Public Disclosure Authorized. Public Disclosure Authorized. Public Disclosure Authorized. Public Disclosure Authorized CONFORMED COPY

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1 Public Disclosure Authorized CONFORMED COPY LOAN NUMBER 3047 ME Public Disclosure Authorized (Industrial Restructuring Project) Public Disclosure Authorized between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT and NACIONAL FINANCIERA, S.N.C. Dated September 25, 1989 Public Disclosure Authorized LOAN AGREEMENT LOAN NUMBER 3047 ME AGREEMENT, dated September 25, 1989 between INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (the Bank) and NACIONAL FINANCIERA, S.N.C. (hereinafter referred to as the Borrower when NACIONAL FINANCIERA, S.N.C. is acting in such capacity). 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 2 to this Agreement, have requested the Bank to assist in the financing of the Project; (B) by an agreement (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; (C) by an agreement (the BANCOMEXT Project Agreement) of

2 even date herewith between the Bank and BANCO NACIONAL DE COMERCIO EXTERIOR, S.N.C. (hereinafter called BANCOMEXT), BANCOMEXT has agreed to undertake the obligations set forth in the BANCOMEXT Project Agreement; (D) by an agreement (the FONEI Project Agreement) of even date herewith between the Bank and NACIONAL FINANCIERA, S.N.C. as trustee (hereinafter referred to as the "Trustee" when NACIONAL FINANCIERA, S.N.C. is acting in such capacity) of Fondo de Equipamiento Industrial, the Trustee has agreed to undertake the obligations set forth in the FONEI Project Agreement; and WHEREAS the Bank has agreed, on the basis, inter alia, of the 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 The "General Conditions Applicable to Loan and Guarantee Agreements" of the Bank, dated January 1, 1985 (the General Conditions), with the last sentence of Section 3.02 deleted, constitute an integral part of this Agreement. Section 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) "peso" means the currency unit of the Guarantor; (c) "Executing Agencies" means collectively the Borrower, BANCOMEXT and the Trustee (as hereinafter defined), and "Executing Agency" means any one of such Agencies; (d) "Financial Intermediary" means a development or commercial bank regulated by the Guarantor s Ley Reglamentaria del Servicio Publico de Banca y Credito of January 14, 1985, or any other financial intermediary acceptable to the Bank; (e) "Industrial Enterprise" means an enterprise engaged in manufacturing activities or in associated services, including the development of industrial parks, established under the laws of the Guarantor; (f) "Category A Industrial Enterprise" means an Industrial Enterprise within a subsector for which the Bank has received a satisfactory Subsector Restructuring Program; (g) "Category B Industrial Enterprise" means an Industrial Enterprise, other than a Category A Industrial Enterprise, which is undergoing a process of modernization and which is not subject to quantitative import restrictions, official reference prices, or export prohibitions; (h) "FONEI" means Industrial Equipment Fund, Fondo de Equipamiento Industrial, entrusted by the Guarantor to the Trustee pursuant to the Trust Agreement (as hereinafter defined); and such term includes the technical and administrative organization, resources, staff and facilities used or to be used by the Trustee to operate FONEI; (i) "Trust Agreement" means the Contrato de Fideicomiso, dated October 29, 1971, between the Guarantor and the Trustee, whereby FONEI has been entrusted to BANCO DE MEXICO and the

3 Contrato de Fideicomiso, dated June 30, 1989, between the UNITED MEXICAN STATES, BANCO DE MEXICO and NACIONAL FINANCIERA, S.N.C., whereby the trusteeship of FONEI was transferred to NACIONAL FINANCIERA, S.N.C.; (j) "FONEI Operating Regulations" means the Reglas Generales de Operacion as approved by FONEI s Comite Tecnico on June 10, 1987; (k) "BANCOMEXT" means BANCO NACIONAL DE COMERCIO EXTERIOR, S.N.C., established by the Guarantor s Ley Organica del BANCO NACIONAL DE COMERCIO EXTERIOR, S.N.C., dated December 19, 1985; (l) "SECOFI" means the Secretariat of Commerce and Industrial Development, Secretaria de Comercio y Fomento Industrial, of the Guarantor; (m) "Coordinating Committee" means the committee established by the Guarantor through Oficio dated October 16, 1984 from the Secretaria de Hacienda y Credito Publico of the Guarantor, and referred to in Section 3.06 (a) of the Guarantee Agreement; (n) "BANCOMEXT Project Agreement" means the agreement between the Bank and BANCOMEXT of even date herewith, as such agreement may be amended from time to time and such term includes all agreements supplemental to the BANCOMEXT Project Agreement; (o) "FONEI Project Agreement" means the agreement between the Bank and the Trustee of even date herewith, as such agreement may be amended from time to time, and such term includes all agreements supplemental to the FONEI Project Agreement; (p) "BANCOMEXT Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and BANCOMEXT pursuant to Section 3.03 (a) (i) of this Agreement and Section 2.03 (a) of the BANCOMEXT Project Agreement, as the same may be amended from time to time; (q) "FONEI Subsidiary Loan Agreement" means the agreement to be entered into between the Borrower and the Trustee pursuant to Section 3.03 (a) (i) of this Agreement and Section 2.03 (a) of the FONEI Project Agreement, as the same may be amended from time to time; (r) "Subsidiary Loan Agreements" means the BANCOMEXT Subsidiary Loan Agreement and the FONEI Subsidiary Loan Agreement; (s) "Subsidiary Loan" means any of the loans made or proposed to be made by the Borrower out of the proceeds of the Loan to BANCOMEXT and the Trustee under the BANCOMEXT Subsidiary Loan Agreement and the FONEI Subsidiary Loan Agreement, respectively; (t) "General Operating Agreement" means any of the general operating agreements (Convenios Generales de Transferencia de Fondos), entered into between each Executing Agency and Financial Intermediaries, which set forth the general terms, conditions and procedures for on-lending funds, including the Reglas de Operacion (as hereinafter defined); (u) "Reglas de Operacion" means the specific regulations amplifying a General Operating Agreement, to be issued by each Executing Agency pursuant to Section 3.02 of this Agreement and Section 2.02 of each of the BANCOMEXT Project Agreements and the FONEI Project Agreement, setting forth the specific terms, conditions and procedures for on-lending the proceeds of the Loan to Financial Intermediaries; (v) "Intermediary Loan" means a loan made or proposed to be made by an Executing Agency out of the proceeds of the Loan to a Financial Intermediary under its respective General Operating Agreement;

