CMI International, Inc., a Michigan Corporation - Page 4




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          impact on Mexico's economy (e.g., zero percent reflected the                
          greatest benefit and 25 percent reflected the least benefit).  On           
          September 18, 1987, Mellon Bank (Mellon), selected by CMI-Texas             
          as the financial intermediary, paid US$1,115,500 (i.e.,                     
          reflecting the prevailing market discount rate of 51.5 percent)             
          for an assignment of debt with a face value of US$2,300,000.                
               On October 1, 1987, the Mexican Government, CMI-Texas,                 
          Industrias, and Mellon entered into a Purchase and Capitalization           
          Agreement (Agreement), which delineated the terms of the swap               
          transaction.  On October 15, 1987, Mellon informed all parties              
          that the transaction would close on October 28, 1987.  On October           
          21, 1987, CMI-Texas tendered US$1,125,000 (i.e., Mellon's cost of           
          the debt, US$1,115,500, plus a US$9,500 commission fee) to                  
          Mellon.                                                                     
               On October 28, 1987, the parties simultaneously consummated            
          the following transactions:  (1) Mellon sold to CMI-Texas, for              
          the previously tendered US$1,125,000, a 100-percent "undivided              
          interest" in U.S.-dollar-denominated debt (debt interest) with a            
          face value of US$2,300,000; (2) CMI-Texas transferred its debt              
          interest to Industrias as an equity contribution; (3) Mellon                
          canceled the debt interest and the underlying debt; (4) the                 
          Mexican Government deposited Mex$3,206,085,431 in an interest-              
          bearing account on behalf of Industrias; and (5) Industrias                 







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