LOAN NUMBER 12 Me Loan Agreement (Comision Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND NACIONAL FINANCIERA, S. A. AND COMISION FEDERAL DE ELECTRICIDAD DATED JANUARY 6, 1949 LOAN NUMBER 12 Me Loan Agreement (Comision Project) ETWNE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND NACIONAL FINANCIERA, S. A. AND COMISION FEDERAL DE ELECTRICIDAD DATED JANUARY 6, 1949 TABLE OF CONTENTS LOAN AGREEMENT Article Number Title Page I Definitions ... .......................... 1 II The Loan.............................. 3 III Use of Proceeds of the Loan................ 6 IV Withdrawal of Proceeds of the Loan......... 7 V Bonds..... .......................... 14 VI Redemption of Bonds .................... 19 VII Particular Covenants of the Borrowers ....... 21 VIII Remedies of the Bank on Default.......... 26 TX Interpretation of Agreement; Arbitration..... 28 X Miscellaneous Provisions ................. 29 XI Effective Date .......................... 31 SCHEDULES Schedule Number Title Page 1 Table of Amortization ................... 34 2 Description of Project .................... 36 3-A Form of Dollar Bond Payable to Order ...... 45 3-B Form of Coupon Bond Payable in Dollars ... 49 4 Estimated Cost of Project ................. 55 3Loan Agrtuent AGREEMENT, dated January 6, 1949, between INTER- NATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT, party of the first part, and NACIONAL FINANCIERA, S. A., and CoMisioN FEDERAL DE ELECTRICIDAD, parties of the second part. ARTICLE I Definitions Wherever used in this Agreement or in any Schedule to this Agreement, unless the context shall otherwise re- quire, the following terms shall have the respective mean- ings hereinafter in this Article set forth: (1) The term Bank means International Bank for Re- construction and Development, the party of the first part hereto. (2) The term Finane.era means Nacional Financiera, S. "A., a corporation (sociedad an6nima) organized and existing under the laws of United Mexican States, an offi- cial agency of United Mexican States, one of the parties of the second part hereto. (3) The term Commission means Comisi6n Federal de Electricidad, an official agency of United Mexican States, one of the parties of the second part hereto. (4) The term Borrowers means Financiera and the Com- mission, the respective parties of the second part hereto. (5) The term Guarantor means United Mexican States. (6) The term Loan means the loan provided for in this Agreement. (7) The term Loan Account means the loan account to be opened as provided in Section 1 of Article IV of this Agreement. 2 (8) The term United States means the United States of America. (9) The term dollars and the sign $ mean dollars in such coin or currency of the United States as at the time referred to shall be legal tender for the payment of pub- lic and private debts in the United States. (10) The term Bond means a bond issued in accordance with Article V of this Agreement. (11) The term principal office of the Bank means its principal office in the City of Washington, District of Columbia, United States. If the principal office of the Bank shall be changed and the Bank shall so notify the Borrowers, the term principal office of the Bank shall thereafter mean the principal office so notified to the Bor- rowers. (12) The term goods means equipment, supplies and services which are required for the purposes specified in Article III of this Agreement, and wherever reference is made in this Agreement to the cost of any goods such cost shall be deemed to include the cost of importing such goods into the territories of the Guarantor, but only to the extent that such cost shall be paid in currency other than currency of the Guarantor. (13) The term external debt means any debt payable in any currency other than currency of the Guarantor, whether such debt is payable absolutely or at the option of the creditor in such other currency. (14) The term Closing Date means December 31, 1952, or such other date as shall be agreed upon in writing be- tween the Bank and the Borrowers as the Closing Date. (15) The term Effective Date means the date on which this Agreement shall come into force and effect as pro- vided in Article XI of this Agreement. (16) The term Guarantee Agreement means the agree ment of even date herewith between the Bank and the Guarantor whereby the Guarantor agrees to guarantee the Loan and the obligations of the Borrowers under this Agreement. (17) The term this Agreement includes the respective Schedules which are referred, to herein and all of which are hereby incorporated herein and are herein referred to by their respective letters and numbers. (18) The term Project means the program prepared by the Borrowers for the development of the facilities and resources of the Guarantor for the production and distribu- tion of electric power, as more particularly set forth in Schedule 2 to this Agreement as such Schedule shall be amended from time to time by agreement in writing be- tween the Bank and the Borrowers. ARTICLE II The Loan SECTION 1. The Bank agrees to lend to the Borrowers, on the terms and conditions in this Agreement set forth, the sum of twenty-four million, one hundred thousand dollars ($24,100,000), or the equivalent thereof in curren- cies other than dollars as hereinafter provided. SECTION 2. The amount of the Loan may be withdrawn by the Borrowers as provided in Article IV of this Agree- ment. The Borrowers shall pay to the Bank a commit- ment charge on any amount of the Loan not so withdrawn for the period from the Effective Date to the respective dates on which the respective amounts shall be so with- drawn or shall be cancelled pursuant to Section 6 or 8 of Article IV of this Agreement or on which the Bank shall incur firm obligations to others than the Borrowers to pay such amounts, whichever shall be the earlier. Such 4 0 commitment charge shall be payable in dollars semi-annu- ally on February 1 and August 1 in each year and shall accrue and be payable at the following rates: (a) For the period to and including the 180th day after the Effective Date, at the rate of one and one-half per cent (1/2%) per annum; (b) Thereafter, at the rate of three and one-half per cent (31/2%) per annum less a credit computed as follows: For each three-month period beginning January 1, April 1, July 1 or October 1, or for any part of such period, such credit shall be computed at the ap- proximate rate of aniual discount on the issue of 90, 91 or 92-day United States Treasury Bills last sold by the United States immediately p-eceding the beginning of such period on the basis of the average price for the sale of such issue, all as an- nounced by the United States Treasury Department; provided, however, that the rate at which such credit shall be computed for any such period, or part thereof, shall in no event exceed two per cent (2%) per annum. SEcTION 3. The Borrowers shall pay interest (includ- ing commission) at the rate of four and one-half per cent (4/2 %) per annum on the principal amount of the Loan out- standing and unpaid from the respective dates on which the respective amounts of the Loan shall be withdrawn by the Borrowers as provided in Article IV of this Agreement or on which the Bank shall incur firm obligations to others than the Borrowers to pay such amounts, whichever shall be the earlier. Such interest shall be payable in dollars semi- annually on February 1 and August 1 in each year, except that interest on any part of the Loan which shall be repay- able in any currency other than dollars shall be payable in such other currency. 5 SEoTION 4. In all cases in which it shall be necessary to compute the amount of commitment charge or interest or service charge which shall have accrued under this Agreement for periods of less than six months, such com- mitment charge, interest or service charge shall be com- puted on a daily basis using a 365 day factor. For even periods of six months such commitment charge, interest and service charge shall be computed on an annual basis. SEcTION 5. The Borrowers shall repay the principal of the Loan in accordance with the amortization schedule set forth in Schedule 1 to this Agreement. SECTIoN 6. Except as shall be otherwise specified in this Agreement or in the Bonds, the principal of, and in- terest, commitment charge and service charge on, the Loan and the premium on Bonds called for redemption prior to the maturity thereof shall be paid at the office of the Bank in The City of New York, State of New York, United States, or at such other place or places as the Bank shall from time to time request in writing. SECTION 7. As soon as practicable, the Borrowers shall notify the Bank of each of the countries other than the United States in which the Borrowers have placed or in- tend to place orders for goods, which notice shall include for each such country a list of the goods for which the Borrowers have placed or intend to place orders and the estimated cost of such goods. The Borrowers shall from time to time promptly notify the Bank of any changes in such counLries or in such lists or in such estimated costs. If apy goods shall be purchased in any country other than the United States, the Borrowers shall make reasonable efforts to pay the cost of such goods in the currency of such other country. To the extent that the cost of any goods shall be payable in any currency other than dollars, the Bank may, at its option, advance such other currency in lieu of dollars as part of the Loan. If and to the ex- 6 tent that the Bank shall acquire in exchange for dollars any such other currency which it shall so advance, the part of the Loan so advanced shall be repayable in dollars and the equivalent in dollars of the part of the Loan so advanced shall be the amount of dollars paid. by the Bank in exchange for such other currency. If and to the extent that the Bank shall advance any such other currency which it shall not have acquired in exchange for dollars the part of the Loan so advanced shall be repayable in such other currency. SECTION 8. The parties to this Agreement accept and agree to the provisions of Loan Regulations No. 2 of the Bank, dated April 28, 1948, a copy. of which has been furnished to the Borrowers, with the same force and effect as if they were fully set forth herein, anything in this Agreement or the Bonds to the contrary notwith- standing. ARTICLE III