EXHIBIT 2.5
BORROWER PLEDGE AGREEMENT
dated as of February 26, 2004
by and between
CONSTRUCTORA INTERNACIONAL DE INFRAESTRUCTURA, S.A. DE C.V.
as Pledgor,
and
BANCO SANTANDER MEXICANO, S.A.
as Onshore Collateral Agent on behalf and for the benefit of the
Secured Parties
as Pledgee
BORROWER PLEDGE AGREEMENT
PLEDGE WITHOUT TRANSFER OF POSSESSION AGREEMENT (this "Agreement") dated
as of February 26, 2004, entered into by and between CONSTRUCTORA INTERNACIONAL
DE INFRAESTRUCTURA, S.A. DE C.V. (the "Pledgor") and BANCO SANTANDER MEXICANO,
S.A. as Onshore Collateral Agent (including its successors, in such capacity,
the "Pledgee") on behalf and for the benefit of the Secured Parties in
accordance with the following Preliminary Statements, Representations and
Clauses:
WITNESSETH:
WHEREAS, as a result of the International Public Bid (Licitacion Publica
Internacional) No. 18164093-011-02 (the "Bid"), the Pledgor was awarded the
construction, equipment, procurement and commissioning of the hydroelectric
project known as Proyecto Hidroelectrico 63 CH El Cajon, at the Yesca and Santa
Maria del Oro Municipalities in the State of Nayarit, Mexico (the "Project"). In
connection with such awarding, the Pledgor entered into with Comision Federal de
Electricidad a financed public works contract (Contrato Mixto de Obra Publica
Financiada No. PIF-005/2003) dated as of March 26, 2003 (as clarified, modified,
amended or supplemented from time to time, the "CFE Contract").
WHEREAS, in connection with the Project, the Pledgor, the lenders from
time to time party thereto and WestLB AG, New York Branch as administrative
agent and collateral agent, entered into a Credit Agreement dated as of March
31, 2003 (as amended, from time to time, the "Interim Credit Agreement").
WHEREAS, the Pledgor and WestLB AG, New York Branch, as collateral agent
under the Interim Credit Agreement, entered into a Rights Pledge Agreement dated
as of April 11, 2003, (as amended by the Amendment Agreement to the Rights
Pledge Agreement dated July 3, 2003, the "Rights Pledge") pursuant to which the
Pledgor pledged in favor of such collateral agent, the rights of the Pledgor
under (i) the CFE Contract and (ii) the Major Risks-Civil Works (Grandes Riesgos
- - Obra Civil) insurance policy No. 998848 (the "GNP Insurance Policy")
contracted by the Pledgor with Grupo Nacional Provincial, S.A., to secure the
obligations of the Pledgor under the Interim Credit Agreement and the agreements
and documents related thereto.
WHEREAS, the Pledgor has entered into (i) with Constructora El Cajon, S.A.
de C.V. a mixed public works contract dated as of April 11, 2003 (as amended
from time to time, the "CECSA Contract"), (ii) with the Open Joint Stock Company
"Power machines - ZTL, LMZ, Electrosila, Energomachexport ("Energo") the
Electromechanical Works Contract No. CIISA-001-2003 (Contrato para el Alcance de
las Obras Electromecanicas requeridas por el Proyecto Hidroelectrico El Cajon)
dated as of March 31, 2003, by means of which CIISA contracted with Energo, the
execution of the electromechanical works (implying the supply, engineering,
manufacture, transport, installation, testing and commissioning of the equipped
turbo-generator units) required by the Project in accordance with Section 8 of
the Bid and in compliance of the provision of the CFE Contract (as amended from
time to time, the "Electromechanical Works Contract"); and (iii) with
Intertechne Consultores Asociados S/C Ltda. and Technoproject, S.A. de C.V. an
Engineering Contract dated as of March 28, 2003 (as amended from time to time,
the "Engineering Contract" and, together with the CECSA Contract and the
Electromechanical Works Contract, the "Principal Subcontracts").
WHEREAS, the Pledgor and WestLB AG, New York Branch, as collateral agent
under the Interim Credit Agreement and Energo acting as depositary, entered into
an Equipment Pledge Agreement dated as of April 8, 2003, (the "Equipment
Pledge") pursuant to which the Pledgor pledged in favor of the Pledgee, the
items listed in exhibit A thereto upon any of them having been acquired by the
Pledgor and delivered to the depositary. Such Equipment Pledge shall be
terminated upon payment in full of the obligations due under the Interim Credit
Agreement and the agreements and documents related thereto.
WHEREAS, the Pledgor desires to refinance the outstanding amounts under
the Interim Credit Agreement and to obtain additional funds to finance the
Project:
(i) the Pledgor acting as Borrower, WestLB AG, New York Branch acting as
Intercreditor Agent and Facility Administrative Agent, Banco
Santander Central Hispano, S.A., New York Branch acting as Offshore
Collateral Agent, Banco Santander Mexicano, S.A. acting as Onshore
Collateral Agent, the Lenders from time to time party thereto,
Citibank, N.A. acting as Note Trustee, and the other Creditors and
Creditor Representatives (each, as defined therein) from time to
time party thereto, entered into a Common Agreement dated as of
February 26, 2004 (the "Common Agreement") setting forth certain
common representations and warranties, covenants, conditions to
funding, events of default and other terms that are complementary to
and form part of the Credit Agreement, the Note Indenture and the
Note Purchase Agreement;
(ii) the Pledgor acting as Borrower, each of the banks and the other
financial institutions parties thereto acting as Lenders and WestLB
AG, New York Branch acting as Facility Administrative Agent, entered
into a Credit Agreement dated as of February 26, 2004 (the "Credit
Agreement") by means of which the Lenders have agreed to provide
financing, in conjunction with the other Creditors, in an amount up
to U.S.$629,400,000 for a construction facility and have agreed to
provide financing in an amount up to U.S.$53,000,000 for a
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contingency facility for the Project, subject to and in accordance
with the terms and conditions of the Credit Agreement and the terms
and conditions of the Common Agreement; and
(iii) the Pledgor has entered into with Citibank, N.A., in its capacity as
Note Trustee, a Note Indenture dated as of February 26, 2004 (the
"Note Indenture") pursuant to which the Pledgor will issue the
Investor Notes to be sold under the Note Purchase Agreement.
REPRESENTATIONS AND WARRANTIES
I. The Pledgor represents and warrants that:
(a) It is a sociedad anonima de capital variable incorporated under the
laws of Mexico as evidenced by public deed No. 158,595, dated February 6, 2003,
executed before Mr. Jesus Castro Figueroa, Notary Public No. 38 of Mexico, D.F.,
Mexico, recorded in the Public Registry of Commerce of Mexico, D.F., Mexico,
under instrument number 29,934 on February 26, 2003.
(b) It is the legitimate and beneficiary owner of the assets purported
to be pledged hereunder, which assets are free and clear from any lien or
ownership restriction except for those created under the Rights Pledge, the
Equipment Pledge and this Agreement, and it needs no consent or authorization
from any person or entity to enter into this Agreement, create the pledge and
perform its obligations hereunder, other than the authorization required under
the Interim Credit Agreement which has been obtained.
(c) It is a condition precedent pursuant to the Common Agreement, among
others, that this Agreement shall have been duly executed and that the Pledgor
has created, notarized and registered the security interest to be created,
notarized and registered pursuant to the terms hereof.
(d) It recognizes and accepts that under the Common Agreement, the
Pledgee has been appointed as Onshore Collateral Agent to act on behalf of and
for the benefit of the Secured Parties with respect to the security interest to
be created by the Pledgor in the Pledged Assets (as defined below).
(e) Considering that the collateral agent under the Equipment Pledge and
the Rights Pledge has waived certain restrictions thereunder, the execution,
delivery and performance of this Agreement by the Pledgor and the security
interest created in the Pledged Assets (as hereinafter defined), do not and will
not violate, conflict with or result in a breach of or default under, its
corporate by-laws, any agreement, license, permit or other instrument to which
it is a party or by which it or its properties may be bound, or any order, rule,
regulation, injunction, decree,
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judgment, statute, law or ruling of any court, administrative agency or
governmental agency applicable to it or its properties.
