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Exhibit 4.2
GRUPO INDUSTRIAL DURANGO, S.A. de C.V.
TO
THE CHASE MANHATTAN BANK,
as Trustee
Indenture
Dated as of July 25, 1996
$250,000,000
125/8% Notes due 2003
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TABLE OF CONTENTS
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Page
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PARTIES...........................................................................................................1
RECITALS OF THE COMPANY 1
ARTICLE ONE DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION....................................................................1
SECTION 101. Definitions 1
SECTION 102. Compliance Certificates and Opinions......................................................15
SECTION 103. Form of Documents Delivered to Trustee....................................................16
SECTION 104. Acts of Holders; Record Dates.............................................................16
SECTION 105. Notices, Etc., to Trustee and Company.....................................................17
SECTION 106. Notice to Holders; Waiver.................................................................17
SECTION 107. Conflict with Trust Indenture Act.........................................................18
SECTION 108. Effect of Headings and Table of Contents..................................................18
SECTION 109. Successors and Assigns....................................................................18
SECTION 110. Separability Clause.......................................................................18
SECTION 111. Benefits of Indenture.....................................................................18
SECTION 112. Governing Law.............................................................................18
SECTION 113. Legal Holidays............................................................................18
SECTION 114. Consent to Service; Jurisdiction..........................................................19
SECTION 115. Language of Notices, Etc..................................................................19
ARTICLE TWO SECURITY FORMS.....................................................................................19
SECTION 201. Forms Generally...........................................................................19
SECTION 202. Form of Face of Security..................................................................20
SECTION 203. Form of Reverse of Security...............................................................22
SECTION 204. Form of Trustee's Certificate of Authentication...........................................27
SECTION 205. Book-Entry Notes..........................................................................27
ARTICLE THREE THE SECURITIES...................................................................................29
SECTION 301. Title and Terms...........................................................................29
SECTION 302. Denominations.............................................................................29
SECTION 303. Execution, Authentication, Delivery and Dating............................................30
SECTION 304. Temporary Securities......................................................................30
SECTION 305. Registration of Transfer and Exchange.....................................................30
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities..........................................31
SECTION 307. Payment of Interest; Interest Rights Preserved............................................32
SECTION 308. Persons Deemed Owners.....................................................................33
(ii)
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SECTION 309. Cancellation..............................................................................33
SECTION 310. Computation of Interest...................................................................33
SECTION 311. CUSIP Numbers.............................................................................34
ARTICLE FOUR SATISFACTION AND DISCHARGE........................................................................34
SECTION 401. Satisfaction and Discharge of Indenture...................................................34
SECTION 402. Application of Trust Money................................................................35
ARTICLE FIVE REMEDIES 35
SECTION 501. Events of Default.........................................................................35
SECTION 502. Acceleration of Maturity; Rescission and Annulment........................................37
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee...........................38
SECTION 504. Trustee May File Proofs of Claim..........................................................39
SECTION 505. Trustee May Enforce Claims Without Possession of Securities...............................39
SECTION 506. Application of Money Collected............................................................39
SECTION 507. Limitation on Suits.......................................................................39
SECTION 508. Unconditional Right of Holders to Receive Principal and Interest..........................40
SECTION 509. Restoration of Rights and Remedies........................................................40
SECTION 510. Rights and Remedies Cumulative............................................................40
SECTION 511. Delay or Omission Not Waiver..............................................................41
SECTION 512. Control by Holders........................................................................41
SECTION 513. Waiver of Past Defaults...................................................................41
SECTION 514. Undertaking for Costs.....................................................................41
SECTION 515. Waiver of Stay or Extension Laws..........................................................42
ARTICLE SIX THE TRUSTEE 42
SECTION 601. Certain Duties and Responsibilities.......................................................42
SECTION 602. Notice of Defaults........................................................................42
SECTION 603. Certain Rights of Trustee.................................................................42
SECTION 604. Not Responsible for Recitals or Issuance of Securities....................................43
SECTION 605. May Hold Securities.......................................................................43
SECTION 606. Money Held in Trust.......................................................................44
SECTION 607. Compensation and Reimbursement............................................................44
SECTION 608. Disqualification: Conflicting Interest...................................................44
SECTION 609. Corporate Trustee Required; Eligibility...................................................44
SECTION 610. Resignation and Removal; Appointment of Successor.........................................45
SECTION 611. Acceptance of Appointment by Successor....................................................46
SECTION 612. Merger, Conversion, Consolidation or Succession to Business...............................46
SECTION 613. Preferential Collection of Claims Against Company.........................................46
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS
BY TRUSTEE AND COMPANY...........................................................................47
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.................................47
SECTION 702. Preservation of Information; Communications to Holders....................................47
(iii)
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SECTION 703. Reports by Trustee........................................................................47
SECTION 704. Reports by Company........................................................................48
ARTICLE EIGHT CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE....................................................................48
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms......................................48
SECTION 802. Successor Substituted.....................................................................50
ARTICLE NINE SUPPLEMENTAL INDENTURES...........................................................................50
SECTION 901. Supplemental Indentures Without Consent of Holders........................................50
SECTION 902. Supplemental Indentures with Consent of Holders...........................................51
SECTION 903. Execution of Supplemental Indentures......................................................51
SECTION 904. Effect of Supplemental Indentures.........................................................52
SECTION 905. Conformity with Trust Indenture Act.......................................................52
SECTION 906. Reference in Securities to Supplemental Indentures........................................52
SECTION 907. Notice of Supplemental Indentures.........................................................52
ARTICLE TEN COVENANTS 52
SECTION 1001. Payment of Principal and Interest........................................................52
SECTION 1002. Maintenance of Office or Agency..........................................................52
SECTION 1003. Money for Security Payments to Be Held in Trust..........................................53
SECTION 1004. Statement by Officers as to Default......................................................54
SECTION 1005. Existence 54
SECTION 1006. Maintenance of Properties................................................................54
SECTION 1007. Payment of Taxes and Other Claims........................................................54
SECTION 1008. Limitation on Indebtedness...............................................................54
SECTION 1009. Limitation on Restricted Payments........................................................56
SECTION 1010. Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries.............57
SECTION 1011. Limitation on the Issuance of Capital Stock and Indebtedness of Subsidiaries.............58
SECTION 1012. Limitation on Transactions with Affiliates...............................................58
SECTION 1013. Limitation on Liens......................................................................59
SECTION 1014. Limitation on Sale and Leaseback Transactions............................................60
SECTION 1015. Limitation on Asset Sales................................................................60
SECTION 1016. Change of Control........................................................................62
SECTION 1017. Indemnification of Judgment Currency.....................................................63
SECTION 1018. Payment of Additional Amounts............................................................63
SECTION 1019. Provision of Financial Information.......................................................66
SECTION 1020. Waiver of Certain Covenants..............................................................66
ARTICLE ELEVEN REDEMPTION OF SECURITIES........................................................................67
SECTION 1101. Right of Redemption......................................................................67
SECTION 1102. Election to Redeem; Notice to Trustee....................................................67
(iv)
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SECTION 1103. Notice of Redemption.....................................................................68
SECTION 1104. Deposit of Redemption Price..............................................................68
SECTION 1105. Securities Payable on Redemption Date....................................................68
ARTICLE TWELVE DEFEASANCE AND COVENANT DEFEASANCE..............................................................69
SECTION 1201. Company's Option to Effect Defeasance or Covenant Defeasance.............................69
SECTION 1202. Defeasance and Discharge.................................................................69
SECTION 1203. Covenant Defeasance......................................................................69
SECTION 1204. Conditions to Defeasance or Covenant Defeasance..........................................70
SECTION 1205. Deposited Money and U.S. Government Obligations to Be Held in Trust, Other
Miscellaneous Provisions.................................................................71
SECTION 1206. Reinstatement............................................................................72
TESTIMONIUM
SIGNATURES AND SEALS
SCHEDULE A
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Indenture
Act Section Section
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ss. 310 (a)(1) ...................................................... 609
(a)(2) ...................................................... 609
(a)(3) ...................................................... Not Applicable
(a)(4) ...................................................... Not Applicable
(b) ...................................................... 608
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610
ss. 311 (a) ...................................................... 613
(b) ...................................................... 613
ss. 312 (a) ...................................................... 701
702(a)
(b) ...................................................... 702(b)
(c) ...................................................... 702(c)
ss. 313 (a) ...................................................... 703(a)
(a)(4) ...................................................... 101
1004
(b) ...................................................... 703(a)
(c) ...................................................... 703(a)
(d) ...................................................... 703(b)
ss. 314 (a) ...................................................... 704
(b) ...................................................... Not Applicable
(c)(1) ...................................................... 102
(c)(2) ...................................................... 102
(c)(3) ...................................................... Not Applicable
(d) ...................................................... Not Applicable
(e) ...................................................... 102
ss. 315 (a) ...................................................... 601
(b) ...................................................... 602
(c) ...................................................... 601
(d) ...................................................... 601
(e) ...................................................... 514
ss. 316 (a) ...................................................... 101
(a)(1)(A) ...................................................... 502
512
(a)(1)(B) ...................................................... 513
(a)(2) ...................................................... Not Applicable
(b) ...................................................... 508
Trust Indenture Indenture
Act Section Section
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(c) ...................................................... 104(c)
ss. 317 (a)(1) ...................................................... 503
(a)(2) ...................................................... 504
(b) ...................................................... 1003
ss. 318 (a) ...................................................... 107
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
INDENTURE, dated as of July 25, 1996, between GRUPO INDUSTRIAL
DURANGO, S.A. de C.V., a corporation duly organized and existing under the laws
of the United Mexican States (herein called the "Company"), having its principal
office at Potasio 150, Ciudad Industrial, Durango, Durango, United Mexican
States, and THE CHASE MANHATTAN BANK, a banking corporation duly organized and
existing under the laws of New York, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of
its 125/8% Notes due 2003 (herein called the "Securities") of substantially the
tenor and amount hereinafter set forth, and to provide therefor the Company has
duly authorized the execution and delivery of this Indenture.
All things necessary to make the Securities, when executed by
the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in Mexico, and, except as otherwise herein
expressly provided, the term "generally accepted accounting principles"
with respect to any computation required or permitted hereunder
shall mean such accounting principles as are generally accepted
accepted in Mexico and consistently applied by the Company at the date
of such computation; and
(4) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"Acquired Indebtedness" means Indebtedness of a Person
existing at the time such Person became a Subsidiary or assumed in connection
with the acquisition of assets from such Person and not Incurred in connection
with, or in contemplation of, such Person becoming a Subsidiary or such assets
being acquired.
"Act," when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Amounts" has the meaning specified in Section
1018.
"Adjusted Consolidated Assets" means the total amount of
assets of the Company and its Subsidiaries (less applicable depreciation,
amortization and other valuation reserves), after deducting therefrom all
current liabilities of the Company and its Subsidiaries, all as set forth on the
most recently available consolidated balance sheet of the Company and its
Subsidiaries, prepared in conformity with Mexican GAAP.
"Adjusted Consolidated Net Income" means, for any period, the
aggregate net income (or loss) of any Person and its consolidated Subsidiaries
for such period determined in conformity with Mexican GAAP; provided that the
following items will be excluded in computing Adjusted Consolidated Net Income
(without duplication): (i) the net income (or loss) of any Person that is not a
Subsidiary of such Person, except to the extent of the amount of dividends or
other distributions actually paid to such Person or any of its Subsidiaries by
such other Person during such period, (ii) solely for the purposes of
calculating the amount of Restricted Payments that may be made pursuant to
clause (3) of the first paragraph of Section 1009 (and, in such case, except to
the extent includible pursuant to the foregoing clause (i) above), the net
income (or loss) of such Person accrued prior to the date it becomes a
Subsidiary of any other Person or is merged into or consolidated with such other
Person or any of its Subsidiaries or all or substantially all of the property
and assets of such Person are acquired by such other Person or any of its
Subsidiaries, (iii) the net income (or loss) of any Subsidiary of such Person to
the extent that the declaration or payment of dividends or similar distributions
by such Subsidiary of such net income is not at the time permitted by the
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation and (iv) all
extraordinary gains and extraordinary losses.
"ADS" means an American Depositary Share representing two
CPOs.
"Affiliate" of any specified Person means any other Person (i)
which directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person, or (ii)
which beneficially owns or holds directly or indirectly
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5% or more of any class of the Voting Stock of such specified Person or of any
Subsidiary of such specified Person. For the purposes of this definition,
"control," when used with respect to any specified person, means the power to
direct the management and policies of such Person directly or indirectly,
whether through the ownership of Voting Stock, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Asset Acquisition" means (i) an investment by the Company or
any of its Subsidiaries in any other Person pursuant to which such Person will
become a Subsidiary of the Company or any of its Subsidiaries or will be merged
into or consolidated with the Company or any of its Subsidiaries or (ii) an
acquisition by the Company or any of its Subsidiaries of the assets of any
Person other than the Company or any of its Subsidiaries that constitute
substantially all of a division or line of business of such Person.
"Asset Disposition" means the sale or other disposition by the
Company or any of its Subsidiaries (other than to the Company or another
Subsidiary of the Company) of (i) all or substantially all of the Capital Stock
of any Subsidiary of the Company or (ii) all or substantially all of the assets
that constitute a division or line of business of the Company or any of its
Subsidiaries.
"Asset Sale" means with respect to any Person, any sale,
transfer or other disposition (including by way of merger, consolidation or Sale
and Leaseback Transaction not involving a Capitalized Lease) in one transaction
or a series of related transactions by such Person or any of its Subsidiaries to
any Person (other than such Person or any of its Subsidiaries in the ordinary
course of business) of (i) all or any of the Capital Stock of any Subsidiary of
such Person, (ii) all or substantially all of the assets of a division or line
of business of such Person or any of its Subsidiaries or (iii) any other assets
of such Person or any of its Subsidiaries outside the ordinary course of
business of such Person or such Subsidiary and, in each case, that is not
governed by the provisions of Article VIII.
"Attributable Indebtedness" means, when used in connection
with a Sale and Leaseback Transaction referred to in Section 1014, at any date
of determination, the product of (i) the net proceeds from such Sale and
Leaseback Transaction and (ii) a fraction, the numerator of which is the number
of full years of the term of the lease relating to the property involved in such
Sale and Leaseback Transaction (without regard to any options to renew or extend
such term) remaining at the date of the making of such computation and the
denominator of which is the number of full years of the term of such lease
(without regard to any options to renew or extend such term) measured from the
first day of such term.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
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"Business Day" means any day except a Saturday, Sunday or
other day on which banking institutions in Durango, Mexico or The City of New
York are authorized or obligated by law or executive order to close.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's capital stock, whether now
outstanding or issued after the date hereof, including, without limitation, all
Common Stock and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease
of any property (whether real, personal or mixed) of which the discounted
present value of the rental obligations of such Person as lessee, in conformity
with Mexican GAAP, is required to be capitalized on the balance sheet of such
Person; and "Capitalized Lease Obligation" is defined to mean the discounted
present value of the rental obligations, as aforesaid, under such lease.
"Change of Control" has the meaning specified in Section 1016.
"Code" is defined to mean the United States Internal Revenue
Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this instrument such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Common Stock" of any Person means Capital Stock of such
Person that does not rank prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of Capital Stock of any
other class of such Person.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by the Chairman of the Board, a Vice
Chairman of the Board, the President or a Vice President, and by the Chief
Financial Officer, the Comptroller, the Treasurer or an Assistant Treasurer, the
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Consolidated EBITDA" means, with respect to any Person for
any period, the sum of the amounts for such period of (i) Adjusted Consolidated
Net Income, (ii) Consolidated Interest Expense, (iii) income taxes (other than
income taxes (either positive or negative) attributable to extraordinary and
non-recurring gains or losses or sales of assets), (iv) depreciation expense,
(v) amortization expense and (vi) all other non-cash items reducing Adjusted
Consolidated Net Income, less all non-cash items increasing Adjusted
Consolidated Net Income, all as determined on a consolidated basis for such
Person and its Subsidiaries in conformity with Mexican GAAP.
