Conformed Copy - L2876 - Manpower Training Project - Loan Agreement

Page 1 CONFORMED COPY LOAN NUMBER 2876 ME (Manpower Training Project) between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and NACIONAL FINANCIERA, S.N.C. Dated October 13, 1987 LOAN AGREEMENT AGREEMENT, dated October 13, 1987 between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank) and NACIONAL FINANCIERA, S.N.C. (the Borrower). WHEREAS (A) the United Mexican States (the Guarantor) and the Borrower, having been satisfied as to the feasibility and priority of the Project described in Schedule 1 to the Guarantee Agreement, have requested the Bank to assist in the financing of the Project; (B) by the Guarantee Agreement of even date herewith between the Guarantor and the Bank, the Guarantor has agreed to guarantee the obligations of the Borrower in respect of the Loan and to undertake such other obligations as set forth in the Guarantee Agreement; and WHEREAS the Bank has agreed, on the basis, inter alia, of the Page 2 foregoing, to extend the Loan to the Borrower upon the terms and conditions set forth in this Agreement; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The "General Conditions Applicable to Loan and Guarantee Agreements" of the Bank, dated January 1, 1985, with the modifications set forth below (the General Conditions) constitute an integral part of this Agreement: (a) the definition of "Project" in Section 2.01, item 11, is deleted and replaced by the following: "11. 'Project' means the project or program for which the Loan is granted, as described in the Guarantee Agreement and as the description thereof may be amended from time to time by agreement between the Bank and the Guarantor."; and (b) the last sentence of Section 3.02 is deleted. Section 1.02. Unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings : (a) "Special Account" means the account referred to in Section 2.02 (b) of this Agreement; (b) "STPS" means the Secretariat of Labor and Social Welfare (Secretaria del Trabajo y Prevision Social) of the Guarantor; (c) "CET" means the Guarantor's Council of Employment and Training (Consejo Consultivo de Empleo, Capacitacion y Adiestramiento); (d) "STPS Retraining Program" means the Training Stipend Program described in Annex C-1 of the Manual Unico de Operacion de los Programas de Desarrollo Regional issued by the Guarantor's Secretariat of Programming and Budget (Secretaria de Programacion y Presupuesto); (e) "Small- and Medium-Scale Enterprises" means enterprises with less than 250 employees; (f) "Project Preparation Advance" means the project preparation advance granted by the Bank to the Guarantor pursuant to an exchange of letters dated November 26, 1986 and December 4, 1986 between the Guarantor and the Bank; (g) "SEE" means State Employment Service (Servicio Estatal de Empleo) of each of the Guarantor's States; (h) "SIP" means Productivity Information Service (Servicio de Informacion sobre Productividad) to be established by STPS under Part B of the Project for the purpose of coordinating and monitoring the activities of the GATES and providing productivity related information to Small- and Medium Scale Enterprises; and (i) "GATES" means the Technical Support Groups for Enterprises (Grupos Tecnicos de Apoyo a las Empresas) to be Page 3 established by STPS at the regional level under Part B of the Project, with the following functions: (i) to provide direct support to the organization and delivery of intensive short-term in-service training; (ii) to analyze the training requirements of Small- and Medium Scale Enterprises and to assist them in the preparation of in-service training programs and proposals; and (iii) to evaluate the results of in-service training programs. ARTICLE II The Loan Section 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in the Loan Agreement, an amount in various currencies equivalent to eighty million dollars ($80,000,000). 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 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 described in Schedule 1 to the Guarantee Agreement and to be financed out of the proceeds of the Loan. (b) The Borrower shall, for the purposes of the Project, open and maintain in dollars a special account on terms and condi- tions satisfactory to the Bank. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 3 to this Agreement. (c) Promptly after the Effective Date, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and pay to itself the amount required to repay the principal amount of the Project Preparation Advance withdrawn and outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advance shall thereupon be cancelled. Section 2.03. The Closing Date shall be December 31, 1993 or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower and the Guarantor of such later date. Section 2.04. The Borrower shall pay to the Bank a commitment charge at the rate of three-fourths of one percent (3/4 of 1%) per annum on the principal amount of the Loan not withdrawn from time to time. Section 2.05. (a) The Borrower shall pay interest on the principal amount of the Loan withdrawn and outstanding from time to time at a rate per annum for each Interest Period equal to one- half of one percent per annum above the Cost of Qualified Borrow- ings for the last Semester ending prior to the commencement of such Interest Period. (b) As soon as practicable after the end of each Semester, the Bank shall notify the Guarantor and the Borrower of the Cost of Qualified Borrowings for such Semester. (c) For purposes of this Section: (i) "Interest Period" means the six - month period commencing on each date specified in Section 2.06 of this Agreement, including the Interest Period in which this Agreement is signed. (ii) "Cost of Qualified Borrowings" means the cost of Page 4 the outstanding borrowings of the Bank drawn down after June 30, 1982, expressed as a percentage per annum, as reasonably determined by the Bank. (iii) "Semester" means the first six months or the second six months of a calendar year. Section 2.06. Interest and other charges shall be payable semiannually on May 15 and November 15 in each year. Section 2.07. The Borrower shall repay the principal amount of the Loan in accordance with the amortization schedule set forth in Schedule 2 to this Agreement. ARTICLE III Transfer of Proceeds of the Loan Section 3.01. The Borrower shall enter into contractual arrangements, satisfactory to the Bank, with the Guarantor provid- ing, inter alia: (a) for the transfer to the Guarantor of the proceeds of the Loan for the purpose of carrying out the Project; and (b) for the transfer by the Guarantor to the Borrower of such funds which the Borrower shall be required to pay to the Bank on account of principal, interest, and other charges on the Loan. Except as the Bank shall otherwise agree, the Borrower shall not change or fail to enforce any provision of such arrangements. ARTICLE IV Financial Covenants Section 4.01. The Borrower shall: (i) have the Special Account audited, for each fiscal year, in accordance with appropriate auditing principles consistently applied, by indepen- dent and qualified auditors; (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 copy of the report of such audit by said auditors, of such scope and in such detail as the Bank shall have reasonably requested; (iii) furnish to the Bank monthly cer- tified statements of the Special Account; and (iv) furnish to the Bank such other information concerning the Special Account and the audit thereof as the Bank shall reasonably request. ARTICLE V Effective Date; Termination Section 5.01. The following event is specified as an additional condition to the effectiveness of the Loan Agreement within the meaning of Section 12.01 (c) of the General Conditions, namely, that the Borrower shall have entered into the contractual arrangements referred to in Section 3.01 of this Agreement. Section 5.02. The following is specified as an additional matter, within the meaning of Section 12.02 (c) of the General Conditions, to be included in the opinion or opinions to be furnished to the Bank, namely, that the contractual arrangements referred to in Section 3.01 of this Agreement have been duly authorized and are legally binding upon the parties thereto in accordance with their terms. Section 5.03. The date January 12, 1988 is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Page 5 Representative of the Borrower; Addresses Section 6.01. The Director Internacional of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. 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: Telex: INTBAFRAD 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) For the Borrower: Nacional Financiera, S.N.C. Plaza Nafinsa, Insurgentes Sur 1971 TORRE Sur 9