(f) Prior to the termination of each of the pledges created under the
Rights Pledge and the Equipment Pledge, the execution, notarization and
registration of this Agreement will create, perfect and constitute a second
priority security interest in the Pledged Assets in favor of the Pledgee, acting
on behalf and for the benefit of the Secured Parties, securing the Secured
Obligations hereunder. Once the pledge created under each of the Rights Pledge
and the Equipment Pledge has been terminated, the security interest created
hereunder will constitute a first priority security interest in the Pledged
Assets. No action is necessary or desirable to otherwise perfect or protect such
security interest, other than the registration of this Agreement in the Public
Registry of Commerce of Mexico City, in accordance with Article 366 of the
LGTOC.
(g) Its representative(s) executing this Agreement on its behalf, are
duly authorized to do so, as evidenced by the public deeds, certified copies of
which have been delivered to the Pledgee prior to the execution date hereof.
Such authority has not been revoked or limited in any manner whatsoever.
II. The Pledgee represents and warrants that:
(a) It is a banking institution organized and existing under the laws of
the United Mexican States.
(b) Under the Common Agreement it was appointed by the Secured Parties
as their agent and was granted the necessary power and authority to act on
behalf and for the benefit of the Secured Parties in the manner contemplated
herein.
(c) Its representative(s) are duly authorized to execute this Agreement
on its behalf.
III. Both parties hereto represent and warrant that:
They recognize the legal capacity of the other party to enter into this
Agreement and the authority of the legal representatives of the other party to
represent such party and bind it hereunder.
NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein contained and based upon the foregoing preliminary statements
and representations and warranties, the parties hereto hereby agree as follows:
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CLAUSE 1
DEFINITIONS
1.1 Definitions. Capitalized terms used in this Agreement and not
otherwise defined shall have the meanings given in the Common Agreement. The
following terms have the following meaning, provided that, in any case, such
meanings shall be applicable to the singular and plural forms of such terms:
"Additional Project Contract" shall mean any additional contract with an
aggregate value equal to or greater than U.S.$5,000,000 entered into by or
assigned to the Pledgor after the execution of the Common Agreement, related to
the development, construction and completion of the Project.
"Additional Project Counterparty" shall mean any Person other than the
Borrower that is party to an Additional Project Contract.
"Bid" shall have the meaning given to such term in the first Whereas
Clause hereof.
"Business Day" shall mean a day of the year on which banks are not
required or authorized to close in Mexico City, Mexico.
"CFE" shall mean the Comision Federal de Electricidad, a public
decentralized entity of the Mexican Federal Public Administration.
"CFE Contract" shall have the meaning given to such term in the first
Whereas Clause hereof.
"Common Agreement" shall have the meaning given to such term in paragraph
(i) of the sixth Whereas Clause hereof.
"Credit Agreement" shall have the meaning given to such term in paragraph
(ii) of the sixth Whereas Clause hereof.
"Endorsement" shall mean the document attached to any Insurance Policy
providing for the appointment of Banco Santander Central Hispano, S.A., New York
Branch as "loss payee" thereunder pursuant to Section 6.01 (d) (ii) of the
Common Agreement, substantially in the form of Exhibit "E" hereto.
"Energo" shall have the meaning given to such term in the fourth Whereas
Clause hereof.
"Equipment Pledge" shall have the meaning given to such term in the fifth
Whereas Clause hereof.
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"Financing Documents" shall mean the agreements listed in the sixth
Whereas Clause hereof and any instrument or document issued thereunder or in
connection therewith.
"GNP Insurance Policy" shall have the meaning given to such term in the
third Whereas Clause hereof.
"Insurance Policies" shall mean the GNP Insurance Policy and any other
insurance policy contracted or to be contracted by the Pledgor with respect to
the development, construction and completion of the Project pursuant to the
Common Agreement.
"Interim Credit Agreement" shall have the meaning given to such term in
the second Whereas Clause hereof.
"Lenders" shall mean each of the banks and other financial institutions
party to the Common Agreement and their permitted Assignees.
"LGTOC" shall mean the Mexican General Law of Negotiable Instruments and
Credit Transactions (Ley General de Titulos y Operaciones de Credito).
"Mexico" shall mean the United Mexican States.
"Note Indenture" shall have the meaning given to such term in paragraph
(iii) of the sixth Whereas Clause hereof.
"Noteholders" shall mean the holders from time to time of the Investor
Notes referred to in paragraph (iii) of the sixth Whereas Clause hereof.
"Pledged Assets" shall have the meaning given to such term in Section 2.1
(a) of this Agreement.
"Pledgee" shall have the meaning given to such term in the Preamble of
this Agreement.
"Pledgor" shall have the meaning given to such term in the Preamble of
this Agreement.
"Principal Subcontractors" shall mean Constructora El Cajon, S.A. de C.V.,
Energo and Intertechne Consultores Asociados S/C Ltda. and Technoproject, S.A.
de C.V. as counterparties to the Principal Subcontracts.
"Principal Subcontracts" shall have the meaning given to such term in the
fourth Whereas Clause hereof.
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"Project" shall have the meaning given to such term in the first Whereas
Clause hereof.
"Rights Pledge" shall have the meaning given to such term in the third
Whereas Clause hereof.
"Secured Obligations" shall mean all payment obligations of the Pledgor
arising now or hereafter under any of the Financing Documents, including but not
limited to, the obligations to pay principal, ordinary, default and overdue
interest, fees, make-whole premium, indemnities, enforcement and other costs and
expenses or any other amount payable for any other concept thereunder.
"Secured Parties" shall mean any and all Lenders, the Facility
Administrative Agent, the Intercreditor Agent, the Collateral Agents, the Note
Trustee, the Offshore Depositary Bank, the Noteholders and any other Person from
time to time constituting a Secured Party (as defined in the Common Agreement).
1.2 Headings. The headings of the Clauses contained in this Agreement
are used solely for convenience and shall not be taken into account in the
interpretation of this Agreement.
1.3 References. Unless otherwise indicated, all references herein to
Clauses, and Exhibits shall be to Clauses and Exhibits of this Agreement. A
reference to any agreement, instrument or document shall include such agreement,
instrument or document as the same may be amended, restated, modified or
supplemented from time to time in accordance with its terms and as permitted by
the Financing Documents.
CLAUSE 2
TERMS OF PLEDGE
2.1 Creation of the Pledge. (a) To secure payment in full when due
(whether at stated maturity, by acceleration or otherwise) of the Secured
Obligations, in accordance with Articles 346 to 380 of the LGTOC, the Pledgor
hereby pledges in favor of the Pledgee acting solely on behalf and for the
benefit of the Secured Parties (and its successors and assigns), the following
movable tangible and intangible properties (the "Pledged Assets"):
(i) the collection rights of the Pledgor under the CFE Contract
(including the right to receive, collect and demand payment of the
Contract Price and Termination Value thereunder but excluding the
non-collection rights under the CFE Contract);
(ii) the rights of the Pledgor under any of the Principal Subcontracts
and under each guarantee, bond, letter of credit or other form of
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security provided in favor of or for the benefit of the Pledgor
pursuant to any Principal Subcontract and, to the extent requested
by the Pledgee, under any Additional Project Contract;
(iii) all rights of the Pledgor under the Insurance Policies;
(iv) the equipment and materials listed in Exhibit "A" hereto;
(v) in accordance with Article 354 of the LGTOC any and all other
movable property presently owned or hereinafter acquired by the
Pledgor in connection with its core business (actividad
preponderante) which is the construction and completion of the
Project, including but not limited to, the blue-prints, plans,
drawings, calculations and all other engineering documents; the
rights to the Site; all cement, thin rods, construction materials
and electromechanical equipment and components; all cash,
instruments and other movable property from time to time received,
receivable or otherwise distributed in respect of or in exchange for
any of the foregoing; if for any reason, a negotiable instrument is
received by the Pledgor, the Pledgor shall promptly deliver it to
the Pledgee, duly endorsed, for deposit into the relevant account
under the Depositary Agreement;
provided however, that, all funds received by the Pledgee in payment of
collection rights under the CFE Contract, the Principal Subcontracts and
the Additional Project Contracts may be applied by the Pledgee and
delivered to the Secured Parties in accordance with the Common Agreement
and the Depositary Agreement.
(b) On or before the Closing Date, the Pledgor shall deliver to the
Pledgee: (i) a written communication to CFE, in the form of Exhibit "B" hereto,
duly executed by CFE in evidence of its acknowledgement and agreement to the
pledge created hereby; (ii) the acknowledgement and consent agreements duly
executed by the Pledgor and each of Technoproject, S.A. de C.V., Intertechne
Consultores Asociados S/C Ltda, Energo and Constructora El Cajon, S.A. de C.V.,
respectively, in the forms set forth in the Common Agreement, in evidence of
their acknowledgement and agreement to the pledge created hereby; and (iii) a
written notice to, and consent of, Grupo Nacional Provincial, S.A., in the form
of Exhibit "C" hereto, duly executed by Grupo Nacional Provincial, S.A. in
evidence of its acknowledgement and agreement to the pledge created hereby,
provided that before delivering such notice to Grupo Nacional Provincial, S.A.,
the Pledgor shall have obtained the signatures of the Pledgee and WestLB AG, New
York Branch as provided in such notice.
