Mexico - Toll Transport Facilities Project : Loan 0317 - Loan Agreement - Conformed

LOAN NUMBER 317 ME Loan Agreement (Toll Transport Facilities Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND CAMINOS Y PUENTES FEDERALES DE INGRESOS AND NACIONAL FINANCIERA, S.A. DATED JUNE 20, 1962 LOAN NUMBER 317 ME Loan Agreement (Toll Transport Facilities Project) BETWEEN INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND CAMINOS Y PUENTES FEDERALES DE INGRESOS AND NACIONAL FINANCIERA, S.A. DATED JUNE 20, 1962 AGREEMENT, dated June 20, 1962, between INTER- NATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT, party of the first part (hereinafter called the Bank), and CAMINOS Y PUENTES FEDERALES DE INGREsos and NACIONAL FINANCIERA, S. A., parties of the second part (hereinafter called the Borrowers). ARTICLE I Loan Regulations; Special Definitions SECTION 1.01. The parties to this Loan Agreement accept all the provisions of Loan Regulations No. 4 of the Bank dated February 15, 1961, with the same force and effect as if they were fully set forth herein, subject, however, to the following modifications thereof (said Loan Regu- lations No. 4 as so modified being hereinafter called the Loan Regulations): (a) The sece'ni sentence of Section 3.02 of the Loan Regulations shall apply only to withdrawals pursuant to subsection (a) of Section 2.03 of the Loan Agreement. (b) Section 4.01 of the Loan Regulations is deleted. (c) Paragraph 6 of Section 10.01 of the Loan Regu- lations is amended to read as follows: "6. The term 'Borrower' means the Borrowers, ex- cept that as used in Sections 5.02 (b), 5.02 (d), 5.02 (e), 5.02 (f), 7.01 and 7.02 such term means the Borrowers or either of them. The term 'Guarantor' means United Mexican States." SECTION 1.02. Unless the the context otherwise requires, the following terms wherever used in this Agreement or in the Loan Regulations shall have the following meanings: 4 (a) The term "Caminos" means Caminos y Puentes Federales de Ingresos, an agency of the Guarantor estab- lished by, and operating under, decree of March 25, 1959, of the Guarantor, or any successor thereto. (b) The term "Financiera" means Nacional Financiera, S.A. ARTICLE II The Loan SECTION 2.01. The Bank agrees to lend to the Borrowers, on the terms and conditions in this Loan Agreement set forth or referred to, an amount in various currencies equivalent to thirty million five hundred thousand dollars ($30,500,000). SECTION 2.02. The Bank shall open a Loan Account on its books in the name of the Borrowers and shall credit to such Account the amount of the Loan. The amount of the Loan may be withdrawn from the Loan Account as provided in, and subject to the rights of cancellation and suspension set forth in, this Agreement and the Loan Regulations. SECTION 2.03. Except as the Bank shall otherwise agree, the Borrowers shall be entitled, subject to the provisions of this Agreement and the Loan Regulations, to withdraw from the Loan Account: (a) such amounts as shall have been expended for the reasonable foreign exchange cost of goods included in part B of the Project and, if the Bank shall so agree, such amounts as shall be required by the Borrowers to meet payments for such goods; and (b) the equivalent of a percentage or percentages to be established from time to time by agreement between the Bank and the Borrowers of such amounts as shall have been expended for the reasonable cost of works included 5 in part A of the Project and not included in (a) above, such percentage to represent the foreign exchange com- ponent of such cost; provided, however, that no withdrawals shall be made on account of: (i) expenditures prior to November 1, 1961; or (ii) expenditures made in the territories of any country (except Switzerland) which is not a member of the Bank or for goods produced in (including services supplied from) such territories. SECTION 2.04. Withdrawals from the Loan Account pur- suant to subsection (b) of Section 2.03 of this Agreement shall be in dollars or such other currency or currencies as the Bank shall from time to time reasonably select. SECTION 2.05. The Borrowers shall pay to the Bank a commitment charge at the rate of three-fourths of one per cent (% of 1%) per annum on the principal amount of the Loan not so withdrawn from time to