4 (w) "Investment Subloan" means a loan made or proposed to be made by an Executing Agency or a Financial Intermediary out of the proceeds of the Loan to a Subborrower (as hereinafter defined) for purposes of financing an Investment Subproject; (x) "Working Capital Subloan" means a loan made or proposed to be made by an Executing Agency or a Financial Intermediary out of the proceeds of the Loan to a Subborrower (as hereinafter defined) for purposes of financing a Working Capital Subproject (as hereinafter defined); (y) "Consultants Services Subloan" means a loan made or proposed to be made by an Executing Agency or a Financial Intermediary out of the proceeds of the Loan to a Subborrower (as hereinafter defined) for purposes of financing a Consultants Services Subproject (as hereinafter defined); (z) "Industry-level Subloan" means a loan made or proposed to be made by an Executing Agency or a Financial Intermediary out of the proceeds of the Loan to a Subborrower (as hereinafter defined) for purposes of financing an Industry-level Subproject (as hereinafter defined); (aa) "Subloan" means an Investment Subloan, a Working Capital Subloan, a Consultant Services Subloan, or an Industry-level Subloan, as the case may be; (bb) "Subborrower", when used in reference to: (i) an Investment Subloan, means an Industrial Enterprise or an Equity Subborrower (as hereinafter defined); (ii) a Working Capital Subloan or a Consultants Services Subloan, means an Industrial Enterprise; and (iii) an Industry-level Subloan, means an entity having the legal capacity to contract and provide services, including the development of industrial parks, to several Category A Industrial Enterprises; (cc) "Equity Subborrower" means a person or an entity with a legal capacity to contract, other than an Executing Agency or a Financial Intermediary, receiving a Subloan for purposes of financing an investment subproject to be carried out by an Industrial Enterprise, as a loan, or as an equity investment in such Industrial Enterprise; (dd) "Direct Investment" means an investment, other than a Subloan, made or proposed to be made by an Executing Agency or a Financial Intermediary from the proceeds of the Loan for purposes of financing an Investment Subproject; (ee) "Subloan Agreement" means any of the agreements to be entered into between the Executing Agencies and Subborrowers as well as between the Financial Intermediaries and Subborrowers pursuant to Section 3.03 (a)(iii) of this Agreement, Section 2.03 (b)(ii) of the BANCOMEXT Project Agreement and Section 2.03 (b)(ii) of the FONEI Project Agreement; (ff) "Direct Investment Agreement" means an agreement to be entered into between an Executing Agency and an Industrial Enterprise or between a Financial Intermediary and an Industrial Enterprise, pursuant to Section 3.04 (a) of this Agreement and Section 2.04 (a) of each of the BANCOMEXT Project Agreement and FONEI Project Agreement; (gg) "Investment Subproject" means a specific development project, excluding land acquisition consisting of: (i) the development of industrial parks for use by Industrial Enterprises; (ii) an investment in physical plant of an Industrial Enterprise, including plant construction, relocation, expansion, improvement, or acquisition of production equipment or machinery, and may include expenditures for technology improvement, Marketing Expenses (as hereinafter defined), Worker Retraining and Relocation Expenses (as hereinafter defined), and Working Capital