(c) Within fifteen (15) calendar days from the date of issuance of any
Insurance Policy other than the GNP Policy, the Pledgor shall deliver to the
Pledgee (i) a written notice to, and consent of, the relevant insurance company,
in the form of Exhibit "D" hereto, duly executed by such insurance company in
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evidence of its acknowledgement and agreement to the pledge created hereby,
provided that before delivering such notice to Grupo Nacional Provincial, S.A.,
the Pledgor shall have obtained the signature of the Pledgee as provided in such
notice, and (ii) notarized copies of such Insurance Policy including the
Endorsement.
(d) Within fifteen (15) calendar days from the date of request therefore
by the Intercreditor Agent, the Pledgor shall deliver to the Pledgee: (i) a
written consent of the relevant Additional Project Counterparty in the form set
forth in the Common Agreement, duly executed by such Additional Project
Counterparty and, in evidence of their acknowledgement and agreement to the
pledge created hereby; and (ii) a notarized copy of any such Additional Project
Contract.
2.2 Formalization and Registration of the Pledge. The parties hereto
hereby agree to ratify their signatures hereof before a notary public. The
Pledgor shall file this Agreement for registration with the Public Registry of
Property and Commerce of Mexico City, Federal District, on or prior to the
Closing Date, and obtain such registration within seventy five (75) calendar
days after the Closing Date. The Pledgor hereby authorizes Banco Santander
Central Hispano, S.A., New York Branch to register this Agreement with any other
registry as required.
2.3 Material Possession of and Title to Exercise the Pledged Assets. The
Pledgor shall retain the material possession of the tangible Pledged Assets
pursuant to the terms of Article 346 of the LGTOC and Clause 3.1 (a) hereof;
however, as long as the Equipment Pledge is in effect, the Pledgee, pursuant to
Article 361 of the LGTOC, hereby authorizes the Pledgor to deposit the assets
subject to the Equipment Pledge with the entity acting as depositary thereunder.
2.4 Use and Exercise of the Pledged Assets. Subject to compliance with
the affirmative and negative covenants provided in Clause 3 below and in the
other Financing Documents, during the term of this Agreement, the Pledgor, in
the ordinary course of its core business, shall have the right to (i) use the
tangible Pledged Assets and exercise the rights with respect to the intangible
Pledged Assets (provided that the Pledgor may not change any payment
instructions given to CFE, GNP, the insurance companies issuing Insurance
Policies, the Principal Subcontractors and/or the Additional Project
Counterparties pursuant to the notices delivered or to be delivered in
accordance with Clauses 2.1 (b), 2.1 (c) and 2.1 (d) above), and (ii) combine
the materials included in the tangible Pledged Assets with other materials and
transform and use them as required in the development of the Project, provided
that the results from such combination shall become part of the Pledged Assets.
The rights of the Pledgor provided in the preceding paragraph of this
Clause 2.4 shall cease upon notice by the Pledgee to the Pledgor that an Event
of Default
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has occurred and that Pledgor must cease to use such assets and exercise such
rights.
2.5 Appointment of Pledgee as Attorney-in-Fact. The Pledgor hereby
undertakes to irrevocably appoint the Pledgee as its attorney-in-fact to act in
its name and on its behalf in order to exercise any rights of the Pledgor in and
to the Pledged Assets (including the assignment of rights and obligations of the
Pledgor under the Principal Subcontracts and under each relevant Additional
Project Contract, if applicable) during the continuation of any Event of Default
which has occurred and for such purpose, to grant in favor of the Pledgee an
irrevocable special power of attorney, to act in the name and on behalf of the
Pledgor in order to exercise, enforce and defend any of the Pledged Assets,
having all authorities provided in Article 2554 of the Federal Civil Code and
the correlative Articles of the Civil Codes for the Federal District and the
States of the Mexican Republic, including authorities requiring general or
special clause in accordance with the applicable law and power to delegate this
power-of-attorney. Such power of attorney shall include sufficient authority to
permit the Pledgee to defend any and all of the Pledged Assets against any claim
or demand.
On or before the Closing Date, the Pledgor shall deliver to the Pledgee
the public deed containing the power-of-attorney referred to in the preceding
paragraph duly formalized before a Mexican notary public.
2.6 Cancellation of the Equipment Pledge and the Rights Pledge. Within
ten (10) days after receipt by the Pledgor of the notices given by the
collateral agent under the Interim Credit Agreement pursuant to Section 5.11 of
the Equipment Pledge and the Rights Pledge that all amounts owed under the
Interim Credit Agreement and the agreements and documents related thereto have
been paid in full, the Pledgor will request the cancellation of the recording in
the Public Registry of Property and Commerce of Mexico City, of the pledges
created under the Equipment Pledge and the Rights Pledge.
2.7 No Liability under the CFE Contract, the Principal Subcontracts, the
Additional Project Contracts and the Insurance Policies. Notwithstanding the
pledge created hereunder, the Pledgor shall remain liable under the CFE
Contract, the Principal Subcontracts, any Additional Project Contract pledged
hereunder and the Insurance Policies to pay and perform all of its obligations
and liabilities assumed by the Pledgor thereunder, all in accordance with and
pursuant to the terms and provisions thereof, and neither the Pledgee nor any of
the Secured Parties shall have any obligation or liability under the CFE
Contract, the Principal Subcontracts, any Additional Project Contract or the
Insurance Policies pledged hereunder by reason of or arising out of the pledge
created hereby and shall not be required or obligated in any manner to make any
inquiry as to the nature or sufficiency of any payment received by the Pledgee
or any Secured Party, or to
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present or file any claim, or to take any action to collect or enforce the
payment of any amount.
CLAUSE 3
COVENANTS OF THE PLEDGOR
3.1 Affirmative and Negative Covenants. So long as any of the Secured
Obligations remains outstanding, the Pledgor shall, unless the Pledgee otherwise
consents in writing, undertake all necessary actions to:
(a) maintain any and all of the tangible Pledged Assets at the Site
and/or at the locations necessary for the performance of Pledgor<180>s
obligations under the CFE Contract, and obtain the written consent of the
Pledgee for the removal thereof from the Site and/or such locations;
(b) furnish to the Pledgee any information concerning the Pledged Assets
as the Pledgee may from time to time reasonably request and permit the Pledgee
or its designees, upon at least three (3) calendar days advanced notice, within
working hours, at any time, to inspect, audit, and make copies of and extracts
from all records and all other papers in the possession of the Pledgor and, upon
the request of Pledgee, deliver to the Pledgee certified copies of all such
records and papers;
(c) deliver notice of any communication received in respect of the
Pledged Assets to the Pledgee, concurrent with its required delivery pursuant to
Section 6.03 of the Common Agreement;
(d) at any time, and from time to time, at the expense of the Pledgor,
exercise its rights and remedies hereunder, including, without limitation,
defending the Pledged Assets and the security interest (including the priority
thereof) of the Pledgee in and to the Pledged Assets against the claims and
demands of all Persons, and promptly execute and deliver further instruments and
documents, and take all further action that may be necessary or desirable, or
that the Pledgee may reasonably request, in order to perfect and protect the
security interest granted hereby, or to enable the Pledgee to exercise its
rights and remedies hereunder;
(e) at all times maintain the Pledged Assets in good working order and
condition (subject to normal wear and tear), in the understanding that, in
accordance with Article 361 of the LGTOC, the Pledgor shall bear all costs and
shall be responsible for the due preservation, repair, administration and
collection of the Pledged Assets;
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(f) maintain the GNP Insurance Policy as required by the Common
Agreement; provided that the Pledgor shall deliver to the Offshore Collateral
Agent, with copy to the Pledgee, a certified copy of the Endorsement in respect
of the GNP Insurance Policy within ten (10) Business Days following the date in
which WestLB AG, New York Branch has given written notice to Grupo Nacional
Provincial with copy to the Pledgor, that it waives its rights under Endorsement
A dated June 4, 2003 of the GNP Policy.