Use of Proceeds of the Loan SECTION 1. Except as shall be otherwise agreed in writ- ing between the Bank and the Borrowers, the proceeds of the Loan shal be applied by the Borrowers exclusively to the payment of the cost of purchasing and importing into the territories of the Guarantor goods which will be re- quired for the carrying out of the Project. The specific goods to be purchased out of the proceeds of the Loan shall be determined by agreement in writing between the Bank and the Borrowers, and the list of such goods may be modi- fied from time to time by agreement in writing between them. SECTION 2. The goods shall be imported into the terri- tories of the Guarantor and shall there be used by the Borrowers in the carrying out of the Project in accordance with the plans and specifications which shall have been furnished to the Bank pursuant to Section 2 of Article 0 7 VII of this Agreement. Except as shall be otherwise agreed in writing between the Bank and the Borrowers, title to all such goods shall be conveyed to the Commission free and clear of all incumbrances. ARTICLE IV Withdrawal of Proceeds of the Loan SECTION 1. The Bank shall open an account on its books in the name of the Borrowers and shall credit to said account the amount of the Loan. The Borrowers shall be entitled from time to time to withdraw from the Loan Account such amounts as shall be required by the Bor- rowers in order to reimburse them for amounts paid subsequent to the Effective Date (except as shall be otherwise specifically provided by agreement in writing between the Bank and the Borrowers) for the purpose of paying the cost of goods purchased in accordance with Article III of this Agreement. The Borrowers shall also be entitled from time to time to withdraw from the Loan Account such amounts as shall from time to time be approved in writing by the Bank and as shall be reason- ably required by the Borrowers in order to enable them to pay the cost of such goods not theretofore paid. SECTION 2. (a) Whenever the Borrowers shall desire to withdraw amounts from the Loan Account, the Borrow- ers shall deliver to the Bank an application in writing set- ting forth: (1) The amount which the Borrowers so desire to with- draw from the Loan Account; (2) A statement that said amount is required to reim- burse the Borrowers for, or to enable the Borrowers to meet, payments made or to be made for the pur- pose of paying the cost of goods as therein set forth, which statement shall show, in such reason- 8 able detail as the Bank shall request, the cost of such goods, the date on which such goods were ordered and the dates on which payment for such goods wFs made or will be due, the names and addresses of the suppliers of such goods, the date of arrival or estimated date of arrival of such goods in the terri- tories of the Guarantor, and the known or intended destination and end-use of such goods in the Project; (3) A statement that the Borrowers have not thereto- fore withdrawn from the Loan Account, or applied for the withdrawal from the Loan Account of, any amounts for the purpose of reimbursing the Bor- rowers for or meeting such payments, and that neither of the Borrowers has obtained or will obtain funds for such purpose out of the proceeds of any other loan or credit available to either of them, other than a short-term loan or credit established in antici- pation of the withdrawal applied for and to be repaid pro tanto with the funds to be withdrawn, which loan or credit shall be described in the appli- cation; (4) A statement that such payments were or will be made for the purposes specified in Article III of this Agreement; that the goods- purchased or to be purchased by means of such payments are appro- priate for such purposes; and that the cost and terms of purchase thereof are not unreasonable; and (5) A statement that at the date of the applicatio;i there is no existing default in the performance of any of the obligations of the Borrowers or either of them under this Agreement or of the Guarantor under the Guarantee Agreement. (b) If such application shall be to withdraw from the Loan Account amounts for the purpose of enabling the 9 Borrowers to meet the cost of goods not theretofore paid, it shall also set forth: (6) A statement of the arrangements under which the amount to be withdrawn from the Loan Account on such application will be applied to the payment of the cost of such goods; and (7) An agreement by the Borrowers that they will apply or cause to be applied the amount to be withdrawn from the Loan Account on such application only to the payment when and as due of the cost of such goods and that, as promptly as possible thereafter, the Borrowers will furnish to the Bank proof satis- factory to the Bank that such amount has been so applied. (c) If such application shall be the first application for withdrawal hereunder, it shall also set forth: (8) A statement that between the date of this Agree- ment and the Effective Date none of the events speci- fied in paragraph (g) of Section 7 of ihis Article has occurred. SECTION 3. (a) Each application under this Article shall be in writing in the English language and shall be signed on behalf of the Borrowers by their representative or representatives duly authorized for the purpose. Each such application shall be executed and delivered to the Bank in triplicate as the Bank shall from time to time direct. Except as otherwise agreed in writing between the Bank and the Borrowers each such application (except the final application for any currency) .shall be for an amount of not less than $50,000, or the equivalent thereof in any one currency. Such applications shall be serially numbered. (b) The Borrowers shall furnish to the Bank, upon .request, original or duplicate receipted bills or invoices 10 or other documents sufficient to show that the payments covered by the application have been made for the goods specified therein. (c) If the expenditures to be reimbursed or paid by the withdrawal applied for were or are to be made in any currency other than dollars, the application shall so state and shall also state the amount of such expenditures in such other currency. SECTION 4. Each application and the accompanying documents must be sufficient to satisfy the Bank that the amount to be withdrawn from the Loan Account is to be used only for the purposes specified in Article III of this Agreement. The Borrowers shall furnish to the Bank any and all such further documents and other evidence in sup- port of the application as the Bank shall at any time or from time to time reasonably request and whether before or after the Bank shall permit any withdrawal requested in the application. All applications and other documents delivered to the Bank under this Article shall be in form and substance satisfactory to the Bank. SECTION 5. If the Bank is satisfied that the application fully complies with the provisions of this Agreement and that the Borrowers are entitled under this Agreement to withdraw from the Loan Account the amount applied for, the Bank shall promptly pay such amount to or on the order of the Borrowers; provided, however, that if the expenditures to be reimbursed or paid by the withdrawal applied for were made or are to be made in any currency other than dollars, the Bank shall have the option, as pro- vided in Section 7 of Article II of this Agreement, to make the advance applied for in such other currency. SECTION 6. The Borrowers may at their option by writ- ten notice to the Bank cancel all or any part of the Loan which the Borrowers shall not have withdrawn prior to * 11 such notice. If the Borrowers shall not on or before the Closing Date have withdrawn from the Loan Account the full amount of the Loan, the amount of the Loan not so withdrawn shall l)e cancelled. Except as otherwise agreed in writing between the Bank aud the Borrowers, any can- collation pursuat to this Section or to Section 8 of this Article shall be applied to the respective maturities of the instalments of the principal amount of the Loan as set forth in Schedule I to this Agreement in the inverse order of such maturities, beginning with the latest matur- ity, except to the extent that Bonds of such maturities shall have theretofore been executed and delivered pur- suant to Article V of this Agreement. SECTION 7. If any of the events hereinafter described shall have happened and be continuing, the Bank may, at its option, suspend the right of the Borrowers to with- draw from the Loan Account, to wit: (a) An Event of Default shall have happened and be existing under this Agreement. (b) An extraordinary situation shall exist which shall make it improbable that the Borrowers or either of them will be able to perform their obligations under this Agreement or that the Guarantor will be able to perform its obligations under the Guarantee Agree- ment. (c) The Guarantor shall have ceased to be a member of the International Monetary Fund or shall have become or been declared ineligible under Section 6 of Article IV, Section 5 of Article V, Section 1 of Article VI or Section 2(a) of Article XV of the Articles of Agreement of the International Mone- tary Fund to use the resources of said Fund. (d) The Guarantor shall have been suspended from membership in or shall have ceased to be a member of the Bank. 12 (e) The Bank shall have suspended operations either temporarily or permanently as provided in Section 5 of Article VI of its Articles of Agreement. (f) Any condition shall arise which shall make it prob- able that the estimated cost of the Project will ma- terially exceed the estimated cost set forth in Schedule 4 to this Agreement, and the Borrowers, after having been accorded a reasonable opportu- nity for consultation with the Bank, shall be unable to show that they can provide or obtain, promptly and upon reasonable terms, the additional funds required to cover such increase. (g) After the date of this Agreement and prior to the Effective Date, the Guarantor or either of the Borrowers shall have taken any action which would have constituted a violation of any covenant con- tained in Section 7, 8 or 9 of Article VII of this Agreement, or in Section 1 or 2 of Article III of the Guarantee Agreement, had this Agreement and the Guarantee Agreement been in full force and effect on the date such action was taken. The Bank may exercise its option to suspend such