5 (as hereinafter defined) associated with such investment; or (iii) a Polution Control Investment Subproject as (hereinafter defined); (hh) "Pollution Control Investment Subproject" means an investment in pollution control equipment, associated with an investment in physical plant of an Industrial Enterprise under paragraph (gg), subparagraph (ii) of this Section; (ii) "Working Capital Subproject" means a specific development project consisting of the increase of Working Capital (as hereinafter defined); (jj) "Industry-level Subproject" means a specific development project for purposes of providing goods and services for Category A Industrial Enterprises under Part C of the Project; (kk) "Consultants Services Subproject" means a specific development project consisting of consultants services for the preparation and implementation of plans for restructuring and improving the competitiveness of such Industrial Enterprise; (ll) "Subproject" means an Investment Subproject, a Pollution Control Investment Subproject, a Working Capital Subproject, a Consultants Services Subproject, or an Industry-level Subproject; (mm) "Marketing Expenses" means expenses for marketing and distributing products of an Industrial Enterprise; (nn) "Worker Retraining and Relocation Expenses" means the expenses of retraining and relocating workers employed by an Industrial Enterprise; (oo) "Working Capital" means the financing requirements resulting from increased use of raw materials, spare parts and other physical inputs required to expand inventories and receivables and raise production levels of an Industrial Enterprise; (pp) "Free-limit Subloan" means a Subloan in an amount not in excess of seven million dollars ($7,000,000) equivalent, which qualifies as a free-limit Subloan pursuant to Section I, paragraph 1 (b) of Schedule 7 to this Agreement; (qq) "Free-limit Direct Investment" means a Direct Investment in an amount not in excess of seven million dollars ($7,000,000) equivalent, which qualifies as a free-limit Direct Investment pursuant to of Section I, paragraph 1 (b), of Schedule 7 to this Agreement; (rr) "General Interest Rate Agreement" means the General Agreement on Interest Rates Applicable to Credit Operations of Fondos de Fomento financed by the International Bank for Reconstruction and Development, between the Guarantor and the Bank, dated August 7, 1984, as amended; (ss) "PVP" means the Sistema de Pagos Variables al Valor Presente, a repayment system which permits the partial capitalization of interest in order to maintain the present value of combined repayments of principal and interest of a Subloan; (tt) "Subsector Restructuring Program" means a long-term readjustment program, satisfactory to the Bank, for an industrial subsector consisting of technical, trade, financial, marketing, fiscal and industrial measures aimed at improving the competitiveness and export capacity of Industial Enterprises within such Subsector; (uu) "Reference Rate" means the Reference Rate, as so defined in the General Interest Rate Agreement; and (vv) "LIBOR" means the average rate per annum at which term

6 deposits in dollars maturing in 30 days are offered in the London interbank market at 11:00 a.m. (London time) two business days before the date the rate of interest of the respective Subsidiary Loan, Intermediary Loan or Subloan is adjusted, inclusive of all commissions, taxes and any charges thereon. For this purpose, "business day" means a day on which dealings in dollar deposits between banks may be carried on in London, England, and on which banks are open in Mexico City, Mexico. ARTICLE II The Loan Section 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 two hundred fifty million dollars ($250,000,000). Section (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 by agreement between the Bank and the Borrower, 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 2 to this 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 conditions satisfactory to the Bank. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 5 to this Agreement. Section The Closing Date shall be December 31, 1994, or such later date as the Bank shall establish. The Bank shall promptly notify the Borrower and the Guarantor of such later date. Section The Borrower 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 (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 onehalf of one percent (1/2 of 1%) per annum above the Cost of Qualified Borrowings 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 the outstanding borrowings of the Bank drawn down after June 30, 1982, expressed as a percentage per annum, as reasonably determined by the Bank; and (iii) "Semester" means the first six months or the second six months of a calendar year. Section Interest and other charges shall be payable semiannually on February 15 and August 15 in each year. Section The Borrower shall repay the principal amount

7 of the Loan in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. ARTICLE III Execution of the Project; Transfer of Loan Proceeds Section The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Loan Agreement, and to this end, shall carry out the Project, with the assistance of the Guarantor and the Executing Agencies and conduct its operations and affairs with due diligence and efficiency and in accordance with sound financial, administrative, and industrial and engineering practices. Section The Borrower shall issue Reglas de Operacion, satisfactory to the Bank, and which shall include, inter alia, the terms and conditions set forth in Schedule 6 to this Agreement. Section (a) The Borrower shall lend a portion of the proceeds of the Loan, on a first-come, first-served basis and within the limits established in Schedule 1 to this Agreement: (i) to BANCOMEXT and the Trustee for purposes of carrying out the Project, except Parts D (i) and D (iii) thereof, under Subsidiary Loan Agreements, satisfactory to the Bank, to be entered into between the Borrower and BANCOMEXT, and the Borrower and the Trustee, which shall include, inter alia, the terms and conditions set forth in Schedule 6 to this Agreement; (ii) to Financial Intermediaries for purposes of carrying out Parts A, B and C of the Project, under its General Operating Agreement; and (iii) in order, as Executing Agency, to make Subloans under Parts A, B and C of the Project, under Subloan Agreements, satisfactory to the Bank, to be entered into between the Borrower and each Subborrower, and which shall include, inter alia, the terms and conditions for Subloans set forth in Schedule 7 to this Agreement. (b) The Borrower shall enter into contractual arrangements, satisfactory to the Bank, with the Guarantor for purposes of transfering the portion of the proceeds of the Loan required by the Guarantor to carry out Part D (iii) of the Project. (c) The Borrower shall exercise its rights under each Subsidiary Loan Agreement, the General Operating Agreement, and each Subloan Agreement to which it is a party, and under the contractual arrangements referred to in paragraph (b) of this Section, in such manner as to protect the interest of the Guarantor, the Bank and the Borrower and to accomplish the purposes of the Loan, and, except as the Bank may otherwise agree, the Borrower shall not change or fail to enforce any Subsidiary Loan Agreement, the Reglas de Operacion of its General Operating Agreement, any Subloan Agreement, such contractual arrangements, or any provision thereof. Section (a) The Borrower shall carry out Direct Investments in Industrial Enterprises under Parts A, B and C of the Project, pursuant to Direct Investment Agreements, satisfactory to the Bank, to be entered into between the Borrower and each Industrial Enterprise, in accordance with the terms and conditions set forth in Schedule 7 to this Agreement. (b) The Borrower shall exercise its rights under each such Direct Investment Agreement in such manner as to protect the interests of the Guarantor, the Bank and the Borrower and to

