Mexico - Fertilizer Project : Loan 1112 - Loan Agreement - Conformed

CONFORMED COPY LOAN NUMBER 1112 ME Loan Agreement (Fertilizer Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND NACIONAL FINANCIERA, S.A. AND GUANOS Y FERTILIZANTES DE MEXICO, S.A. DATED MAY 22, 1975 CONFORMED COPY LOAN NUMBER 1112 ME Loan Agreement (Fertilizer Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND NACIONAL FNANCIERA, S.A. AND GUANOS Y FERTILIZANTES DE MEXICO, S.A. DATED MAY 22, 1975 LOAN AGREEMENT AGREEMENT, dated May 22, 1975, between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT, party of the first part (hereinafter called the Bank), and NACIONAL FINANCIERA, S.A. and-GUANOS Y FERTILIZANTES DE MEXICO, S.A., parties of the second part (hereinafter jointly called the Borrowers). WHEREAS Nacional Financiera, S.A. (hereinafter called NAFIN) and Guanos y Fertilizantes de Mexico, S.A. (hereinafter called GUANOMEX) have requested the Bank to assist in the financing of the Project described in Schedule 2 to this Agreement (hereinafter called the Project) that GUANOMEX will carry out; and WHEREAS the Bank is willing to make the loan jointly to NAFIN and GUANOMEX upon the terms and conditions set forth hereinafter and in a Guarantee Agreement of even date herewith between United Mexican States and the Bank; NOW THEREFORE the parties hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Loan and Guarantee Agreements of the Bank, dated March 15, 1974, with the same force and effect as if they were fully set forth herein, subject, iowever, to the amendment of paragraph 6 of Section 2.01 to read as follows: "6. The term 'Borrower' means the Borrowers, except that as used in paragraphs (a), (c), (d), (e), (g), (h), and (i) of Section 6.02, paragraphs (c), (e), (f) and (g) of Sections 7.01 and Sections 10.01 and 10.02, such term means the Borrowers or either of them"; (said General Conditions Applicable to Loan and Guarantee Agreements of the Bank, as so modified, being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions have the respective meanings therein set forth. 4 ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrowers, on the terms and conditions in the Loan Agreement set forth or referred to, an amount in various currencies equivalent to fifty million dollars ($50,000,000). Section 2.02. (a) The amount of the Loan may be withdrawn from the Loan Account in. accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time, for expenditures made (or, if the Bank shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Loan and in respect of interest and other charges on the Loan. (b) Except as the Borrowers shall otherwise request, on or before each of the semi-annual interest payment dates specified in Section 2.07 of this Agreement, the Bank shall, on behalf of the Borrowers, withdraw from the Loan Account and pay to itself the amounts required to pay, on such date, interest and other charges on the Loan accrued and payable on or before the date set forth, and up to the amount allocated, in Schedule I to this Agreement, as such Schedule may be amended from time to time. Section 2.03. Except as the Bank shall otherwise agree, the goods, works and services (other than consultants' services) for the Project to be financed out of the proceeds of the Loan, shall be procured in accordance with the provisions of Schedule 4 to this Agreement. Section 2.04. The Closing Date shall be December 31, 1978 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrowers of such later date. Section 2.05. The Borrowers shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.06. The Borrowers shall pay interest at the rate of eight and one-half per cent (8-1/2%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. Section 2.07. Interest and other charges shall be payable semi-annually on January 15 and July 15 in each year. 0 5 Section 2.08. The Borrowers shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. Section 2.09. All obligations of the Borrowers under the Loan Agreement, unless such oblilations shall have been expressly undertaken by one of the Borrowers, shall be joint and several and the obligation of either of them to comply with any provision of the Loan Agreement is not subject to any prior notice to, demand upon or action against the other. No extension of time or forbearance given to either of the Borrowers in respect of the performance of any of its obligations under the Loan Agreement, and no failure of the Bank 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 the Loan Agreement, 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 either of the Borrowers under the Loan Agreement. ARTICLE III Execution of the Project by GUANOMEX Section 3.01. GUANOMEX shall carry out the Project with due diligence and efficiency, in accordance with such schedules as have been agreed between the Bank and GUANOMEX, as such schedules may be revised by agreement between the Bank and GUANOMEX, and in conformity with sound engineering, financial, and administrative practices. Section 3.02. In order to assist GUANOMEX in carrying out the design, engineering, procurement and start-up and initial operation of the facilities included in the Project, GUANOMEX shall employ qualified and experienced engineering consultants acceptable to the Bank, upon satisfactory terms and conditions. Section 3.03. (a) GUANOMEX undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Loan against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by GUANOMEX to replace or repair such goods. (b) Except as the Bank shall otherwise agree, GUANOMEX shall cause all goods and services financed out of the proceeds of the Loan to be used exclusively for the Project. 