right to withdraw by notice to the Borrowers of its election to exercise such option. Upon the giving of such notice the right of the Borrowers to withdraw from the Loan Ac- count, except as otherwise provided in this Section and in Section 9 of this Article, shall forthwith be suspended and shall continue to be suspended unitil the event which gave rise to such suspension shall have ceased to exist or until the Bank shall have notified the Borrowers that the Bank has lifted such suspension, whichever is the earlier. If the Borrowers' right to withdraw from the Loan Account shall be so suspended for a period of 30 days, then at any time after the expiration of such 30 days, the Borrowers may, by notice to the Bank, elect to treat 13 such suspension as a cancellation. The amount of the Loan not theretofore withdrawn shall be deemed to have been cancelled pursuant to Section 8 of this Article as of the date of receipt by the Bank of such notice. SECTION 8. Except as otherwise provided in Section 9 of this Article, if any of the events described in Section 7 of this Article shall have happened and be continuing, the Bank may at any time by notice to the Borrowers termi- nate any and all obligations of the Bank to permit the Borrowers to withdraw from the Loan Account, and upon the giving of such -Uotice the amount of the Loan not theretofore withdrawn shall be cancelled. SECTION 9. If the right of the Borrowers to withdraw from the Loan Account shall be suspended pursuant to Section 7 or cancelled pursuant to Section 8 of this Article and if prior to the date of such suspension or cancellation, as the case may be, the Borrowers shall have entered into any binding commitment for the purchase of goods which shall have been approved in writing by the Bank either before or after the making thereof, then the Bank shall permit the Borrowers to withdraw from the Loan Account such amounts as shall be necessary in order to enable the Borrowers to satisfy their obligations under such commit- ment. The right of the Borrowers to withdraw from the Loan Account pursuant to this Section shall be subject to the condition that the Borrowers shall comply with the provisions of Sections 2 (except subparagraphs 5 and 8 thereof), 3, 4 and 5 of this Article. The commitment charge specified in Section 2 of Article II of this Agree- ment shall continue to accrue on amounts subject to with- drawal under this Section. SECTION 10. Notwithstanding any cancellation pursuant to Section 6 or 8 of this Article or any suspension pur- suant to Section 7 of this Article, all the provisions of this Agreement shall continue in full force and effect except as in this Artic6 specifically provided. 14 ARTICLE V Bonds SECTION 1. The Borrowers shall, as hereinafter in this Article provided, execute and deliver to the Bank for amounts withdrawn from the Loan Account Bonds bear- ing the guarantee of the Guarantor endorsed thereon as provided in the Guarantee Agreement. From and after the delivery of any such Bonds, they shall represent a principal amount of the Loan equal to the principal amount of such Bonds, and payment of the principal of any such Bonds shall pro tanto discharge the obligation of the Bor- rowers to repay the principal of the Loan as provided in Section 5 of Article II of this Agreement. SECTION 2. If and when the Bank shall so request, the Borrowers shall, within 60 days after the date of the re- quest, execute and deliver to or on the order of the Bank Bonds bearing such guarantee so endorsed thereon in the aggregate principal amount specified in such request, not exceeding, however, the aggregate principal amount of the Loan which shall have been withdrawn and shall be outstanding and unpaid at the date of such request and for which Bonds shall not theretofore have been so exe- cuted and delivered. SECTION 3. Within 60 days after the Closing Date the Borrowers shall so execute and deliver to the Bank Bonds bearing such guarantee so endorsed thereon in the aggre- gate principal amount of the Loan which shall have been withdrawn and shall be * outstanding and unpaid at the Closing Date and for which Bonds shall not theretofore have been so executed and delivered. SECTION 4. The respective maturities of the Bonds which shall be so executed and delivered shall correspond to the maturities of instalments of the principal of the 15 Loan as specified in the amortization schedule set forth in Schedule 1 to this Agreement; provided, however, that, except as the Bank and the Borrowers shall otherwise agree in writing, any Bonds so executed and delivered prior to the Closing Date shall have the earliest maturity dates so specified for the corresponding instalments of the principal of the Loan for which Bonds shall not thereto- fore have been so executed and delivered. SECTIOiT 5. The Bonds shall be payable to. the order of the Bank or another payee or other payees or shall be coupon Bonds, as the Bank shall request. Bonds to the order of a named payee or payees payable in dollars shall be substantially in the form set forth in Schedule 3-A to this Agreement. Coupon Bonds and the coupons at- tached thereto shall be substantially in the form set forth in Schedule 3-B to this Agreement. SECTION 6. If any part of the Loan shall be repayable in any currency other than dollars, the Bonds representing the amount so repayable shall be payable as to principal and interest in such other currency and the aggregate principal amount of such Bonds shall be equal to the aggre- gate amount of such currency so advanced and not there- tofore repaid. Bonds payable in any currency other than dollars shall be substantially in the form set forth in Schedule 3-A or 3-B to this Agreement, as the case may be, except as they shall provide for payment of principal, in- terest and premium, if any, on redemption, in such other currency, shall provide for such place or places of pay- ment as the Bank shall specify and shall contain such other modifications as the Bank shall reasonably request in order to conform to the laws or to financial usage of the country in the territories of which they are payable. SECTION 7. The Bond shall bear interest at such rate or rates as the Bank shall specify, not in excess, however, 16 of 4 % per annum. If any of the Bonds shall bear in- terest at a rate less than 41/2% per annum, the Borrow- ers shall pay to the Bank a service charge oi, the prin- cipal amount of the Loan outstanding and unpaid from time to time and represented by such Bonds at an annual rate equal to the difference between 4 % per annum and the interest rate specified in such Bonds. Such service charge shall be payable semi-annually on Fqbruary I and August 1 in each year in the currency in which such Bonds are payable. The payment of interest at the rate specified in the Bonds, and the payment of service charge at the rate determined as provided in this Section, shall pro tanto discharge the obligation of the Borrowers to pay interest (including commission) on the Loan as provided in Section 3 of Article II of this Agreement. SECTION 8. Each Bond payable to the order of a named payee or ,named payees) shall be dated the semi-annual interest payment date on which or immediately preceding the date on which it shall be delivered. Each coupon Bond shall be dated February 1, 1949, and shall have attached coupons for semi-annual interest from the semi-annual interest payment date on which or immediately preceding the date on which it shall be delivered. Upon the delivery of Bonds appropriate adjustment shall be made so that there shall be no loss to the Bank or to the Borrowers in respect of interest, service charge and commitment charge on the principal amount of the Loan for which such Bonds shall have been delivered. SECTION 9. Bonds payable in dollars shall be-in denomi- nations of $1000 or multiples thereof as the Bank shall request. Bonds payable in other currencies shall be in such denominations as the Bank shall request. SECTION 10. The Bori owers shall at any time and from time to time, within 60 days after the Bank shall so re- 17 quest, execute and deliver to the Bank, in exchange for Bonds theretofore executed and delivered to it, new Bonds, bearing the guarantee of the Guarantor endorsed thereon as provided in the Guarantee Agreement, in accordance with the following provisions: (a) Bonds payable to the order of a named payee or named payees may be exchanged for Bonds payable to the order of another payee or other payees speci- fled in the request or for coupon Bonds, and coupon Bonds may be exchanged for Bonds payable to the order of a payee or payees specified in the request. (b) Bonds of any denominations may be exchanged for Bonds of any other authorized denominations. (c) Bonds bearing interest at one rate may be exchanged for Bonds bearing interest at any other rate not in excess of 41/2 o per annum. (d) Coupon Bonds surrendered or executed and deliv- ered on any such exchange shall have all unmatured coupons attached. * (e) Bonds payable to the order of a named payee or named payees surrendered on any such exchange shall, unless payable to the order of the Bank and not further endorsed, be appropriately endorsed or be accompanied by appropriate instruments of assignment. (f) All Bonds surrendered on any such exchange shall be cancelled forthwith. (g) Upon exchanges of Bonds payable to order for cou- pon Bonds or of coupon Bonds for Bonds payable to order or of Bonds bearing interest at one rate for Bonds bearing interest at another rate appro- priate adjustment shall be made so that there shall not be any loss to the Bank or the Borrowers in respect of interest and service charge on the prin- 18 cipal amount of the Loan represented by such Bonds. (h) The new Bonds so executed and delivered shall be of the same aggregate principal amount and, ex- cept as hereinbefore provided, shall be of the same tenor and effect as the Bonds surrendered for ex- change. (i) The Bank shall reimburse the Borrowers for the reasonable cost of preparation of the new Bonds and of effecting the exchange. SECTION 11. No holder of any- Bond other than the Bank shall by virtue of being the holder thereof be entitled to any of the rights or benefits conferred, or be subject to any of the conditions or obligations imposed, upon the Bank under this Agreement except as shall be otherwise provided in such Bond or in the guarantee of the Guar- antor endorsed thereon. SECTION 12. At any time or from time to time, upon the request of the Bank, the Borrowers will at their own expense do any and all such things as the Bank shall reasonably request in order to comply with any laws or regulations of any country, or of any state or political subdivision thereof, or of any,securities exchange therein, in order to enable the Bank to sell or offer for sale any of the Bonds, by public sale or otherwise, in any country or to list any of the Bonds for trading on any securities exchange. To that end the Borrowers will execute and deliver all registration statements, applications and other documents, and furnish to the Bank all information which shall be required in order so to comply with any such law or regulation, and the Borrowers will pay all registra- tion and filing fees required by any such law or regulation. The Bank will give to the Borrowers not less than four months notice of any such request. 