(g) contract and maintain any necessary Insurance Policies covering all
Pledged Assets as required by the Common Agreement and duly attached with an
Endorsement designating the Offshore Collateral Agent as loss payee; within five
(5) Business Days after the date any such Insurance Policy is contracted, the
Pledgor shall deliver a certified copy of such Insurance Policy including the
Endorsement thereof to the Offshore Collateral Agent with copy to the Pledgee.
(h) except as permitted under paragraph (a) of Section 6.02 of the
Common Agreement, refrain from creating or permitting the existence of any lien
or ownership limitation upon or with respect to any of the Pledged Assets;
(i) except as permitted under paragraph (n) of Section 6.02 of the
Common Agreement, refrain from selling, assigning or otherwise disposing, or
granting any option of any nature and to any party in respect, of the Pledged
Assets described in items (iv) and (v) of Clause 2.1 hereof, except for the
transfer of ownership of any of the Pledged Assets in accordance with the
provisions of the CFE Contract, any Principal Subcontract, any Additional
Project Contract or by operation of law;
(j) refrain from undertaking any actions or omitting to undertake any
action the undertaking of which, or omissions to undertake, could reasonably be
expected to result in a decline in the value of the Pledged Assets or in any of
such Pledged Assets ceasing to exist; and
(k) except as otherwise permitted by the Financing Documents or as
approved by the Pledgee in writing, refrain from (i) canceling or terminating
any of its relationships with any obligors in connection with the Pledged
Assets, or consenting to or accepting any cancellation or termination thereof,
(ii) waiving any default or breach under, failing to enforce, forgive,
compromise, settle, adjust or release, or agreeing to the variation of, any
provision of any of the CFE Contract, the Principal Subcontracts any Additional
Project Contract and the Insurance Policies, (iii) exercising any right to
initiate any arbitration or legal proceeding under any of the CFE Contract, the
Principal Subcontracts, any Additional Project Contract and the Insurance
Policies, or taking any action with respect to any arbitration proceeding
initiated against the Pledgor under such documents, that seeks, or may
reasonably be expected, to amend, rescind, terminate, invalidate, suspend or
otherwise impair any Pledged Asset, and/or (iv) taking any other legal
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or administrative action that seeks, or may reasonably be expected, to amend,
rescind, terminate, invalidate, suspend or otherwise impair any Pledged Asset.
CLAUSE 4
RIGHTS IN RESPECT TO THE PLEDGED ASSETS
4.1 Remedies upon Event of Default. (a) In case an Event of Default has
occurred and is continuing, the Pledgee shall be entitled to enforce the pledge
granted hereunder, in accordance with applicable law, in addition to other
rights and remedies available to it hereunder, under any of the Financing
Documents and as a secured party following the appropriate procedures under
applicable law.
(b) The Pledgor covenants and agrees that it will execute and deliver
such documents and take such other action as the Pledgee reasonably deems
necessary or advisable in order that any sale or disposal of the Pledged Assets,
after the occurrence and during the continuance of an Event of Default, may be
made in compliance with applicable law. Any proceeds of any such sale shall be
applied to the payment of the Secured Obligations in accordance with the
priorities established in Section 7.04 of the Common Agreement and Article 3 of
the Intercreditor Agreement.
(c) After payment in full of all of the Secured Obligations in the above
mentioned order of priorities, any remainder of the proceeds obtained from the
sale of the Pledged Assets shall be delivered to the Pledgor or to whomever may
be lawfully entitled to receive such balance. To the contrary, in case such
proceeds shall be insufficient to pay in full all of the Secured Obligations,
the Secured Obligations shall not be deemed to be discharged or paid in full,
and thus the rights of Pledgee to claim the relevant unpaid portion shall
continue in full force and effect.
(d) In no event shall the Pledgee be liable for any loss or damage
relating to the Pledged Assets, resulting from actions carried out pursuant to
this Clause 4.
(e) The Pledgor hereby agrees that the three (3) year period for the
statute of limitations set forth in Article 375 of the LGTOC, shall start to run
on the final maturity date of any outstanding Secured Obligation.
4.2 Certain Rights of Pledgor. Notwithstanding any other provision of
this Agreement or any provision of any other Financing Document, at all times,
the Pledgor shall have the right, without prejudice to any other rights of the
Pledgee under the Financing Documents, to receive from any other party to the
CFE Contract, the Principal Subcontracts, the Additional Project Contracts
and/or the Insurance Policies, any and all notices that such party is permitted
or required to give to the Pledgor pursuant to such instruments.
13
CLAUSE 5
MISCELLANEOUS
5.1 Fees and Indemnification of Pledgee. The Pledgor agrees to pay fees
of, and indemnify the Pledgee pursuant to Section 11.04 of the Common Agreement.
The rights, protections, immunities and indemnities afforded to the Pledgee
pursuant to the Common Agreement shall be afforded to the Pledgee hereunder as
if such provisions were specifically set forth herein. The Pledgor hereby
expressly acknowledges, recognizes and agrees that, for all matters relating to
or arising from or in connection with this Agreement, (i) the Pledgee is acting
solely in its capacity as agent for, and for the benefit and pursuant to the
instructions of, the Secured Parties, and not personally, and assumes no direct
or personal obligations, expressed or implied, and (ii) the Pledgee has all
necessary authority and legal capacity to act in the name and on behalf of the
Secured Parties.
5.2 Continuing Pledge. This Agreement shall create an effective
continuing pledge without transfer of possession on and security interest in the
Pledged Assets and shall remain in full force and effect and shall not be
cancelled or diminished until the later of payment in full or release of the
Secured Obligations, therefore, the Pledgor shall have no right to request the
reduction of the pledge created hereunder in the Pledged Assets for any partial
payments made under any of the Financing Documents and agrees to waive its
rights under Article 349 of the LGTOC in such respect.
5.3 Notices. Each notice, demand, report, or communication relating to
this Agreement shall be in writing in the English language, shall be
hand-delivered or sent by overnight courier or facsimile transmission (with a
copy by hand delivery or overnight courier to follow, which copy shall not be
required to effect notice), and shall be deemed duly given when received at the
following addresses, or to such other address or number as each party shall have
last specified by notice to the other party:
To the Pledgor:
CONSTRUCTORA INTERNACIONAL DE INFRAESTRUCTURA, S.A. DE C.V.
Mineria 145 Edificio C Piso 2
Col. Escandon
C.P. 11800, Mexico, D.F.
Attention: Jorge Ibarrola/Luis Horcasitas/Gabriel de la Concha
Telephone: (5255) 52729991 ext. 3500, 3210 or 3300
14
Fax: (5255) 52275043
To the Pledgee:
BANCO SANTANDER MEXICANO, S.A.
Prolongacion Paseo de la Reforma No. 500 Piso 2 Mod. 209
Col. Lomas de Santa Fe
01219, Mexico, D.F.
Attention: Trinidad Guadalupe Caso Robles
Telephone: (5255) 5257 8000
Fax: (5255) 5269 1956
5.4 Expenses. The Pledgor hereby agrees to pay or reimburse on demand
all reasonable out-of-pocket costs, expenses and disbursements of the Pledgee in
connection with the creation, perfection, preservation, protection and
foreclosure of the pledge in any circumstance including, without limitation, all
fees and taxes in connection with the recording or filing of instruments and
documents in public offices, payment or discharge of any taxes or liens upon or
in respect of the Pledged Assets, premiums for insurance with respect to the
Pledged Assets and all other reasonable fees, costs and expenses in connection
with protecting, maintaining, preserving and foreclosing the pledge on the
Pledged Assets and the Pledgee's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Pledged Assets. Any amounts paid
by Pledgee as to which Pledgee has the right to reimbursement shall constitute
Secured Obligations secured by the Pledged Assets. The obligations of the
Pledgor contained in this Clause 5.4 shall continue in full force and effect
notwithstanding the termination of any or all of the Financing Documents.
5.5 No Waiver; Rights Cumulative. No failure on the part of the Pledgee
to exercise, and no delay in exercising, any right hereunder or under any
related agreement, instrument or document shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right. The rights and
remedies of the Pledgee provided herein, in any of the Financing Documents and
in all related agreements, instruments and documents are cumulative and are in
addition to, and not exclusive of, any rights or remedies provided by law. The
rights of the Pledgee under each of this Agreement, any of the Financing
Documents and any related agreements, instruments and documents against any
party thereto are not conditional or contingent on any attempt by the Pledgee to
exercise any of its rights hereunder or under any related agreement, instrument
or document against such party or against any person or entity.