6 Section 3.04. (a) GUANOMEX shall furnish to the Bank, promptly upon their preparation, the plans, specifications, reports, contract documents and construction and procurement schedules for the Project, and any material modifications thereof or additions thereto, in such detail as the Bank shall reasonably request. (b) GUANOLIEX shall cause the urea plants included in the Project to be designed so as to ensure that the levels of ecologically harmful discharges will not exceed standards acceptable to the Bank and GUANOMEX. (c) GUANOMEX: (i) shall maintain records adequate to record the progress of the Project (including its cost), to identify the goods and services financed out of the proceeds of the Loan, and to disclose their use in the Project; (ii) shall enable the Bank's representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Loan and any relevant records and documents; and (iii) shall furnish to the Bank all such information as the Bank shall reasonably request concerning the Project, the expenditure of the proceeds of the Loan and the goods, works and services financed out of such proceeds. Section 3.05. Except as the Bank shall otherwise agree, GUANOMEX shall: (a) within one year after the date of this Agreement (i) carry out or cause to be carried out a study of inventory control, transportation and distribution of fertilizer, and of accounts receivable, and (ii) carry out or cause to be carried out a study of fertilizer demand (including optimum rates of fertilizer application for various crops taking into account different climatic and soil conditions as well as the needs and projected availability of agricultural credit and extension services) and promotion of its use on small farms; (b) use its best efforts to obtain the cooperation of other agencies of the Guarantor in the study referred to in paragraph (a)(ii) hereof; (c) carry out or cause to be carried out such studies under terms of reference agreed upon with the Bank; and (d) take appropriate measures in respect of the matters covered by such studies, based on the conclusions and recommendations thereof, after giving the Bank a reasonable opportunity to exchange views on the result of such studies and the proposed measures. ARTICLE IV Management and Operations of GUANOMEX Section 4.01. (a) GUANOMEX shall at all times continue to manage its affairs, carry on its operations, plan the development of its business and undertaking, and maintain its financial position, all in accordance with sound 7 industrial, financial and administrative practices, and under the supervision of experienced and competent management. (b) Without limitation or restriction upon the provisions of paragraph (a) hereof, GUANOMEX shall: (i) continue to operate and maintain its plant, equipment, properties and facilities, and shall, from time to time, promptly as needed, make all necessary renewals and repairs thereof, all in accordance with sound engineering practices; and (ii) not sell, lease, transfer or otherwise dispose of any of its properties or assets required for the efficient carrying out of its business and undertaking, including the carrying out of the Project, except in the normal course of its business or with the prior concurrence of the Bank. Section 4.02. GUANOMEX shall at all times take all steps necessary: (i) to maintain its right to carry on its operations, including the Project; and (ii) to acquire and to retain such land, properties, and interests thereon, and to acquire, maintain and renew such licenses, consents, franchises or other rights, as may be necessary or useful for the construction and operation of the Project and the conduct of its business and undertaking. Section 4.03. GUANOMEX shall continue to take out and maintain with responsible insurers, insurance against such risks and in such amounts as shall be consistent with sound industrial insurance practice. Section 4.04. GUANOMEX shall: (i) monitor the levels of ecologically harmful discharges from the plants included in the Project and shall take all reasonable measures to ensure that they are operated with due regard to ecological and environmental factors; and (ii) maintain and continue to enforce adequate safety regulations in its parathion plant and for the handling of such plant's product. Section 4.05. GUANOMEX shall: (a) maintain adequate records of the production and sales of each of the plants included in the Project, and of their respective operating costs, in such detail as shall be required to monitor the technical and financial performance of each of them; and (b) furnish to the Bank quarterly reports containing the above-referred to information for each such plant, not later than 45 days after the end of each quarter. 