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"Consolidated Interest Expense" means, with respect to any
Person for any period, the aggregate amount of interest in respect of
Indebtedness (including amortization of original issue discount on any
Indebtedness and the interest portion of any deferred payment obligation,
calculated in accordance with the effective interest method of accounting; all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing; and the net costs associated with
Interest Rate Agreements) and all but the principal component of rentals in
respect of Capitalized Lease Obligations paid, accrued or scheduled to be paid
or to be accrued by such Person and its consolidated Subsidiaries during such
period; excluding, however, any amount of such interest of any Subsidiary of
such Person if the net income (or loss) of such Subsidiary is excluded in the
calculation of Adjusted Consolidated Net Income for such Person pursuant to
clause (iii) of the definition thereof (but only in the same proportion as the
net income (or loss) of such Subsidiary is excluded from the calculation of
Adjusted Consolidated Net Income for such Person pursuant to clause (iii) of the
definition thereof).
"Consolidated Tangible Net Worth" of any Person means the
stockholders' equity of such Person, determined on a consolidated basis in
accordance with Mexican GAAP, less (i) amounts attributable to Redeemable Stock
of such Person and (ii) amounts attributable to deferred charges; provided that,
with respect to the Company, adjustments following the date of this Indenture to
the accounting books and records of the Company in accordance with the Mexican
counterparts for Accounting Principles Board Opinions Nos. 16 and 17 (or
successor opinions thereto) or otherwise resulting from the acquisition of
Control of the Company by another Person will not be given effect.
"Corporate Trust Office" means the principal office of the
Trustee in The City of New York at which at any particular time its corporate
trust business shall be administered, which at the date hereof is 4 Chase
MetroTech Center, Brooklyn, NY 11245, or such other office as shall be specified
in writing.
"corporation" means a corporation, association, company,
joint-stock company or business trust.
"Covenant Defeasance" shall have the meaning specified in
Section 1203.
"CPO" means an ordinary participation certificate issued by
the CPO Trust.
"CPO Trust" means that certain trust created pursuant to the
Trust Agreement, dated November 24, 1989, by Nafinsa, S.N.C., as grantor and as
the CPO Trustee, which will hold Series A Shares and which will issue CPOs.
"CPO Trustee" means Nafinsa, S.N.C., or its successor, as
Trustee under the Trust Agreement, dated November 24, 1989.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement reasonably
designed to protect the Company or any of its Subsidiaries against fluctuations
in currency values to or under which the
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Company or any of its Subsidiaries is a party or a beneficiary
on the Issue Date or becomes a party or a beneficiary thereafter.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" shall have the meaning specified in Section 1202.
"Employee Stock Option Trust" means the trust established
under the trust agreement dated June 9, 1994, which pursuant thereto may
purchase Series A Shares from time to time for the benefit of the officers and
employees of the Company.
"Event of Default" has the meaning specified in Section 501.
"Excess Proceeds" has the meaning specified in Section 1015.
"Excess Proceeds Payment" has the meaning specified in Section
1015.
"Exchange Act" means the United States Securities Exchange Act
of 1934, as amended.
"Expiration Date" shall have the meaning specified in the
definition of "Offer to Purchase."
"Group" has the meaning specified in Section 1016.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation of such other Person (whether
arising by virtue of partnership arrangements, or by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided that the term "Guarantee" will
not include endorsements for collection or deposit in the ordinary course of
business; and the term "Guaranteed" will have a meaning correlative to the
foregoing.
"Holder" means the registered holder of a Security.
"Incur" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to
Mexican GAAP or otherwise, of any such Indebtedness or other obligation on the
balance sheet of such Person (and "Incurrence," "Incurred," "Incurrable," and
"Incurring" have meanings correlative to the foregoing); provided, however, that
a change in Mexican GAAP that
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results in an obligation of such Person that exists at such time becoming
Indebtedness will not be deemed an Incurrence of such Indebtedness.
"Indebtedness" means, with respect to any Person at any date
of determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all obligations of such
Person in respect of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto), (iv) all obligations of such
Person to pay the deferred and unpaid purchase price of property or services,
which purchase price is due more than six months after the date of placing such
property in service or taking delivery and title thereto or the completion of
such services, (v) all obligations of such Person as lessee under Capitalized
Leases, (vi) all Indebtedness of other Persons secured by a Lien on any asset of
such Person, whether or not such Indebtedness is assumed by such Person;
provided that the amount of such Indebtedness will be the lesser of (a) the fair
market value of such asset at such date of determination and (b) the amount of
such Indebtedness of such other Persons, (vii) all Indebtedness of other Persons
Guaranteed by such Person to the extent such Indebtedness is Guaranteed by such
Person, (viii) the Securities and any Guarantees thereof and (ix) to the extent
not otherwise included in this definition, obligations under Currency Agreements
and Interest Rate Agreements. The amount of Indebtedness of any Person at any
date will be the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability, upon the occurrence of
the contingency giving rise to the obligation, of any contingent obligations at
such date; provided that the amount outstanding at any time of any Indebtedness
issued with original issue discount is the face amount of such Indebtedness less
the remaining unamortized portion of the original issue discount of such
Indebtedness at such time as determined in conformity with Mexican GAAP.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Interest Coverage Ratio" means, with respect to any Person on
any Transaction Date, the ratio of (i) the aggregate amount of Consolidated
EBITDA of such Person for the four fiscal quarters for which financial
information in respect thereof is available immediately prior to such
Transaction Date to (ii) the aggregate Consolidated Interest Expense of such
Person during such four fiscal quarters. In making the foregoing calculation,
(a) pro forma effect will be given to (1) any Indebtedness Incurred subsequent
to the end of the four-fiscal-quarter period referred to in clause (i) and prior
to the Transaction Date, (2) any Indebtedness Incurred during such period to the
extent such Indebtedness is outstanding at the Transaction Date and (3) any
Indebtedness to be Incurred on the Transaction Date, in each case as if such
Indebtedness had been Incurred on the first day of such four-fiscal-quarter
period and after giving effect to the application of the proceeds thereof; (b)
Consolidated Interest Expense attributable to interest on any Indebtedness
(whether existing or being Incurred) computed on a pro forma basis and bearing a
floating interest rate will be computed as if the rate in effect on the date of
computation (taking into account any Interest Rate Agreement applicable to such
Indebtedness if such Interest Rate
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Agreement has a remaining term in excess of 12 months) had been the applicable
rate for the entire period; (c) there will be excluded from Consolidated
Interest Expense any Consolidated Interest Expense related to any amount of
Indebtedness that was outstanding during such four-fiscal-quarter period or
thereafter but that is not outstanding or is to be repaid on the Transaction
Date; (d) pro forma effect will be given to Asset Dispositions and Asset
Acquisitions that occur during such four-fiscal-quarter period or thereafter and
prior to the Transaction Date (including any Asset Acquisition to be made with
the Indebtedness Incurred pursuant to clause (a) above) as if they had occurred
on the first day of such four-fiscal-quarter period; and (e) pro forma effect
will be given to asset dispositions and asset acquisitions that have been made
by any Person that has become a Subsidiary of the Company or has been merged
with or into the Company or any Subsidiary of the Company during the
four-fiscal-quarter period referred to above or subsequent to such period and
prior to the Transaction Date and that would have been Asset Dispositions or
Asset Acquisitions had such transactions occurred when such Person was a
Subsidiary of the Company as if such asset dispositions or asset acquisitions
were Asset Dispositions or Asset Acquisitions that occurred on the first day of
such period.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities.
"Interest Rate Agreement" means any interest rate protection
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedge agreement or other similar agreement or
arrangement reasonably designed to protect the Company or any of its
Subsidiaries against fluctuations in interest rates to or under which the
Company or any of its Subsidiaries is a party or a beneficiary on the date
hereof or becomes a party or a beneficiary hereafter.
"Investment" means any direct or indirect advance (other than
advances to customers in the ordinary course of business that are recorded as
accounts receivable on the balance sheet of any Person or its Subsidiaries),
loan or other extension of credit or capital contribution to (by means of any
transfer of cash or other property to others or any payment for property or
services for the account or use of others), or any purchase or acquisition of
Capital Stock, bonds, notes, debentures or other similar instruments issued by,
any other Person.
"Issue Date" means the date on which the Securities are
originally issued under this Indenture.
"Judgment Currency" has the meaning specified in Section 1017.
"Lien" with respect to any property or assets means any
mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement (other than any easement
not materially impairing usefulness or marketability), encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such property or assets (including,
without limitation, any conditional sale or other title retention agreement
having substantially the same economic effect as any of the foregoing).
-8-
"Management Stockholders" means Ing. Miguel Rincon, Dr.
Jose A. Rincon and Sr. Jesus Rincon and members of their immediate families.
"Maturity," when used with respect to any Security, means the
date on which the principal of such Security becomes due and payable as therein
or herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Mexican GAAP" means accounting principles generally accepted
in Mexico, including accounting principles which account for the effects of
inflation as provided for under Bulletin B-10 "Recognition of the Effects of
Inflation on the Financial Information," as amended, issued by the Mexican
Institute of Public Accountants.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations (to the extent corresponding
to the principal, but not interest, component thereof) when received in the form
of cash or cash equivalents (except to the extent such obligations are financed
or sold with recourse to the Company or any Subsidiary of the Company) and
proceeds from the conversion of other property received when converted to cash
or cash equivalents, net of (i) brokerage commissions and other fees and
expenses (including fees and expenses of counsel and investment bankers) related
to such Asset Sale, (ii) provisions for all taxes (whether or not such taxes
will actually be paid or are payable) as a result of such Asset Sale without
regard to the consolidated results of operations of the Company and its
Subsidiaries, taken as a whole, (iii) payments made to repay Indebtedness or any
other obligation outstanding at the time of such Asset Sale that either (a) is
secured by a Lien on the property or assets sold or (b) is required to be paid
as a result of such sale and (iv) appropriate amounts to be provided by the
Company or any Subsidiary of the Company as a reserve against any liabilities
associated with such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as determined in conformity with Mexican GAAP.
"1994 Yankee Bonds" means the Company's 12% Notes Due 2001,
issued under an indenture dated as of July 21, 1994.
"Non-Recourse Indebtedness" means any Indebtedness of a
Non-Recourse Subsidiary (i) in respect of which neither the Company nor any of
its Subsidiaries (other than a Non-Recourse Subsidiary) is liable or obligated
in any manner including, without limitation, liabilities or obligations
constituting Indebtedness of the Company or any of its Subsidiaries (other than
a Non-Recourse Subsidiary) and (ii) the occurrence of any event or the existence
of any condition under any agreement or instrument relating to which shall not
at any time have the effect of accelerating, or permitting the acceleration of,
the maturity of any Indebtedness of the Company or any of its Subsidiaries
(other than a Non-Recourse Subsidiary) or otherwise permitting any such
Indebtedness to be declared to be due and payable, or to be required to be
prepaid, purchased or redeemed, prior to the stated maturity thereof.
"Non-Recourse Subsidiary" means a Subsidiary designated by the
Board of Directors in a Board Resolution delivered to the Trustee that at the
time of such designation has
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total assets of $1,000 or less and that (i) owns only property and assets
acquired by such Subsidiary after the Issue Date from a Person or Persons other
than the Company or any of its Subsidiaries or Affiliates, and (ii) has no
Indebtedness other than Non-Recourse Indebtedness.
"Offer" has the meaning specified in the definition of "Offer
to Purchase."
"Offer to Purchase" means an offer by the Company (the
"Offer"), which is set forth in a writing sent by first class mail, postage
prepaid, to each Holder at the address of such Holder appearing in the Security
Register on the date of the Offer, offering to purchase up to the principal
amount of Securities specified in such Offer at the purchase price specified in
such Offer (as determined pursuant to the provisions hereof). Unless otherwise
required by applicable law, the Offer will specify an expiration date (the
"Expiration Date") of the Offer to Purchase which will be, subject to any
contrary requirements of applicable law, not less than 30 days or more than 60
days after the date of such Offer and a settlement date (the "Purchase Date")
for the purchase of Securities within five Business Days after the Expiration
Date. The Company will notify the Trustee at least 15 Business Days (or such
shorter period as is acceptable to the Trustee) prior to the mailing of the
Offer of the Company's obligation to make an Offer to Purchase, and the Offer
will be mailed by the Company or, at the Company's request, by the Trustee in
the name and at the expense of the Company. The Offer will contain information
concerning the business of the Company and its Subsidiaries which the Company in
good faith believes will enable such Holders to make an informed decision with
respect to the Offer to Purchase (which at a minimum will include (i) the most
recent annual and quarterly financial statements and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" contained in the
documents required to be filed pursuant to Section 1019 (which requirements may
be satisfied by delivery of such documents together with the Offer), (ii) a
description of material developments in the Company's business subsequent to the
date of the latest of such financial statements referred to in clause (i)
(including a description of the events requiring the Company to make the Offer
to Purchase), (iii) if applicable, appropriate pro forma financial information
concerning the Offer to Purchase and the events requiring the Company to make
the Offer to Purchase and (iv) any other information required by applicable law
to be included therein). The Offer will contain all instructions and materials
necessary to enable such Holders to tender Securities pursuant to the Offer to
Purchase. The Offer will also state:
(a) the Section of this Indenture pursuant to which the Offer to
Purchase is being made;
(b) the Expiration Date and the Purchase Date;
(c) the aggregate principal amount of the outstanding Securities
offered to be purchased by the Company pursuant to the Offer to
Purchase (including, if less than 100%, the manner by which such has
been determined pursuant to the Section of this Indenture requiring
the Offer to Purchase) (the "Purchase Amount");
(d) the purchase price to be paid by the Company for each $1,000
aggregate principal amount of Securities accepted for payment (the
"Purchase Price");
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(e) that the Holder may tender all or any portion of the
Securities registered in the name of such Holder and that any portion
of a Security tendered must be tendered in an integral multiple of
$1,000 principal amount;
(f) the place or places where Securities are to be surrendered
for tender pursuant to the Offer to Purchase;
(g) that interest on any Security not tendered or tendered but
not purchased by the Company pursuant to the Offer to Purchase will
continue to accrue;
(h) that on the Purchase Date the Purchase Price will become due
and payable upon each Security accepted for payment pursuant to the
Offer to Purchase and that interest thereon will cease to accrue on
and after the Purchase Date;
(i) that each Holder electing to tender a Security pursuant to
the Offer to Purchase will be required to surrender such Security at
the place or places specified in the Offer prior to the close of
business on the Expiration Date (such Security being, if the Company
or the Trustee so requires, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or an attorney for
the Holder duly authorized in writing);
(j) that Holders of Securities will be entitled to withdraw all
or any portion of Securities tendered if the Company (or its Paying
Agent) receives, not later than the close of business on the
Expiration Date, a facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Security the Holder
tendered, the certificate number of the Security the Holder tendered
and a statement that such Holder is withdrawing all or a portion of
the tender of such Holder;
(k) that (i) if Securities in an aggregate principal amount less
than or equal to the Purchase Amount are duly tendered and not
withdrawn pursuant to the Offer to Purchase, the Company will purchase
all such Securities and (ii) if Securities in an aggregate principal
amount in excess of the Purchase Amount are tendered and not withdrawn
pursuant to the Offer to Purchase, the Company will purchase
Securities having an aggregate principal amount equal to the Purchase
Amount on a pro rata basis (with such adjustments as may be deemed
appropriate so that only Securities in denominations of $1,000 or
integral multiples thereof will be purchased); and
(1) that in case of any Holder whose Security is purchased only
in part, the Company will execute, and the Trustee will authenticate
and deliver to the Holder of such Security without service charge, a
new Security or Securities, of any authorized denomination as
requested by such Holder, in an aggregate principal amount equal to
and in exchange for the unpurchased portion of the Security so
tendered.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the President or a Vice
President, and by the Chief Financial Officer, the Comptroller, the Treasurer or
an Assistant Treasurer, the Secretary or an Assistant Secretary,
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of the Company, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 1004 shall be the principal
executive, financial or accounting officer of the Company.