15
5.6 Amendments. This Agreement may not be amended, supplemented, waived
or otherwise modified except by an instrument signed by each of the parties
hereto provided that any modification or supplement to this Agreement shall be
registered in the corresponding Public Registry of Property and Commerce.
5.7 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute one and the same instrument.
5.8 Severability. If any provision of this Agreement shall be invalid,
illegal, or unenforceable in any jurisdiction, the parties hereto agree to the
fullest extent they may effectively do so that the validity, legality, and
enforceability of such provision in other jurisdictions, and the validity,
legality, and enforceability of the other provisions in such jurisdiction, shall
not in any way be affected or impaired thereby.
5.9. Assignment. The Pledgor may not assign, transfer or in any other
manner dispose of any of its rights or obligations created hereunder without the
prior written authorization of the Pledgee.
5.10 Benefit of Agreement. This Agreement shall inure to the benefit of,
and be enforceable by, the parties hereto and the Secured Parties and their
respective successors and permitted assigns, and no other Person shall be
entitled to any of the benefits of this Agreement.
5.11 Termination; No Reduction. This Agreement and the security interest
granted hereunder shall neither be terminated nor reduced until the Pledgor
receives written note from the Pledgee of the payment in full of all Secured
Obligations. Within thirty (30) Business Days after such payment in full, the
Pledgee shall deliver to the Pledgor the notarized release instrument required
for the cancellation of this pledge.
5.12 Languages. This Agreement is executed in both English and Spanish
versions, both of which shall bind the parties hereto; provided, however, that
in the case of doubt as to the proper interpretation and construction of this
Agreement, the Spanish text shall prevail.
5.13 Governing Law and Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of Mexico, without regard to the
conflicts of laws provisions thereof. Any legal proceedings arising out of or
relating to this agreement shall be brought in the competent courts of Mexico
City, Federal District, Mexico. The parties hereto hereby waive any other
preferential jurisdiction by reason of its present or future domicile or
otherwise.
16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed through their duly authorized officers as of the date first above
written.
THE PLEDGOR:
CONSTRUCTORA INTERNACIONAL
DE INFRAESTRUCTURA, S.A. DE C.V.
By: ______________________________
Name: Jorge Bernardo Aguirre y Quintana
Title: Attorney-in-fact
THE PLEDGEE
BANCO SANTANDER MEXICANO, S.A.,
as Onshore Collateral Agent on behalf and for the benefit of
the Secured Parties
By: __________________________
Name: Trinidad Guadalupe Caso Robles
Title: Delegada Fiduciaria
17
EXHIBIT "A"
List of Equipment and Materials
OBRAS ELECTROMECANICAS
ELECTROMECHANICAL WORKS
I. CONCEPTOS MECANICOS
MECHANICAL CONCEPTS
I.1 TURBINAS HIDRAULICAS TIPO FRANCIS DE EJE VERTICAL Lote
2
VERTICAL AXIS HYDRAULC TURBINES FRANCIS TYPE Lot
I.2 CHUMACERAS GUIA Y COMBINADA DE CARGA GUIA PARA EL GRUPO Lote
2
GUIDE & COMBINED LOADED BUSHINGS FOR THE UNTI Lot
I.3 REGULADOR DE VELOCIDAD ELECTROHIDRAULICO CON CONTROL DIGITAL PROGRAMABLE PARA
TURBINAS Lote
2
ELECTROHYDRAULIC GOVERNOR (SPEED REGULATOR) WITH PROGRAMABLE DIGITAL CONTROL
FOR TURBINES Lot
I.4 COMPUERTAS, MECANISMOS DE OPERACION Y GRUA PORTICO DEL VERTEDOR Lote
6
GATES. OPERATIONAL MECHANISMS AND GANTRY CRANE FOR SPILLWAY Lot
I.5 COMPUERTA, MECANISMOS DE OPERACION Y GRUA DE OBRA DE TOMA Lote
2
GATES. OPERATION MECHANISM S AND CRANE FOR WATER INTAKE Lot
I.6 GRUAS VIAJERAS PARA CASA DE MAQUINAS Lote
2
BRIDGE CRANES FOR POWER HOUSE Lot
I.7 COMPUERTAS, MECANISMOS DE OPERACION Y GRUA PARA DESFOGUE Lote
2
GATES. OPERATION MECHANISMS AND CRANE FOR SUCTION TUBE Lot
I.8 UNIDAD AUXILIAR CON TURBINA TIPO FRANCIS Lote
1
AUXILIAR UNIT WITH FRANCIS TYPE TURBINE Lot
I.9 EQUIPOS PARA EL SISTEMA DE AGUA DE ENFRIAMIENTO Lote
2
EQUIPMENTS FOR WATER COOLING SYSTEM Lot
I.10 SISTEMA DE PROTECCION CONTRA INCENDIO Lote
1
FIRE PROTECTION SYSTEM Lot
OBRAS ELECTROMECANICAS
ELECTROMECHANICAL WORKS
I. CONCEPTOS MECANICOS
MECHANICAL CONCEPTS
I.11 SISTEMA DE DESAGUE Y ACHIQUE
Lote 1
DRAIN AND DRENAGE SYSTEM
I.12 SISTEMA DE VENTILACION
Lote 1
VENTILATION SYSTEM
I.13 OBTURADORES Y MECANISMOS DE OPERACION PARA OBRA DE DESVIO DE LA C. H. EL
CAJON, NAY.
Lote 1
STOP LOGS AND OPERATIONAL MECHANISM FOR THE DEVIATION WORKS FOR THE EL CAJON
HPP, NAY.
I.14 EQUIPO DE TALLER MECANICO
Lote 1
EQUIPMENT FOR MECHANICAL HARDWARE HOUSE
I.15 EQUIPO DE AIRE ACONDICIONADO
Lote 1
AIR CONDITIONING EQUIPMENT
I.16 SISTEMA DE MEDICION DE LOS NIVELES DE EMBALSE Y DESFOGUE
Lote 1
LEVEL MESUREMENT SYSTEM IN THE RESERVOIR AND SUCTION TUBE
I.17 SISTEMA DE AIRE DE SERVICIO
Lote 1
PNEUMATIC UTILITY SYSTEM
I.18 SISTEMA DE AGUA DE SERVICIO
Lote 1
WATER SUPPLY SYSTEM
I.19 GRUA PUENTE PARA LA CASETA DE LA SUBESTACION ELECTRICA SF6
Lote 1
BRIDGE CRANE FOR SF6 SUBSTATION
2
OBRAS ELECTROMECANICAS
ELECTROMECHANICAL WORKS
II. CONCEPTOS ELECTRICOS
ELECTRIC CONCEPTS
II.1 GENERADORES ELECTRICOS.
Lote 2
ELECTRIC GENERATORS
II.2 FABRICACION DE BARRAS Y BOBINAS PARA ESTATORES DE GENERADORES ELECTRICOS
Lote 2
MANUFACTURE OF BARS AND COILS FOR ELECTRIC GENERATOR'S STATORS
II.3 SISTEMA DE EXCITACION ESTATICO PARA GENERADORES ELECTRICOS.
Lote 2
EXCITATION SYSTEM FOR ELECTRIC GENERATORS
II.4 TRANSFORMADORES TIPO SECO PARA EXCITACION DE GENERADORES ELECTRICOS.
Lote 2
DRY TYPE TRANSFORMATORS FOR ELECTRIC GENERATORS
II.5 BUS DE FASE AISLADA Y FASE SEGREGADA
Lote 2
ISOLATED AND SEPARATED BUSBAR
II.6 TRANSFORMADORES DE POTENCIA DE 10 MVA Y MAYORES.
Lote 7
POWER TRANSFORMATORS 10 MVA AND MORE
II.7 SISTEMA DE CONTROL, AUTOMATIZACION Y ADQUISICION DE DATOS (SCAAD)
Lote 1
CONTROL. AUTOMATIZATION AND DATA ADQUISITION SYSTEM
II.8 SUBESTACIONES BLINDADAS AISLADAS CON GAS SF6 (HEXAFLORURO DE
AZUFRE) PARA TENSIONES DE 123 A 420 KV.
Lote 1
ARMORED SF6 SUBSTATION
II.9 TABLEROS DE PROTECCION CON RELEVADORES DE ESTADO SOLIDO Y/O DIGITALES.
