Mexico - Industrial Development Line Of Credit : Loan 0033 - Guarantee Agreement - Conformed

LOAN NUMBER 33 ME Guarantee Agreement BETWEEN UNITED MEXICAN STATES AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED OCTOBER 18, 1950 Press of Byron S. Adams LOAN NUMBER 33 ME, Guarantee Agreement BETWEEN UNITED MEXICAN STATES * AND INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT DATED OCTOBER 18, 1950 Press of Byron S. Adams guarantee Zgreement AGREEMENT, dated October 18, 1950, between UNITED MEXICAN STATES (hereinafter called the Guarantor) and INTERNATIONAL PANK FOR RECONSTRUCTION AND DEVEL- OPMENT (hereinafter called the Bank). WHEREAS by an agreement between the Bank and Banco Nacional de Mexico, S.A., Banco de Comercio, S.A., Banco Internacional, S.A., Banco de Londres y Mexico, S.A., Banco Mexicano, S.A., Banco Mercantil de Monterrey, S.A., Banco Industrial de Monterrey, S.A., and Banco Comercial Mexi- cano, S.A., and Nacional Financiera, S.A., (which agreement and the schedules therein referred to are hereinafter called the Loan Agreement) executed and delivered simul- taneously with the execution and delivery of this Agree- ment and bearing even date herewith, the Bank has agreed to establish a line of credit in favor of the Borrowers in the aggregate principal amount of ten million dollars ($10,000,000), or the equivalent thereof in other currencies, on the terms and conditions set forth in the Loan Agree- ment, but only on condition that the Guarantor agree to guarantee such line of credit as herein provided; and WHEREAS in the Loan Agreement the Bank and the Bor- rowers have agreed to accept all the provisions of Loan Regulations No. 4, dated August 15, 1950, a copy of which has been furnished to the Guarantor subject however to the modifications of said Loan Regulations set forth in Schedule 2 attached to the Loan Agreement, said Loan Regulations as so modified being hereinafter called the Loan Regulations; and WHEREAS the Guarantor, in consideration of the Bank's entering into the Loan Agreement with the Borrowers has agreed to guarantee such line of credit as herein provided; 4 Now THEREFORE the parties hereto hereby agree as follows: ARTICLE I SECTION 1.01. The parties hereto hereby accept all the provisions of the Loan Regulations with the same force and effect as if fully set forth herein. Each of the parties hereto agrees to perform all the obligations on its part to be performed under the Loan Regulations. SECTION 1.02. Wherever used in this Guarantee Agree- ment, unless the context shall otherwise require, the re- spective terms which are defined in Article I of the Loan Agreement shall have the respective meanings therein set forth. ARTICLE II SECTION 2.01. Without limt -ation or restriction upon any of the other covenants on its part in this Guarantee Agree- ment contained, the Guarantor hereby unconditionally guarantees, as primary obligor and not as surety merely, the due and punctual payment of the principal of, and in- terest and other charges on, the Loans and the premium, if any, on the prepayment of the Loans. ARTICLE III SECTIox 3.01. (a) The Guarantor and the Bank shall cooperate fully to assure that the purposes of 'the line of credit shall be accomplished. To that end, each of them shall furnish to the other all such information as it shall reasonably request with regard to the general status of the line of credit. On the part of the Guarantor, such in- formation shall include information with respect to finan- cial and economic conditions in the territories of the Guar- antor and the international balance of payments position of the Guarantor. (b) The Guarantor and the Bank will from time to time exchange views through their representatives with regard 5 to matters relating to the purposes of the line of credit and the maintenance of the service of the Loans. The Guar- antor will promptly inform the Bank of any condition that shall interfere with, or threaten to interfere with, the accomplishment of the purposes of the line of credit or the maintenance of the service of the Loans. (c) Except as the Bank shall otherwise agree in writing, if the Guarantor or any of its political subdivisions or any agency of the Guarantor or of any such political subdivi- sion, shall propose to incur any substantial external debt, or substantially to modify the terms of payment of any then existing external debt incurred by any of them, the Guarantor will notify the Bank or cause the Bank to be noti- fied promptly of the particular proposal and, prior to the time of the taking of the proposed action, will afford to the Bank all opportunity which is reasonably practicable