19 SECTION 13. If the Bank shall at any time sell any of the Bonds and shall then or thereafter guarantee the pay- ment in whole or in part of the principal thereof, the in- terest thereon, and the premium, if any, on the redemption thereof, the Borrowers will indemnify the Bank against and hold it harmless from liability arising out of such guarantee. ARTICLE VI Redemption of Bonds SEcTION 1. The Borrowers or either of them may, at their election, at any time or from time to time after the date of the Bonds, pay off and redeem all or any of the Bonds, at a redemption price for each Bond equal to the principal amount thereof, plus the interest accrued and unpaid thereon to the date fixed for the redemption thereof, plus as a premium the following respective percentages of such principal amount: 1/2 of 1%, if redeemed not more than five years prior to the date of maturity specified in such Bond; 1%, if redeemed more than five years and not more than ten years prior to said date; 11/2%, if re- deemed more than ten years and not more than fifteen years prior to said date; 2%, if redeemed more than fifteen years and not more than twenty years prior to said date; and 21/2%, if redeemed more than twenty years prior to' said date. Such premium shall be payable in the currency in which such Bond is payable. SECTION 2. If the Borrowers or either of them shall so elect to redeem less than all of the Bonds at the time out- standing and unpaid, the Bonds so to be redeemed shall be designated by lot, or in such other manner, as the Bank and the Borrowers shall agree upon in writing. SECTION 3. The Borrowers' election to redeem the Bonds or any thereof shall be exercised by giving notice 20 as provided in this Section stating such election, desig- nating the Bond or Bonds to be redeemed, stating the redemption price or prices thereof determined as in Sec- tion 1 of this Article provided, and stating the date (some- times referred to in this Article as the date fixed for redemption) on which such Bonds are to be redeemed. Such notice shall be given to the Bank not less than 90 days prior to the date fixed for redemption and, if any of the Bonds to be redeemed are coupon Bonds, the Borrowers shall in addition give at least 45 days' notice by publication in two daily newspapers printed in the English language and published and of general circulation in the Borough of Manhattan in The City of New York, State of New York, United States. SECTION 4. Notice of election to redeem having been given as, above provided, the Bonds to be redeemed shall on the date fixed for redemption become due and payable at their respective redemption prices determined as in Section 1 of this Article provided. From and after the date fixed for redemption (unless the Borrowers shall fail to make payment of the redemption price or prices of such Bonds) interest on such Bonds shall cease to accrue and, upon presentation of such Bonds for payment and redemp- tion in accordance with said notice, such Bonds shall be paid by the Borrowers at the redemption price or prices aforesaid. If any of such Bonds shall not be so paid upon presentation thereof, they shall continue to bear interest as therein specified until paid. Upon the date fixed for redemption, the Borrowers shall pay to the Bank the amount of service charge, if any, accrued and unpaid on the part of the Loan represented by the Bonds to be redeemed. 21 ARTICLE VII Particular Covenants of the Borrowers The Borrowers hereby covenant as follows: SECTION 1. The Borrowers will carry out and complete the Project with due diligence and efficiency and in con- formity with sound engineering practice. SECTION 2. The Borrowers will, immediately upon the preparation thereof, furnish to the Bank the plans and specifications for the Project in such form and detail as the Bank shall reasonably request. Any modifications or changes in such plans and specifications shall be promptly furnished to the Bank. SECTION 3. The Borrowers will apply the proceeds of the Loan and the goods purchased with such proceeds in accordance with the provisions of Article III of this Agree- ment. SECTION 4. So long as any part of the Loan shall be outstanding and unpaid, the Borrowers will maintain books, accounts and records adequate to identify the goods purchased with the proceeds of the Loan, to disclose the end-use thereof in the Project and the progress of the Project, and to reflect in accordance with consistently maintained sound accounting practices the financial con- dition and operations of each of the Borrowers. SECTIoN 5. So long as any part of the Loan shall be outstanding and unpaid, the Borrowers will permit ac- credited representatives of the Bank, including independ- ent accountants and engineers designated by the Bank for that purpose, to inspect any and all goods purchased out of the proceeds of the Loan and any of the properties owned or operated by the Commission and to inspect, 22 audit and make copies of, any books, accounts, records, contracts, orders, invoices, engineering studies and reports, and other documents relating to the goods purchased out of the proceeds of the Loan, and the use thereof in the Project, or to the progress of ,the Project, or otherwise to the financial condition or operations of the Borrowers. SECTION 6. So long as any part of the Loan shall be outstanding and unpaid, the Borrowers will furnish to the Bank all such information, at such times, in such form and in such detail, as the Bank shall reasonably request relating to the expenditure of the proceeds of the Loan, the use of the goods purchased therewith, the progress of the Project and the operations and financial condition of the Borrowers. SECTION 7. So long as any part of the Loan shall be outstanding and unpaid, the Commission will not, without the prior written approval of the Bank, incur any debt if thereby the aggregate amount required in any fiscal year of the Commission (including the fiscal year in which the Commission proposes to incur such debt) for the payment of principal (including amortization and sinking fund pay- ments) of, and interest and other charges on, all outstand- ing debt (including said proposed debt) incurred by the Commissioli would exceed 66%o of the aggregate amount of the revenues received by the Commission during its fiscal year last preceding the date on which the CommiE .)n pro- poses to incur such debt. For purposes of this Section: (a) the term "revenues of the Commission" shall be deemed to mean the aggregate of (i) all current revenues of the Commission exclud- ing public appropriations and grants and (ii) all payments on account of principal of, and amortization and sinking fnds on, debt owing to the Commission but only to the extent that the Commis- sion shall have made payments during the same fiscal year on account of principal of, and amortization and sinking funds on, debt of the Commission; less the amount of all operating, administrative and overhead expenses of the Commission, but without deduction of any amounts for depreciation, replace- ment, retirement, obsolescence, interest, sinking fund or amortization of principal of indebtedness; (b) the term "debt" shall not include debt maturing by its terms in not more than one year after its date in an aggregate principal amount not exceeding the equivalent of ten million pesos in the currency of the Guarantor; (c) the term "debt" shall not include the loan in the principal amount of $10,000,000 provided for in a loan agreement of even date herewith between the Bank and the Borrowers and the term "revenues of the Commission" shall not include any amounts received on account of the loan in the principal amount of $10,000,000 provided for in a contract to be entered into, pursuant to said loan agreement, by the Borrowers and The Mexican Light and Power Company, Limited; (d) the term "incur" with reference to any debt shall include any assumption or guarantee of such debt or any modification of the terms of payment of such debt; and (e) sums in currency other than currency of the Guar- antor shall be ronverted into currency of the Guar- antor at the official selling rate of the Bank of Mexico for such other currency on the date on which the Commission proposes to incur the debt in question. SECTION 8. Except as the Bank shall otherwise agree in writing, so long as any part of the Loan shall be out- 24 standing and unpaid, if any privilege or priority (includ- ing any mortgage, pledge or charge) shall be created on any property, assets, revenues or receipts of the Commis- sion as security for the payment of any debt, then by the creation thereof such privilege or priority shall equally and ratably secure the payment of the principal of, and the interest, commitment and service charges on, the Loan and the Bonds, and the Commission covenants that in the creation of any such privilcge or priority express provi- sion shall be made to that effect; provided, however, that this Section shall not apply to any privilege or priority created on property purchased at the time of purchase solely as security for the payment of the purchase price of such property. SECTION 9. So long as any part of the Loan shall be outstanding and unpaid, if Financiera shall propose to incur, assume or guarantee any external debt, or substan- tially to modify the terms of payment of any then exist- ing external debt incurred, assumed or guaranteed by it, it will notify the Bank promptly of the particular proposal, and prior to the taking of the proposed action, will afford to the Bank all opportunity which is reasonably prac- ticable under the circumstances to exchange views with it with regard to such proposal. SECTION 10. If at any time so long as any part of the Loan shall be outstanding and unpaid any condition shall arise which shall prevent, obstruct or interfere with, or threaten to prevent, obstruct or interfere with, the com- pletion of the Project, the accomplishment of the purposes of the Loan or the maintenance of the service of the Loan, the Borrowers will promptly inform the Bank of such condition and will afford to the Bank a reasonable oppor- tunity to exchange views with the Borrowers with regard thereto. 