Lote 1
PROTECCION SWITCHBOARDS FOR SOLID SATE AND DIGITASL RELAYS
II.10 TABLEROS DE SERVICIOS AUXILIARES
Lote 1
AUXILIAR SWITCHBOARDS
3
OBRAS ELECTROMECANICAS
ELECTROMECHANICAL WORKS
II. CONCEPTOS ELECTRICOS
ELECTRIC CONCEPTS
II.11 TABLEROS METALICOS BLINDADOS TIPO METAL CLAD PARA TENSIONES NOM.
DE 15 A 38 KV.
Lote 1
METALCAD SWITCHGEAR, FOR MEDIUM AVERAGE VOLTAGE
II.12 ELECTRODUCTO ALIMENTADOR DE BAJA IMPEDANCIA.
Lote 1
LOW IMPEDANCE BUSBAR
II.13 EQUIPOS DE COMUNICACIONES
Lote 1
COMMUNICATION EQUIPMENTS
II.14 TRAMPAS DE ONDA
Lote 1
CARRIER FILTER
II.15 APARTARRAYOS DE OXIDOS METALICOS PARA SUBESTACION
Lote 1
SURGE ARRESTER
II.16 BATERIAS ABIERTAS PARA SERVICIO ESTACIONARIO
Lote 1
OPEN BATERIES FOR STATIONARY OPERATION
II.17 CARGADOR DE BATERIAS.
Lote 1
BATERY CHARGERS
II.18 TRANSFORMADORES DE POTENCIAL CAPACITIVO.
Lote 1
CAPACITIVE POTENTIAL TRANSFORMATOR
II.19 SISTEMAS DE ALUMBRADO
Lote 1
LIGHTING SYSTEM
II.20 SISTEMA DE REDES DE TIERRA EN PLANTA Y SUBESTACIONES ELECTRICAS.
Lote 1
EARTH SYSTEM FOR HPP AND SUBSTATION
II.21 SISTEMA DE INTERCOMUNICACION Y VOCEO
Lote 1
INTERPHONE SYSTEM
II.22 SISTEMA DE MONITOREO MEDIANTE CIRCUITO CERRADO DE TELEVISION Lote 1
4
OBRAS ELECTROMECANICAS
ELECTROMECHANICAL WORKS
II. CONCEPTOS ELECTRICOS
ELECTRIC CONCEPTS
CLOSE TV CIRCUIT SYSTEM
II.23 CONDUCTORES CON AISLAMIENTO Y CUBIERTA TERMOFIJOS LIBRES DE
HALOGENOS PARA INSTALACIONES HASTA 600V 90 DEGREES C.
Lote 1
ISOLATED CABLES
II.24 CABLES DE CONTROL CON AISLAMIENTO TERMOFIJO LIBRE DE HALOGENOS PARA 90 degrees C.
Lote 1
CONTRO CABLES
II.25 CHAROLAS PARA CABLES CONDUCTORES DE FUERZA Y CONTROL.
Lote 1
CABLE TRAYS
II.26 CABLE DE GUARDA.
Lote 1
SURGEARREST CABLE
II.27 PLANTA GENERADORA CON MOTOR DE COMBUSTION INTERNA HASTA 2 000 KW
Lote 1
DIESEL POWER PLANT
II.28 HERRAJES Y ACCESORIOS
Lote 1
MISCELANIOUS
II.29 CABLES DE ALUMINIO CON CABLEADO CONCENTRICO Y ALMA DE ACERO (ACSR).
Lote 1
ACSR CABLES
II.30 AISLADORES DE SUSPENSION DE PORCELANA O DE VIDRIO TEMPLADO.
Lote 1
CERAMIC AND GLASS ISOLATORS
II.31 CABLES DE POTENCIA MONOPOLARES DE 5 A 35 KV.
Lote 1
MONOPOLAR POWER CABLES (5/35 Kv)
II.32 ALIMENTADORES DE DISTRIBUCION AEREOS EN 13,8 KV
Lote 1
FEEDERS DISTRIBUTION LINES 13.8 KV
5
EXHIBIT "B"
[To be executed in Spanish]
FORM OF CFE NOTICE
February __, 2004
Comision Federal de Electricidad
Reforma No. 164
Colonia Cuauhtemoc
06500 - Mexico, D.F.
RE: EL CAJON
Dear Sirs:
Reference is made to:
(i) the Contrato Mixto de Obra Publica Financiada No.
PIF-005/2003 dated March 26, 2003 (as amended, from time to
time, the "Public Works Contract"), between Comision Federal
de Electricidad (the "CFE") and Constructora Internacional de
Infraestructura, S.A. de C.V. (the "Company"), in connection
with the construction, development and commissioning of the
Proyecto Hidroelectrico 63 CH El Cajon (the "Project"); and
(ii) the notice dated April 11, 2003, given by the Company to
CFE, and acknowledged and agreed by CFE, regarding the pledge
created by the Company in the collection rights under the
Public Works Contract pursuant to the Rights Pledge Agreement
dated as of April 11, 2003, (as amended, the "Rights Pledge")
between the Company and WestLB AG, New York Branch as
collateral agent on behalf and for the benefit of the secured
parties; the pledge created under the Rights Pledge secures
the obligations of the Company under the Credit Agreement
dated as of March 31, 2003 (as amended, from time to time, the
"Interim Credit Agreement") among the Company, the lenders
from time to time party thereto and WestLB AG, New York Branch
as administrative agent and collateral agent, providing for
the initial financing of the Project.
1. NOTICE OF PLEDGE. Pursuant to Clause 30.1 of the Public Works
Contract, the Company hereby notifies you that it has entered into a Pledge
Agreement without Transfer of Possession dated as of February 26, 2004 (the
"Borrower Pledge Agreement") pursuant to which it has pledged all the collection
rights of the Company under the Public Works Contract in favor of Banco
Santander Mexicano, S.A., its successors and assigns, as Onshore Collateral
Agent on behalf and for the benefit of the secured parties (the "Onshore
Collateral Agent") to secure the obligations of the Company towards such secured
parties (the "Secured Obligations") under:
(a) the Common Agreement dated as of February 26, 2004 (the
"Common Agreement"), among the Company as borrower, WestLB AG,
New York Branch as intercreditor agent and facility
administrative agent, Banco Santander Central Hispano, S.A.,
New York Branch as offshore collateral agent, Banco Santander
Mexicano, S.A. as Onshore Collateral Agent and Citibank, N.A.
as note trustee, the lenders and the other creditors and
creditor representatives from time to time party thereto,
setting forth certain common representations and warranties,
covenants, conditions to funding, events of default and other
terms that are complementary to and form part of the Financing
Documents (as hereinafter defined);
(b) the Credit Agreement dated as of February 26, 2004 (the
"Credit Agreement"), among the Company as borrower, the banks
and the other financial institutions parties thereto and
WestLB AG, New York Branch as facility administrative agent,
pursuant to which the Company will obtain additional funds to
be used as specified in the Public Works Contract for the
payment of Project-related costs;
(c) the notes to be issued by the Company and sold under a note
purchase agreement dated as of February 26, 2004 among the
Company, the sponsor parties named therein and the
representatives named therein, the rights and obligations in
respect of which notes shall be governed by the Note Indenture
dated as of February 26, 2004 (the "Note Indenture"), among
the Company as issuer and Citibank, N.A. as note trustee; and
(d) the Depositary Agreement dated as of February 26, 2004 (the
"Depositary Agreement") among the Company as borrower, Banco
Santander Central Hispano, S.A., New York Branch as offshore
collateral agent and offshore depositary bank, Banco Santander
Mexicano, S.A. as Onshore Collateral Agent, Citibank, N.A. as
note trustee and WestLB AG, New York Branch as facility
administrative agent and intercreditor agent, which will
govern the establishment
2
and maintenance of various off-shore accounts and the flow of
funds into and from such accounts.
The Common Agreement, the Credit Agreement, the Note Indenture
and the Depositary Agreement have been entered into to refinance the
outstanding amounts payable by the Company under the Interim Credit
Agreement and to provide the Company with additional funds to finance
the Project, and together with any instrument or document issued
thereunder or in connection therewith shall hereinafter be referred to
as the "Financing Documents".
The pledge created under the Borrower Pledge Agreement shall
constitute a second ranking pledge on the collection rights under the Public
Works Contract, until the Rights Pledge is cancelled pursuant to the following
paragraph. Upon such cancellation, the Borrower Pledge Agreement shall
constitute a first ranking pledge on the collection rights under the Public
Works Contract.