"Opinion of Mexican Counsel" means a written opinion of
Mexican counsel admitted to practice in Mexico who shall be acceptable to the
Trustee, provided that such counsel may rely, as to any matters of U.S. law, on
an Opinion of U.S. Counsel.
"Opinion of U.S. Counsel" means a written opinion of
independent U.S. counsel admitted to practice in the State of New York who shall
be acceptable to the Trustee, provided that such counsel may rely, as to any
matters of Mexican law, on an Opinion of Mexican Counsel.
"Outstanding," when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that, if
such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 306
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee actually knows to be so
owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.
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"Paying Agent" means any Person authorized by the Company to
pay the principal of or interest on any Securities on behalf of the Company,
which shall initially be The Chase Manhattan Bank.
"Permitted Business Investment" means any Investment by the
Company or a Subsidiary of the Company in another Subsidiary or in an Affiliate
which is an Affiliate solely by reason of being directly or indirectly
controlled by the Company or such Subsidiary and which is engaged in a business
similar to that of the Company and its Subsidiaries.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen security.
"Preferred Stock" means, with respect to any Person, any and
all shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such Person's preferred or preference stock,
whether now outstanding or issued after the date hereof, including, without
limitation, all series and classes of such preferred or preference stock.
"Purchase Amount" has the meaning specified in the definition
of Offer to Purchase.
"Purchase Date" has the meaning specified in the definition of
Offer to Purchase.
"Purchase Price" has the meaning specified in the definition
of Offer to Purchase.
"Redeemable Stock" of any Person means any equity security of
such Person that by its terms or otherwise is required to be redeemed prior to
the final Stated Maturity of the Securities or is redeemable at the option of
the holder thereof at any time prior to the final Stated Maturity of the
Securities.
"Redemption Date," when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture-
"Redemption Price," when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the July 1 or January 1 (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date.
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"Related Person" of any Person means any other Person that
owns, or any controlling Affiliate of any other Person that owns, (i) 5% or more
of the outstanding Common Stock of such Person or (ii) 5% or more of the Voting
Stock of such Person.
"Required Filing Dates" has the meaning specified in Section
1019.
"Restricted Payment" has the meaning specified in Section
1009.
"Sale and Leaseback Transaction" of any Person means an
arrangement with any lender or investor or to which such lender or investor is a
party providing for the leasing by such Person of any property or asset of such
Person which has been or is being sold or transferred by such Person more than
180 days after the acquisition thereof or the completion of construction or
commencement of operation thereof to such lender or investor or to any person to
whom funds have been or are to be advanced by such lender or investor on the
security of such property or asset. The stated maturity of such arrangement will
be the date of the last payment of rent or any other amount due under such
arrangement prior to the first date on which such arrangement may be terminated
by the lessee without payment of a penalty.
"Securities Act" means the United States Securities Act of
1933, as amended.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Series A Shares" means the Company's Series A common shares,
without par value.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.
"Spot rate of exchange" shall have the meaning specified in
Section 1017.
"Stated Maturity" means, when used with respect to any
Security or any installment of interest thereon, the date specified in such
Security as the fixed date on which the principal of such Security or such
installment of interest is due and payable.
"Subsidiary" means, with respect to any Person, any
corporation, association or other business entity of which more than 50% of the
outstanding Voting Stock is owned, directly or indirectly, by such Person and
one or more other Subsidiaries of such Person.
"Substantially-Owned Subsidiary" means, with respect to any
Person, any Subsidiary of such Person if at least 95% of the Common Stock or
other similar equity ownership interests (but not including Preferred Stock) in
such Subsidiary (other than any directors' qualifying shares) is owned directly
or indirectly by such Person.
"Successor Company" shall have the meaning specified in
Section 801.
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"Transaction Date" means, with respect to the Incurrence of
any Indebtedness by the Company or any of its Subsidiaries, the date such
Indebtedness is to be Incurred and, with respect to any Restricted Payment, the
date such Restricted Payment is to be made.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Underwriting Agreement" means the underwriting agreement,
dated July 22, 1996 between the Company and the underwriters named therein
relating to the sale of the 126/8% Notes due 2003.
"Vice President," when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president."
"Voting Stock" means Capital Stock of any class or kind
ordinarily having the power to vote for the election of directors of the
Company.
"Working Capital Facilities" means a borrowing facility or
facilities established for working capital purposes, as certified to the Trustee
in an Officers' Certificate, entered into after the Issue Date.
SECTION 102. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee such
certificates and opinions as may be required under the Trust Indenture Act. Each
such certificate or opinion shall be given in the form of an Officers'
Certificate, if to be given by an officer of the Company, or an opinion of
Mexican Counsel or an Opinion of U.S. Counsel, as the case may be, if to be
given by counsel, and shall comply with the requirements of the Trust Indenture
Act and any other requirement set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition and
the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
-15-
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to
whether or not such covenant or condition has been complied with;
and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 104. Acts of Holders; Record Dates. (a) Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed
by such Holders in person or by an agent duly appointed in writing; and, except
as herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee and, where it is
hereby expressly required, to the Company. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof.
-16-
Where such execution is by a signer acting in a capacity other than such
Person's individual capacity, such certificate or affidavit shall also
constitute sufficient proof of such Person's authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The Company may, in the circumstances permitted by the
Trust Indenture Act, fix any date as the record date for the purpose of
determining the Holders entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote on
any action, authorized or permitted to be given or taken by Holders. If not set
by the Company prior to the first solicitation of a Holder made by any Person in
respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 701) prior to such first solicitation or vote, as the case
may be. With regard to any record date, only the Holders on such date (or their
duly designated proxies) shall be entitled to give or take, or vote on, the
relevant action.
(d) The ownership of Securities shall be proved by the
Security Register.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
SECTION 105. Notices, Etc., to Trustee and Company. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Administration, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this instrument
or at any other address furnished in writing to the Trustee by the
Company.
SECTION 106. Notice to Holders; Waiver. Where this Indenture
provides for notice to Holders of any event, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at the
address of the Holder as it appears in the Security Register, not later than the
latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such
-17-
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with a provision of the Trust
Indenture Act that is required under such Act to be a part of and govern this
Indenture, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that may
be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns. All covenants and
agreements in this Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.
SECTION 110. Separability Clause. In case any provision in
this Indenture or in the Securities shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture. Nothing in this Indenture
or in the Securities, express or implied, shall give to any Person, other than
the parties hereto and their successors hereunder and the Holders of Securities,
any benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 112. Governing Law. THIS INDENTURE AND THE SECURITIES
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 113. Legal Holidays. In any case where any Interest
Payment Date, Redemption Date, Purchase Date or Stated Maturity of any Security
shall not be a Business Day, then (notwithstanding any other provision of this
Indenture or of the Securities) payment of interest or principal need not be
made on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on the Interest Payment Date or Redemption
Date, Purchase Date or at the Stated Maturity, provided that no interest shall
accrue
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for the period from and after such Interest Payment Date, Redemption Date,
Purchase Date or Stated Maturity, as the case may be.
SECTION 114. Consent to Service; Jurisdiction. Each party
hereto irrevocably agrees that any legal suit, action or proceeding arising out
of or relating to this Indenture or the Securities may be instituted in any
federal or state court in the Borough of Manhattan, The City of New York, waives
any objection which it may now or hereafter have to the laying of the venue of
any such legal suit, action or proceeding, waives any immunity from jurisdiction
or to service of process in respect of any such suit, action or proceeding, and
irrevocably submits to the exclusive jurisdiction of any such court in any such
suit, action or proceeding. The Company agrees that a final judgment in any such
suit, action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law in
accordance with applicable law. The Company hereby irrevocably waives any right
to invoke jurisdiction it may have to any court by virtue of Mexican law. The
Company hereby appoints CT Corporation System Inc., 1633 Broadway, New York, New
York 10019 as its authorized agent upon which process may be served in any legal
suit, action or proceeding arising out of or relating to this Indenture or the
Securities which may be instituted in any federal or state court in the Borough
of Manhattan, The City of New York, and agrees that service of process upon such
agent, and written notice of said service to the Company by the person serving
the same, shall be deemed in every respect effective service of process upon the
Company in any such suit, action or proceeding and further designates its
domicile, the domicile of CT Corporation System Inc. specified above and any
domicile CT Corporation System Inc. may have in the future as its domicile to
receive any notice hereunder (including service of process). If for any reason
CT Corporation System Inc. (or any successor agent for this purpose) shall cease
to act as agent for service of process as provided above, the Company will
promptly appoint a successor agent for this purpose reasonably acceptable to the
Trustee. The Company agrees to take any and all actions as may be necessary to
maintain such designation and appointment of such agent in full force and
effect.
SECTION 115. Language of Notices, Etc. Any request, demand,
authorization, direction, notice, consent or waiver required or permitted under
this Indenture shall be in the English language, except that any published
notice may be in an official language of the country of publication.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally. The Securities and the Trustee's
certificate of authentication shall be in substantially the forms set forth in
this Article, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities.
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The definitive Securities shall be printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner permitted by the rules of any
securities exchange on which the Securities may be listed, all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.
SECTION 202. Form of Face of Security.
GRUPO INDUSTRIAL DURANGO, S.A. de C.V.
12-6/8% NOTES DUE 2003
CUSIP No. 40050MAA4
No. R-1
$250,000,000
GRUPO INDUSTRIAL DURANGO, S.A. de C.V., a limited liability
company duly organized and existing under the laws of the United Mexican States
(herein called the "Company," which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to _________________, or registered assigns, the principal sum of Two Hundred
and Fifty Million U.S. Dollars on August 1, 2003, and to pay interest thereon
from July 25, 1996 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semiannually on February 1 and
August 1 in each year, commencing February 1, 1997 at the rate of 126/8% per
annum, until the principal hereof is paid or made available for payment. The
interest so payable and punctually paid or duly provided for on any Interest
Payment Date will, as provided in the Indenture (as defined on the reverse
hereof), be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the January 15 or July 15 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment at such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture. Payment of the
principal of and interest on this Security will be made at the office or agency
of the Company maintained in The City of New York for that purpose, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by cheek mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
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The Company shall pay Additional Amounts and the Securities
shall be subject to redemption by the Company as provided in Sections 1018 and
1101 of the Indenture.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
GRUPO INDUSTRIAL DURANGO, S.A. de C.V.
By:
--------------------------------------
Name:
Title:
[SEAL)
Attest:
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SECTION 203. Form of Reverse of Security. This Security is one
of a duly authorized issue of Securities of the Company designated as its 125/8%
Notes due 2003 (herein called the "Securities"), limited in aggregate principal
amount to $250,000,000, issued and to be issued under an Indenture, dated as of
July 25, 1996 (herein called the "Indenture"), between the Company and The Chase
Manhattan Bank, as Trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered.
The Securities shall constitute direct, unsecured and
unconditional obligations of the Company and will rank pari passu among
themselves and with all other present and future unsecured and unsubordinated
indebtedness of the Company, other than obligations which are mandatorily
preferred by statute or by operation of law.
All payments of principal and interest in respect of the
Securities shall be made after withholding or deduction for any taxes, duties,
assessments or governmental charges of whatever nature imposed, levied,
collected, withheld or assessed by or within Mexico or any authority therein or
thereof having power to tax. The Company shall pay such additional amounts
("Additional Amounts") as will result in receipt by the Holders of such amounts
as would have been received by them had no such withholding or deduction been
required, except that no such Additional Amounts shall be payable with respect
to any payment on any Security to the extent:
(i) that any such taxes, duties, assessments or other
governmental charges would not have been imposed but for a connection
between the Holder or beneficial owner of such Security and Mexico (or
any authority therein or thereof having power to tax) other than the
holding of such Security and the receipt of payments with respect to
such Security;
(ii) of any such taxes, duties, assessments or other
governmental charges with respect to a Security presented for payment
more than 30 days after the date on which such payment became due and
payable or the date on which payment thereof is duly provided for and
notice thereof given to Holders, whichever occurs later, except to the
extent that the Holder of such Security would have been entitled to
such Additional Amounts on presenting such Security for payment on any
date during such 30-day period;
(iii) of any Mexican taxes to the extent that such Mexican
taxes would not have been imposed but for the failure of the Holder or
beneficial owner of such Security to comply with any certification,
identification, information, documentation or other reporting
requirement if (a) such compliance is required by law (including,
without limitation, Article 154 of the Mexican Income Tax Law),
regulation or administrative practice as a precondition to exemption
from, or reduction in the rate of withholding of, Mexican taxes (other
than a reduction or exemption pursuant to any income tax treaty to
which Mexico is a party) and (b) at least 30 days prior to the first
interest payment date with respect to which the Company shall apply
this clause (iii), the Company shall have
-22-
notified the Trustee in writing that the Holders or beneficial Owners
of the Securities will be required to provide such information or
documentation;
(iv) of any Mexican taxes imposed at a rate in excess of 15%
if (a) such Holder or beneficial owner has failed to provide on a
timely basis, at the reasonable request of the Company (subject to the
conditions set forth below), information or documentation concerning
such Holder's or beneficial owner's eligibility for benefits under an
income tax treaty to which Mexico is a party that is necessary to
determine the appropriate rate of deduction or withholding of Mexican
taxes under any such treaty and (b) at least thirty 30 days prior to
the first Interest Payment Date with respect to which the Company shall
make such request, the Company shall have notified the Trustee in
writing that the holders or beneficial owners of the Securities will be
required to provide such information or documentation; or
(v) of estate, inheritance, gift, property or other similar
taxes imposed with respect to such Security.
Notwithstanding the foregoing, the limitations on the
Company's obligation to pay Additional Amounts set forth in clauses (iii) and
(iv) above shall not apply if a certification, identification, information,
documentation or other reporting requirement described in clause (iii), or the
provision of information or documentation described in clause (iv), as the case
may be, would be materially more onerous, in form, in procedure or in the
substance of information disclosed, to such Holders or beneficial owners (taking
into account any relevant differences between U.S. and Mexican law, regulation
or administrative practice) than comparable information or other reporting
requirements imposed under U.S. tax law, regulation (including proposed
regulations) and administrative practice or other reporting requirements imposed
as of July 22, 1996 under U.S. tax law, regulation (including proposed
regulations) and administrative practice (such as IRS Forms 1001, W-8 and W-9).
Notwithstanding the preceding sentence, so long as Rule 252 issued by the
Secretaria de Hacienda y Credito Publico (the "Ministry of Finance") published
in the Diario Oficial de la Federacion on March 29, 1996 or a substantially
similar successor of such rule is in effect, the limitations on the Company's
obligation to pay Additional Amounts set forth in Clause (iii) above shall not
apply unless (a) the certification, identification, information, documentation
or other reporting requirement described in such Clause (iii) is required in
order to apply Rule 252 (or a substantially similar successor rule thereto), (b)
the Company cannot obtain such certification, identification, information,
documentation or other reporting requirement through reasonable diligence and
(c) the Company otherwise would meet the requirements for application of Rule
252 (or a substantially similar successor rule thereto). In addition, clauses
(iii) and (iv) above shall not be construed to require that a non-Mexican
pension or retirement fund or a non-Mexican financial institution or any other
Holder register with the Ministry of Finance for the purpose of establishing
eligibility for an exemption from Mexican withholding tax or to require that a
Holder or beneficial owner certify or provide information concerning whether it
is or is not a tax-exempt pension or retirement fund.