8 accomplish the purposes of the Loan, and, except as the Bank may otherwise agree, the Borrower shall not change or fail to enforce any Direct Investment Agreement or any provision thereof. Section The Borrower shall exercise its rights in relation to each Subproject in such manner as to: (i) protect the interests of the Bank and the Borrower; (ii) comply with its obligations under this Agreement; and (iii) achieve the purposes of the Loan. Section Except as the Bank shall otherwise agree, procurement of the goods, works and consultants services required for the Project and to be financed out of the proceeds of the Loan shall be governed by the provisions of Schedule 4 to this Agreement. Section The Bank and the Borrower agree that the obligations set forth in Sections 9.04, 9.05, 9.06, 9.07, 9.08 and 9.09 of the General Conditions (relating, respectively, to insurance, use of goods and services, plans and schedules, records and reports, maintenance and land acquisition) in respect of the Project shall be carried out by the Borrower in respect of the Project activities executed by it, and by the Guarantor in respect of Part D (iii) of the Project pursuant to Section 3.03 of the Guarantee Agreement, and by BANCOMEXT and the Trustee in respect of the Project activities each executes pursuant, respectively, to Section 2.07 of each of the BANCOMEXT Project Agreement and the FONEI Project Agreement. Section (a) The Borrower shall: (i) retain, through completion of the Project, a Project manager, with qualifications and responsibilities acceptable to the Bank, for purposes of supervising the implementation of the Project; and (ii) employ consultants, with qualifications and terms of reference acceptable to the Bank, as may be appropriate to provide assistance to such Project manager. (b) The Borrower shall ensure that a program, satisfactory to the Bank, to promote industrial restructuring and regional implementation of the Project shall be carried out in accordance with its terms. ARTICLE IV Financial Covenants Section (a) The Borrower shall maintain, or cause to be maintained, separate records and accounts, adequate to reflect, in accordance with sound accounting practices, the resources and expenditures in respect of the Project. (b) The Borrower shall: (i) have such separate records and accounts, including the Special Account, for each fiscal year audited in accordance with generally accepted auditing standards and practices consistently applied, by independent and qualified auditors; (ii) furnish to the Bank as soon as available, but in any case not later than six (6) months after the end of each such year: (A) certified copies of such financial statements for such year as so audited, and (B) 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 each month certified statements of the Special Account; and (iv) furnish to the Bank such other information concerning the Special Account, and the audit thereof, and

9 said records as the Bank shall from time to time reasonably request. (c) For all expenditures with respect to which withdrawals are requested from the Loan Account on the basis of statements of expenditures, the Borrower shall: (i) maintain, or cause to be maintained, in accordance with paragraph (a) of this Section, separate records and accounts reflecting such expenditures; (ii) retain, or cause to be retained, until at least one year after the Bank has received the audit report for the fiscal year in which the last withdrawal from the Loan Account was made, all records (including contracts, orders, invoices, bills, receipts and other documents) evidencing such expenditures; (iii) enable the Bank s representatives to examine such records; and (iv) ensure that such separate accounts are included in the annual audits referred to in paragraph (b) of this Section and that the report of such audit contains a separate opinion by said auditors as to whether the statements of expenditure submitted during such fiscal year, together with the procedures and internal controls involved in their preparation, can be relied upon to support the related withdrawals. ARTICLE V Remedies of the Bank Section Pursuant to Section 6.02 (k) of the General Conditions, the following additional events are specified: (a) BANCOMEXT or the Trustee, shall have failed to perform any of their respective obligations under the BANCOMEXT Project Agreement or the FONEI Project Agreement; (b) as a result of events which have occurred after the date of the Loan Agreement, an extraordinary situation shall have arisen which shall make it improbable that BANCOMEXT or the Trustee, will be able to perform their respective obligations under the BANCOMEXT Project Agreement or the FONEI Project Agreement; (c) a change shall have been made in the Trust Agreement, or in the FONEI Operating Regulations, which shall materially and adversely affect the carrying out of the parts of the Project to be carried out by the Trustee on behalf of FONEI; and (d) a situation has arisen which shall make it improbable that a Subsector Restructuring Program, or a significant part thereof, will be carried out. Section Pursuant to Section 7.01 (h) of the General Conditions, the following additional events are specified, namely that any event specified in paragraphs (a) or (c) of Section 5.01 of this Agreement shall occur and shall continue for a period of thirty days after notice thereof shall have been given by the Bank to the Borrower. ARTICLE VI Effective Date; Termination Section The following events are specified as additional conditions to the effectiveness of the Loan Agreement