2. TERMINATION OF THE RIGHTS PLEDGE. Upon receipt by CFE of the
written notice by WestLB AG, New York Branch as collateral agent under the
Interim Credit Agreement that all amounts owed under the Interim Credit
Agreement and the related loan documents have been paid in full, therefore
terminating the pledge created by means of the Rights Pledge, the rights and
obligations of CFE under the notice referred to in paragraph (ii) above shall
terminate.
3. ACKNOWLEDGEMENT. CFE acknowledges that it is hereby notified
of the pledge created under the Borrower Pledge Agreement and confirms that the
consent given pursuant to Clause 30.1 of the Public Works Contract to assign the
collection rights, applies to the pledge created under the Borrower Pledge
Agreement.
4. PAYMENTS UNDER THE PUBLIC WORKS CONTRACT. The Company hereby
irrevocably instructs CFE to pay, by wire transfer in U.S. Dollars, until CFE
receives written instructions from the Onshore Collateral Agent to pay such
amounts to another entity or account, any and all U.S. dollar-denominated
amounts payable by CFE to the Company under the Public Works Contract (including
but not limited to the Contract Price and the Termination Value, each as defined
in the Public Works Contract) as follows:
Account Holder: Constructora Internacional de Infraestructura, S.A.
de C.V.
Bank: Banco Santander Central Hispano, S.A.
Account Number: 8130790001
ABA: 026007692
New York, N.Y., U.S.A.
Attention: Ligia Castro.
3
Reference: El Cajon
Likewise, the Company hereby irrevocably instructs CFE to pay, by
electronic transfer in Mexican pesos, until CFE receives written instructions
from the Onshore Collateral Agent to pay such amounts to another entity or
account, any and all peso-denominated amounts payable by CFE to the Company
under the Public Works Contract as follows:
Account Holder: Direccion Fiduciaria El Cajon.
Bank: Banco Santander Mexicano, S.A.
Account Number: 6550109969-7 (code: 014180)
Mexico, D.F.
Attention: Guadalupe Caso
Reference: El Cajon
Notwithstanding the foregoing, any instruction pursuant to this
paragraph 4. shall only become effective upon receipt by CFE of the notice
referred to in paragraph 2. above and until such time CFE shall continue to
abide by the instructions contained in the notice referred to in paragraph (ii)
above.
CFE hereby agrees to make all payments under the Public Works Contract
in accordance with the foregoing and to give written notice concurrently with
each such payment to the Onshore Collateral Agent with copy to the Company
specifying under which Section of the Public Works Contract such payment is
made.
5. CERTAIN REPRESENTATIONS AND AGREEMENTS OF CFE.
(a) CFE hereby confirms that its representations contained in the
Public Works Contract are true and correct as of the date
hereof.
(b) CFE hereby confirms that it is not in default under the Public
Works Contract and that, except for the pledge created under
the Rights Pledge and the pledge created under the Borrower
Pledge Agreement, it has not received notice and has not
consented to any pledge or assignment of collection rights of
the Company under the Public Works Contract. CFE further
confirms that as of this date it is not aware of any default
by the Company under the Public Works Contract.
(c) CFE agrees that it will not consent to any further assignment,
transfer or pledge by the Company of all or any part of its
rights under the Public Works Contract, except with the prior
written consent of the Onshore Collateral Agent.
4
(d) CFE hereby confirms that except for the Primer Convenio
Modificatorio al Contrato Mixto de Obra Publica Financiada
dated as of July 4, 2003 and the Segundo Convenio
Modificatorio al Contrato Mixto de Obra Publica Financiada
dated September 10, 2003, the Primer Memorandum de
Aclaraciones dated July 17, 2003, the Segundo Memorandum de
Aclaraciones dated October 8, 2003 and the letter dated
November 18, 2003, all between the Company and CFE, as of the
date hereof it has not executed any amendment, clarification,
supplement or other modification to the Public Works Contract.
(e) CFE agrees to deliver to the Onshore Collateral Agent
promptly, a copy of any notice delivered by CFE to the Company
of a default by the Company of any of its obligations under
the Public Works Contract.
(f) CFE agrees not to modify the Public Works Contract except with
the written consent of the Onshore Collateral Agent.
6. MISCELLANEOUS PROVISIONS. (a) All notices and other
communications hereunder shall be in Spanish, in writing and shall be sent by
first class mail, by hand or by courier service, shall be effective upon receipt
by the addressee and shall be directed:
(i) If to the Company or to CFE to the relevant address
set forth in the Public Works Contract,
(ii) If to the Onshore Collateral Agent to:
Banco Santander Mexicano, S.A.
Prol. Paseo de la Reforma No. 500, piso 2, Mod. 209
Col. Lomas de Santa Fe 01219, Mexico, D.F.
Attention: Trinidad Guadalupe Caso Robles
(iii) To such other address as any of CFE, the Company or
the Onshore Collateral Agent may designate by prior written
notice to the other parties, given pursuant to this paragraph
6 (a).
(b) This instrument may be executed in counterparts each of which
when so executed will be deemed to be an original.
(c) This instrument may only be amended, supplemented or modified
by an instrument in writing signed by each of the parties
hereto.
5
(d) This instrument shall be governed by the laws of the United
Mexican States.
(e) Any dispute arising from this instrument shall be settled in
accordance with the terms of Clause 31.3 of the Public Works
Contract, as if such terms were literally reproduced herein.
(f) This instrument shall continue in effect until the first to
occur between (i) the termination of the Borrower Pledge
Agreement, it being understood that the Onshore Collateral
Agent shall notify CFE of the termination of the Borrower
Pledge Agreement not later than 30 calendar days following
receipt by the Onshore Collateral Agent of payment in full of
the Secured Obligations, (ii) or the payment in full of all
amounts payable by CFE under the Public Works Contract,
including the termination value, in its case.
Very truly yours,
CONSTRUCTORA INTERNACIONAL
DE INFRAESTRUCTURA, S.A. DE C.V
----------------------------------
Name:
Title:
BANCO SANTANDER MEXICANO, S.A.,
as Onshore Collateral Agent
----------------------------------
Name:
Title:
AGREED AND ACKNOWLEDGED BY:
COMISION FEDERAL DE ELECTRICIDAD
----------------------------------
Name:
Title:
6
By its signature below, WestLB AG, New York Branch, in its
capacity as collateral agent under the Interim Credit
Agreement acknowledges and consents to the creation of the
pledge under the Borrower Pledge Agreement hereby notified to
CFE.
WESTLB AG, NEW YORK BRANCH
----------------------------------
Name:
Title:
7
EXHIBIT "C"
FORM OF GNP NOTICE
February ___, 2004
Grupo Nacional Provincial, S.A. de C.V.
Av. de las Torres No. 395
04200 - Mexico, D.F.
Attention: __________________
Dear Sirs:
Reference is made to the Major Risks - Civil Works Insurance Policy No.
998848, dated June 4, 2003 issued by you and contracted by Constructora
Internacional de Infraestructura, S.A. de C.V. ("CIISA"), as supplemented by
endorsement A, dated June 4, 2003, naming WestLB AG, New York Branch as loss
payee (the "GNP Insurance Policy") which endorsement will be replaced by an
Endorsement naming Banco Santander Central Hispano, S.A., New York Branch as
loss payee upon WestLB AG, New York Branch having notified you that its rights
under such endorsement A are released.
By means hereof CIISA notifies you that on February 26, 2004, CIISA
entered into with Banco Santander Mexicano, S.A. acting as Pledgee in its
capacity as Onshore Collateral Agent for the benefit of the Secured Parties (as
defined therein), a Pledge Agreement (the "Borrower Pledge Agreement") by means
of which CIISA granted in pledge, among others, its rights deriving from the GNP
Insurance Policy; the pledge created under the Borrower Pledge Agreement is
however, second ranking to the pledge created under the Rights Pledge Agreement
dated as of April 11, 2003, as amended, until you receive written notice of the
cancellation of the Rights Pledge Agreement from WestLB AG, New York Branch.
By its signature below, Banco Santander Mexicano, S.A., in its capacity
as Pledgee under the Borrower Pledge Agreement, hereby instructs you, until you
receive alternate written instructions from the Pledgee, to pay all amounts
payable under the GNP Insurance Policy by wire transfer in U.S. Dollars to the
loss payee named in the endorsement A referred to in the first paragraph above
or in the Endorsement that will replace it naming Banco Santander Central
Hispano, S.A., New York Branch as loss payee, whichever is in effect at the time
of the relevant payment.
Very truly tours,
CONSTRUCTORA INTERNACIONAL DE INFRAESTRUCTURA, S.A. DE C.V.