Upon the Trustee's receipt of timely notification from the
Company that the Holders or beneficial owners will be required to provide
information or documentation, as described in clause (iii) or (iv) above, the
Trustee shall provide such notification to the Holders or
-23
beneficial owners, as the case may be. The Company shall, as soon as practicable
and in no event later than 30 days following the due date for each payment of
Mexican taxes withheld by the Company with respect to the Securities, provide
the Trustee with a certified copy of the official receipt evidencing the payment
of such taxes. The Trustee shall, for a period of five years following the due
date for each payment, maintain in its files each such certified copy received
from the Company.
The Trustee shall, upon written request by the beneficial
owner of a Security or any Paying Agent, provide such owner or Paying Agent with
a copy of the certified copy of the receipt provided to the Trustee by the
Company regarding the amount of Mexican tax withheld by the Company with respect
to the Securities within 30 Business Days following the receipt by the Trustee
of such request.
All references in this Security to principal or interest in
respect of any Security shall be deemed to mean and include all Additional
Amounts, if any, payable in respect of such principal or interest, unless the
context otherwise requires, and express mention of the payment of Additional
Amounts in any provision hereof shall not be construed as excluding reference to
Additional Amounts in those provisions hereof where such express mention is not
made. All references in this Security to principal in respect of any Security
shall be deemed to mean and include any redemption price or purchase price
payable in respect of such Security pursuant to any redemption provided for
above or pursuant to any Offer to Purchase, and express mention of the payment
of any redemption price or purchase price in any provision hereof shall not be
construed as excluding reference to any redemption price or purchase price in
those provisions hereof where such express reference is not made.
In the event that Additional Amounts actually paid with
respect to the Securities are based on rates of deduction or withholding of
Mexican taxes in excess of the appropriate rate applicable to the Holder or
beneficial owner of such Securities, and, as a result thereof, such Holder or
beneficial owner is entitled to make a claim for a refund or credit of such
excess from Mexican tax authorities, then such Holder or beneficial owner shall,
by accepting the Securities, be deemed to have assigned and transferred all
right, title and interest to any such claim for a refund or credit of such
excess to the Company. However, by making such assignment, the Holder or
beneficial owner makes no representation or warranty that the Company will be
entitled to receive such claim for a refund or credit and incurs no other
obligation with respect thereto.
Reference is made to Section 1018 of the Indenture for further
provisions with respect to the payment of Additional Amounts.
If, as a result of any amendment to, or change in, the laws
(or any regulation or rulings thereunder) of Mexico or any political subdivision
or taxing authority thereof or therein, or any amendment to or change in an
official interpretation or application regarding such laws, regulations or
rulings, which amendment, change, application or interpretation becomes
effective on or after July 22, 1996, the Company pays or would be obligated for
reasons outside its control, and after taking reasonable measures available to
it to avoid such obligation, to pay Additional Amounts in respect of any
Security pursuant to the terms and conditions thereof in excess of those
attributable to the Mexican withholding tax of 15% imposed on interest payments
to
-24-
Holders, then, at the option of the Company, the Securities may be redeemed, as
a whole but not in part, at any time, upon giving not less than 30 nor more than
60 days' notice by mail to the Holders (which notice shall be irrevocable), at a
Redemption Price equal to the principal amount thereof, together with accrued
interest to the Redemption Date (subject to the right of Holders of record on
the relevant Record Date to receive interest due on the Interest Payment Date
that is on or prior to the Redemption Date) and any Additional Amounts which
would otherwise be payable; provided that (i) no such notice of redemption may
be given earlier than 90 days prior to the earliest date on which the Company
would but for such redemption be obligated to pay such Additional Amounts and
(ii) at the time such notice is given, such obligation to pay such Additional
Amounts remains in effect.
Prior to the publication of any notice of redemption pursuant
to this provision, the Company shall deliver to the Trustee (i) an Officers'
Certificate stating that the Company is entitled to effect such redemption and
setting forth a statement of facts showing that the condition or conditions
precedent to the right of the Company so to redeem have occurred and (ii) an
Opinion of Mexican Counsel to the effect that the Company has or shall become
obligated to pay such Additional Amounts as a result of such amendment or
change. Such notice, once delivered by the Company to the Trustee, shall be
irrevocable.
The Company shall pay all stamp and similar duties, if any,
which may be imposed by Mexico, the United States of America or any other
governmental entity or political subdivision therein or thereof or any taxing
authority of or in any of the foregoing, with respect to the Indenture or the
initial issuance of this Security.
Except as specifically provided in this Security or the
Indenture, the Company shall not be required to make any payment with respect to
any tax, duty, assessment or other governmental charge of whatever nature
imposed or levied by any government or any political subdivision or taxing
authority thereof or therein.
If an Event of Default shall occur and be continuing, the
principal of all the Securities may be declared due and payable in the manner
and with the effect provided in the Indenture.
The Indenture provides that, subject to certain conditions, if
(i) certain Net Cash Proceeds are available to the Company as a result of an
Asset Disposition or (ii) a Change of Control occurs, the Company shall be
required to make an Offer to Purchase for all or a specified portion of the
Securities.
The Indenture contains provisions for defeasance at any time
of (i) the entire indebtedness of this Security or (ii) certain restrictive
covenants and Events of Default with respect to this Security, in each case upon
compliance with certain conditions set forth therein.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Securities at the
-25-
time Outstanding. The Indenture also contains provisions permitting the Holders
of specified percentages in aggregate principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange therefore or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have any right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
written notice to the Trustee of a continuing Event of Default, the Holders of
not less than 25% in principal amount of the Outstanding Securities shall have
made written request to the Trustee to institute proceedings in respect of such
Event of Default as Trustee and offered the Trustee reasonable indemnity, the
Trustee for 60 days after the receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding, and no direction
inconsistent with such request shall have been given to the Trustee during such
60-day period by the Holders of a majority in principal amount of the
Outstanding Securities. The foregoing shall not apply to any suit instituted by
the Holder of this Security for the enforcement of any payment of principal
hereof or interest hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in The City of New York, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Security Registrar duly executed by the Holder hereof or an
attorney for the Holder duly authorized in writing, and thereupon one or more
new Securities, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities are exchangeable for a like aggregate principal amount of Securities
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
-26-
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
Interest on this Security shall be computed on the basis of a
360-day year of twelve 30-day months.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased in its
entirety by the Company pursuant to Section 1015 or 1016 of the Indenture, check
the box:
|_|
If you want to elect to have only a part of this Security
purchased by the Company pursuant to Section 1015 or 1016 of the Indenture,
state the amount: $
Dated: Your Signature:
-----------------------------
(Sign exactly as name appears
on the other side of this Security)
SECTION 204. Form of Trustee's Certificate of Authentication.
This is one of the Securities referred to in the within-mentioned Indenture.
Dated: THE CHASE MANHATTAN BANK,
as Trustee
By
-----------------------------------
Authorized Signatory
SECTION 205. Book-Entry Notes. (a) Anything in the other
provisions of this Indenture to the contrary notwithstanding, it is intended
that the Securities shall be initially represented by one or more registered
global notes (the "Global Notes") in an amount equal to the aggregate principal
amount of the Securities which shall be deposited with, or on behalf of,
-27-
The Depository Trust Company, New York, New York (the "Depositary") and
registered in the name of the Depositary's nominee. The Global Notes shall be
substantially in the form provided in Section 201, with such modifications as
may be necessary or desirable to reflect the issuance thereof in global form,
and may be transferred, in whole and not in part, only to another nominee of the
Depositary or to a successor of the Depositary or its nominee. If a Company
Order pursuant to Section 303 has been, or simultaneously is, delivered, any
further instructions by the Company with respect to the endorsement or delivery
of the Global Notes shall be in writing but need not comply with Section 102 and
need not be accompanied by an Opinion of Mexican Counsel or an Opinion of U.S.
Counsel.
The Global Notes shall bear a legend substantially to The
following effect: "Unless this Global Note is presented by an authorized
representative of The Depository Trust Company ("DTC"), to the Company or its
agent for registration of transfer, exchange or payment, and any Global Note
issued is registered in the name of Cede & Co., as nominee of DTC (and any
payment hereon is made to Cede & Co. or to such other entity as is requested by
an authorized representative of DTC), any transfer, pledge or other use hereof
for value or otherwise by or to any other person is wrongful, inasmuch as the
record owner hereof, Cede & Co. (or such other entity as is requested by an
authorized representative of DTC), has an interest herein."
(b) So long as a nominee of the Depositary is the registered
owner of the Global Notes, such nominee will be considered the sole owner and
holder of the Securities represented by the Global Notes under this Indenture.
Except as provided below, owners of beneficial interests in the Global Notes
will not be entitled to have Securities represented by the Global Notes
registered in their names, will not receive or be entitled to receive physical
delivery of the Securities in certificated form and will not be considered the
owners or holders thereof under this Indenture.
Neither the Company, the Trustee nor any Underwriter (as
defined in the Underwriting Agreement) will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests in the Global Notes, or for maintaining,
supervising or reviewing any records relating to such beneficial interests.
Principal and interest payments on Notes represented by the
Global Notes shall be made to the Depositary's nominee as the registered owner
of the Global Notes. Under the terms hereof, the Company and the Trustee shall
treat the persons in whose names the Notes are registered as the owners of such
Notes for the purpose of receiving payment of principal and interest on such
Notes and for all other purposes whatsoever. Therefore, neither the Company nor
the Trustee has any direct responsibility or liability for the payment of
principal or interest on the Notes to owners of beneficial interests in the
Global Notes.
(c) If the Depositary is at any time unwilling or unable to
continue as depositary and a successor depositary is not appointed by the
Company within 90 days, the Company shall issue Securities in definitive form in
exchange for the Global Notes. In addition, the Company may at any time
determine not to have the Securities represented by the Global Notes and, in
such event, the Company will issue Securities in definitive form in exchange for
the Global Notes representing such Securities. In any such instance, an owner of
a beneficial interest
-28-
in the Global Notes will be entitled to physical delivery in certificated form
of Securities equal in principal amount to such beneficial interest and to have
such Securities registered in its name. Securities so issued in certificated
form will be issued in the denominations and in the form provided in this
Indenture.
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms. The aggregate principal amount
of Securities which may be authenticated and delivered under this Indenture is
limited to $250,000,000, except for Securities authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of, other
Securities pursuant to Section 304, 305, 306 or 906, or in connection with an
Offer to Purchase pursuant to Section 1015 or 1016.
The Securities shall be known and designated as the "125/8%
Notes due 2003" of the Company. Their Stated Maturity shall be August 1, 2003,
and they shall bear interest at the rate of 126/8% per annum, from July 25, 1996
or from the most recent Interest Payment Date to which interest has been paid or
duly provided for, as the case may be, payable semiannually on February 1 and
August 1, commencing February 1, 1997, until the principal thereof is paid or
made available for payment.
The principal of and interest on the Securities shall be
payable at the office or agency of the Company in The City of New York
maintained for such purpose and at any other office or agency maintained by the
Company for such purpose; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register.
The Company shall pay Additional Amounts, and the Securities
shall be subject to redemption by the Company, as provided in Sections 1018 and
1101.
The Securities shall be subject to repurchase by the Company
pursuant to an Offer to Purchase as provided in Sections 1015 and 1016.
The Securities shall be subject to Defeasance at the option of
the Company as provided in Article Twelve.
The Securities shall constitute direct, unsecured and
unconditional obligations of the Company and will rank pari passu among
themselves and with all other present and future unsecured and unsubordinated
indebtedness of the Company, other than obligations which are mandatorily
preferred by statute or by operation of law.
SECTION 302. Denominations. The Securities shall be issuable
only in registered form without coupons and only in denominations of $1,000 and
any integral multiple thereof.
-29-
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman of the
Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall authenticate and make such Securities available
for delivery as in this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein executed by the Trustee by manual signature, and such certificate upon
any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder.
SECTION 304. Temporary Securities. Pending the preparation of
definitive Securities, the Company may execute, and upon Company Order the
Trustee shall authenticate and make available for delivery, temporary Securities
which are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of such
Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated pursuant to Section
1002, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange therefor a like
principal amount of definitive Securities of authorized denominations. Until so
exchanged the temporary Securities shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities.
SECTION 305. Registration of Transfer and Exchange. The
Company shall cause to be kept at the Corporate Trust Office of the Trustee a
register (the register maintained in such office and in any other office or
agency designated pursuant to Section 1002 being herein
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sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at
an office or agency of the Company designated pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount.
At the option of the Holder, Securities may be exchanged for
other Securities of any authorized denominations and of a like aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Security Registrar duly executed, by the Holder thereof or
an attorney for such Holder duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304 or 906 or in accordance with any Offer to
Purchase pursuant to Section 1015 or 1016.
The Company shall not be required to issue, register the
transfer of or exchange any Security after the opening of business 15 days
before the day of the mailing of a notice of redemption of Securities under
Section 1103.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a
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bona fide purchaser, the Company shall execute and the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable and is punctually paid or duly
provided for on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed
payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more
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than 15 days and not less than 10 days prior to the date of the
the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the
name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder at
the address of such Holder as it appears in the Security Register, not
less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid
to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following Clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this
Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners. Prior to due presentment
of a Security for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name such
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of and (subject to Section 307) interest on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.
SECTION 309. Cancellation. All Securities surrendered for
payment, redemption, registration of transfer or exchange or for credit against
any Offer to Purchase pursuant to Section 1015 or 1016 shall, if surrendered to
any Person other than the Trustee, be delivered to the Trustee and shall be
promptly cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All canceled
Securities held by the Trustee shall be destroyed unless the Trustee shall have
received written instructions from the Company directing it to take other action
with respect thereto.
SECTION 310. Computation of Interest. Interest on the
Securities shall be computed on the basis of a 360-day year of twelve 30-day
months.
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SECTION 311. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use), and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers, either as printed on the Securities or as
contained in any notice of a redemption, and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in, or omission of, such numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect (except as to any surviving rights
of registration of transfer or exchange of Securities herein expressly provided
for), and the Trustee, on demand of and at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 306 and (ii) Securities for whose
payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee
for cancellation; or
(B) all such Securities not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee far cancellation, for
principal and interest to
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the date of such deposit (in the case of Securities which have
become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other
sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate, an Opinion of Mexican Counsel and an Opinion of U.S.
Counsel, each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been
complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money. Subject to the
provisions of the last paragraph of Section 1003, all money deposited with the
Trustee pursuant to Section 401 shall be held in trust and applied by it, in
accordance with the provisions of the Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal and interest for whose payment such money has
been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.