8 ARTICLE V Financial Covenants Section 5.01. GUANOMEX shall continue to maintain records adequate to reflect in accordance with consistently maintained sound accounting practices its operations and financial condition. Section 5.02. GUANOMEX shall: (i) continue to have its accounts and financial statemerts (balance sheets, statements of income and expenses and related statements) for each fiscal year audited, in accordance with sound auditing principles consistently applied, by auditors appointed by the Guarantor; (ii) furnish to the Bank as soon as available, but in any case not later than six months after the end of each such year, (A) certified copies of its financial statements for such year as so audited and (B) the report of such audit by said auditors; and (iii) furnish to the Bank such other information concerning its accounts and financial statements and the audit thereof as the Bank shall from time to time reasonably request. Section 5.03. (a) The Borrowers represent that at the date of this Agreement no lien exists on any of their assets as security for any debt except as otherwise reported by GUANOMEX to the Bank. (b) Each of the Borrowers undertakes that, except as the Bank shall otherwise agree, if any lien shall be created on any of its respective assets as security, as to NAFIN for any external debt and as to GUANOMEX for any debt, such lien will ipso facto equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan, and in the creation of any such lien express provision will be made to that effect, at no cost to the Bank; provided, however, that the foregoing provisions of this paragraph shall not apply to: (A) any lien created on property, at the time of purchase thereof, solely as security for the payment of the purchase price of such property; or (B) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after the date on which it is originally incurred. Section 5.04. Except as the Bank shall otherwise agree, GUANOMEX shall furnish to the Bank: (a) every three months, and not later than 45 days after the end of each quarter, regarding its operations, quarterly financial reports; and (b) every year, reports on production and sales of its main products, and projections of production, income, and cash flow during the following twelve months. Section 5.05. GUANOMEX may make expenditures or commitments for expenditures for fixed or capital assets (including investments in or loans to other 9 business entities) only to the extent that such expenditures or commitments for expenditures will not impair the ability of GUANOMEX to carry out and operate the Project and to meet its other obligations under this Agreement. Section 5.06. Except as the Bank shall otherwise agree, GUANOMEX shall: (a) not incur any debt if after the incurrence thereof either (i) the debt/equity ratio of GUANOMEX would exceed 60:40, or (ii) the net revenue of GUANOMEX for the fiscal year next preceding such incurrence or for a later consecutive twelve-month period, whichever is the greater, would be, after the completion of the Project, less than 1.4 times the estimated maximum payments of interest and other charges on all debt in any succeeding fiscal year, including the debt proposed to be incurred; (b) at all times after the completion of the Project, maintain a ratio of current assets to current liabilities of at least 1.3:1.0; and (c) not pay dividends (other than in shares of GUANOMEX's capital), or prepay other loans other than the Loan, if after the corresponding payments GUANOMEX's ratio of current assets to current liabilities would be less than 1.5:1.0; provided, however, that the provisions of this paragraph shall not apply to any prepayment of a loan if such prepayment is part of the refinancing of such loan by another loan on terms and conditions more favorable to GUANOMEX than the loan to be prepaid, and the new loan is to be withdrawn substantially at the same time said prepayment is made. For purposes of this Section: (i) "debt" means any debt incurred by GUANOMEX maturing more than one year after the date on which it is originally incurred; (ii) debt shall be deemed to be incurred (A) under a loan contract or agreement, on the date and to the extent that it is drawn down pursuant to such loan contract or agreement, and (B) under a guarantee agreement, on the date the agreement providing for such guarantee is entered into but only to the extent that the guaranteed debt is outstanding; (iii) "equity" means the sum of GUANOMEX's unimpaired paid-in share capital, surplus and reserves not allocated to cover specific * liabilities; 10 (iv) "net revenue" means gross revenue from all sources less all operating and