10 within the meaning of Section (c) of the General Conditions: (a) that the BANCOMEXT Subsidiary Loan Agreement shall have been executed by the Borrower and BANCOMEXT; (b) that the FONEI Subsidiary Loan Agreement shall have been executed by the Borrower and the Trustee; and (c) that the Borrower shall have provided to the Bank the promotion program referred to in Section 3.08 (b) of this Agreement. Section The following are specified as additional matters, within the meaning of Section (c) of the General Conditions, to be included in the opinion or opinions to be furnished to the Bank: (a) that the BANCOMEXT Project Agreement has been executed and duly authorized and is legally binding upon BANCOMEXT in accordance with its terms; (b) that the FONEI Project Agreement has been executed and duly authorized and is legally binding upon the Trustee in accordance with its terms; (c) that the BANCOMEXT Subsidiary Loan Agreement has been executed and duly authorized and is legally binding upon the parties thereto in accordance with its terms; and (d) that the FONEI Subsidiary Loan Agreement has been executed and duly authorized and is legally binding upon the parties thereto in accordance with its terms. Section The date of December 27, 1989 is hereby specified for the purposes of Section of the General Conditions. ARTICLE VII Representative of the Borrower; Addresses Section The Director Internacional of the Borrower is designated as representative of the Borrower for the purposes of Section of the General Conditions. Section The following addresses are specified for the purposes of Section of the General Conditions: For the Bank: International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C United States of America Cable address: INTBAFRAD Washington, D.C. Telex: (ITT) (RCA) or (WUI) For the Borrower: Direccion Internacional Nacional Financiera, S.N.C. Plaza NAFINSA, Insurgentes Sur Piso Torre Sur CP 01020, Mexico, D.F. Mexico

11 Cable address: Telex: NAFIN NAFIME Mexico ; IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, 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/ Shahid Husain Regional Vice President Latin America and the Caribbean NACIONAL FINANCIERA, S.N.C. By /s/ Juan Jose Paramo Authorized Representative 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) Part A of the Project Subloans and Direct 150,000, % of amounts Investments disbursed under Subloans and Direct Investments (2) Part B of the Project Subloans and Direct 85,000, % of amounts Investments disbursed under Subloans and Direct Investments (3) Part C of the Project Industry-level 10,000, % of amounts Subloans disbursed under Industry-level Subloans Amount of the

12 Loan Allocated % of (Expressed in Expenditures Category Dollar Equivalent) to be Financed (4) Part D of the Project 5,000,000 (a) Goods 80% (b) Consultants 100% services TOTAL 250,000, Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) payments made for expenditures prior to the date of this Agreement, except that withdrawals in an aggregate amount not exceeding the equivalent of $25,000,000, may be made on account of payments made for expenditures before that date but after January 1, 1988; (b) a Subloan or Direct Investment unless the Subloan or Direct Investment has been made in accordance with the procedures, terms and conditions set forth in Schedule 7 to this Agreement; (c) except as the Bank may otherwise agree, disbursements made by any Executing Agency to a Financial Intermediary or to a Subborrower during any three-month period of time, unless the Bank shall have received: (i) the evidence referred to in Section 2.02 of the General Interest Rate Agreement for said period with respect to Category VI, paragraph 5 of the table set forth in Schedule 1 to said Agreement, as amended, unless such disbursements are made in respect of a Subloan made exclusively to finance a Pollution Control Investment Subproject, in which case said evidence shall be submitted with respect to Category VI, paragraph 2 of such Schedule; and (ii) evidence that the interest rates for dollar-denominated Subloans are in accordance with the interest rate set forth in Schedule 7 to this Agreement; (d) disbursements made by any Financial Intermediary to a Subborrower or an Industrial Enterprise, unless the Bank shall have received a copy of the Reglas de Operacion issued by each Executing Agency, together with a legal opinion, satisfactory to the Bank, by counsel for each Executing Agency that such Reglas de Operacion issued in conjuction with the relevant General Operating Agreement, are legally binding upon the Executing Agency and the Financial Intermediaries signatory to such General Operating Agreement in accordance with the terms of such Agreement; and (e) expenditures incurred under Part D (iii) of the Project, unless the Bank shall have received a copy of the contractual arrangements referred to in Section 3.03 (b) of this Agreement together with a legal opinion, satisfactory to the Bank, that such contractual arrangements have been executed, duly authorized and are legally binding upon the parties thereto in accordance with their terms. SCHEDULE 2 Description of the Project The objective of the Project is to assist the Guarantor in carrying out its program of industrial modernization. The Project consists of the following parts, subject to such modifications thereof as the Bank and the Borrower may agree upon from time to time to achieve such objectives:

