from 44 4 time to time by -agreement between the Guarantor, the Bank and the Borrower of such amounts as shall have been expended by the Guarantor for the reasonable cost of goods required for carrying out the work included in part (a) of the Project, such percentage to represent the foreign exchange component of such cost. (b) Withdrawals under clause (a) of this Section shall be in dollars or such other currencies as the Bank may rea- sonably determine. (c) Notwithstanding the foregoing provisions of this Section, no withdrawals shall be made on account of ex- penditures prior to November 1, 1960, or expenditures in the territories of any country (except Switzerland) which is not a member of the Bank or for goods produced in (in- cluding services supplied from) such territories. SECTION 2.04. The Borrower shall pay to the Bank a com- mitment charge at the rate of three-fourths of one per cent (% of 17) per annum on the principal amount of the Loan not so withdrawn from time to time. Such commitment charge shall accrue from a date sixty days after the date of this Agreement to the respective dates on which amounts shall be withdrawn by the Borrower from the Loan Account as provided in Article IV of the Loan Regulations or shall be cancelled pursuant to Article V of the Loan Regulations. SECTION 2.05. The Borrower shall pay interest at the rate of five and three --)urths per cent (5%o) per annum on the principal amount of the Loan so withdrawn and outstanding from time to time. SECTION 2.06. Except as the Borrower and the Bank shall otherwise agree, the charge payable for special commit- ments entered into by the Bank at the request of the Bor- rower pursuant to Section 4.02 of the Loan Regulations shall be at the rate of one-half of one per cent (1/ of 1%) per annum on the principal amount of any such special commitments outstanding from time to time. 5 SECTION 2.07. Interest and other charges shall be pay- able semi-annually on May 1 and November 1 in each year. SECTION 2.08. The Borrower shall repay the principal of the Loan in accordance with the amortization schedule set forth in Schedule 1 to this Agreement. ARTICLE III Use of Proceeds of the Loan SECTION 3.01. Subject to the provisions of this Agree- ment, the Borrower shall cause the proceeds of the Loan to be applied exclusively to financing the cost of goods re- quired to carry out the Project described in Schedule 1 to the Guarantee Agreement. The specific goods to be financed out of the proceeds of the Loan and the methods and procedures for procurement of such goods shall be determined by agreement between the Guarantor, the Bor- rower and the Bank, subject to modification by further agreement between them. ARTICLE IV Bonds SECTION 4.01. The Borrower shall execute and deliver Bonds representing the principal amount of the Loan as provided in the Loan Regulations. SECTION 4.02. The Director General of the Borrower and such person or persons as he shall appoint in writing are designated as authorized representatives of the Borrower for the purposes of Section 6.12 of the Loan Regulations. ARTICLE V Particular Covenants SECTION 5.01. The Borrower shall make with the Guaran- tor arrangements satisfactory to the Bank providing for the transfer of the proceeds of ffe Loan from the Bor- rower to the Guarantor. 6 SECTION 5.02. (a) The Bank and the Borrower shall co- operate fully to assure that the purposes of the Loan will be accomplished. To that end, each of them shall furnish to the other all such information as it shall reasonably re- quest with regard to the general status of the Loan. (b) The Bank and the Borrower shall from time to time exchange views through their representatives with regard to matters relating to the purposes of the Loan and the maintenance of the service thereof. The Borrower shall promptly inform the Bank of any condition which inter- feres with, or threatens to interfere with, the accomplish- ment of the purposes of the Loan or the maintenance of the service thereof. (c) The Borrower shall maintain or cause to be main- tained records adequate to reflect in accordance with con- sistently maintained sound accounting practices the opera- tions and financial condition of the Borrower; shall enable the Bank's representatives to inspect any relevant records and documents; and shall furnish or cause to be furnished to the Bank all such information as the Bank shall rea- sonably request concerning the expenditure of the proceeds of the Loan and the operations and financial condition of the Borrower. SECTION 5.03. 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 the Bonds, and that in the crea- tion of any such lien express provision will be made to that effect; provided, however, that the foregoing provisions of this Section shall not apply to: (i) any lien created on prop- erty, at the time of purchase thereof, solely as security for the payment of the purchase price of such property or (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. SECTION 5.04. The Borrower shall pay or cause to be paid all taxes or fees, if any, imposed under the laws of the Guarantor or laws in effect in the territories of the Guaran- tor on or in connection with the execution, issue, delivery or registration of this Agreement, the Guarantee Agree- ment or the Bonds, or the payment of principal, interest or other charges thereunder; provided, however, that the pro- visions of this Section shall not apply to taxation of, or fees upon, payments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual or corporate resident of the Guarantor. SECTION 5.05. The Borrower shall pay or cause to be paid all taxes and fees, if any, imposed under the laws of the country or countries in whose currency the Loan and the Bonds are payable or laws in effect in the territories of such country or countries on or in connection with the ex- ecution, issue, delivery or registration of this Agreement, the Guarantee Agreement or the Bonds. ARTICLE VI Remedies of the Bank SECTION 6.01. (i) If any event specified in paragraph (a), paragraph (b), paragraph (e) or paragraph (f) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of thirty days, or (ii) if any event specified in paragraph (c) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of sixty days after notice thereof shall have been given by the Bank to the Borrower, then at any subsequent time during the con- tinuance thereof, the Bank, at its option, may declare the principal of the Loan and of all the Bonds then outstand- ing to be due and payable immediately, and upon such declaration such principal shall become due and payable immediately, anything in this Agreement or in the Bonds to the contrary notwithstanding. 8 ARTICLE VII Effective Date; Termination SECTION 7.01. The following event is specified as an ad- ditional condition to the effectiveness of this Agreement within the meaning of Section 9.01(a) (ii) and Section 9.01(b) (ii) of the Loan Regulations: The arrangements referred to in Section 5.01 of this Agreement, in terms satisfactory to the Bank, shall have been made. SECTION 7.02. The following is specified as an additional matter, within the meaning of Section 9.02(e) of the Loan Regulations, to be included in the opinion or opinions to be furnished to the Bank: That the arrangements referred to in Section 5.01 of this Agreement are valid and are binding on the Guarantor and the Borrower. SECTION 7.03. A date 60 days after the date of this Agreement is hereby specified for the purposes of Section 9.04 of the Loan Regulations. ARTICLE VIII Miscellaneous SECTION 8.01. The Closing Date shall be March 31, 1965. SECTION 8.02. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: For the Borower: Nacional Financiera, S. A. Avenida Venustiano Carranza 25 Mexico 1, D.F., Mexico Alternative address for cablegrams and radiograms: Nafin Mexico City 9 For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington 25, D.C. United States of America Alternative address for cablegrams and radiograms: Intbafrad Washington, D.C. IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Loan Agreement to be signed in their respective names and delivered in the District of Columbia, United States of America, as of the day and year first above writ- ten. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By EUGENE R. BLACK President NACIONAL FINANCIERA, S. A. By RAUL MARTINEZ OsTos Authorized Representative 10 SCHEDULE 1 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* May 1, 1965 $ 536,000 November 1, 1965 552,000 May 1, 1966 568,000 November 1, 1966 584,000 May 1, 1967 601,000 November 1, 1967 618,000 May 1, 1968 636,000 November 1, 1968 654,000 May 1, 1969 673,000 November 1, 1969 692,000 May 1, 1970 712,000 November 1, 1970 732,000 May 1, 1971 753,000 November 1, 1971 775,000 May 1, 1972 797,000 November 1, 1972 820,000 May 1, 1973 844,000 November 1, 1973 868,000 May 1, 1974 893,000 November 1, 1974 919,000 May 1, 1975 945,000 November 1, 1975 972,000 May 1, 1976 1, 000 November 1, 1976 1,029,000 May 1, 1977 1,059,000 November 1, 1977 1,089,000 May 1, 1978 1,120,000 November 1, 1978 1,153,000 May 1, 1979 1,186,000 November 1, 1979 1,220,000 * To the extent that any part of the Loan is repayable in a currency other than dollars (see Loan Regulations, Section 3.02), the figures in this column represent dollar equivalents determined as for purposes of with- drawal. 11 Premiums on Prepayment and Redemption The following percentages are specified as the premiums payable on repayment in advance of maturity of any part of the principal amount of the Loan pursuant to Section 2.05(b) of the Loan Regulations or on the redemption of any Bond prior to its maturity pursuant to Section 6.16 of the Loan Regulations: Time of Prepayment or Redemption Premium Not more than 3 years before maturity /. of 1% More than 3 years but not more than 6 years before maturity ................ 11/ More than 6 years but not more than 11 years before maturity ................ 21/%o More than 11 yeai;s but not more than 14 years before maturity ................ 31/o More than 14 years but not more than 17 years before maturity ................ 43/4% More than 17 years before maturity ...... 53/4o S 12 SCHEDULE 2 Modifications of Loan Regulations No. 4 For the purposes of this Agreement the provisions of Loan Regulation No. 4 of the Bank, dated June 15, 1956, shall be deemed to be modified as follows: (a) Section 2.02 shall be deleted. (b) The second sentence of Section 3.01 shall read as fol- lows: "Subject to the provisions of Section 2.03 of the Loan Agreement, the proceeds of the Loan shall, to the extent that the Bank shall so elect, be with- drawn from the Loan Account in the several cur- rencies in which goods are paid for." (c) Section 3.05 shall read as follows: "Section 3.05. Valuation of Currencies. Whenever it shall be necessary for the purposes of this Agree- ment to value one currency in terms of another cur- rency, such value shall be as reasonably determined by the Bank." (d) Section 4.01. is deleted. (e) The first five lines of Section 5.02 shall read as fol- lows: "Section 5.02. Suspension by the Bank. If any of the following events shall have happened and be con- tinuing, the Bank may at any time or from time to time by notice to the Borrower suspend in whole or in part the right of the Borrower to make with- drawals fron the Loan Account:" (f) The last paragraph of Section 5.02 shall read as fol- -. lows: 13 "The right of the Borrower to make withdrawals from the Loan Account shall continue to be sus- pended in whole or in part, as the case may be, un- til the event or events which gave rise to such sus- pension shall have ceased to exist or until the Bank shall have notified the Borrower that the right to make withdrawals has been restored, whichever is the earlier; provided, however, that in the case of any such notice of restoration, the right to make withdrawals shall be restored only to the extent and subject to the conditions specified in such notice, and no such notice shall affect or impair any right, power or remedy of the Bank in respect of any other or subsequent event described in this Section." (g) Section 9.03 shall read as follows: "Section 9.03. Effective Date. Notwithstanding the provisions of Section 8.01, except as shall be other- wise agreed by the Borrower and the Bank, the Loan Agreement and Guarantee Agreement shall come into force and effect on the date upon which the Bank dispatches to the Borrower and the Guarantor no- tice of its acceptance of the evidence required by Sec- tion 9.01." (h) Paragraph 12 of Section 10.01 shall read as follows: "The term 'Project' means the project or projects or program or programs for which the Loan is granted, as described in the Guarantee Agreement and as the description thereof shall be amended from time to time by agreement between the Guaran- tor and the Bank." (i) Paragraph 14 of Section 10.01 shall read as follows: "14. The term 'external debt' means any debt pay- able in any medium other than currency of the Guarantor, whether such debt is or may become pay- able absolutely or at the option of the creditor in such other medium."