25 SECTION 11. The Borrowers shall pay or cause to be paid any and all taxes, duties, imposts and fees that shall be imposed upon this Agreement, the Bonds or the Guar- antee Agreement, or the execution, delivery or registra- tion thereof, or the payment of principal, interest or other charges thereunder. Such principal, interest and other charges shall be paid without deduction for and free of any and all such taxes, duties, imposts and fees imposed by the Guarantor or any taxing authority thereof or therein. This Section shall not apply to taxation of pay- ments made under the provisions of any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual or corporate resident of the Guar- antor. SECTION 12. So long as any part of the Loan shall be outstanding and unpaid: (a) Each of the Borrowers will at all times maintain its existence and right to carry on operations and the Commission will, except as the Bank shall other- wise agree in writing, maintain and renew all rights, powers, privileges anO franchises owned by it and necessary or useful in the operation of its business; (b) The Commission will maintain its plants, equip- ment and property, and from time to time make all necessary renewals and repairs thereof, all in ac- cordance with sound engineering standards; and (c) The Commission will not, without the written con- sent of the Bank, sell or otherwise dispose of all or substantially all of its property and assets or all or substantially all the property included in the Project or any plant included therein, unless the Borrowers shall first redeem and pay, or make ade- quate provision satisfactory to the Bank for re- 26 demption and payment of, all of the Loan which shall then be outstanding and unpaid. SECTION 13. Until such time as the Project shall have been completed, whenever there is reasonable cause to believe that at any time the 'amount of currency of the Guarantor held by the Commission and accruing to it from revenues for the twelve month period next follow- ing such time will be inadequate to meet th6 estimated expenditures payable in currency of the Guarantor and required for carrying out the Project during such twelve month period, the Commission shall forthwith notify Financiera and the Bank of such fact and of the amount of the- anticipated deficit for uch twelve month period. Upon the receipt of such notice, Financiera shall forth- with take such action as may be necessary to provide the Commission with an amount of currency of the Guarantor adequate to meet such deficit if and as it arises, and upon the completion thereof the Commission shall advise the Bank in writing concerning the details of the arrange- ments made. SECTION 14. Except as shall be otherwise agreed in writing between the Bank and the Borrowers, the Bor- rowers will insure or cause to be insured with responsible insurers all goods purchased in whole or in part with the proceeds of the Loan for the full cost of such goods against marine and transit hazards incident to delivery of the goods into the territories of the Guarantor under con- tracts of insurance payable in dollars or in the currency in which the part of the Loan applied to the cost of such goods is payable. ARTICLE VIII Remedies of the Bank on Default SECTION 1. If any of the following events (herein called Events of Default) shall happen, that is to say: 27 (a) if default shall be made in the payment of any instalment of interest on the Loan or on any of the Bonds or any instalment of service charge or com- mitment charge on the Loan when and as the same shall become payable; or (b) if default shall be made in the payment of the prin- cipal or redemption price of the Loan or of any of the Bonds, whether upon the date of maturity of such Bonds or upon call for redemption or by dec- laration or otherwise as provided in this Agree- ment or the Bonds; or (c) if default shall be made in the performance of any other covenant or agreement on the part of the Bor- rowers or either of them or of the Guarantor in the Bonds or in this Agreement or in the Guarantee Agreement set forth; or (d) if the Guarantor or any governmental authority shall take any action for the dissolution or disestab- lishment of either of the Borrowers or for the sus- pension of the opera tions of either of them; or (e) if by action of the Guarantor or of any governmen- tal authority, the ownership, possession or control of all or substantially all of the properties which are included in the Project, or of any plant in- cluded therein, or of any property necessary for the operation thereof, shall be taken from the Com- mission; then and in each such case during the continuance of -such Event of Default (but in the case of an Event of Default specified in clause (a) of this Section only if such default shall continue for a period of thirty days; and in the case of an Event of Default specified in clause (c) of this Section only if such default shall continue for a period of sixty days after written notice thereof shall have been 28 given by the Bank to the Borrowers) the Bank, at its op- tion, may declare the principal of the Loan and of all the Bonds then outstanding (if not already due) to be due and payable immediately, and upon any such declaration such principal shall become aVd shall be due and payable immediately, anything in this Agreement or in the Bonds contained to the contrary notwithstanding. SECTION 2. No delay by the Bank in exercising, or omission of the Bank to exercise, any right or power ac- crning to it under this Agreement upon any Event of De- fault shall impair any such right or power or be construed to be a waiver of any such Event of Default or ac- quiescence therein; nor shall the action of the Bank in respect of any default, or in respect of the waiver of any default, affect or impair any right or power of the Bank in respect of any other or subsequent default; and every right, power and remedy given hereunder to the Bank may be exercised by it from time to time and as often as it may deem expedient. ARTICLE IX Interpretation of Agreement; Arbitration SEcTiow 1. The respective rights and obligations of the parties under this Agreement and the Bonds shall be valid and enforceable in accordance with their terms any- thing in any statute, law or regulation of any nation or state or political subdivision thereof to the contrary not- withstanding. None of such parties shall be entitled in any proceeding under this Article to assert any claim that any provision of this Agreement or of the Bonds is invalid or unenforceable because of any provision of the Articles of Agreement of the Bank or for any other rea- son. SsoN 2. The provisions of this Agreement and of the Bonds shall be interpreted in accordance with the law 29 of the State of New York, United States, as at the time in effect. SECTION 3. Any controversy between the parties to this Agreement and any claim by any of such parties against anTy other party thereto arising under this Agreement or the Bonds which shall not be determined by agreement of such parties shall be submitted to and determined by ar- bitration by an Arbitral Tribunal in accordance with the provisions of Loan Regulations No. 1 of the Bank dated May 9, 1947, a copy of which has been furnished to the Borrowers. The parties to this Agreement accept and agree to the provisions of said Loan Regulations No. 1 with the same force and effect as if they were fully set forth herein; provided, however, that the term "Borrower" as used in said Loan Regulations No. 1 shall be deemed to mean the Borrowers. ARTICLE X Miscellaneous Provisions SECTION 1. Any notice, request or demand required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given when it shall be delivered in writing or by telegram, cable or radiogram to the party or parties to which such notice, request or demand is required or permitted to be givep at its or their address or addresses hereinafter specified, or at such other address or addresses as such party or parties shall have designated by notice in writing to the party or parties giving or making such notice, request or demand. The addresses so specified are: (a) For the Bank: International Bank for Reconstruction and Development, 1818 H Street, N. W., Washington 25, District of Columbia, United States of America. 30 (b) For Financiera: Nacional Financiera, S. A., Avenida Venustiano Carranza 25, Mexico, D. F., Mexico; (c) For the Commission: Comisi6n Federal de Electricidad, Calle de Humboldt 30, Mexico, D. F., Mexico. SECTION 2. The Borrowers shall furnish to the Bank sufficient evidence of the authority of the person or per- sons who will sign the applications provided for in Article IV of this Agreement and the Bonds or who will, on be- half of the Borrowers, take any other action or execute any other documents required or permitted to be taken or executed by the Borrowers pursuant to any of the pro- visions of this Agreement and the authenticated specimen signature of each such person. SECTiOw 3. All obligations of the Borrowers under this Agreement and the Bonds shall be joint and several and the obligation of either of them to comply with any pro- vision of this Agreement is not subject to any prior notice to, demand upon or action against the other. No exten- sion of time or forbearance given to either of the Bor- rowers in respect of the performance of any of its obli- gations under this Agreement or the Bonds, and no fail- ure of the Bank or of any holder of the Bonds to give any notice or to make any demand or protest whatsoever to either of the Borrowers, or strictly to assert any right or pursue any remedy against either of them in respect of this Agreement or the Bonds, and no failure by either of the Borrowers to comply with any requirement of any law, regulation or order, shall in any way affect or impair any obligation of the other Borrower under this Agreement or the Bonds. SECTION 4. This Agreement may be executed in several counterparts, each of which shall be an original and all collectively but one instrument. 