13 Part A: Financing of Subprojects for Category A Industrial Enterprises. Part B: Financing of Subprojects for Category B Industrial Enterprises. Part C: Investments in goods and services for developing the subsectors of textile and automobile parts manufacturing and cutflower production, consisting of the following: (a) for the subsector of textile manufacturing: (i) the design and implementation of an action program to improve textile manufacturing, which may include improvement of quality standards, quality analysis, design and fashion, and dissemination of information on new technology; (ii) the implementation of a commercial promotion program; and (iii) consultants assistance for management and worker training; (b) for the subsector of automobile parts manufacturing: (i) the development of technical centers and communication systems between Mexico and major geographic markets of the subsector; (ii) the development of commercial and warehouse facilities for increasing exports; (iii) a commercial promotion program, and (iv) consultant assistance for management and worker training; and (c) for the subsector of cut flowers: (i) the design and implementation of an industry-level action program to provide training to greenhouse managers and technicians; and (ii) the implementation of a commercial training program. Part D: Technical assistance, consisting of: (i) subsectoral studies for purposes of developing restructuring plans for subsectors for which no Subsector Restructuring Programs have been established as of the date of this Agreement; (ii) consultant assistance in implementation of the Project; (iii) acquisition and utilization of computer equipment and software by SECOFI; (iv) acquisition and utilization of computer equipment and software by the Executing Agencies; (v) training activities by the Executing Agencies for their staff and for the staff of the Financial Intermediaries; and (vi) activities by the Executing Agencies for the promotion of Subsector Restructuring Programs. * * * The Project is expected to be completed by June 30, SCHEDULE 3

14 Amortization Schedule Date Payment Due Payment of Principal (expressed in dollars)* On each February 15 and August 15 beginning August 15, 1994 through August 15, ,415,000 On February 15, ,455,000 * The figures in this column represent dollar equivalents determined as of the respective dates of withdrawal. See General Conditions, Sections 3.04 and Premiums on Prepayment The following premiums are specified for the purposes of Section 3.04 (b) of the General Conditions: Time of Prepayment Premium The interest rate (expressed as a percentage per annum) applicable to the balance outstanding on the Loan on the day of prepayment multiplied by: Not more than three years 0.18 before maturity More than three years but 0.35 not more than six years before maturity More than six years but 0.65 not more than eleven years before maturity More than eleven years but not 0.88 more than fifteen years before maturity More than fifteen years before 1.00 maturity SCHEDULE 4 Procurement and Consultants Services Section I. Part A: Procurement of Goods and Works International Competitive Bidding Except as provided in Part C hereof, goods and works shall be procured under contracts awarded in accordance with procedures consistent with those set forth in Sections I and II of the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the Bank in May 1985 (the Guidelines). Part B: Preference for Domestic Manufacturers In the procurement of goods in accordance with the procedures described in Part A hereof, goods manufactured in Mexico may be granted a margin of preference in accordance with, and subject to, the provisions of paragraphs 2.55 and 2.56 of the Guidelines and paragraphs 1 through 4 of Appendix 2 thereto.

15 Part C: Other Procurement Procedures 1. Contracts for computers and office equipment under Part D of the Project estimated to cost less than $300,000 equivalent may be procured on the basis of competitive bidding, advertised locally, in accordance with procedures satisfactory to the Bank. 2. Contracts for goods (excluding computers and office equipment under Part D of the Project) and works estimated to cost less than $7,000,000 equivalent may be procured under contracts awarded on the basis of international shopping procedures, acceptable to the Bank. 3. Contracts for goods (excluding computers and office equipment under Part D of the Project) and works estimated to cost less than $3,000,000 equivalent may be awarded on the basis of established commercial procurement practices acceptable to the Bank. Part D: Review by the Bank of Procurement Decisions 1. Review of invitations to bid and of proposed awards and final contracts: (a) With respect to the first three contracts financed by each Financial Intermediary and Executing Agency, the procedures set forth in paragraphs 2 and 4 of Appendix 1 to the Guidelines shall apply. When payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract required to be furnished to the Bank pursuant to said paragraph 2 (d) shall be furnished to the Bank prior to the making of the first payment out of the Special Account in respect of such contract. (b) With respect to each contract not governed by the preceding paragraph, the procedures set forth in paragraphs 3 and 4 of Appendix 1 to the Guidelines shall apply. When payments for such contract are to be made out of the Special Account, such procedures shall be modified to ensure that the two conformed copies of the contract together with the other information required to be furnished to the Bank pursuant to said paragraph 3 shall be furnished to the Bank as part of the evidence to be furnished pursuant to paragraph 4 of Schedule 5 to this Agreement. (c) The provisions of the preceding subparagraphs (a) and (b) shall not apply to contracts on account of which the Bank has authorized withdrawals from the Loan Account on the basis of statements of expenditure. Such contracts shall be retained in accordance with Section 4.01 (c) (ii) of this Agreement, the Guarantee Agreement, the BANCOMEXT Project Agreement and the FONEI Project Agreement. 2. The figure of 20% is hereby specified for purposes of paragraph 4 of Appendix 1 to the Guidelines. Section II. Employment of Consultants Whenever consultants are employed to assist in the carrying out of the Project, such consultants shall have qualifications, experience and terms and conditions of employment satisfactory to the Bank. Such consultants shall be selected in accordance with principles and procedures satisfactory to the Bank on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August SCHEDULE 5 Special Account 1. For the purposes of this Schedule: (a) the term "Eligible Categories" means Categories (1),