ARTICLE FIVE
REMEDIES
--------
SECTION 501. Events of Default. "Event of Default," wherever
used herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of arty administrative or governmental body):
(1) default in the payment of the principal of any Security at its
Maturity; or
(2) default in the payment of any interest upon any Security when it
becomes due and payable, and continuance of such default for a period of 30
days; or
(3) default, on the applicable Purchase Date, in the purchase of
Securities required to be purchased by the Company pursuant to an Offer to
Purchase as to which an Offer has been mailed to Holders; or
(4) failure to perform or comply with the provisions of Section 801;
or
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(5) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with), and continuance of such default or breach for a
period of 30 days after there has been given, by overnight courier, to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 10% in principal amount of the Outstanding Securities a written
notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder; or
(6) a default under any Indebtedness for money borrowed by the Company
or any Subsidiary of the Company; provided that such Indebtedness,
individually or in the aggregate, has an aggregate principal amount then
outstanding in excess of $5 million (or the equivalent thereof in other
currencies or currency units) whether such Indebtedness now exists or shall
hereafter be created, which default shall constitute a failure to pay any
portion of the principal of such Indebtedness when due and payable after
the expiration of any applicable grace period with respect thereto or shall
have resulted in such Indebtedness becoming or being declared due and
payable prior to the date on which it would otherwise have become due and
payable, without such Indebtedness having been discharged, or such
acceleration having been rescinded or annulled, within a period of 10 days
after there shall have been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 10% in principal amount of the Outstanding Securities a written
notice specifying such default and requiring the Company to cause such
Indebtedness to be discharged or cause such acceleration to be rescinded or
annulled and stating that such notice is a "Notice of Default" hereunder;
or
(7) the entry by a court having jurisdiction in the premises of a
final judgment or order (not subject to appeal) against the Company or any
of its Subsidiaries in excess of $5 million (or the equivalent thereof in
other currencies or currency units) individually or $5 million (or the
equivalent thereof in other currencies or currency units) in the aggregate
of all such Persons which remains undischarged or unbonded for a period of
60 days thereafter; or
(8) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company or any Subsidiary of
the Company in an involuntary case or proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar law of Mexico or
the United States of America or any political subdivision thereof or (B) a
decree or order adjudging the Company or any such Subsidiary a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company or any such Subsidiary under any applicable law of Mexico or
the United States of America or any political subdivision thereof, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any such
Subsidiary or of any substantial part of the property of the Company or any
such Subsidiary, or ordering the winding up or liquidation of the affairs
of the Company or any
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such Subsidiary, and the continuance of any such decree or order for relief
or any such other decree or order unstayed and in effect for a period of 15
consecutive days; or
(9) the commencement by the Company or any of its Subsidiaries of a
voluntary case or proceeding under any applicable bankruptcy, insolvency,
reorganization or other similar law of Mexico or the United States of
America or any political subdivision thereof or of any other case or
proceeding in any court in Mexico or the United States of America or any
political subdivision thereof to be adjudicated a bankrupt or insolvent, or
the consent by the Company or any such Subsidiary to the entry of a decree
or order for relief in respect of the Company or any of its Subsidiaries in
an involuntary case or proceeding under any applicable bankruptcy,
insolvency, reorganization or other similar law of Mexico or the United
States of America or any political subdivision thereof or to the
commencement of any bankruptcy or insolvency case or proceeding against the
Company or any of its Subsidiaries in any court in Mexico or the United
States of America or any political subdivision thereof, or the filing by
the Company or any of its Subsidiaries of a petition or answer or consent
seeking reorganization or relief under any applicable law of Mexico or the
United States of America or any political subdivision thereof, or the
consent by the Company or any of its Subsidiaries to the filing of such
petition or the appointment of or the taking of possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official
of the Company or any of its Subsidiaries or of any substantial part of the
property of the Company or any of its Subsidiaries, or the making by the
Company or any of its Subsidiaries of an assignment for the benefit of
creditors, or the admission by the Company or any of its Subsidiaries in
writing of its inability to pay its debts generally as they become due, or
the taking of corporate action by the Company or any of its Subsidiaries in
furtherance of any such action.
SECTION 502. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default occurs and is continuing, then and in every
such case the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities may declare the principal of all the Securities to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal shall
become immediately due and payable.
At any time after such a declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article provided, the Holders of
a majority in principal amount of the Outstanding Securities, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of any Securities which have become
due otherwise than by such declaration of acceleration
(including any Securities required to have
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been purchased on the Purchase Date pursuant to an Offer
to Purchase made by the Company) and interest thereon at the
rate borne by the Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate borne by
the Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses, dis-
bursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default, other than the nonpayment of the
principal of Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee. The Company covenants that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default continues
for a period of 30 days, or
(2) default is made in the payment of the principal of any
Security at the Maturity thereof or, with respect to any Security required to
have been purchased pursuant to an Offer to Purchase made by the Company, at the
Purchase Date thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest, and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal and on
any overdue interest, at the rate borne by the Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as Trustee of an express trust, may
institute judicial proceedings for the collection of the sums so due and unpaid,
and may prosecute such proceedings to judgment or final decree, and may enforce
the same against the Company and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of the Company,
wherever situated.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
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SECTION 504. Trustee May File Proofs of Claim. In case of any
judicial proceeding relative to the Company (or any other obligor upon the
Securities), its property or its creditors, the Trustee shall be entitled and
empowered, by intervention in such proceeding or otherwise, to take any and all
actions authorized under the Trust Indenture Act in order to have claims of the
Holders and the Trustee allowed in any such proceeding. In particular, the
Trustee shall be authorized to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected. Any money
collected by the Trustee pursuant to this Article shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or interest, upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest on the Securities in respect of which or for
the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such Securities for principal and interest, respectively.
SECTION 507. Limitation on Suits. No Holder of any Security
shall have any right to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless
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(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive
Principal and Interest. Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and (subject to Section
307) interest on such Security on the respective Stated Maturities expressed in
such Security (or, in the case of redemption, on the Redemption Date or in the
case of an Offer to Purchase made by the Company and required to be accepted as
to such Security, on the Purchase Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies. If the
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities in the last paragraph of Section 306, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise.
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The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver. No delay or
omission of the Trustee or of any Holder of any Security to exercise any right
or remedy accruing upon any Event of Default shall impair any such right or
remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 512. Control by Holders. The Holders of a majority in
principal amount of the Outstanding Securities shall have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee,
provided that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture;
(2) the Trustee need not take any action which might involve it
in personal liability or be unjustly prejudicial to the Holders not
taking part in such action; and
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults. The Holders of not less
than a majority in principal amount of the Outstanding Securities may on behalf
of the Holders of all the Securities waive any past default hereunder and its
consequences, except a default
(1) in the payment of the principal of or interest on any
Security (including any Security which is required to have been
purchased pursuant to an Offer to Purchase which has been made by the
Company), or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, a court
may require any party litigant in such suit to file an undertaking to pay the
costs of such suit, and may assess costs against any such party litigant, in the
manner and to the extent provided in the Trust Indenture Act; provided that
neither this
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Section nor the Trust Indenture Act shall be deemed to authorize any court to
require such an undertaking or to make such an assessment in any suit instituted
by the Holders or the Trustee.
SECTION 515. Waiver of Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities. The duties
and responsibilities of the Trustee shall be as provided by the Trust Indenture
Act. Notwithstanding the foregoing, no provision of this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it. Whether or not therein expressly
so provided, every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 602. Notice of Defaults. The Trustee shall give the
Holders notice of any default hereunder as and to the extent provided by the
Trust Indenture Act; provided, however, that in the case of any default of the
character specified in Section 501(5), no such notice to Holders shall be given
until at least 30 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default.
SECTION 603. Certain Rights of Trustee. Subject to the
provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
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(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel of its selection and
the written advice of such counsel, any Opinion of Mexican Counsel or
any Opinion of U.S. Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by
it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney;
(g) the Trustee may execute any of the Trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(h) the Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Indenture.
SECTION 604. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities. The Trustee, any Paying
Agent, any Security Registrar or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee of Securities
and, subject to Sections 608 and 613, may otherwise deal with the Company with
the same rights it would have if it were not Trustee, Paying Agent, Security
Registrar or such other agent.
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SECTION 606. Money Held in Trust. Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed in writing with the
Company.
SECTION 607. Compensation and Reimbursement. The Company
agrees
(1) to pay to the Trustee from time to time such
compensation as shall be agreed in writing between the Company
and the Trustee for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify each of the Trustee and any predecessor
trustee for, and to hold it harmless against, any and all loss,
liability, damage, claim or expense, including taxes (other than
taxes based on the income of the Trustee), incurred without
negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder.
The Trustee shall have a lien prior to the Securities as to
all property and funds held by it hereunder for any amount owing to it or any
predecessor Trustee pursuant to this Section 607, except with respect to funds
held in trust for the benefit of the Holders of particular Securities.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(8) or Section
501(9), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for its services are intended to constitute
expenses of administration under any applicable Federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the termination
of this Indenture.
SECTION 608. Disqualification: Conflicting Interest. If the
Trustee has or shall acquire a conflicting interest within the meaning of the
Trust Indenture Act, the Trustee shall either eliminate such interest or resign,
to the extent and in the manner provided by, and subject to the provisions of,
the Trust Indenture Act and this Indenture.
SECTION 609. Corporate Trustee Required; Eligibility. There
shall at all times be a Trustee hereunder which shall be a Person that is
eligible pursuant to the Trust Indenture Act
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to act as such and has a combined capital and surplus of at least $50,000,000
and its Corporate Trust Office in The City of New York. If such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of a federal or state supervising or examining authority, then, for the purposes
of this Section, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of
Successor. (a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 611.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company.
(c) The Trustee may be removed at any time by Act of the
Holders of a majority in principal amount of the Outstanding Securities,
delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after the giving of
notice of resignation or removal, the Trustee resigning or being removed may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(f) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Company, by a Board Resolution,
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shall promptly appoint a successor Trustee. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee and supersede the
successor Trustee appointed by the Company. If no successor Trustee shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner hereinafter provided, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(g) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor. Every
successor Trustee appointed hereunder shall execute, acknowledge and deliver to
the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder. Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession
to Business. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any Successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against
Company. If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the
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Securities), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of claims against the Company (or any
such other obligor).
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS
BY TRUSTEE AND COMPANY
----------------------
SECTION 701. Company to Furnish Trustee Names and
Addresses of Holders. The Company will furnish or cause to be furnished to the
Trustee
(a) semiannually, not more than 15 days after each Regular
Record Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders as of such Regular
Record Date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. Preservation of Information; Communications to
Holders. (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders
with respect to their rights under this Indenture or under the Securities, and
the corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to names and addresses of Holders made pursuant
to the Trust Indenture Act.
SECTION 703. Reports by Trustee. (a) The Trustee shall
transmit to Holders such reports concerning the Trustee and its actions under
this Indenture as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant thereto. If required by Section 313(a)
of the Trust Indenture Act, the Trustee shall, within 60 days after each April
15 following the date of this Indenture, deliver to Holders a brief report,
dated as of such April 15, which complies with the provisions of such Section
313(a).
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(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company will promptly notify the Trustee when the Securities are listed on any
stock exchange.
SECTION 704. Reports by Company. The Company shall file with
the Trustee and the Commission, and transmit to Holders, such information,
documents and other reports, and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant to such Act; provided that any such information, documents or reports
required to be filed with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act shall be filed with the Trustee within 15 days after the same is so
required to be filed with the Commission.
Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
ARTICLE EIGHT
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
-----------------------------
SECTION 801. Company May Consolidate, Etc., Only on Certain
Terms. The Company (i) shall not consolidate with or merge into any other
Person; (ii) shall not permit any other Person to consolidate with or merge into
the Company; (iii) shall not directly or indirectly transfer, convey, sell,
lease or otherwise dispose of all or substantially all of its properties and
assets as an entirety; or (iv) shall not, and shall not permit any Subsidiary
to, directly or indirectly (a) acquire the Capital Stock of or other ownership
interests of any other Person such that such Person becomes a Subsidiary of the
Company or (b) purchase, lease or otherwise acquire all or substantially all of
the property and assets of any Person as an entirety or any existing business
(whether existing as a separate entity, subsidiary, division, unit or otherwise)
of any Person, unless:
(1) immediately before and after giving effect to such
transaction and treating any Indebtedness Incurred by the Company or a
Subsidiary of the Company as a result of such transaction as having
been Incurred by the Company or such Subsidiary at the time of such
transaction, no Event of Default, and no event which, after notice or
lapse of time, or both, would become an Event of Default, would have
occurred and be continuing;
(2) in case the Company consolidates with or merges into
another Person or will directly or indirectly transfer, convey, sell,
lease or otherwise dispose of all or substantially all of its
properties and assets as an entirety, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by
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transfer, conveyance, sale, lease or other disposition all or
substantially all of the properties and assets of the Company as an
entirety (for purposes of this Section 801, a "Successor Company") will
be a corporation, partnership or trust, will be organized and validly
existing under the laws of Mexico or the United States or any political
subdivision thereof and will expressly assume by a supplemental
indenture executed and delivered to the Trustee, in form satisfactory
to the Trustee, the due and punctual payment of the principal of and
interest on all the Securities and the performance of every covenant of
this Indenture on the part of the Company to be performed or observed;
(3) immediately after giving effect to such transaction (other
than a transaction described in (iv) above), the Consolidated Tangible
Net Worth of the Company or, if applicable, the Successor Company, will
be equal to or greater am the Consolidated Tangible Net Worth of the
Company immediately prior to such transaction;
(4) immediately after giving effect to such transaction, and
treating any Indebtedness Incurred by the Company or any Subsidiary of
the Company as a result of such transaction as having been Incurred at
the time of such transaction, the Interest Coverage Ratio of the
Company or the Successor Company is at least 1.1:1, or, if less, equal
to the Interest Coverage Ratio of the Company immediately prior to such
transaction; provided that, if the Interest Coverage Ratio of the
Company before giving effect to such transaction is within the range
set forth in column (A) below, then the pro forma Interest Coverage
Ratio of the Company or the Successor Company shall be at least equal
to the lesser of (i) the ratio determined by multiplying the percentage
set forth in column (B) below by the Interest Coverage Ratio of the
Company prior to such transaction and (ii) the ratio set forth in
column (C) below:
(A) (B) (C)
<s> <c> <c>
1.11:1 to............................................ 90% 1.75:1
1.99:1
2.00:1 to............................................ 80% 2.10:1
2.99:1
3.00:1 to............................................ 70% 2.40:1
3.99:1
4.00:1 to............................................ 60% 2.50:1
4.99:1
and provided further that, if the pro forma Interest Coverage Ratio of
the Company or the Successor Company is 2.5:1 or more, the calculation
in the preceding proviso shall be inapplicable and such transaction
shall be deemed to have complied with the requirements of this clause
(4); and
(5) if, as a result of any such transaction, property
and assets of the Company or any Subsidiary of the Company would
become subject to a Lien which would not be
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permitted by this Indenture, the Company or, if applicable, the
the Successor Company, as the case may be, will take such steps as will
be necessary effectively to secure the Securities equally and ratably
with (or prior to) the Indebtedness secured by such Lien.
SECTION 802. Successor Substituted. Upon any consolidation of
the Company with, or merger of the Company into, any other Person or any
conveyance, transfer or lease of the properties and assets of the Company
substantially as an entirety in accordance with Section 801, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
-----------------------
SECTION 901. Supplemental Indentures Without Consent of
Holders. Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants
and obligations of the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit
of the Holders, or to surrender any right or power herein
conferred upon the Company; or
(3) to provide for uncertificated Securities in addition to
or in place of certificated Securities (provided that the
uncertificated Securities are issued in registered form for
purposes of Section 163(f) of the Code, or in a manner such that
the uncertificated Securities are described in Section
163(f)(2)(B) of the Code); or
(4) to confirm and evidence the release and discharge of any
Lien created for the benefit of the Holders no longer required
pursuant to Section 1013; or
(5) to comply with any requirement of the Commission in
connection with the qualification of this Indenture under the
Trust Indenture Act or otherwise; or
(6) to secure the Securities; or
(7) to cure any ambiguity, error, defective provision or
inconsistency, to cure, correct or supplement any provision
herein which may be inconsistent with any other provision herein,
or to make any other provisions with respect to matters or
questions
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arising under this Indenture, provided that such action pursuant
to this clause (4) shall not adversely affect the interests of
the Holders in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal amount
of the Outstanding Securities, by Act of said Holders delivered to the Company
and the Trustee, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the Holders under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon, or change the place of
payment where, or the coin or currency in which any Security, interest
or premium, if any, thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after
the Redemption Date or, in the case of an Offer to Purchase which has
been made, on or after the applicable Purchase Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required
for any waiver of compliance with certain provisions of this Indenture
or certain defaults hereunder and their consequences provided for in
this Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1020, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby, or
(4) following the mailing of an Offer with respect to an Offer to
Purchase pursuant to Section 1015 or 1016, modify the provisions of
this Indenture with respect to such Offer to Purchase in a manner
adverse to such Holder.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures. In
executing, or accepting the additional trusts created by, any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion of
Mexican Counsel and an Opinion of U.S. Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be
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obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
SECTION 905. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental
Indentures. Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
SECTION 907. Notice of Supplemental Indentures. Promptly after
the effective date of each supplemental indenture, the Company shall mail or
shall cause to be mailed to Holders a notice briefly describing the substance of
such supplemental indenture; provided that the failure to give such notice to
any Holder, or any defect therein, will not impair or affect the validity or
such supplemental indenture.