31 ARTICLE XI Effective Date SECTION 1. This Agreement is subject to the condition that before it shall become effective the following events shall have occurred: (a) the execution and delivery on behalf of the Guar- antor of the Guarantee Agreement shall have been duly authorized or ratified by all necessary governmental ac- tion; and (b) the execution and delivery of this Agreement on behalf of the Borrowers shall have been duly authorized or ratified by all necessary action of each of the Borrow- ers; and (c) any privilege or priority (including any mortgage, pledge or charge) existing at the date of this Agreement on any property, assets, revenues or receipts of the Com- mission as security for the payment of any debt shall have been extinguished, except as the Bank shall have otherwise agreed in writing. SECTION 2. The Borrowers shall promptly furnish to the Bank evidence satisfactory to the Bank that all acts required to be performed pursuant to Section 1 of this Article have been performed. As part of such evidence, the Borrowers shall furnish to the Bank an opinion or opinions satisfactory to the Bank of legal counsel accept- able to the Bank showing: (1) that this Agreement has been duly authorized by, and executed and delivered on behalf of, each of the Borrowers, and the Guarantee Agreement has been duly authorized by, and executed and delivered on behalf of, the Guarantor; and (2) that said Agreements constitute valid and binding obligations of the Borrowers and the Guarantor, respectively, in accordance with their terms; and 32 (3) that the Bonds when signed and delivered as pro- vided in this Agreement and the Guarantee Agree- ment will constitute valid and binding obligations of the Borrowers in accordance with their terms and the guarantee of the Guarantor thereon endorsed will constitute the valid and binding obligation of the Guarantor in accordance with its terms; and (4) that, except as the Bank shall otherwise agree in writing, all privileges and priorities (including any mortgage, pledge or charge) existing at the date of this Agreement on any property, assets, reve- nues and receipts of the Commission as security for the payment of any debt have been extinguished and are no longer effective. Except as shall be otherwise agreed in writing between the Bank and the Borrowers, this Agreement shall come into force and effect on the date when the Bank notifies the Borrowers and the Guarantor of its acceptance of such evidence. SECTION 3. If all acts required to be performed pur- suant to Section 1 of this Article shall not have been per- formed and satisfactory evidence thereof shall not have been furnished to the Bank within 30 days after the date of this Agreement, the Bank may at its option by notice to the Borrowers and the Guarantor terminate this Agree- ment, and upon the giving of such notice of termination, this Agreement and all obligations of the parties hereunder shall forthwith cease and determine. IN WITNESS WHEREOF the parties hereto have caused this Agreement to be signed in their respective names by their representatives thereunto duly authorized as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCML , AND DEVELOPMENT by JOHN J. MCCLOY NACIONAL FINANCIERA, S. A. by ANTONIO CARRILLO COMISION FEDERAL DE ELECTRICIDAD by A. PAEZ U. 0 0 SHEDULE 1. Table of Amortization. Principal Outstand- Payment ing After of Each Date Principal Payment August 1, 1952 - 24,100,000 February 1, 1953 393,000 23,707,000 August 1, 1953 400,000 23,307,000 February 1, 1954 407,000 22,900,000 August 1, 1954 414,000 22486,000 February 1, 1955 422,000 22,064,000 August 1, 1955 429,000 21,635,000 February 1, 1956 437,000 21,198,000 August 1, 1956 444,000 20,754,000 February 1, 1957 452,000 20,302,000 August 1, 1957 460,000 19,842,000 February 1, 1958 468,000 19,374,000 August 1, 1958 476,000 18,898,000 February 1, 1959 484,000 18,414,000 August 1, 1959 493,000 17,921,000 February 1, 1960 501,000 17,420,000 August 1, 1960 510,000 16,910,000 February 1, 1961 519,000 16,391,000 August 1, 1961 528,000 15,863,000 February 1, 1962 538,000 15,325,000 August 1, 1962 547,000 14,778,000 February 1, 1963 557,000 14,221,000 August 1, 1963 566,000 13,655,000 February 1, 1964 576,000 13,079,000 August 1, 1964 586,000 12,493,000 February 1, 1965 596,000 11,897,000 August 1, 1965 607,000 11,290,000 February 1, 1966 618,000 10,672,000 August 1, 1966 628,000 10,044,000 February 1, 1967 639,000 9,450,000 August 1, 1967 651,000 8,754,000 February 1, 1968 662,000 8,092,000 August 1, 1968 674,000 7,418,000 February 1, 1969 685,000 6,733,000 August 1, 1969 697,000 6,036,000 35 Principal Outstand- Payment ing After of Each Date Principal Payment February 1, 1970 709,000 5,327,000 August 1, 1970 722,000 4,605,000 February 1, 1971 735,000 3,870,000 August 1, 1971 747,000 3,123,000 February 1, 1972 761,000 2,362,000 August 1, 1972 774,000 1,588,000 February 1, 1973 787,000 801,000 August 1, 1973 801,000 - 36 S SCHEDULE 2. Description of Project. I. "Miguel Aleman" Hydroelectric System (a) Sa%ta Barbara 1. Complete construction of bydroelectric plant of 84,250 KVA with penstocks, gates and valves. 2. Install 9,000 KVA outdoor type substation to step up generating voltage of 13.8 KV to transmission line voltage of 150 KV, with appropriate transformer taps, control equipment, steel structures and auxiliary equipment. 3. Construct 150 KV steel tower transmission tie-line from Santa Barbara substation to Ixtapantongo substation, and 13.2 KV steel tower line between Santa Barbara and Ixtapantongo for power and control services. 4. Construct 150 KV double circuit high tension trans- mission line from Ixtapantongo to El Alamo receiving sub- station in Mexico City. (b) San Bartolo 1. Build hydroelectric plant of 37,000 KVA capacity, with penstocks, gates, valves and outdoor type substation. 2. Construct diversion canals and tunnels from Villa Vic- toria storage reservoir to San Simon regulating reservoir, and thence to San Bartolo plant. (c) lxtapantongo 1. Install third unit consisting of vertical water-wheel generator of 62,000 KVA capacity and 67,000 b.p. water turbine with appropriate control and operating equipment. Carry out requisite extension of existing outdoor type sub- station. 2. Install third penstock, with necessary gates, valves and control equipment. 37 3. Complete diversion of Ixtapan del Oro, Zitacuaro and Tuxpan Rivers, including construction of Tuxpan and El Bosque darns and storage reservoirs and Ixtapan diver- sion darn, together with canals, tunnels and inverted siphons necessary to bring the waters of the above rivers into the Colorines regulating reservoir located immediately upstream from the Ixtapantongo plant. (d) El Durazno 1. Construct El Durazno hydroelectric plant, complete with two 11,000 KVA waterwheel generators, two 12,400 h.p. turbines, and outdoor type substation of 19,800 KVA capacity to step-up the generating voltage of 13.8 KV to transmission line voltage of 161 Ky. 2. Carry out the corresponding civil engineering works, including the installation .of piping from the discharge side of Valle de Bravo dam to the entrance of the Durazno tunnel and penstocks from the outlet of this tunnel into the plant, with appropriate gates and valves. (e) El Alamo Receiving Station 1. Install equipment necessary to enable the El Alamo step-down substation at the Mexico City terminal of the Ixtapantongo-Mexico City lines to receive the power out- put of the Santa Barbara, San Bartolo, Ixtapantongo and El Durazno plants. II. Puebla-Veracruz System (a) Tepazolco 1. Complete construction and installation of Tepazolco 13,600 KVA hydroelectric plant downstream from existing Valsequillo irrigation dam, with necessary civil engineer- ing works, including appropriate penstocks, gates, valves and other equipment. 38 2. Construct 20,250 KVA outdoor type substation with appropriate transformer taps, control equipment and steel structures, to step-up the generating voltage of 13.8 KV to transmission line voltages of 110 KV and 66 KV, in order to tie in the Tepazolco plant with the Puebla City receiving station on the 110 KV side and to feed the City of Thuacan on the 66 KV side. (b) Minas No. 1 1. Complete construction and installation of 12,000 KVA first stage of Minas No. 1 hydroelectric plant, with neces- sary civil engineering works, including appropriate pen- stocks, gates, valves and other equipment. 2. Complete construction and installation of the Minas No. 1 outdoor type step-up substation, including the neces- sary connection with the Minas No. 1 hydroelectric plant. (c) El Encanto 1. Complete construction and installation of 12,500 KVA El Encanto hydroelectric plant, with necessary civil engi- neering works, including appropriate penstocks, gates, valves and other equipment. 2. Complete construction and installation of outdoor type step-up substation at El Encanto, including the necessary connection with the El Encanto hydroelectric plant. (d) Puebla witching Station Construct and install Puebla switching station in the City of Puebla at the terminal end of Tepazolco-Puebla and Teziutlan-Puebla 110 KV transmission lines to tie them in with the existing lines and substations of the subsidiaries of the American Foreign Power Co. Inc., complete with oil circuit breakers, control panels and auxiliary equipment. 39 (e) Teziutlan Substation Complete the construction and installation of the Teziut- lan substation, including installation of oil circuit breakers, control panels and auxiliary equipment for the purpose of receiving energy from Minas No. 1 and El Encanto hydro- electric plants at 66 KV and. stepping it up to 110 KV for transmission to the Puebla City switching stations, and to provide 6.6 KV primary distribution for the town of Teziutlan. (f) Tecamachalco and Chalchicomula 1. Construct 4,500 KVA outdoor type step-down sub- station at Tecamachalco, Pue., to step down the Tepazolco- Puebla transmission line voltage of 110 KV to 33 KV. 2. Construct step-down distribution substations at Teca- machalco and Chalchicomula, of 2,000 KVA and 3,000 KVA .respectively,. to step down voltage from 33 KV to 13.2 KV and .6.6 KV respectively. (g) Substations Complete construction and installation of the following substations in the State of Veracruz: San Rafael 300 KYA Martinez de la Torre 300 KVA Misantla 300 KVA Jalala 5,000 KVA with corresponding control and metering equipment. (h) Distribution Systems Complete distribution systems in the States of Veracruz and Puebla, linking eighteen towns with the Puebla-Vera- cruz system. 