administrative expenses, and amounts paid on account of taxes; provided that the operating and administrative expenses shall not include interest and other charges on debt, provision for income taxes, and provision for depreciation of assets; (v) "current assets" includes cash, accounts receivable due within twelve months less the reserve for bad debts, inventories, pre-paid expenses and all other assets which could, in the ordinary course of business, be converted within twelve months into cash; (vi) "current liabilities" includes accounts payable within twelve months, customer advances, income taxes, dividends, bonuses and all other liabilities due and payable, or which could be called for payment, within twelve months; and (vii) whenever it shall be necessary to value in terms of the currency of the Guarantor debt payments in another currency, such valuation shall be made at the prevailing rate of exchange as determined by Banco de Mexico, S.A. Section 5.07. (a) NAFIN shall charge GUANOMEX and collect from it, and IGUANOMEX shall pay to NAFIN, a fee of three and one-half per cent (3-1/2%) per annum on the principal amount of the Loan withdrawn and outstanding from time to time. (b) NAFIN and GUANOMEX hereby undertake to make contractual arrangements for the purpose of charging and paying, respectively, the fee referred to in paragraph (a) hereof. Section 5.08. Except as the Bank shall otherwise agree, and without limitation on the provisions of Section 5.06(a)(i) hereof, GUANOMEX shall take all appropriate measures to increase its paid-in share capital, in accordance with such schedule as shall be required by GUANOMEX to carry out the Project and comply at all times with its other obligations pursuant to this Agreement; the aggregate of such increase to be not less than the equivalent of forty per cent (40%) of the cost of the Project. Section 5.09. GUANOMEX shall use its best efforts to obtain sufficient credit on reasonable terms to finance its sales of imported fertilizer and pesticides, and other commercial operations, so as to continue to operate efficiently the Project and its other productive undertakings. 11 ARTICLE VI Remedies of the Bank Section 6.01. For the purposes of Section 6.02 of the General Conditions, the following additional event is specified pursuant to paragraph (k) thereof, namely, a change shall have been made in GUANOMEX's Estatutos which, in the Bank's judgment, shall materially and adversely affect the carrying out of the Project or the conduct of GUANOMEX's operations or its financial condition. For purposes of this Section GUANOMEX's Estatutos means those set forth in the escritura 13,457 executed in the presence of Notary Manuel Boja Soriano on July 17, 1943, as amended to the date of this Agreement. Section 6.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified pursuant to paragraph (h) thereof, namely, the event specified in Section 6.01 hereof shall occur. ARTICLE VII Termination Section 7.01. The date August 29, 1975, is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VIII Addresses Section 8.01. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: INTBAFRAD Washington, D.C. 12 For the Borrowers: NAFIN: Nacional Financiera, S.A. Isabel la Cat6lica 51 M6xico 1, D.F. Telex address: NAFIN 383-1772538 Mexicc City GUANOMEX: Guanos y Fertilizantes de M6xico, S.A. Morena 804 M6xico 12, D.F. Telex address: GUANOMEX-MEX 01771136 Mexico City IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Adalbert Krieger Regional Vice President Latin America and the Caribbean NACIONAL FINANCIERA, S.A. By /s/ Jesus Puente Leyva Authorized Representatie GUANOS Y FERTILIZANTES DE MEXICO, S.A. By /s/ Luciano Barraza Authorized Representative 13 SCHEDULE 1 Withdrawal of the Proceeds of the Loan 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Loan, the allocation of the amounts of the Loan to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (1) Equipment and 33,000,000 materials: (a) directly 100% of foreign imported expenditures (b) imported, but 100% of foreign procured expenditures or locally 70% (c) locally manu- 100% of the ex- factured factory cost (2) Engineering, in- 7,500,000 100% of foreign cluding services expenditures for erection and supervision, and licenses for the industrial processes to be used in the plants included in the Project (3) Interest and other 5,600,000 Amounts due charges on the Loan accrued on or before July 14, 1978 (4) Unallocated 3,900,000 TOTAL 50,000,000 14 2. For the purposes of this Schedule the term "foreign expenditures" means expenditures in the currency of a country other than the Guarantor and for goods or services supplied from the territory of any country other than the Guarantor. 