ARTICLE TEN
COVENANTS
---------
SECTION 1001. Payment of Principal and Interest. The Company
will duly and punctually pay the principal of and interest on the Securities in
accordance with the terms of the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency. The Company
will maintain in The City of New York an office or agency where Securities may
be presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
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The Company may also from time to time designate one or more
other offices or agencies (in or outside the Borough of Manhattan in The City of
New York) where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
SECTION 1003. Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will, on or
before each due date of the principal of or interest on any of the Securities,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it
will, prior to each due date of the principal of or interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be
held as provided by the Trust Indenture Act, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this Section,
that such Paying Agent will (i) comply with the provisions of the Trust
Indenture Act applicable to it as a Paying Agent and (ii) during the continuance
of any default by the Company (or any other obligor upon the Securities) in the
making of any payment in respect of the Securities, upon the written request of
the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of or
interest on any Security and remaining unclaimed for two years after such
principal or interest has become due and payable shall be paid to the Company on
Company Request, or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, notice that
such money remains unclaimed and that,
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after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 1004. Statement by Officers as to Default. The Company
will deliver to the Trustee, within 60 days after the end of each January and
June ending after the date hereof, an Officers' Certificate, stating whether or
not to the best knowledge of the signers thereof the Company is in default in
the performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.
SECTION 1005. Existence. Subject to Article Eight, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its existence, rights (charter and statutory) and franchises;
provided, however, that the Company shall not be required to preserve any such
right or franchise if the Company shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company and that
the loss thereof is not disadvantageous in any material respect to the Holders.
SECTION 1006. Maintenance of Properties. The Company will
cause all properties material to the conduct of its business or the business of
any Subsidiary to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this Section shall prevent the
Company from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Company, desirable
in the conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Holders.
SECTION 1007. Payment of Taxes and Other Claims. The Company
will pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (1) all material taxes, assessments and governmental charges
levied or imposed upon the Company or any Subsidiary or upon the income, profits
or property of the Company or any Subsidiary, and (2) all lawful material claims
for labor, materials and supplies which, if unpaid, might by law become a lien
upon the property of the Company or any Subsidiary; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings and for
which a reserve is being maintained in accordance with Mexican GAAP.
SECTION 1008. Limitation on Indebtedness. The Company will not
Incur any Indebtedness (other than the Securities); provided that the Company
may Incur Indebtedness if, after giving effect to the Incurrence of such
Indebtedness and the receipt and application of the proceeds therefrom, the
Interest Coverage Ratio of the Company would be greater than or equal to
3.5:1.00.
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Notwithstanding the foregoing, the Company may Incur each and
all of the following: (i) Indebtedness in an aggregate principal amount which
does not exceed $200 million, less the aggregate principal amount of all
Indebtedness Incurred and outstanding by Subsidiaries of the Company pursuant to
Section 1011(ii)(e), it being understood that, as of the Issue Date, $119.4
million aggregate principal amount of Indebtedness (which Indebtedness is set
forth on a schedule to the Indenture) shall be deemed to have been Incurred
pursuant to this clause (i) after the Issue Date; (ii) Indebtedness of the
Company to any of its Subsidiaries; (iii) Indebtedness Incurred in respect of
performance bonds, bankers' acceptances and letters of credit provided in the
ordinary course of business, provided that the aggregate principal amount of all
Indebtedness Incurred pursuant to this clause (iii) and Section 1011(ii)(c) and
outstanding at any one time does not exceed $10 million; (iv) Indebtedness
Incurred under Currency Agreements and Interest Rate Agreements, provided that,
in the case of Currency Agreements that relate to other Indebtedness, such
Currency Agreements do not increase the Indebtedness of the Company outstanding
at any time other than as a result of fluctuations in foreign currency exchange
rates; (v) Acquired Indebtedness, provided that at the time of Incurrence
thereof the Company could Incur at least $1.00 of Indebtedness under the
preceding paragraph; (vi) Indebtedness in respect of surety or appeal bonds;
(vii) Indebtedness not otherwise permitted to be Incurred under this or the
preceding paragraph, provided that the aggregate principal amount of all
Indebtedness Incurred pursuant to this clause (vii) does not exceed $20 million
outstanding at any one time; and (viii) Indebtedness Incurred to renew, extend,
refinance or refund, directly or indirectly, the Securities, any Indebtedness
outstanding on the Issue Date that was not repaid with the proceeds of the
Securities issued hereunder or any Indebtedness Incurred pursuant to clause
(iii) or (v) above, provided, however, that such Indebtedness does not exceed
the principal amount of such Securities, any such Indebtedness outstanding on
the Issue Date or any such Indebtedness Incurred pursuant to clause (iii) or (v)
above being renewed, extended, refinanced or refunded, as the case may be, plus
costs and expenses ordinarily and customarily incurred upon such renewal,
extension, refinancing or refunding; provided further that if Indebtedness being
renewed, extended, refinanced or refunded is subordinate in right of payment to
the Securities, such Indebtedness must be subordinated in right of payment to
the Securities to the same extent; and provided further that such Indebtedness
by its terms or by the terms of any agreement or instrument pursuant to which
such Indebtedness is issued, (x) does not provide for payments of principal of
such Indebtedness at the stated maturity thereof or by way of any mandatory
redemption, defeasance, retirement or repurchase thereof by the Company or any
Subsidiary of the Company (including any redemption, retirement or repurchase
which is contingent upon events or circumstances, but excluding any retirement
required by virtue of acceleration of such Indebtedness upon an event of default
thereunder), (A) in the case of Indebtedness being Incurred to renew, extend,
refinance or refund a portion of the Securities, prior to the Stated Maturity of
the Securities or (B) in the case of Indebtedness outstanding on the Issue Date
being renewed, extended, refinanced or refunded pursuant to this clause (viii)
which has a stated maturity subsequent to the Stated Maturity of the Notes,
prior to the Stated Maturity of the Notes, and (y) does not permit redemption or
other retirement (including pursuant to an offer to purchase made by the Company
or any Subsidiary of the Company) which is conditioned upon a change of control
of the Company unless such redemption or retirement is pursuant to provisions
substantially similar to those described in Section 1016.
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SECTION 1009. Limitation on Restricted Payments. The Company
will not, and will not permit any Subsidiary of the Company to, directly or
indirectly, (i) declare or pay any dividend or make any distribution on its
Capital Stock (other than dividends or distributions payable solely in shares of
its or such Subsidiary's Capital Stock (other than Redeemable Stock) of the same
relative priority in liquidation and with respect to dividends held by such
holders or in options, warrants or other rights to acquire such shares of
Capital Stock) held by Persons other than the Company or a Subsidiary of the
Company, (ii) purchase, redeem, retire or otherwise acquire for value any shares
of Capital Stock of the Company or any Subsidiary of the Company (including
options, warrants or other rights to acquire such shares of Capital Stock) held
by Persons other than the Company or a Substantially-Owned Subsidiary of the
Company other than in exchange for shares of Capital Stock of the Company (other
than Redeemable Stock) or options, warrants or other rights to acquire such
shares of Capital Stock, (iii) make any voluntary or optional principal payment,
or voluntary or optional redemption, repurchase, defeasance, or other
acquisition or retirement for value, of Indebtedness of the Company or any
Subsidiary of the Company that is subordinated in right of payment to the
Securities other than pursuant to clause (viii) of the second paragraph of
Section 1008 or clause (ii)(h) of Section 1011, or (iv) make any Investment in
any Affiliate of the Company or any Subsidiary of the Company, except to the
extent that the consideration used to make such Investment consists of Capital
Stock (other than Redeemable Stock) of the Company (such payments or any other
actions described in clauses (i) through (iv) being collectively "Restricted
Payments"), if, at the time of, and after giving effect to, the proposed
Restricted Payment: (1) an Event of Default or event that, after notice or
passage of time or both would become an Event of Default, will have occurred and
be continuing, (2) the Company could not Incur at least $1.00 of Indebtedness
under the first paragraph of Section 1008 or (3) the aggregate amount expended
for all Restricted Payments (the amount so expended, if other than in cash, to
be determined in good faith by the Board of Directors, whose determination will
be conclusive and evidenced by a Board Resolution) after the date hereof will
exceed the sum of (X) 50% of the aggregate amount of the Adjusted Consolidated
Net Income (or, if the Adjusted Consolidated Net Income is a loss, minus 100% of
such amount) of the Company accrued on a cumulative basis during the period
(taken as one accounting period) beginning on July 1, 1996 and ending on the
last day of the last fiscal quarter preceding the Transaction Date plus (Y) the
aggregate net proceeds (including the fair market value of non-cash proceeds as
determined in good faith by the Board of Directors, whose determination will be
conclusive and evidenced by a Board Resolution) received by the Company from the
issuance and sale of its Capital Stock (not including Redeemable Stock) to a
Person who is not a Subsidiary of the Company, including an issuance or sale
permitted by this Indenture for cash or other property upon the conversion of
any Indebtedness of the Company subsequent to the Issue Date, or from the
issuance of any options, warrants or other rights to acquire Capital Stock of
the Company (in each case, exclusive of any Redeemable Stock or any options,
warrants or other rights that are redeemable at the option of the holder, or are
required to be redeemed, prior to the Stated Maturity of the Securities and
exclusive of any issuance of Capital Stock to an Affiliate as contemplated by
(iv) above if such Person is an Affiliate by virtue of clause (i) of the
definition of "Affiliate"), plus (Z) $10 million.
The foregoing provision will not take into account, and will
not be violated by reason of, (i) an Investment by the Company in a
Substantially-Owned Subsidiary of the Company
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or by any Subsidiary of the Company in the Company or a Subsidiary of the
Company or an Investment by the Company or any Subsidiary of the Company in any
Affiliate that becomes a Subsidiary of the Company or any of its Subsidiaries as
a result of such Investment (other than a Person that is an Affiliate by virtue
of clause (i) of the definition of "Affiliate"); (ii) the purchase of up to
20,000 Series A Shares of the Company in any consecutive 12-month period by the
Company, provided such Series A Shares of the Company are contributed to the
Company's Employee Stock Option Trust; (iii) payments to purchase shares of
Capital Stock of Grupo Industrial Atenquique, S.A. de C.V. outstanding on the
Issue Date and not owned directly or indirectly by the Company; (iv) payments
pursuant to the purchase, redemption or other acquisition for value of any
shares of Capital Stock of the Company solely out of the proceeds of the
concurrent sale (other than to a Subsidiary of the Company) of shares of Capital
Stock of the Company (other than Redeemable Stock); (v) payments of pro rata
dividends to holders of minority interests in Subsidiaries of the Company; (vi)
Permitted Business Investments not otherwise permitted by clause (i) above,
provided that the aggregate amount of such Permitted Business Investment does
not exceed $5 million in any 12-month period; or (vii) the payment of any
dividend within 60 days after the date of declaration thereof, provided,
however, that any amounts paid pursuant to clause (vii) will thereafter be
considered as Restricted Payments paid pursuant to clause (3) of the preceding
paragraph.
SECTION 1010. Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries. The Company will not, and will not permit
any Subsidiary of the Company to, create or otherwise cause or suffer to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any Subsidiary of the Company to (i) pay dividends or make any other
distributions permitted by applicable law on any Capital Stock of such
Subsidiary owned by the Company or any other Subsidiary of the Company, (ii) pay
any Indebtedness owed to the Company or any other Subsidiary of the Company,
(iii) make loans or advances to the Company or any other Subsidiary of the
Company or (iv) transfer any of its property or assets to the Company or any
other Subsidiary of the Company.
The foregoing provision will not restrict or prohibit any
encumbrances or restrictions existing: (i) pursuant to any agreement in effect
on the date hereof; (ii) pursuant to an agreement which has been entered into
for the sale or disposition of all or substantially all of the Capital Stock or
assets of such Subsidiary, provided that consummation of such transaction would
not result in an Event of Default or an event or condition that with the passage
of time or the giving of notice or both would become an Event of Default and
that such encumbrance or restriction terminates if such agreement is terminated
or such transaction is abandoned; (iii) with respect to any Person or the
property and assets of such Person acquired by the Company or by any Subsidiary
of the Company, existing at the time of such acquisition and permitted by
Section 1013; or (iv) pursuant to an agreement effecting a renewal, extension,
refinancing or refunding of Indebtedness Incurred pursuant to an agreement
referred to in clause (i) or (iii) above; provided, however, that the provisions
contained in such renewal, extension, refinancing or refunding agreement
relating to such encumbrance or restriction are no more restrictive in any
material respect than the provisions contained in the agreement the subject
thereof, as determined in good faith by the Board of Directors of the Company
and evidenced by a Board Resolution.
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SECTION 1011. Limitation on the Issuance of Capital Stock and
Indebtedness of Subsidiaries. The Company will not permit any Subsidiary of the
Company, directly or indirectly, to (i) issue or sell any shares of such
Subsidiary's Capital Stock (including options, warrants or other rights to
purchase shares of such Capital Stock) except (a) to the Company or a
Substantially-Owned Subsidiary of the Company or (b) for fair value, or (ii)
Incur any Indebtedness except (a) Indebtedness to the Company or to a Subsidiary
of the Company; (b) Non-Recourse Indebtedness if such Subsidiary is a
Non-Recourse Subsidiary; (c) Indebtedness Incurred in respect of performance
bonds, bankers' acceptances and letters of credit provided in the ordinary
course of business, provided that the aggregate principal amount of all
Indebtedness Incurred pursuant to this clause (c) and clause (iii) of the second
paragraph of Section 1008 and outstanding at any one time does not exceed $10
million; (d) Acquired Indebtedness, provided that at the time of Incurrence
thereof the Company could Incur at least $1.00 of Indebtedness under the first
paragraph of Section 1008; (e) Indebtedness Incurred (A) under Working Capital
Facilities, (B) as Acquired Indebtedness and (C) in respect of purchase money
obligations; provided that (i) the aggregate amount of Indebtedness outstanding
under this clause (e) shall not exceed $80 million and under clause (B) and (C)
of this clause (e) shall not exceed $40 million, and (ii) the aggregate amount
outstanding under this clause (e) and under clause (i) of Section 1008 shall not
exceed $200 million; (f) Indebtedness Incurred under Currency Agreements and
Interest Rate Agreements, provided that, in the case of Currency Agreements that
relate to other Indebtedness, such Currency Agreements do not increase the
Indebtedness of the Company outstanding at any time other than as a result of
fluctuations in foreign currency exchange rates; (g) Indebtedness described in
clause (vi) of the definition of the term "Indebtedness" resulting solely from a
Lien described in Section 1013(x); or (h) Indebtedness Incurred to renew,
extend, refinance or refund Indebtedness outstanding on the Issue Date or
Indebtedness Incurred pursuant to clause (c), (d) or (e)(B) above, provided,
however, that such Indebtedness does not exceed the principal amount of, and
premium, if any, on the Indebtedness being renewed, extended, refinanced or
refunded, plus costs and expenses ordinarily and customarily incurred upon such
renewal, extension, refinancing or refunding, and provided further that if the
Indebtedness being renewed, extended, refinanced or refunded is subordinate in
right of payment to the Securities, such Indebtedness must be subordinated in
right of payment to the Securities to the same extent.