40 (i) Transmission Lines Complete the construction of the following single circuit transmission lines: (i) El Encanto-Teziutlan, 66 KV, 17 miles (ii) El Encanto-Martinez de la Torre-San Rafael, 6.6 KV, 26 miles (iii) El Encanto-T1apacoyan, 6.6 KV, 3 miles (iv) Minas-Cruz Blanca-Jalapa, 66 KV, 20 miles (v) Cruz Blanca-Teziutlan, 6.6 KV, 12 miles (vi) Tepazolco-Puebla, 110 KV, 44 miles (vii) Tepazolco-Tehuacan, 66 KV, 30 miles (viii) Tecamachalco-Serdan, 33 KV, 15 miles (ix) Tecamachalco-Tepeaca, 33 KV, 15 miles III. Sonora System (a) Guaymas Complete construction and installation of the first stage of the Guaymas steam electric station, consisting of two 15,625 KVA units, including powerhouse structure, and Guaymas-Hermosillo 110 KV transmission line, with step- up substation at Guaymas terminal and step-down sub- W station at Hermosillo terminal. (b) Ciudad Obregon Complete construction of the first stage of the Ciudad Obregon steam electric station and construct and install second stage of this plant, consisting of one additional 6,250 KVA turbogenerator unit, complete with powerhouse struc- ture, cooling tower, oil storage tank and other auxiliary equipment. IV. Juarez System (a) Ciudad Juarez (Chihuahua) 1. Complete construction and installation of first stage of Ciudad Juarez steam electric station, consisting of two 6,250 KVA units, complete with powerhouse structure, oil 41 storage tank, water cooling installation, and other auxiliary equipment. 2. Construct and install second stage of Ciudad Juarez plant, consisting of one 6,250 KVA turbogenerator unit complete with powerhouse structure extension, water cool- ing installation, oil storage tank, and other auxiliary equip- ment. V. Bombana System (a) Bombana (Chiapas) 1. Complete installation of first stage of Bombana hydro- electric plant of 3,250 KVA, complete with control and mis- cellaneous equipment, and including step-up substation. 2. Complete construction of distribution systems in five towns in the State of Chiapas and in the Bombana plant camp, to be fed from the Bombana hydroelectric plant. 3. Complete construction of Bombana-San Fernando- Tuxtla 33 KV single circuit transmission line, 28 miles. (b) San Fernando Complete installation of San Fernando 100 KVA step- down substation. VI. Laguna Steam Plant (a) Gomez Palacio (Durango) Construct and install at the Laguna steam plant, addi- tions consisting of three steam generators, and two 31,250 KVA turbogenerators, including control meters, fuel tanks, pumps, water treating equipment, powerhouse structure, and other auxiliary equipment. VII. Aldama System (a) Aldama (Chihuahua) 1. Construct and install Aldama steam electric station, consisting of three 2,500 KVA turbogenerator units, com- 42 plete with water cooling facilities, fuel storage tanks, powerhouse structure, and other auxiliary equipment. 2. Construct and install temporary 400 KVA substation in Aldama Valley. VIII Rural Electrification Install rural type diesel generating stations in twenty- eight towns in the States of Veracruz, Nuevo Leon, Du- rango, Tabasco, Tamaulipas, Nayarit, and two steam elec- tric stations in the State of Coahuila, with a capacity range of from 200 KW to 1,000 KW, with the corresponding sub- stations, rural transmission lines and distribution systems. IX. Miscellaneous Projects (a) Diesel Stations Carry out extensions of the following diesel stations by addition of the units indicated: Oaxaca 2-750 KVA units Villahermosa 1-750 KVA unit Progreso 2-750 KVA units La Paz 2-375 KVA units (b) Distribution Substations. Construct and install the following distribution substa- tions: Guamuchil 1,000 KVA Villahermosa 1,000 KVA La Paz 600 KVA Progreso 600 KVA Oaxaca 1,500 KVA 43 (c) Distribution Systems Complete construction and installation of distribution systems in: 5 towns in the State of Michoacan 1 town Morelos 2 towns Yucatan 1 town Hidalgo 3 towns Mexico 1 town Tabasco 1 town Queretaro, and in the City of Oaxaca. X. Equipment for Private Companies (a) Compania Electrica Fronteriza, S.A., (Baja Califor- nia) Supply to the Company equipment and materials for the construction of transmission lines between the towns of Tecate, Tijuana and Ensenada, for the expansion of the distribution systems in each of these three towns, and for the construction and installation of substations and line extensions along the above-mentioned transmission lines. (b) Compania Mexicana Productora de Luz y Fuerza, S.A., (Chihuahua) Supply to the Company equipment and materials for the construction and installation of- (i) a step-up substation at the Commission's steam electric plant in Ciudad Juarez; (ii) a 66 KV transmission line through the Valley of Juarez; (iii) two 66/13.8 KV step-down substations; (iv) 13.8 KV rural distribution lines complete with con- trol and metering equipment. 44 (c) Compania Electrica de Tuxpan, Ver., S.A., (Veracruz) Supply to the Company equipment and materials for- (i) additions to existing generating capacity up to a maximum of 2,500 KVA, complete with substation and control equipment; (ii) the extension of its distribution facilities in and around the City of Tuxpan. XI. Construction Equipment A small amount of construction equipment and material, such as trucks, pneumatic drills, compressors and dyna- mite, of the kinds necessary for use in the civil engineering works involved in the construction of the plants and the installation of the equipment specified above will be im- ported into the territories of the Guarantor, Such con- struction equipment will be used, for the time and to the extent necessary, by the Commission, or by contractors employed by the Commission, for the construction of the plants and the installation of the equipment specified above. Thereafter, such construction equipment may be used in the territories of the Guarantor for other purposes. XII. General All constructions and installations described in the fore- going Sections I through X of this Schedule shall be car- ried out and placed in serviceable operating order in con- formity with sound engineering practice and in accordance with the detailed plans and specifications to be furnished to the Bank by the Borrowers. Such constructions and installations shall include the acquisition of all necessary land and franchises, the construction of all necessary civil and hydraulic engineering work and the installation of adequate communication systems. 45 80HEDULE 3-A Form of Dollar Bond Payable to Order $ 000 $ 000 No. 000 No. 000 NACIONAL FINANCIERA, S. A. and ComisioN FEDERAL DE ELEcTmoAD GUARANTEED SERIAL BOND DuE, NACIONAL FINANCIERA, S. A. (hereinafter called Finail- ciera), and CoMIsToN FEDERAL DE ELECTRICIDAD (hereinafter called the Commission), both official agencies of United Mexican States existing under the laws of United Mexican States, for value received, hereby jointly and severally promise to pay to, or on the order of .................. ...... . .. ..........on the ............... day of ......... 19 . , at the office or agency of INTERNATIONAL BANK FOR RECONSTRUCTION AND DEvELOPMENT (hereinafter called the Bank) in the Borough of Manhattan in The City of New York, State of New York, United States of America, the sum of ...........................Dollars in such coin or currency of the United States of America as at the time of payment thereof shall be legal tender for the payment of public and private debts, and to pay interest thereon from the date hereof at said office in like coin or currency at the rate of ..............per cent (.... %) per annum, payable semi-annually on February 1 and August 1 in each year until payment of the said sum has been made or duly provided for. 46S This Bond is one of an authorized issue of bonds of the aggregate principal amount of $24,100,000 (or the equivalent thereof payable in other currencies), known as the Guaranteed Serial Bonds of Fiinanciera and the Com- mission (hereinafter called the Bonds), all issued or to be issued under a Loan Agreement dated................, 194 , between the Bank and Financiera and the Commis- sion and guaranteed by United Mexican States in accord- ance with the terms of a Guarantee Agreement dated ..... 194... , between United Mexican States and the Bank. No reference herein to the Loan Agreement shall impair the obligations of Financiera and the Commission which are absolute and unconditional to pay the principal of and interest on this Bond at the time and place and in the amount and in the currency herein prescribed. The Bonds are subject to redemption at the election of Financiera and the Commission, or either of them, as a whole at any time or in part (designated by lot or in such other manner as may be agreed upon by the Bank and Financiera and the Commission) from time to time upon at least 90 days' notice to the Bank at its principal office in the City of Washington, District of Columbia, United States of America (and, in addition, if any of the Bonds to be redeemed are coupon Bonds, upon at least 45 days' notice by publication in two daily newspapers printed in the Eng- lish language and published and -of general circulation in said Borough of Manhattan), at a redemption price for each Bond equal to the principal amount thereof and interest accrued thereon to the date fixed for such redemption, plus as a premium the following respective percentages of such principal amount: 1 of 1%, if re- deemed not more than five years prior to the date of ma- turity specified in such Bond; 1%, if redeemed more than five years and not more than ten years prior to said date: 11/2%, if redeemed more than ten years and not more than fifteen years prior to said date; 2%, if redeemed more than fifteen years and not more than twenty years prior to 47 said date; and 21/2%, if redeemed more than twenty years prior to said date. After the redemption date specified in said