time. SECTION 2.06. The Borrowers shall pay interest at the rate of five and three-fourths per cent (5%,o) per annum on the principal amount of the Loan so withdrawn and outstanding from time to time. SECTION 2.07. Except as the Bank and the Borrowers shall otherwise agree, the charge payable for special com- mitments entered into by the Bank at the request of the Borrowers pursuant to Section 4.02 of the Loan Regulations shall be at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of any such special commitments outstanding from time to time. SECTION 2.08. Interest and other charges shall be pay- able semi-annually on January 1 and July 1 in each year. SECTION 2.09. The Borrowers shall repay the principal of the Loan in accordance with the amortization schedule set forth in Schedule 1 to this Agreement. 6 SECTION 2.10. All obligations of the Borrowers under the Loan Agreement and the Bonds, unless such obligations shall have been expressly undertaken by one of the Borrowers, shall be joint and several, and the obligation of either of them to comply wtih 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 Ag.eement or the Bonds, and no failure 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 the Loan 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 the Loan Agreement or the Bonds. ARTICLE III Use of Proceeds of the Loan SECTION 3.01. The Borrowers shall apply the proceeds of the Loan exclusively to financing the cost of goods required to carry out the Project described in Schedule 2 to this Agreement. The specific goods to be financed out of the proceeds of the Loan and the methods and pro- cedures for procurement of such goods shall be determined by agreement between the Bank and the Borrowers, subject to modification by further agreement between them. SECTION 3.02. Except as the Bank and the Borrowers shall otherwise agree, the Borrowers shall cause all goods financed out of the proceeds of the Loan to be used in the territories of the Guarantor exclusively in the carrying out of the Project. 7 ARTICLE IV Bonds SECoiN 4.01. The Borrowers shall execute and deliver Bonds representing the principal amount of the Loan as provided in the Loan Regulations. The forms of Bonds referred to in Article VI of the Loan Regulations shall be appropriately modified so as to provide that the obligations on the part of the Borrowers under the Bonds shall be joint and several. SECTION 4.02. (a) The Director of Caminos and such person or persons as he shall appoint in writing are desig- nated as authorized representatives of Caminos for the purposes of Section 6.12 (a) of the Loan Regulations. (b) The Director General of Financiera and such person or persons as he shall appoint in writing are designated as authorized representatives of Financiera for the purposes of Section 6.12 (a) of the Loan Regulations. ARTICLE V Particular Covenants SECTION 5.01. (a) The Borrowers shall carry out or cause the Pioject to be carried out with due diligence and efficiency and in conformity with sound engineering and financial practices. (b) The Borrowers shall, in accordance with the provi- sions of decree of March 25, 1959, of the Guarantor referred to in Section 1.02(a) of this Agreement, make with the Secretaria de Obras Pgblicas of the Guarantor arrange- ments satisfactory to the Bank with regard to the planning, designing, construction and supervision by the Secretaria de Obras Piblicas of the facilities included in Part A of the Project. 8 (c) Except as the Bank shall otherwise agree, the Borrowers shall cause all works included in the Project (including the ferry-boat) to be constructed by contractors acceptable to the Bank and the Borrowers under contracts providing for construction thereof on terms and conditions satisfactory to the Bank and the Borrowers. (d) The Borrowers shall cause the designing and con- struction of the ferry-boat included in part B of the Project to be supervised by competent and experienced consultants acceptable to, and employed upon terms and conditions satisfactory to, the Bank. (e) The general design standards and the types of sur- facing (including pavement) to be used for the toll bridges and toll and access roads included in the Project shall be as determined by agreement between the Bank and the Borrowers, subject to modification