3. The disbursement percentages have been calculated in compliance with the policy of the Bank that no proceeds of the Loan shall be disbursed on account of payments for taxes levied by, or in the territory of, the Guarantor on goods or services, or on the importation, manufacture, procurement or supply thereof; to that end, if the amount of any such taxes levied on or in respect of any item to be financed out of the proceeds of the Loan decreases or increases, the Bank may, by notice to the Borrowers, increase or decrease the disbursement percentage then applicable to such item as required to be consistent with the aforementioned policy of the Bank. 4. Notwithstanding the provisions of paragraph I above, no withdrawals shall be made in respect of expenditures prior to the date of this Agreement, except that withdrawals in an aggregate amount not exceeding the equivalent of $3,600,000 may be made in respect of expenditures incurred after January 1, 1975. 5. Notwithstanding the allocation of an amount of the Loan or the disbursement percentages set forth in the table in paragraph I above, if the Bank has reasonably estimated that the amount of the Loan then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Bank may, by notice to the Borrowers: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Loan which are then allocated to another Category and which in the opinion of the Bank and the Borrowers are not needed to meet other expenditures, and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expenditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. 6. If the Bank, after consultation with the Borrowers, shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Loan and the Bank may, without in any way restricting or limiting any other right, power or remedy of the Bank under the Loan Agreement, by notice to the Borrowe rs, cancel such amount of the Loan as, in the Bank's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Loan. 15 SCHEDULE 2 Description of the Project The Project consists of the construction of an urea plant at Coatzacoalcos, State of Veracruz, to manufacture about 495,000 metric tons of urea annually; a urea plant near Salamanca, State of Guanajuato, to manufacture about 330,000 metric tons of urea annually; and the expansion of an existing parathion plant near Salamanca, State of Guanajuato, to achieve a manufacturing capacity of about 10,000 metric tons of parathion annually; the three plants to include facilities to protect the environment from potentially harmful effects of their operation. The Project is expected to be completed by July 31, 1978, and will be deemed to be completed only when the facilities'have been in satisfactory operation for not less than thirty consecutive days at a production rate of not less than 80% of rated capacity. * 16 SCHEDULE 3 Amortization Schedule Payment of Principal -Date Payment Due (expressed in dollars)* January 15, 1979 1,520,000 July 15, 1979 1,585,000 January 15, 1980 1,655,000 July 15, 1980 1,725,000 January 15, 1981 1,795,000 July 15, 1981 1,875,000 January 15, 1982 1,955,000 July 15, 1982 2,035,000 January 15, 1983 2,125,000 July 15, 1983 2,215,000 January 15, 1984 2,305,000 July 15, 1984 2,405,000 January 15, 1985 2,505,000 July 15, 1985 2,615,000 January 15, 1986 2,725,000 July 15, 1986 2,840,000 January 15, 1987 2,960,000 July 15, 1987 3,085,000 January 15, 1988 3,220,000 July 15, 1988 3,355,000 January 15, 1989 3,500,000 * To the extent that any portion of the Loan is repayable in a currency other than dollars (see General Conditions, Section 4.02), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. 17 Premiums on Prepayment The following percentages are specified as the premiums payable on repayment in advance of maturity of any portion of the principal amount of the Loan pursuant to Section 3.05(b) of the General Conditions: Time of Prepayment Premium Not more than three years before maturity 1-1/2% More than three years but not more than six years before maturity 2-3/4% More than six years but not more than ten years before maturity 5-3/4% More than ten years but not more than twelve years before maturity 7% More than twelve years before maturity 8-1/2% 18 SCHEDULE 4 Procurement A. General Procedures 1. Except as provided in Part A.2 hereof, contracts shall be let under procedures consistent with those set forth in the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in April 1972, as revised in October 1972 (hereinafter called the Guidelines), on the basis of international competitive bidding. 2. (a) GUANOMEX may procure such proprietary and long-delivery equipment required for the timely execution of the Project as the Bank and GUANOMEX shall agree upon, after obtaining quotations from such qualified suppliers as shall be agreed upon by the Bank and GUANOMEX. (b) GUANOMEX may procure goods to be financed under Category 1(a) or (b) of Schedule I hereto, estimated to cost less than $50,000 equivalent through normal commercial channels in accordance with its own procedures, provided that the aggregate cost of the goods so procured does not exceed $1,000,000 equivalent. B. Evaluation and Comparison of Bids for Goods; Preference for Domestic Manufacturers 1. For the purpose of evaluation and comparison of bids for the supply of goods: (i) bidders shall be required to state in their bid the c.i.f. (port of entry) price for imported goods, or the ex-factory price for domestically-manufactured goods; (ii) customs duties and other import taxes on imported goods, and sales and similar taxes on domestically-supplied goods, shall be excluded; and (iii) the cost to the Borrower of inland freight and other expenditures incidental to the delivery of goods to the place of their use or installation shall be included. 