notice, in- terest on the Bonds so called for redemption shall cease to accrue and, upon presentation and surrender of such Bonds for payment and redemption in accordance with said notice, such Bonds shall be paid by Financiera and the Commission at the office or agency of the Bank in The City of New York aforesaid and at the redemption price or prices aforesaid. If any of such Bonds shall not be so paid upon presentation thereof, they shall continue to bear interest as therein specified until paid. In case an Event of Default as defined in said Loan Agreement shall happen and shall continue for the period, if any, provided in said Loan Agreement, then and in each such case during the continuance of such Event of Default the Bank, at its option, may declare the principal of all the Bonds then outstanding (if not already due) to be due and payable immediately, and upon any such declaration such principal shall become and shall be due and payable immediately. The principal of the Bonds, the interest accruing thereon and the premium on the redemption thereof shall be paid without deduction for and free from any taxes, imposts, levies or duties of any nature now or at any time here- after imposed by United Mexican States or by any taxing authority thereof or therein and shall be paid free from all restrictions of United Mexican States, its political sub- divisions or its agencies; provided, however, that the pro- visions of this paragraph shall not apply to payments made under the provisions of any Bond to a holder thereof other than the Bank if at the time of such payment such Bond is beneficially owned by an individual or corporate resi- dent of United Mexican States. IN WITNESS WHEREOF Financiera and the Commission have caused this Bond to be signed in their respective 48 nam es by their ................................... and ................................, respectively, thereunto duly authorized. NAaIoNAL FINANOIERA, S. A. by Authorized Representative ComisioN FEDERAL DE ExoTRcrmAD by Authorized Representative Dated..... ............... Form of Guarantee UNITED MEXICAN STATES, for value received, as a primary obligor and not as surety merely, hereby absolutely 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 and redemption price of said Bond, and the interest thereon. Dated........................ UNITED MEXICAN STATES by Authorized Representative 49 8CHEDULE 3-B Form of Coupon Bond Payable in Dollars $ 000 $ 000 No. 000 No. 000 NACIoNAL FINANCIERA, S. A. and COMISION FEDERAL DE ELEoTnic1m GUARANTEED SBRiAL BOND DUE NAOIoNAL FINA:L ,CiERA, S. A. (hereinafter called Finan- ciera), and CoMIsIoN FEDERAL DE ELECTRICOAD (herein- after called the Commission), both official agencies of United Mexican States existing under the laws of United Mexican States, for value received, hereby jointly and severally promise to pay to the bearer on the ......... day of ..............., 19..., at the office or agency of INTERNATIONAL BAK FOR RECONSTRUCTION AND DEVELOP- MENT (hereinafter called the Bank) in the Borough of Man- hattan in The City of New York, State of New York, United States of America, the sum of .................Dollars in such coin or currency of the United States of America as at the time of payment thereof shall be legal tender for the payment of public and private debts, and to pay interest thereon from the date hereof at said office in like coin or currency at the rate of . ....................per cent (.... %) per annum, payable semi-annually on February 1 and August 1 in each year until payment of the said sum has been made or duly provided for, but until the maturity of this Bond only upon presentation and surrender of the coupons annexed hereto as they severally mature. 50 This Bond is one of an authorized issue of bonds of the aggregate principal amount of $24,100,000 (or the equiva- lent thereof payable in other currencies), known as the Guaranteed Serial Bonds of Financiera and the Commis- sion (hereinafter called the Bonds), all issued or to be issued under a Loan Agreement dated .........., 194.., between the Bank and Financiera and the Commission and guaranteed by United Mexican States in accordance with the terms of a Guarantee Agreement dated.......... 194.., between United Mexican States and the Bank. No reference herein to the Loan Agreement shall impair the obligations of Financiera and the Commission which are absolute and unconditional to pay the principal of and interest on this Bond at the time and place and in the amount and in the currency herein prescribed. The Bonds are subject to redemption at the election of Financiera and the Commission, or either of them, as a whole at any time or in part (designated by lot or in such other manner as may be agreed upon by the Bank and Financiera and the Commission) from time to time upbn at least 90 days' notice to the Bank at its principal office in the City of Washington, District of Columbia, United States of America (and, in addition, if any of the Bonds to be redeemed are coupon Bonds, upon at least 45 days' notice by publication in two daily newspapers printed in the English language and published and of general cir- culation in said Borough of Manhattan), at a redemp- tion price for each Bond equal to the principal amount thereof and interest accrued thereon to the date fixed for such redemption, plus as a premium the follow- ing respective percentages of such principal amount: 1/2 of 1%, if redeemed not more than five years prior to the date of maturity specified in such Bond; 1%, if re- deemed more than five years and not more than ten years prior to said date; 1Y2%, if redeemed more than ten years and not more than fifteen years prior to said date; 2%, if redeemed more t].a fifteen years and not more than Im 51 twenty years prior to said date; and 21/2%, if redeemed more than twenty years prior to said date. After the redemption date specified in said notice, inter- est on the Bonds so called for redemption shall cease to accrue and the coupons for interest accruing after said date shall be void and, upon presentation and surrender of such Bonds for payment and redemption in accordance with said notice with all unmatured coupons thereto ap- pertaining, such Bonds shall be paid by Financiera and the Commission at the office or agency of the Bank in The City of New York aforesaid and at the redemption price or prices aforesaid. If any of such Bonds shall not be so paid upon presentation thereof, they shall continue to bear interest as therein specified until paid, and the coupons for interest accruing after the date fixed for re- demption shall be in full force and effect. In case an Event of Default as defined in said Lo-n Agreement shall happen and shall continue for the period, if any, provided in said Loan Agreement, then and in each such case during the continuance of such Event of Default the Bank, at its option, may declare the principal of all the Bonds then outstanding (if not already due) to be due and payable immediately, and upon any such declaration such principal shall become and shall be due and payable im- mediately. The principal of the Bonds, the interest accruing thereon and the premium on the redemption thereof shall be paid without deduction for and free from any taxes, imposts, levies or duties of any nature now or at any time here- after imposed by United Mexican States or by any taxing Authority thereof or therein and shall be paid free from all restrictions of United Mexican States, its political sub- divisions or its agencies; provided, however, that the pro- visions of this paragraph shall not apply to payments made under the provisions of any Bond to a holder thereof other than the Bank if at the time of such payment such Bond is beneficially owned by an individual or corporate resident of United Mexican States. 52 IN WITNESS WHEREOF Financiera and the Commission have caused this Bond to be signed in their respective names by their ............... and .............. respectively, thereunto duly authorized and the coupons for said interest bearing the facsimile signatures of their ........... and ................, respectively, to be attached hereto. Dated .................. NACIONAL FINANCIERA, S. A. by Authorized Representative ComisioN FEDERAL DE ELECTRIOIDAD by Authorized Representative 53 Form of Guarantee UnTD MEXICAN STATES, for value received, as a primary obligor and not As surety merely, hereby absolutely 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 and redemption price of said Bond, and the interest thereon. Dated UNIrED MEXICAN STATES by Authorized Representative Form of Interest Coupon No . .. On the ............day of ..........., 19.., unless the Bond hereinafter mentioned shall have been called for previous redemption and payment duly provided there- for, Nacional Financiera, S. A., and Comision Federal de Electricidad will pay to bearer, upon surrender of this coupon, at the office of International Bank for Reconstruc- tion and Development in the Borough of Manhattan in The City of New York ........................Dollars $..............) in such coin or currency of the United States of America as at the time of payment shall be legal 54 tender for public and private debts, being six months' interest then due on their Guaranteed Serial Bond, due ..... .... . 19..., No. ........ NAcIoNAL FINANOIERA, S. A. by Authorized Representative COMISION FEDERAL DE ELECTRICIDAD by Authorized Representative 55 SCHEDULE 4. Estimated Cost of Project. Cost required Cost payable to be paid in in foreign Mexican exchange currency Mexican Miguel Aleman System $ 8,721,430 Pesos 114,839,000 Puebla-Veracruz System 1,839,907 13,350,000 Sonora System 2,664,480 19,865,000 Juarez System 757,107 4,226,000 Bombana System 97,300 2,959,000 Laguna System 3,572,000 13,802,000 Aldama Steam Plant 1,069,082 2,391,000 Rural Electrification 3,257,099 44,553,000 Miscellaneous Extension Projects 626,703 5,510,000 Mexican Total $22,605,108 Pesos 221,495,000 Equipment for three pri- vate power companies 1,500,000 3,211,000 Mexican GRAND ToTAL $24,105,108 Pesos 224,706,000
Groupe de la Banque mondiale · Loan Agreement
Mexico - Comision Project : Loan 0012 - Loan Agreement - Conformed
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Texte intégral
Informations clés
Organisation
Groupe de la Banque mondiale
Type de document
Loan Agreement
Pays
Mexique
Source
Banque mondiale