by further agreement between them. SECTION 5.02. (a) The Borrowers shall at all times main- tain their corporate existence and right to carry on their operations and Caminos shall, except as the Bank shall otherwise agree, take all steps necessary to acquire, main- tain and renew all rights, powers, privileges and franchises which are necessary or useful in the conduct of its business. (b) Caminos shall operate and maintain the equipment, properties and toll facilities entrusted to it by the Guaran- tor, and from time to time make all necessary renewals and repairs thereof, all in accordance with sound engi- neering practices. (c) Caminos shall at all times carry on its planning and operations, conduct its affairs and maintain its financial position all in accordance with sound management, busi- ness, financial and engineering principles and practices. SECTION 5.03. (a) Upon request from time to time by the Bank, the Borrowers shall promptly furnish or cause 9 to be furnished to the Bank the plans, specifications and work schedules for the Project and any material modifi- cations subsequently made therein, in such detail as the Bank shall reasonably request. (b) The Borrowers shall maintain or cause to be main- tained records adequate to identify the goods financed out of the proceeds of the Loan, to disclose the use thereof in the Project, to record the progress of the Project (including the cost thereof) and to reflect in accordance with consistently maintained sound accounting practices the operations and financial condition of the Borrowers. (c) The Borrowers shall enable the Bank's representa- tives to inspect the Project, the goods and any relevant records and documents, and all other sites, works, equip- ment, properties and toll facilities entrusted to Caminos by the Guarantor. (d) The Borrowers shall furnish or cause to be furnished to the Bank all such information as the Bank shall reason- ably request concerning the expenditure of the proceeds of the Loan, the Project, the goods, and the operations and financial condition of the Borrowers. SECTION 5.04. Each of the Borrowers undertakes that, except as the Bank shall otherwise agree, if any lien shall be created on any of its assets as security, as to Financiera for any external debt and as to Caminos for any debt, such lien shall ipso facto equally and ratably secure the payment of the principal of, and interest and other charges on, the Loan and the Bonds, and that in the creation of any such lien express provision shall be made to that effect; pro- vided, however, that the foregoing provisions of this Section shall not apply to: (i) 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 (ii) any lien arising in the ordinary course of banking trans- actions and securing a debt maturing not more than one year after its date. 10 SECTION 5.05. Caminos shall have its financial state- ments (balance sheet and related statement of earnings and expenses) certified annually by an independent accountant or accounting firm acceptable to the Bank and shall promptly after their preparation and not later than four months after the close of Caminos's fiscal year transmit to tt, Bank certified copies of such statements and a signed copy of the accountant's or accounting firm's report. SECTION 5.06. (a) The Bank and the Borrowers shall cooperate fully to assure that the purposes of the Loan will be accomplished. To that end, each of them shall furnish to any other of them all such information as it shall reasonably request with regard to the general status of the Loan. (b) The Bank and the Borrowers shall from time to time exchange views through their representatives with regard to matters relating to the purposes of the Loan and the maintenance of the service thereof. The Borrowers shall promptly inform the Bank of any condition which inter- feres with, or threatens to interfere with, the accomplish- ment of the purposes of the Loan or the maintenance of the service thereof. SECTION 5.07. The Borrowers shall pay or cause to be paid all taxes, if any, imposed under the laws of the Guarantor or laws in effect in the territories of the Guarantor on or in connection with the execution, issue, delivery or registration of the Loan Agreement, the Guar- antee Agreement, the Bonds or the payment of