BANCO SANTANDER MEXICANO, S.A.
By its signature below, WestLB AG, New York Branch, in its
capacity as collateral agent under the Interim Credit
Agreement acknowledges and consents to the creation of the
pledge under the Borrower Pledge Agreement hereby notified to
Grupo Nacional Provincial.
WESTLB AG, NEW YORK BRANCH
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Name:
Title:
Acknowledged and consented:
By
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GRUPO NACIONAL PROVINCIAL, S.A.
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EXHIBIT "D"
FORM OF INSURER NOTICE
Date: ______________
[Name and address of corresponding
INSURANCE COMPANY]
Attention: __________________
Dear Sirs:
Reference is made to the Insurance Policy No.________, dated
___________ (the "Insurance Policy") issued by you and contracted by
Constructora Internacional de Infraestructura, S.A. de C.V. ("CIISA"), naming
Banco Santander Central Hispano, S.A., New York Branch as loss payee, in its
capacity as offshore collateral agent on behalf of and for the benefit of the
Secured Parties (as defined in the Borrower Pledge Agreement referred to below).
By means hereof CIISA notifies you that on February 26, 2004, it
entered into with Banco Santander Mexicano, S.A. acting as Pledgee in its
capacity as Onshore Collateral Agent for the benefit of the Secured Parties, a
Pledge Agreement without Transfer of Possession (the "Borrower Pledge
Agreement") by means of which CIISA granted in pledge, among others, its rights
deriving from any insurance policy contracted or to be contracted by it with
respect to the development, construction and completion of the hydroelectric
project known as Proyecto Hidroelectrico 63 CH El Cajon, at the Yesca and Santa
Maria del Oro Municipalities in the State of Nayarit, Mexico.
By its signature below, Banco Santander Mexicano, S.A., in its capacity
as Pledgee under the Borrower Pledge Agreement hereby instructs you to pay,
until you receive written instructions from the Pledgee to pay such amounts to
another entity or account, all amounts payable under the Insurance Policy in
U.S. Dollars, by wire transfer, directly to Banco Santander Central Hispano,
S.A., New York Branch for the benefit of the Secured Parties, to the account set
forth in the Insurance Policy.
Very truly tours,
CONSTRUCTORA INTERNACIONAL DE INFRAESTRUCTURA, S.A. DE C.V.
BANCO SANTANDER MEXICANO, S.A.
Acknowledged and consented:
By
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[Name of corresponding
INSURANCE COMPANY]
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EXHIBIT "E"
INSURANCE ENDORSEMENT
TO BE ATTACHED TO/AND FORMING PART OF THE INSURANCE POLICIES
CO- INSURED AND LOSS PAYEE ENDORSEMENT
By means of this endorsement, Banco Santander Central Hispano, S.A., New York
Branch, in its capacity as offshore collateral agent for the benefit of the
secured parties (the "Offshore Collateral Agent") is appointed as co-insured and
loss payee (coasegurado y beneficiario preferente) under this policy No. ______.
The appointment of Banco Santander Central Hispano, S.A., New York Branch as
co-insured and loss payee, may not be cancelled or modified without the prior
written consent of Banco Santander Central Hispano, S.A., New York Branch or any
successor entity.
The Comision Federal de Electricidad is named as additional beneficiary
(beneficiario adicional) under this policy No. _________.
[NAME OF INSURANCE COMPANY] (the "Insurer")*(1) agrees to deliver all amounts
payable hereunder to Banco Santander Central Hispano, S.A., New York Branch, to
the following account (or any other account notified by Banco Santander Central
Hispano, S.A., New York Branch to this insurance company in writing):
Bank: [insert data for Dollar Loss Proceeds Deposit Account]
ABA No.:
Beneficiary:
Account No.
Re:
Att'n:
This appointment of loss payee does not apply for payments to be made by third
parties according to Section 2 - Civil Liability.
It is understood and agreed that any increase in the amount of any risk to be
indemnified, attributable to the application to the loss payee clause, shall be
exclusively paid by Constructora Internacional de Infraestructura, S.A. de C.V.
without anything herein to affect the rights of Banco Santander Central Hispano,
S.A., New York Branch.
In turn, the Insurer agrees that, if any new policy with respect to the works
referred to in public bid number 18164093-011-02 issued by Comision Federal de
- --------
(1) Use the defined term in the relevant policy
Electricidad is created, such new policy shall automatically include an
endorsement equal to the endorsement hereof, without needing prior notification
or request from any person.
Likewise, the Insurer agrees that immediate notice shall be delivered to Banco
Santander Central Hispano, S.A., New York Branch at [insert address] of:
(i) Any claim initiated under such policy and
(ii) If this policy or any policy issued in the future is not
renewed, or if renewed, is not renewed on the same terms as
are in the existing policy.
Banco Santander Central Hispano, S.A., New York Branch shall not be responsible
for the payment of any premium or other amounts payable hereunder.
The Insurer shall notify Banco Santander Central Hispano, S.A., New York Branch
in writing at least thirty (30) days in advance of any reduction, cancellation
or termination of this policy due to lack of payment and at least ten (10) days
before any payment deadline in the event of lack of payment of the corresponding
premium.
With respect to Section 2 - Civil Liability hereunder, it is noted that the
insurance is primary, without right to contribution of any other insurance or
auto-insurance of the contractor of this policy or Banco Santander Central
Hispano, S.A., New York Branch as Offshore Collateral Agent and/or Offshore
Depositary Bank and all Secured Parties.
All payments of claims of losses hereunder in favor of the loss payee shall be
made pursuant to the provisions of this endorsement and shall only be addressed
and made to the loss payee under this policy, until the time Banco Santander
Central Hispano, S.A., New York Branch notifies the Insurer in writing that all
amounts payable to the loss payee for or in connection with the insured
(including all financial documents and agreements) have been satisfied and
irrevocably paid in full. Upon the Insurer having received such notice, it shall
receive instructions in writing from the insured in order to address all
payments of claims of losses to, and in name of, CFE.
WAIVER OF RIGHTS SUBROGATION CLAUSE
The Insurer shall be subrogated in all rights of the insured against any person
or entity in an up to the amount of any payment of a claim made under this
policy. The insured shall sign and deliver all instruments and documents and
shall take all actions necessary to make such rights effective and upon any
loss, it shall refrain from taking any action that may impair such rights.
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The insured shall cooperate with the Insurer and, at its request, shall assist
it in any settlement, gathering of proofs and witnesses, litigation in the
understanding that any expense incurred in compliance with the requests of the
Insurer shall be paid by the Insurer.
The Insurer accepts not to exercise its subrogation rights against Banco
Santander Central Hispano, S.A., New York Branch as Offshore Collateral Agent
and/or Offshore Depositary Bank or any of the Secured Parties or any of the
affiliates, officers, agents or employees of any of the foregoing. The insured
accepts not to waive its rights in the future without the prior written consent
of the Insurer.
MULTIPLE INSURED CLAUSE.
(1) It is noted and agreed that the insured hereunder comprises more than
one insured party each operating as separate and distinct entities and that
cover hereunder shall apply in the same manner and to the same extent as if
individual policies had been issued to each such insured party. Provided that
the total liability of the Insurers to all of the insured parties collectively
shall not exceed the respective Sums Insured and Limits of Indemnity defined in
this Policy.
(2) It is understood and agreed that any payment or payments by the
Insurers to any one or more such insured parties shall reduce to the extent of
that payment, the Insurers liability to all such parties arising from any one
event giving rise to a claim under this policy and (if applicable) in the
aggregate.
(3) It is further understood that the insured parties will at all times
preserve and enforce the various contractual agreements entered into by the
insured parties and the contractual remedies of such parties in the event of
loss or damage.
(4) It is further understood and agreed that the Insurers shall be entitled
to avoid liability to or (as may be appropriate) claim damages from any of the
insured parties in circumstance of fraud, material misrepresentation or
non-disclosure, or breach of any warranty or condition of this policy committed
by that insured party each referred to in this clause as a Vitiating Act.
(5) It is however agreed that a Vitiating Act committed by one insured
party shall not prejudice the right to indemnity of any other insured party who
has an insurable interest and who has not committed a Vitiating Act.
(6) The Insurers hereby agree to waive all rights of subrogation which they
may have or acquire against any insured party except where the rights of
subrogation or recourse are acquired in consequence or otherwise following a
Vitiating Act in which circumstances, the Insurers may enforce such rights
notwithstanding the continuing or former status of the vitiating party as an
insured.
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