16 through (4) as set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (b) the term "Eligible Expenditures" means expenditures 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 allocated from time to time to the Eligible Categories in accordance with the provisions of Schedule 1 to this Agreement; and (c) the term "Initial Deposit" means an amount equivalent to twenty-five million dollars ($25,000,000) to be withdrawn from the Loan Account and deposited in the Special Account pursuant to paragraph 3 of this Schedule. 2. Payments out of the Special Account shall be made exclusively for Eligible Expenditures in accordance with the provisions of this Schedule. The Borrower shall make withdrawals from the Special Account for payments of Eligible Expenditures on the basis of the evidence that the Bank shall have reasonably determined, and shall debit the Special Account with the amount in dollars so withdrawn or with the dollar equivalent of the currency other than dollars in which the payment was made, determined on the basis of the rate of exchange between the dollar and such currency in effect: (i) on the date each payment shall have been made, if the payment has taken place within 90 days before the date of the withdrawal in question has been requested, provided however, that in respect of Eligible Expenditures under Subloans or Direct Investments, such 90-day period shall be counted as from the date on which the Bank dispatches its: (A) approval of the Subloan or Direct Investment, or (B) authorization of withdrawals from the Loan Account in respect of Free-limit Subloans and Free-limit Investments; or (ii) on the date each withdrawal shall have been made. 3. The Bank may, at the request of the Borrower, withdraw on behalf of the Borrower from the Loan Account and deposit into the Special Account the Initial Deposit. Thereafter, and on the basis of requests by the Borrower furnished to the Bank at such intervals as the Bank shall specify, the Bank shall further so withdraw from the Loan Account and deposit into the Special Account such amounts as shall be required to replenish the Special Account for Eligible Expenditures, but only to the extent that the amount of any such deposit, together with any amount remaining on deposit in the Special Account as of the date of such request, shall not exceed, in the aggregate, the equivalent of the Initial Deposit. Except as the Bank may otherwise agree, each such deposit after the Initial Deposit shall be withdrawn by the Bank from the Loan Account under the respective Eligible Categories, and in the respective equivalent amounts, as shall have been justified by the evidence supporting the request for such deposit furnished pursuant to paragraph 4 of this Schedule. 4. Prior to or at the time of each request by the Borrower for a deposit by the Bank into the Special Account after the Initial Deposit, the Borrower shall furnish to the Bank in respect of each payment made by the Borrower out of the Special Account, such documents and other evidence as the Bank shall reasonably request, showing that such payment was made for Eligible Expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Schedule, when the total unwithdrawn amount of the Loan allocated to the Categories, minus the amount of any outstanding special commitment entered into by the Bank pursuant to Section 5.02 of the General Conditions, shall be equal to the equivalent of twice the amount of the Initial Deposit, the Bank shall be entitled, after consultation with the Borrower, to reduce the percentage of disbursements for Eligible Expenditures or take any other action which will ensure the Bank that by the time of disbursements of the total amount of the proceeds of the Loan, all deposits (including the Initial Deposit made by the Bank into the Special Account) were made for Eligible Expenditures.

17 6. (a) If the Bank shall have determined that any payment out of the Special Account: (i) was made for any expenditure or in any amount not eligible for financing by withdrawal from the Loan Account; or (ii) was not justified by the documentation furnished pursuant to paragraph 4 above, the Bank shall notify the Borrower of such circumstances, and if, after a period of 30 days from the issuance of such notice, an amount equal to the amount of such payment or the portion thereof not so eligible or justified has not been deposited by the Borrower into the Special Account or, if the Bank shall so request, refunded, to the Bank, the Bank may, without in any way restricting or limiting any other rights, power, or remedy of the Bank under the Loan Agreement, refrain from making further deposits into such Account. (b) If any amount outstanding in the Special Account will not be required to cover further payments for Eligible Expenditures, the Borrower shall, promptly upon notice from the Bank, and unless otherwise agreed by the Bank, refund to the Bank such amount then outstanding in the Special Account for crediting to the Loan Account and immediate cancellation. SCHEDULE 6 Terms and Conditions of Subsidiary Loans and Intermediary Loans 1. Retention of Interest Payments to Cover Technical Assistance Expenditures In order to finance technical assistance expenditures, the Borrower shall retain from interest paid on all Subsidiary Loans and Intermediary Loans made by the Borrower: (a) one percent of each interest payment made on peso-denominated loans; and (b) 0.25 percent of each interest payment made on dollar-denominated loans. The Borrower shall retain such funds in a separate account and shall use such account to provide counterpart financing of expenditures under Part D of the Project. 2. Terms The following terms and conditions shall apply to Subsidiary and Intermediary Loans: A. Currency Denomination: Dollars or Pesos B. Interest Rate: Except as provided in E below, the interest rate for the Subloan or Direct Investment to be financed from the proceeds of the Subsidiary or Intermediary Loan, minus a margin adequate to cover financial intermediation costs, including administrative costs, an adequate return on capital and provision for losses C. Amortization and Variable, depending on the Grace Periods: Subloan or Direct Investment to be financed from the proceeds of the Subsidiary or Intermediary Loan, as follows: Not Not Less More Years Than Than (i) Investment Subloans Amortization 1 13