principal, interest or other charges thereunder; provided, however, that the provisions of this Section shall not apply to tax- ation of payments under any Bond to a holder thereof other than the Bank when such Bond is beneficially owned by an individual or corporate resident of the Guarantor. SECTION 5.08. The Borrowers shall pay or cause to be paid all taxes, if any, imposed under the laws of the country or countries in whose currency the Loan and the Bonds 11 are payable or laws in effect in the territories of such country or countries on or in connection with the execution, issue, delivery or registration of the Loan Agreement, the Guarantee Agreement or the Bonds. SECTION 5.09. (a) The Borrowers shall insure or cause to be insured with responsible insurers all goods financed out of the proceeds of the Loan. Such insurance shall cover such marine, transit and other hazards incident to the purchase and importation of the goods into the territories of the Guarantor and delivery thereof to the sites of the Project, and shall be for such amounts, as shall be con- sistent with sound commercial practices. Such insurance shall be payable in dollars or in the currency in which the cost of the goods insured thereunder shall be payable. (b) In addition, Caminos shall, except as the Bank shall otherwise agree, take out and maintain, with good and reputable insurance companies, insurance against such risks and in such amounts as shall be consistent with sound business practices. SECTION 5.10. Caminos shall from time to time take all necessary or desirable steps to cause such adjustments in the toll charges on Caminos s facilities to be made as shall be required to provide Caminos with funds sufficient to: (a) cover all cash operating expenses of Caminos, includ- ing adequate maintenance and taxes, and service payments on debt; and (b) create a surplus adequate to meet a reasonable portion of the cost of expansion of Caminos's facilities. ARTICLE VI Remedies of the Bank SECTION 6.01. (i) If any event specified in paragraph (a), paragraph (b), paragraph (e) or paragraph (f) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of thirty days, or (ii) if any event specified in paragraph (c) of Section 5.02 of the Loan Regulations shall occur and shall continue for a period of S 12 sixty days after notice thereof shall have been given by the Bank to the Borrowers or to either of them, then at any subsequent time during the continuance thereof, the Bank, at its option, may declare the principal of the Loan and of all the Bonds then outstanding to be due and payable immediately, and upon any such declaration such principal shall become due and payable immediately, anything in the Loan Agreement or in the Bonds to the contrary not- withstanding. ARTICLE VII Effective Date; Termination SECTION 7.01. The following events are specified as additional conditions to the effectiveness of this Agreement within the meaning of Section 9.01(c) of the Loan Regulations: (a) Contractual arrangements have been made by Caminos providing, on terms and conditions satisfactory to the Bank, for additional financing for the Project in an amount of not less than five hundred million pesos in currency of the Guarantor; and (b) Contractual arrangements have been made by Caminos with the Banco Nacional Hipotecario Urbano y de Obras Piblicas, S.A. providing for the extension, on terms and conditions satisfactory to the Bank, of the life of the Banco's loans and credits to Caminos presently outstanding. SECTION 7.02. The following is specified as an additional matter within the meaning of Section 9.02(c) of the Loan Regulations, to be included in the opinion or opinions to be furnished to the Bank: that the arrangements referred to in Section 7.01 are valid and are binding on the parties thereto. SECTION 7.03. A date ninety days after the date of this Agreement is hereby specified for the purposes of Sec- tion 9.04 of the Loan Regulations. 