SECTION 1012. Limitation on Transactions with Affiliates. The
Company will not, and will not permit any Subsidiary of the Company to, directly
or indirectly, enter into, renew or extend any transaction (including, without
limitation, the purchase, sale, lease or exchange of property or assets, or the
rendering of any service) with any Affiliate of the Company or any Subsidiary of
the Company, except (i) upon fair and reasonable terms no less favorable to the
Company or such Subsidiary than could be obtained in a comparable arm's-length
transaction with a Person that is not such an Affiliate and (ii) if such
transaction is in the best interests of the Company or such Subsidiary, provided
that with respect to a transaction or series of related transactions involving
aggregate payments by the Company or such Subsidiary having a fair market value
equal to or in excess of (a) $1 million but less than $5 million, the Board of
Directors of the Company approves such transaction or series of transactions
and, in its good faith judgment, believes that such transaction or series of
transactions complies with clauses (i) and (ii) of this paragraph as evidenced
by a Board Resolution and (b) $5 million, (A) the Company receives the written
opinion of a firm of investment bankers nationally recognized in the United
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States that such transaction (or series of transactions) is fair, from a
financial point of view, to the Company or such Subsidiary and (B) the Board of
Directors of the Company approves such transaction or series of transactions
and, in its good faith judgment, believes that such transaction or series of
transactions complies with clauses (i) and (ii) of this paragraph, as evidenced
by a Board Resolution.
The foregoing limitation does not limit, and will not apply to
(i) any transaction between the Company and any Substantially-Owned Subsidiary
of the Company or between Substantially-Owned Subsidiaries of the Company; (ii)
any transaction between the Company or any Subsidiary of the Company and any
Person that is an Affiliate of the Company or of any Subsidiary of the Company,
if (u) such Person is engaged in a similar business to that of the Company and
its Subsidiaries, (v) such transaction is in the ordinary course of business of
the Company or its Subsidiary, as the case may be, and such Person, (w) such
transaction is on fair and reasonable terms no less favorable to the Company or
such Subsidiary than could be obtained in a comparable arm's-length transaction
with a Person that is not an Affiliate, (x) such transaction is in the best
interest of the Company or such Subsidiary, and (y) such Person is an Affiliate
solely by virtue of being directly or indirectly controlled by the Company or a
Subsidiary of the Company; (iii) payments not prohibited by Section 1009 solely
by virtue of clause (iv) of the first paragraph thereof or payments that are
"Restricted Payments" not prohibited by Section 1009; (iv) payments of
reasonable and customary fees and salaries of directors and officers of the
Company; (v) so long as the 1994 Yankee Bonds are outstanding, loans or
advances, or transfers of any property or assets to the Company or any
Subsidiary of the Company; and (vi) the contribution by the Company of Series A
Shares of the Company to the Company's Employee Stock Option Trust.
SECTION 1013. Limitation on Liens. The Company will not, and
will not permit any Subsidiary of the Company to, Incur any Lien upon property
or assets of the Company or any Subsidiary of the Company to secure Indebtedness
without making, or causing such Subsidiary to make, effective provision for
securing the Securities equally and ratably with (or prior to) such Indebtedness
as to such property for as long as such Indebtedness will be so secured unless
such Indebtedness is subordinate in right of payment to the Securities, in which
case the Securities will be secured prior to such Indebtedness as to such
property for as long as such Indebtedness will be so secured.
The foregoing restrictions will not apply to (i) Liens
existing on the Issue Date; (ii) Liens securing only the Securities; (iii) Liens
upon property or assets of any Subsidiary of the Company in favor of only the
Company or any Subsidiary of the Company, and Liens upon the property or assets
of the Company in favor of only any Substantially-Owned Subsidiary of the
Company; (iv) Liens for taxes or assessments or other governmental charges or
levies not yet delinquent or, if due, which are being contested in good faith
and for which a reserve or other appropriate provision, if any, is being
maintained in accordance with Mexican GAAP; (v) Liens Incurred or deposits made
in the ordinary course of business to secure obligations under workers'
compensation, unemployment insurance and other types of social security laws;
(vi) any judgment Lien, unless the judgment it secures will not, within 60 days
after the entry thereof, have been discharged or execution thereof stayed
pending appeal, or will not have been discharged within 60 days after the
expiration of any such stay; (vii) Liens Incurred to secure the performance of
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statutory obligations, surety or appeal bonds, performance or return-of-money
bonds or other obligations of a like nature incurred in the ordinary course of
business; (viii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen, repairmen or other similar Liens arising
in the ordinary course of business and with respect to amounts not yet
delinquent or being contested in good faith by appropriate legal proceedings
promptly instituted and diligently conducted and for which a reserve or other
appropriate provision, if any, as shall be required in conformity with Mexican
GAAP shall have been made; (ix) Liens with respect to Acquired Indebtedness,
provided that such Liens do not extend to or cover any property or assets of the
Company or any Subsidiary of the Company other than the property or assets
acquired and such Acquired Indebtedness is otherwise permitted by this Indenture
and such Lien is not incurred in connection with, or in contemplation of, the
transaction involving the incurrence of such Acquired Indebtedness; (x) Liens
upon property acquired after the Issue Date, provided that (A) such Lien is
created solely for the purpose of securing Indebtedness Incurred (1) to finance
the cost (including the cost of improvement or construction) of the property
subject thereto and such Lien is created prior to, at the time of or within six
months after the later of the acquisition, completion of construction or the
commencement of full operation of such property or (2) to refinance any
Indebtedness previously so secured, (B) the principal amount of the Indebtedness
secured by such Lien does not exceed 100% of such cost, (C) any such Lien shall
not extend to or cover any property other than such property, the proceeds
thereof and any improvements thereon and (D) the Incurrence of the Indebtedness
secured by such Lien is otherwise permitted by the Indenture; (xi) Liens
securing Indebtedness Incurred under Section 1011(ii)(e)(A); and (xii) Liens
securing Indebtedness Incurred to renew, extend, refinance or refund, in whole
or in part, Indebtedness secured by any Lien incurred under clause (i), (ix) or
(x) hereof, provided, that such Lien does not extend to any other property or
assets and the principal amount of Indebtedness so secured is not increased.
In addition to the foregoing, the Company and its Subsidiaries
may Incur a Lien to secure any Indebtedness, without equally and ratably
securing the Securities, if the sum of (i) the amount of Indebtedness secured by
a Lien entered into after the date of this Indenture and otherwise prohibited by
this Indenture and (ii) the aggregate amount of all Attributable Indebtedness
with respect to all Sale and Leaseback Transactions entered into after the date
of the Indenture pursuant to Section 1014 does not exceed 15% of the
Consolidated Tangible Net Worth of the Company.
SECTION 1014. Limitation on Sale and Leaseback Transactions.
The Company will not, and will not permit any Subsidiary of the Company to,
enter into any Sale and Leaseback Transaction unless the aggregate amount of all
Attributable Indebtedness with respect to all such transactions, plus all
Indebtedness secured by Liens (excluding secured Indebtedness that is excluded
as described in the second paragraph of Section 1013), does not exceed 15% of
the Consolidated Tangible Net Worth of the Company.
SECTION 1015. Limitation on Asset Sales. In the event and to
the extent that the Net Cash Proceeds received by the Company or any of its
Subsidiaries from one or more Asset Sales occurring on or after the Issue Date
in any period of 12 consecutive months exceed 10% of Adjusted Consolidated
Assets in any one fiscal year (determined as of the date closest to the
commencement of such 12-month period for which a balance sheet of the Company
and its
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Subsidiaries has been prepared), then the Company will, within 12 months after
the date such Net Cash Proceeds are received, apply an amount equal to the Net
Cash Proceeds from such Asset Sale (or enter into a definitive agreement
committing to so apply such amount within 12 months after the date of such
agreement), either (i) to an investment or investments in property or assets
that are of a nature or type or are used in a business (or in a company having
property and assets of a nature or type, or engaged in a business) similar or
related to the nature or type of the property and assets of, or the business of,
the Company and its Subsidiaries existing on the date thereof (as determined in
good faith by the Board of Directors, whose determination will be conclusive and
evidenced by a Board Resolution), or (b) to permanently repay all or a portion
of the 1994 Yankee Bonds. The amount of such excess Net Cash Proceeds required
to be applied (or to be committed to be applied) during such 12-month period and
not applied as so required by the end of such period will constitute "Excess
Proceeds."
If, as of the first day of any calendar month, the aggregate
amount of Excess Proceeds not theretofore subject to an Offer to Purchase totals
at least $5 million, the Company must, not later than the fifteenth Business Day
of such month, make an Offer to Purchase from the Holders on a pro rata basis an
aggregate principal amount of Securities equal to the Excess Proceeds on such
date, at a purchase price equal to 100% of the principal amount of such
Securities, plus, in each case, accrued interest (if any) to the Purchase Date
(subject to the right of Holders of record on the relevant Record Date to
receive interest due on an Interest Payment Date that is on or prior to the
Purchase Date) (the "Excess Proceeds Payment").
Notwithstanding the foregoing, (i) to the extent that any or
all of the Net Cash Proceeds of any Asset Sale are prohibited or delayed by
applicable local law from being repatriated to Mexico, the portion of such Net
Cash Proceeds so affected will not be required to be applied pursuant to this
Section 1015 but may be retained for so long, but only for so long, as the
applicable local law will not permit repatriation to Mexico (the Company hereby
agrees to promptly take all reasonable actions required by applicable local law
to permit such repatriation) and once such repatriation of any such affected Net
Cash Proceeds is permitted under the applicable local law, such repatriation
will be immediately effected and such repatriated Net Cash Proceeds will be
applied in the manner set forth in this Section 1015 as if such Asset Sale had
occurred on the date of repatriation; and (ii) to the extent that the Board of
Directors has determined in good faith that repatriation of any or all of the
Net Cash Proceeds would have an adverse tax consequence to the Company, the Net
Cash Proceeds so affected may be retained outside Mexico for so long as such
adverse tax consequence would continue.
On the Purchase Date the Company will (i) accept for payment
on a pro rata basis Securities or portions thereof tendered pursuant to the
Offer to Purchase; (ii) deposit with the Paying Agent money sufficient to pay
the Purchase Price of all Securities or portions thereof so accepted; and (iii)
deliver, or cause to be delivered, to the Trustee Securities or portions thereof
so accepted together with an Officers' Certificate specifying the Securities or
portions thereof accepted for payment by the Company. The Paying Agent shall
promptly mail or deliver to the Holders of Securities so accepted payment in an
amount equal to the Purchase Price, and the Trustee shall promptly authenticate
and mail or deliver to such Holders a new Security or Securities equal in
principal amount to any unpurchased portion of the Security surrendered as
requested by the Holder. The Company will publicly announce the results of the
Offer to
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Purchase as soon as practicable after the Purchase Date. For purposes of this
Section 1015, the Trustee will act as the Paying Agent.
SECTION 1016. Change of Control. (a) Upon the occurrence of a
Change of Control, each Holder of a Security shall have the right to have such
Security repurchased by the Company on the terms and conditions set forth in
this Section 1016 and this Indenture. The Company shall, within 30 days
following the date of the consummation of a transaction resulting in a Change of
Control (as defined below), make an Offer to Purchase all Outstanding Securities
at a Purchase Price equal to 101% of their aggregate principal amount plus
accrued interest, if any, to the Purchase Date (subject to the right of Holders
of record on the relevant Record Date to receive interest due on an Interest
Payment Date that is on or prior to the Purchase Date).
(b) One Business Day prior to the Purchase Date, the Company
shall deposit with the Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) money
sufficient to pay the Purchase Price of all Securities or portions thereof so
accepted. On the Purchase Date, the Company shall (i) accept for payment
Securities or portions thereof tendered pursuant to the Offer to Purchase, and
(ii) deliver, or cause to be delivered, to the Trustee all Securities, or
portions thereof so accepted together with an Officers' Certificate specifying
the Securities or portions thereof accepted for payment by the Company. The
Paying Agent shall promptly mail or deliver to the Holders of Securities so
accepted payment in an amount equal to the Purchase Price, and the Trustee shall
promptly authenticate and mail or deliver to such Holders a new Security or
Securities equal in principal amount to any unpurchased portion of the Security
surrendered as requested by the Holder. The Company shall publicly announce the
results of the Offer to Purchase on or as soon as practicable after the Purchase
Date.
(c) A "Change of Control" will be deemed to have occurred in
the event that, after the date of this Indenture, either (i)(a) a Person or any
Persons acting together which would constitute a "group" (a "Group") for
purposes of Section 13(d) of the Exchange Act, or any successor provision
thereto, together with any Affiliates or Related Persons thereof (other than any
person or Group controlled by the Management Stockholders together with any
Affiliates or Related Persons thereof), has become the beneficial owner (other
than through the CPO Trust), by way of purchase, merger, consolidation or
otherwise, of 35% or more of the Voting Stock of the Company and (b) such Person
or Group (together with any Affiliates or Related Persons thereof) has become
the beneficial owner (other than through the CPO Trust), by way of purchase,
merger, consolidation or otherwise of a greater percentage of Voting Stock of
the Company than that held by the Management Stockholders (together with any
Affiliates or Related Persons thereof); or (ii) at any time during any
consecutive two-year period individuals who at the beginning of such period were
members of the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the shareholders of the Company was approved by a vote of a majority
of directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office.
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SECTION 1017. Indemnification of Judgment Currency. The
Company shall indemnify the Trustee and any Holder of a Security against any
loss incurred by the Trustee or such Holder, as the case may be, as a result of
any judgment or order being given or made for any amount due under this
Indenture or such Security and being expressed and paid in a currency (the
"Judgment Currency") other than United States dollars, and as a result of any
variation between (i) the rate of exchange at which the United States dollar
amount is converted into the Judgment Currency for the purpose of such judgment
or order and (ii) the spot rate of exchange in The City of New York at which the
Trustee or such Holder, as the case may be, on the date of payment of such
judgment or order is able to purchase United States dollars with the amount of
the Judgment Currency actually received by the Trustee or such Holder. The
foregoing indemnity shall constitute a separate and independent obligation of
the Company and shall continue in full force and effect notwithstanding any such
judgment or order as aforesaid. The term "spot rate of exchange" shall include
any premiums and costs of exchange payable in connection with the purchase of,
or conversion into, United States dollars.