18 (other than to Equity Grace 0 3 Subborrowers); Industry-level Subloans (ii) Working Capital Amortization 1 7 Subloans; Consultants Grace 0 3 Services Subloans (iii)direct Investments; Amortization 3 10 Investment Subloans Grace 0 5 to Equity Subborrowers The grace period for each Subloan or Investment shall be included within, and not additional to, the amortization period for such Subloan or Investment. D. On-lending: Each Subloan and Direct Investment made from the proceeds of a Subsidiary Loan or Intermediary Loan shall be made in accordance with the terms and conditions set forth in Schedule 7 to this Agreement. E. Technical Assistance: There shall be no interest charged nor repayment of funds transferred under a Subsidiary Loan Agreement for purposes of carrying out Part D of the Project. SCHEDULE 7 Procedures for and Terms and Conditions of Subloans and Direct Investments Section I. General Terms Applicable to All Subloans and Direct Investments 1. Approval and Authorization Procedures. No expenditures for goods, works or services required for a Subloan or Direct Investment shall be eligible for financing from the proceeds of the Loan unless: (a) the Subloan or Direct Investment shall have been approved by the Bank and such expenditures shall have been made not earlier than 180 days prior to the date on which the Bank shall have received the application and information required under paragraph 2(a) of this Section in respect of such Subloan or Direct Investment; or (b) the Subloan or Direct Investment shall have been a Free-limit Subloan or Free-limit Direct Investment, for which the Bank has authorized withdrawals from the Loan Account, and the expenditures in question shall have been made not earlier than 180 days prior to the date on which the Bank shall have

19 received the request and information required under paragraph 2(b) of this Section in respect of such Free-limit Subloan or Free-limit Direct Investment. For purposes of this Agreement, a Free-limit Subloan shall be a Subloan, and a Free-limit Direct Investment shall be a Direct Investment, for a Subproject in an amount to be financed out of the proceeds of the Loan which shall not exceed seven million dollars ($7,000,000) equivalent, when added to all other outstanding amounts made available by any Executing Agency or any Financial Intermediary, to the Industrial Enterprise in question, financed or proposed to be financed out of the proceeds of the Loan. However, unless the Bank shall otherwise agree: (i) the first three Free-limit Subloans and the first three Free-limit Direct Investments, and (ii) the first three Investment Subloans to an Equity Subborrower qualifying as Free-limit Subloans shall be subject to prior approval by the Bank in accordance with paragraphs 1(a) and 2(a) of this Section. (2) (a) When presenting a Subloan or Direct Investment to the Bank for approval, the Borrower shall furnish to the Bank an application together with: (i) a description of the Industrial Enterprise and an appraisal of the Subproject, including a description of the expenditures to be financed out of the proceeds of the Loan; (ii) the proposed terms and conditions of the Subloan or Direct Investment, including methods of procurement; (iii) in the case of Investment Subprojects, evidence, satisfactory to the Bank, that such Subproject has financial and economic rates of return of not less than 10 percent in real terms, unless such Subproject will be financed by a Direct Investment or a Subloan to an Equity Subborrower, in which case such rates of return shall be not less than 12 percent in real terms; and (iv) such other information as the Bank shall reasonably request, including time period for holding equity received as part of a Direct Investment; (b) Each request by the Borrower for authorization to make withdrawals from the Loan Account in respect of a Free-limit Subloan or Free-limit Direct Investment shall contain: (i) a summary description of the Industrial Enterprise and the Subproject in question, including a description of the expenditures proposed to be financed out of the proceeds of the Loan; (ii) the terms and conditions of the Subloan or Direct Investment, including methods of procurement; and (iii) in the case of Investment Subprojects, evidence, satisfactory to the Bank, of financial and economic rates of return which shall comply with the minimum rates set forth in subparagraph (a) (iii) of this Section; and (c) Applications and requests made pursuant to the provisions of paragraphs 2(a) and 2(b) of this Section shall be presented to the Bank on or before June 30, Terms and Conditions of Subloan Agreements and Direct Investment Agreements. Subloans and Direct Investments shall be made on terms whereby the Executing Agency or the Financial Intermediary shall obtain, by written contract with each Subborrower and, when the Subborrower is an Equity Subborrower, with the Equity Subborrower and the Industrial Enterprise, rights adequate to protect the interests of the Bank and the Borrower, including the right to: