Conformed Copy - L3159 - Interest Support Loan - Guarantee Agreement

Page 1 CONFORMED COPY LOAN NUMBER 3159-ME Guarantee Agreement (Interest Support Loan) between UNITED MEXICAN STATES INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated February 4, 1990 LOAN NUMBER 3159 ME GUARANTEE AGREEMENT AGREEMENT, dated February 4, 1990, between UNITED MEXICAN STATES (the Guarantor) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank). WHEREAS (A) the international banking community has responded favorably to the request dated September 15, 1989 of the UNITED MEXICAN STATES (the Guarantor) for participation in a debt relief and new financing package designed to support the Guarantor's medium-term growth-oriented economic program and the Guarantor has requested the assistance of the Bank, as part of such package, in financing the provision of collateral to secure interest payments on bonds to be issued in exchange for existing debt; (B) on the basis, inter alia, of the foregoing, the Bank has decided to provide such assistance to the Guarantor by making the loan to the Borrower; and Page 2 (C) by an agreement of even date herewith (the Loan Agreements between the Bank and Banco Nacional de Comercio Exterior, S.N.C., (the Borrower), the Bank has agreed to extend to the Borrower a loan in various currencies equivalent to one billion two hundred and sixty million dollars ($1,260,000,000), 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 provided in this Agreement and to undertake the obligations set forth in this Agreement; WHEREAS the Guarantor, in consideration of the Bank's entering into the Loan Agreement with the Borrower, 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 "General Conditions Applicable to Loan and Guarantee Agreements" of the Bank, dated January l, 1985 (the General Conditions), with the modifications set forth in Schedule 3 to the Loan Agreement constitute an integral part o\1a this Agreement. Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions and in Section 1.02 of the Loan Agreement have the respective meanings therein set forth. ARTICLE II Guarantee; Provision and Transfer of Funds Section 2.01. (a) Without limitation or restriction upon any of its other obligations under the Guarantee Agreement, the Guarantor hereby unconditionally guarantees, as primary obligor and not merely as surety, the due and punctual payment of the principal of, and interest and other charges on, the Loan, and the premium, 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. (b) The Guarantor shall enter into the contractual arrangements referred to in Section 3.01 of the Loan Agreement and, except as the Bank may otherwise agree, shall not change or fail to enforce any provision of such contractual arrangements. ARTICLE III Other Covenants Section 3.01. (a) The Guarantor and the Bank, and the Borrower, pursuant to Section 3.02 (a) of the Loan Agreement, shall, from time to time at the request of any party, exchange views on the Project. (b) Prior to each such exchange of views, the Guarantor, and the Borrower pursuant to Section 3.02 (b) of the Loan Agreement, shall furnish to the Bank, for its Page 3 review and comment a report on the Project in such detail as the Bank shall reasonably request. Section 3.02. (a) The Guarantor shall take all actions as shall be necessary or required in order to enable the Borrower to comply with the provisions of Section 2.08 of the Loan Agreement. (b) The Guarantor, and the Borrower pursuant to Section 2.08 (b) of the Loan Agreement, shall inform the Bank of the occurrence of any of the events listed in paragraph (a) of Section 2.08 of the Loan Agreement within five (5) working days of the occurrence thereof. Section 3.03. (a) The Guarantor may use the proceeds of the Loan solely for the purposes of the Project. (b) On or prior to the Exchange Date, the Guarantor shall submit to the Bank legal opinions satisfactory to the Bank of counsel acceptable to the Bank on the Exchange and the establishment and maintenance of the Collateral pursuant to the Financing Package in accordance with the arrangements for the submission of such legal opinions approved by the Bank under paragraph 2 (a) of Schedule 1 to the Loan Agreement. (c) Without any limitations or restrictions upon the provisions of Section 9.01 of the General Conditions and Section 3.02 (b) of this Agreement, the Guarantor shall: (i) at all times keep the Bank informed of all notices, certificates and confirmations issued to or received by the Guarantor in respect of the Collateral; and (ii) provide to the Bank copies of the monthly reports with respect to the Collateral Accounts delivered by the Collateral Agent to the Guarantor pursuant to the provisions of the Collateral Pledge Agreements within 15 days of the receipt thereof. ARTICLE IV Financial Covenants Section 4.01. (a) The Guarantor shall maintain, or cause to be maintained, separate records and accounts adequate to reflect in accordance with consistently maintained sound accounting practices the payments made in respect of the Project and financed out of the proceeds of the Loan. (b) The Guarantor shall: (i) have the records and accounts referred to in paragraph (a) of this Section for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent and qualified auditors; (ii) furnish, or cause to be furnished, to the Bank as soon as available, but in any case not later than six months after the end of each such year, a certified copy of the report of such audit by said Page 4 auditors, of such scope and in such detail as the Bank shall have reasonably requested; and (iii) furnish, or caused to be furnished, to the Bank such other information concerning said records and accounts and the audit thereof as the Bank shall from time to time reasonably request. ARTICLE V Representative of the Guarantor; Addresses Section 5.01. The Director General de Captacion de Credito Externo of 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: Direccion General de Captacion de Credito Externo Secretaria de Hacienda y Credito Publico Palacio Nacional, Primer Patio, Mariano, 4o. Piso 06066 Mexico, D.F., Mexico Telex: 1777313-SHOCME 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) IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have caused this Agreement to be signed in their respective names in Mexico City, Mexico, as of the day and year first above written. UNITED MEXICAN STATES By /s/ Pedro Aspe Armella Authorized Representative INTERNATIONAL BANK FOR Page 5 RECONSTRUCTION AND DEVELOPMENT By /s/ Shahid Husain Regional Vice President Latin America and the Caribbean