13 ARTICLE VIII Miscellaneous SECTION 8.01. The Closing Date shall be July 1, 1965, or such other date as shall be agreed by the Bank and the Borrowers as the Closing Date. SECTION 8.02. The following addresses are specified for the purposes of Section 8.01 of the Loan Regulations: (a) For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington 25, D. C. United States of America Alternative address for cablegrams and radiograms: Intbafrad Washington, D. C. (b) For the Borrowers: Caminos y Puentes Federales de Ingresos Insurgentes Sur 214, 20 piso Mexico, D.F., Mexico and Nacional Financiera, S.A. Avenida Venustiano Carranza 25 Mexico 1, D.F., Mexico Alternative address for cablegrams and radiograms to Financiera: Nafin Mexico with copies to: Secretaria de Obras Pfiblicas Xola y Ave. Universidad Mexico 13, D.F., Mexico 14 IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Loan Agreement to be signed in their respective names and delivered 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/ W. A. B. ILIr Vice President CAMINOS Y PUENTES FEDERALES DE INGRESOS By /s/ HUGO CERVANTES DEL Rio Authorized Representative NACIONAL FINANCIERA, S.A. By /s/ RAUL MARTINEZ OsTos Authorized Representative 15 SCHEDULE 1 Amortization Schedule Payment of Principal Date Payment Due (expressed in dollars)* July 1, 1965 $ 515,000 Jan. 1, 1966 530,000 July 1, 1966 545,000 Jan. 1, 1967 565,000 July 1, 1967 580,000 Jan. 1, 1968 595,000 July 1, 1968 615,000 Jan. 1, 1969 630,000 July 1, 1969 650,000 Jan. 1, 1970 665,000 July 1, 1970 685,000 Jan. 1, 1971 705,000 July 1, 1971 725,000 Jan. 1, 1972 745,000 July 1, 1972 770,000 Jan. 1, 1973 790,000 July 1, 1973 815,000 Jan. 1, 1974 835,000 July 1, 1974 860,000 Jan. 1, 1975 885,000 July 1, 1975 910,000 Jan. 1, 1976 935,000 July 1, 1976 965,000 Jan. 1, 1977 990,000 July 1, 1977 1,020,000 Jan. 1, 1978 1,050,000 July 1, 1978 1,080,000 Jan. 1, 1979 1,110,000 July 1, 1979 1,145,000 Jan. 1, 1980 1,175,000 July 1, 1980 1,210,000 Jan. 1, 1981 1,245,000 July 1, 1981 1,280,000 Jan. 1, 1982 1,315,000 July 1, 1982 1,365,000 * To the extent that any part of the Loan is repayable in a currency other than dollars (see Loan Regulations, Section 3.03), the figures in this column represent dollar equivalents determined as for purposes of withdrawal. 16 Premiums on Prepayment and Redemption The following percentages are specified as the premiums payable on repayment in advance of maturity of any part of the principal amount of the Loan pursuant to Section 2.05(b) of the Loan Regulations or on the redemption of any Bond prior to its maturity pursuant to Section 6.16 of the Loan Regulations: Time of Prepayment or Redemption Premium Not more than three years before maturity....................... /2 of 1% More than three years but not more than six years before maturity......... 1/2% More than six years but not more than eleven years before maturity ... 21/% More than eleven years but not more than sixteen years before maturity... 31/2% More than sixteen years but not more than eighteen years before maturity. . 43/4% More than eighteen years before maturity 53/4% 17 SCHEDULE 2 Description of the Project The Project consists of: Part A I. The construction of a total of about 385 kilometers of toll roads, all such toll roads to be part of the toll road system of Caminos. The toll roads to be constructed are the following: (a) Mexico City - Puebla - Orizaba (b) Mexico City - Venta de Carpio - Tecamac (c) Tijuana - Ensenada II. The construction of a total of about 125 kilometers of roads of access to the toll road system of Caminos, all such access roads to be part of the National Highway System of the Guarantor. The access roads to be con- structed are the following: (a) La Pera - Cuautla (b) Texmelucan- Ocotoxco (c) Ciudad Serdin - Esperanza (d) Tecamac - Teotihuacin III. The construction of the following five toll bridges: Coatzacoalcos, Culiacin, Alvarado, Caracol and Papaloa- pan. IV. The construction of terminal facilities in the port of Mazatlan and the Pichilingue site of the port of La Paz for the ferry-boat provided for in Part B-I below, and an access road of a length of about 12 kilometers joining Pichilingue to La Paz. 18 Part B I. The acquisition and utilization in the ferry service be- tween Mazatlin and La Paz of a ferry-boat, the general characteristics of which are to be the following: (a) Length: about 90 meters (b) Capacity: about 100 cars and 500 passengers (c) Register: Lloyd's Register of Shipping II. The acquisition and utilization of miscellaneous main- tenance and other equipment for toll facilities, such as electronic devices for traffic control, signal panels and toll gates. S