under the circumstances to exchange views with the Guarantor with regard to such proposal; provided, however, that the provisions of this paragraph (c) shall not apply to the en- tering into international payments or similar agreements the term of which is not more than one year and under which the transactions on each side are expected to balance over the period of the agreement. (d) The Guarantor will afford all reasonable opportunity for accredited representatives of the Bank to visit any part of the territories of the Guarantor for purposes related to the line of credit or the Loans. SECTION 3.02. Except as the Bank shall otherwise agree in writitg, if any lien shall be created on any assets of the Guarantor or any of its political subdivisions or any agency of the Guarantor or any such political subdivision as security for the payment of any external debt, then by the creation thereof such lien shall equally and ratably secure the payment of the principal of, and the interest and other charges on, the Loans, and in the creation of any such 6 lien express provision will be made to that effect, provided, however, that this Section shall not apply to: (a) any lien created on property purchased, at the time of the purchase thereof, solely as security for the payment of the purchase price of such property; or (b) to any pledge of commercial goods to secure debt maturing not more than one year after the date in- curred and to be paid out of the proceeds of sale of such commercial goods. SERcTIoN 3.03. The principal of, and interest and other charges on, the Loans and the premium, if any, on the pre- payment of the Loans, shall be paid without deduction for and free from any taxes imposed by the Guarantor or any taxing authority thereof or therein and free from all re- strictions of the Guarantor and its political subdivisions. The Guarantee Agreement and the Loan Agreement shall be free of any issue, stamp or other tax imposed by the Guarantor or any taxing authority thereof or therein. SECTION 3.04. The Guarantor covenants that it will not take or permit any of its political subdivisions or any agency of any of them to take any action which would pre- vent or interfere with the performance by the Borrowers of any of the covenants, agreements and obligations of the Borrowers in the Loan Agreement contained, and will take or cause to be taken all reasonable action which shall be necessary in order to enable the Borrowers to perform such covenants, agreements and obligations. ARTICLE IV SECTION 4.01. If the Guarantor shall default in the per- formance of any agreement on its part in this Guarantee Agreement contained, the Bank, at its option, may by notice to the Guarantor require that the Guarantor pay the aggregate principal amounts of the Loans which shall then 7 be outstanding and unpaid, and the interest accrued and unpaid thereon to the date of payment thereof, and forth- with upon the giving of such notice such principal and in- terest shall become immediately due and payable by the Guarantor, anything in this Guarantee Agreement or the Loan Agreement to the contrary notwithstanding. If and when such Loans shall have been so paid, the Guarantor shall succeed to all the rights of the Bank to receive pay- ments of principal and interest on such Loans and to the rights of the Bank to declare the principal of such Loans to be due and payable pursuant to Section 6.01 of the Loan Agreement by reason of an event specified in clause (a) of such Section 6.01. The Guarantor shall not succeed to any other right, power or remedy of the Bank under the Loan Agreements, and the exercise by the Bank of its right hereunder to require payment by the Guarantor of the prin- cipal of, and interest on, the Loans shall not impair or affect any other right, power or remedy which the Bank may have under this Guarantee Agreement or the Loan Agreement. ARTICLE V SECTION 5.01. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: For the Guarantor: United Mcxican States c/o Nacional Financiera, S. A. Avenida Venustiano Carranza 25 Mexico, D. F., Mexico For the Bank: International Bank for Reconstruction and Development 1818 H Street, N. W. Washington 25, D. C. United States of America 8 SECTION 5.02. Nacional Financiera, S. A., is designated for the purposes of Section 8.03 of the Loan Regulations. IN WITNEss WHEREOF the parties hereto have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, by their representatives thereunto duly authorized as of the day and year first above written. UNITED MEXICAN STATES by NACIONAL FINANCIERA, S. A. by A. CORTINA Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT by EUGENE R. BLACK