2. Goods manufactured in Mexico may be granted a margin of preference in accordance with, and subject to, the following provisions: (a) All bidding documents for the procurement of goods shall clearly indicate any preference which will be granted, the information required to establish the eligibility of a bid for such preference and the following methods and stages that will be followed in the evaluation and comparison of bids. (b) After evaluation, responsive bids will be classified in one of the following three groups: 19 (1) Group A: bids offering goods manufactured in Mexico if the bidder shall have established to the satisfaction of the Borrower and the Bank that the manufacturing cost of such goods includes a value added in Mexico equal to at least 20% of the ex-factory bir( price of such goods. (2) Group B: all other bids offering goods manufactured in Mexico. (3) Group C: bids offering any other goods. (c) All evaluated bids in each group shall be first compared among themselves, excluding any customs duties and other import taxes on goods to be imported and any sales or similar taxes on goods to be supplied domestically, to determine the lowest evaluated bid of each group. Such lowest evaluated bids shall then be compared with each other, and if, as a result of this comparison, a bid from group A or group B is the lowest, it shall be selected for the award. (d) If, as a result of the comparison under paragraph (c) above, the lowest bid is a bid from group C, all group C bids shall be further compared with the lowest evaluated bid from group A after adding to the c.i.f. bid price of the imported goods offered in each group C bid, for the purpose of this further comparison only, an amount equal to (i) the amount of customs duties and other import taxes which a non-exempt importer would have to pay for the importation of the goods offered in such group C bid, or (ii) 15% of the c.i.f. bid price of such goods if said customs duties and taxes exceed 15% of such price. If the group A bid in such further comparison is the lowest, it shall be selected for the award; if not, the bid from group C which as a result of the comparison under paragraph (c) is the lowest evaluated bid shall be selected. C. Review of Procurement Decisions by Bank 1. Review of invitation to bid and of proposed awards and final contracts. With respect to all contracts estimated to cost the equivalent of $300,000 or more: (a) Before bids are invited, GUANOMEX shall furnish to the Bank, for its comments, the text of the invitations to bid and the specifications and other bidding documents, together with a description of the advertising procedures to be followed for the bidding, and shall make such modifications in the said documents or procedures as the Bank shall reasonably request in consultation with GUANOMEX. Any further modification to the bidding documents shall require the Bank's concurrence before it is issued to the prospective bidders. 20 (b) After bids have been received and evaluated, GUANOMEX shall, before a final decision oin the award is made, inform the Bank of the name of the bidder to which it intends to award the contract and shall furnish to the Bank, in sufficient time for its review, a detailed report on the evaluation and comparison of the bids received, together with the reasons for the intended award. The Bank shall, if it determines that the intended award would be inconsistent with the Guidelines or this Schedule, promptly inform GUANOMEX and state the reasons for such determination. (c) The terms and conditions of the contract shall not, without the Bank's concurrence, materially differ from those on which bids were asked or prequalification invited. (d) Two conformed copies of the contract shall be furnished to the Bank promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract. 2. With respect to each contract to be financed out of the proceeds of the Loan and not governed by the preceding paragraph, GUANOMEX shall furnish to the Bank, promptly after its execution and prior to the submission to the Bank of the first application for withdrawal of funds from the Loan Account in respect of such contract, two conformed copies of such contract, together with the analysis of bids and recommendations for award, in the case of contracts other than those awarded pursuant to paragraph A2(b) hereof, and such other information as the Bank shall reasonably request. The Bank shall, if it determines that the award of the contract was not consistent with the Guidelines or this Schedule, promptly inform GUANOMEX and state the reasons for such determination.