SECTION 1018. Payment of Additional Amounts. (a) All payments
of principal and interest in respect of the Securities shall be made after
withholding or deduction for any taxes, duties, assessments or governmental
charges of whatever nature imposed, levied, collected, withheld or assessed by
or within Mexico or any authority therein or thereof having power to tax. The
Company shall pay such additional amounts ("Additional Amounts") as will result
in receipt by the Holders of such amounts as would have been received by them
had no such withholding or deduction been required, except that no such
Additional Amounts shall be payable with respect to any payment on any Security
to the extent:
(i) that any such taxes, duties, assessments or other
governmental charges would not have been imposed but for a connection
between the Holder or beneficial owner of such Security and Mexico (or
any authority therein or thereof having power to tax) other than the
holding of such Security and the receipt of payments with respect to
such Security;
(ii) of any such taxes, duties, assessments or other
governmental charges with respect to a Security presented for payment
more than 30 days after the date on which such payment became due and
payable or the date on which payment thereof is duly provided for and
notice thereof given to Holders, whichever occurs later, except to the
extent that the Holder of such Security would have been entitled to
such Additional Amounts on presenting such Security for payment on any
date during such 30-day period;
(iii) of any Mexican taxes to the extent that such Mexican
taxes would not have been imposed but for the failure of the Holder or
beneficial owner of such Security to comply with any certification,
identification, information, documentation or other reporting
requirement if (a) such compliance is required by law (including,
without limitation, Article 154 of the Mexican Income Tax Law),
regulation or administrative practice as a precondition to exemption
from, or reduction in the rate of withholding of, Mexican taxes (other
than a reduction or exemption pursuant to any income tax treaty to
which Mexico is a party) and (b) at least 30 days prior to the first
interest payment date with respect to which the Company shall apply
this clause (iii), the Company shall have
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notified the Trustee in writing that the Holders or beneficial owners
of the Securities will be required to provide such information or
documentation;
(iv) of any Mexican taxes imposed at a rate in excess of 15%
if (a) such Holder or beneficial owner has failed to provide on a
timely basis, at the reasonable request of the Company (subject to the
conditions set forth below), information or documentation concerning
such Holder's or beneficial owner's eligibility for benefits under an
income tax treaty to which Mexico is a party that is necessary to
determine the appropriate rate of deduction or withholding of Mexican
taxes under any such treaty and (b) at least 30 days prior to the first
Interest Payment Date with respect to which the Company shall make such
request, the Company shall have notified the Trustee in writing that
the Holders or beneficial owners of the Securities will be required to
provide such information or documentation; or
(v) of estate, inheritance, gift, property or other similar
taxes imposed with respect to such Security.
Notwithstanding the foregoing, the limitations on the
Company's obligation to pay Additional Amounts set forth in Section 1018(a)(iii)
and 1018(a)(iv) above shall not apply if a certification, identification,
information, documentation or other reporting requirement described in Section
1018(a)(iii), or the provision of information or documentation described in
Section 1018(a)(iv), as the case may be, would be materially more onerous, in
form, in procedure or in the substance of information disclosed, to such Holders
or beneficial owners (taking into account any relevant differences between U.S.
and Mexican law, regulation or administrative practice) than comparable
information or other reporting requirements imposed under U.S. tax law,
regulation (including proposed regulations) and administrative practice or other
reporting requirements imposed as of July 22, 1996 under U.S. tax law,
regulation (including proposed regulations) and administrative practice (such as
IRS Forms 1001, W-8 and W-9). Notwithstanding the preceding sentence, so long as
Rule 252 issued by the Secretaria de Hacienda y Credito Publico (the "Ministry
of Finance") published in the Diario Oficial de la Federacion on March 29, 1996
or a substantially similar successor of such rule is in effect, the limitations
on the Company's obligation to pay Additional Amounts set forth in Section
1018(a)(iii) above shall not apply unless (a) the certification, identification,
information, documentation or other reporting requirement described in such
Section 1018(a)(iii) is required in order to apply Rule 252 (or a substantially
similar successor rule thereto), (b) the Company cannot obtain such
certification, identification, information, documentation or other reporting
requirement through reasonable diligence and (c) the Company otherwise would
meet the requirements for application of Rule 252 (or a substantially similar
successor rule thereto). In addition, Sections 1018(a)(iii) and 1018(a)(iv)
above shall not be construed to require that a non-Mexican pension or retirement
fund or a non-Mexican financial institution or any other Holder register with
the Ministry of Finance for the purpose of establishing eligibility for an
exemption from Mexican withholding tax or to require that a Holder or beneficial
owner certify or provide information concerning whether it is or is not a
tax-exempt pension or retirement fund.
Upon the Trustee's receipt of timely written notification from
the Company that the Holders or beneficial owners will be required to provide
information or documentation, as
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described in Section 1018(a)(iii) or 1018(a)(iv) above, the Trustee shall
provide such notification to the Holders or beneficial owners, as the case may
be. The Company shall, as soon as practicable and in no event later than 30 days
following the due date for each payment of Mexican taxes withheld by the Company
with respect to the Securities, provide the Trustee with a certified copy of the
official receipt evidencing the payment of such taxes. The Trustee shall, for a
period of five years following the due date for each payment, maintain in its
files each such certified copy received from the Company.
The Trustee shall, upon written request by the beneficial
owner of a Security or any Paying Agent, provide such owner or Paying Agent with
a copy of the certified copy of the receipt provided to the Trustee by the
Company regarding the amount of Mexican tax withheld by the Company with respect
to the Securities within 30 Business Days following the receipt by the Trustee
of such request.
In respect of the Securities issued hereunder, at least 10
days prior to the first date of payment of interest on the Securities and at
least 10 days prior to each date, if any, of payment of principal or interest
thereafter if there has been any change with respect to the matters set forth in
the below-mentioned Officers' Certificate, the Company shall furnish the Trustee
and each Paying Agent with an Officers' Certificate instructing the Trustee and
such Paying Agent as to whether such payment of principal of or any interest on
such Securities shall be made without deduction or withholding for or on account
of any tax, duty, assessment or other governmental charge. If any such deduction
or withholding shall be required by Mexico or under the federal laws of the
United States, then such certificate shall specify, by country, the amount, if
any, required to be deducted or withheld on such payment to Holders of such
Securities, and the Company shall pay or cause to be paid to the Trustee or such
Paying Agent Additional Amounts, if any, required by this Section 1018. The
Company agrees to indemnify the Trustee and each Paying Agent for, and to hold
them harmless against, any loss, liability or expense reasonably incurred
without negligence or bad faith on their part arising out of or in connection
with actions taken or omitted by them in reliance on any Officers' Certificate
furnished pursuant to this Section 1018.
The Company shall pay all stamp and similar duties, if any,
which may be imposed by Mexico, the United States of America or any other
governmental entity or political subdivision therein or thereof, or any taxing
authority of or in any of the foregoing, with respect to this Indenture or the
initial issuance of the Securities.
(b) Except as specifically provided in the Security or this
Indenture, the Company shall not be required to make any payment with respect to
any tax, duty, assessment or other governmental charge of whatever nature
imposed or levied by any government or any political subdivision or taxing
authority thereof or therein.
(c) The Company shall provide each Paying Agent and any
withholding agent under relevant tax regulations with copies of each certificate
received by the Company from a Holder of a Security pursuant to the text of such
Security. Each such Paying Agent and withholding agent shall retain each such
certificate received by it for as long as any Security is outstanding and in no
event for less than four years after its receipt, and for such additional period
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thereafter, as set forth in an Officers' Certificate, as such certificate may
become material in the administration of applicable tax laws.
(d) All references in this Indenture to principal or interest
in respect of any Security shall be deemed to mean and include all Additional
Amounts, if any, payable in respect of such principal or interest, unless the
context otherwise requires, and express mention of the payment of Additional
Amounts in any provision hereof shall not be construed as excluding reference to
Additional Amounts in those provisions hereof where such express mention is not
made.
(e) In the event that Additional Amounts actually paid with
respect to the Securities are based on rates of deduction or withholding of
Mexican taxes in excess of the appropriate rate applicable to the Holder or
beneficial owner of such Securities, and, as a result thereof, such Holder or
beneficial owner is entitled to make a claim for a refund or credit of such
excess from Mexican tax authorities, then such Holder or beneficial owner shall,
by accepting the Securities, be deemed to have assigned and transferred all
right, title and interest to any such claim for a refund or credit of such
excess to the Company. However, by making such assignment, the Holder or
beneficial owner makes no representation or warranty that the Company will be
entitled to receive such claim for a refund or credit and incurs no other
obligation with respect thereto.
SECTION 1019. Provision of Financial Information. Whether or
not the Company is subject to Section 13(a) or 15(d) of the Exchange Act, or any
successor provision thereto, the Company will file with the Commission the
annual reports, quarterly reports and other documents which the Company would
have been required to file with the Commission pursuant to such Section 13(a) or
15(d) if the Company were so subject, such documents to be filed with the
Commission on or prior to the respective dates (the "Required Filing Dates") by
which the Company would have been required so to file such documents if the
Company were so subject. The Company shall also in any event (a) within 15 days
of each Required Filing Date (i) transmit, or cause the Trustee to transmit, by
mail to all Holders, as their names and addresses appear in the Security
Register, without cost to such Holders, and (ii) file with the Trustee copies of
the annual reports, quarterly reports and other documents which the Company
would have been required to file with the Commission pursuant to Section 13(a)
or 15(d) of the Exchange Act or any successor provisions thereto if the Company
were subject to such Sections, and (b) if filing such documents by the Company
with the Commission is not permitted under the Exchange Act, promptly upon
written request supply copies of such documents to any prospective Holder. All
such documents to be so filed or transmitted must be prepared in English and all
financial statements included therein must be prepared in accordance with
Mexican GAAP (with, in the case of annual financial statements, a reconciliation
to U.S. GAAP as contemplated by the rules and regulations of the Commission),
and include a convenience translation to U.S. dollars.
SECTION 1020. Waiver of Certain Covenants. The Company may
omit in any particular instance to comply with any covenant or condition set
forth in Sections 1008 to 1019, inclusive, if before the time for such
compliance the Holders of at least a majority in principal amount of the
Outstanding Securities shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such
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waiver shall extend to or affect such covenant or condition except to the extent
so expressly waived, and, until such waiver shall become effective, the
obligations of the Company and the duties of the Trustee in respect of any such
covenant or condition shall remain in full force and effect; provided, however,
with respect to an Offer to Purchase as to which an Offer has been mailed, no
such waiver may be made or shall be effective against any Holder tendering
Securities pursuant to such Offer, and the Company may not omit to comply with
the terms of such Offer as to such Holder.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
------------------------
SECTION 1101. Right of Redemption. The Securities may be
redeemed, at the option of the Company, as a whole but not in part, if, as a
result of any amendment to, or change in, the laws (or any regulation or rulings
thereunder) of Mexico or any political subdivision or taxing authority thereof
or therein, or any amendment to or change in an official interpretation or
application regarding such laws, regulations or rulings, which amendment,
change, application or interpretation becomes effective on or after July 22,
1996, the Company pays or would be obligated for reasons outside its control,
and after taking reasonable measures available to it to avoid such obligation,
to pay Additional Amounts in respect of any Security pursuant to the terms and
conditions thereof in excess of those attributable to the Mexican withholding
tax of 15% imposed on interest payments to Holders, then, at the option of the
Company, the Securities may be redeemed, as a whole but not in part, at any
time, upon giving not less than 30 nor more than 60 days' notice by mail to the
Holders (which notice shall be irrevocable), at a Redemption Price equal to the
principal amount thereof, together with accrued interest to the Redemption Date
(subject to the right of Holders of record on the relevant Record Date to
receive interest due on the Interest Payment Date that is on or prior to the
Redemption Date) and Additional Amounts, if any, which would otherwise be
payable; provided that (1) no such notice of redemption may be given earlier
than 90 days prior to the earliest date on which the Company would but for such
redemption be obligated to pay such Additional Amounts and (2) at the time such
notice is given, such obligation to pay such Additional Amounts remains in
effect.
Prior to the publication of any notice of redemption pursuant
to this Section 1101, the Company shall deliver to the Trustee (i) an Officers'
Certificate stating that the Company is entitled to effect such redemption and
setting forth a statement of facts showing that the condition or conditions
precedent to the right of the Company so to redeem have occurred and (ii) an
Opinion of Mexican Counsel to the effect that the Company has or shall become
obligated to pay such Additional Amounts as a result of such amendment or
change. Such notice, once delivered by the Company to the Trustee, shall be
irrevocable.
SECTION 1102. Election to Redeem; Notice to Trustee. The
election of the Company to redeem any Securities pursuant to Section 1101 shall
be evidenced by a Board Resolution. In case of any redemption at the election of
the Company, the Company shall, at least 60 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be
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satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities to be redeemed.
SECTION 1103. Notice of Redemption. Notices to redeem
Securities shall be given to each Holder in the manner set forth in Section 106.
Such notice will be given once not more than 60 days nor less than 30 days prior
to the date fixed for redemption. Such notices will be deemed to have been given
on the date of mailing. Notices to redeem Securities shall identify the
Securities to be redeemed (including CUSIP numbers), specify the Redemption
Date, the places of payment, that payment will be made upon presentation and
surrender of the Securities to be redeemed, that interest accrued to the date,
fixed for redemption (subject to the right of Holders of record on the relevant
Record Date to receive interest on an Interest Payment Date that is on or prior
to the Redemption Date) will be paid as specified in said notice, and that on
and after said date interest thereon will cease to accrue. Such notice shall
also state that the conditions precedent to such redemption have occurred and
the Redemption Price.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
SECTION 1104. Deposit of Redemption Price. Prior to any
Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 1003) an amount of money sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on, all the Securities which are to be redeemed
on that date.
SECTION 1105. Securities Payable on Redemption Date. If notice
of redemption has been given in the manner set forth in Section 1103, the
Securities shall become due and payable on the Redemption Date specified in such
notice and upon presentation and surrender of the Securities at the place or
places specified in such notice, the Securities shall be paid and redeemed by
the Company at the places and in the manner herein specified and at the
Redemption Price herein specified together with accrued interest (subject to the
right of Holders of record on the relevant Record Date to receive interest on an
Interest Payment Date that is on or prior to the Redemption Date) to the
Redemption Date. From and after the Redemption Date, if monies for the
redemption of Securities called for redemption shall have been made available at
the office of the Paying Agent (or, if the Company is acting as its own Paying
Agent, segregated and held in trust as provided in Section 1003), for redemption
on the Redemption Date, the Securities called for redemption shall cease to bear
interest, and the only right of the Holders of such Securities shall be to
receive payment of the Redemption Price together with accrued interest (subject
to the right of Holders of record on the relevant Record Date to receive
interest on an Interest Payment Date that is on or prior to the Redemption Date)
to the Redemption Date as aforesaid. If monies for the redemption of the
Securities are not made available for payment until after the Redemption Date,
the Securities called for redemption shall not cease to bear interest until such
monies have been so made available.
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If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid, bear
interest from the Redemption Date at the rate borne by the Security.
ARTICLE TWELVE
DEFEASANCE AND COVENANT DEFEASANCE
----------------------------------
SECTION 1201. Company's Option to Effect Defeasance or
Covenant Defeasance. The Company may at its option by Board Resolution, at any
time, elect to have either Section 1202 or Section 1203 applied to the
Outstanding Securities upon compliance with the conditions set forth below in
this Article Twelve.
SECTION 1202. Defeasance and Discharge. Upon the Company's
exercise of the option provided in Section 1201 applicable to this Section, the
Company shall be deemed to have been discharged from its obligations with
respect to the Outstanding Securities on the date the conditions set forth below
are satisfied (hereinafter, "Defeasance"). For this purpose, such Defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Outstanding Securities and this Indenture and to
have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following which shall survive until otherwise terminated
or discharged hereunder: (A) the rights of Holders of such Securities to
receive, solely from the trust fund described in Section 1204 and as more fully
set forth in such Section, payments in respect of the principal of and interest
on such Securities when such payments are due, (B) the Company's obligations
with respect to such Securities under Sections 304, 305, 306, 1002 and 1003, (C)
the rights, powers, trusts, duties and immunities of the Trustee hereunder,
including, without limitation, the rights of the Trustee under Section 607
hereunder, and (D) this Article Twelve. Subject to compliance with this Article
Twelve, the Company may exercise its option under this Section 1202
notwithstanding the prior exercise of its option under Section 1203.
SECTION 1203. Covenant Defeasance. Upon the Company's exercise
of the option provided in Section 1201 applicable to this Section, (i) the
Company shall be released from its obligations under Sections 1008 through 1016
and Section 1019, inclusive, any covenants provided pursuant to Section 901(2)
for the benefit of the Holders of Securities and Clause (3) and Clause (4) of
Section 801, and (ii) the occurrence of an event specified in Section 501(3) or
501(4) (but only with respect to Clauses (3) and (4) of Section 801) or 501(5)
shall not be deemed to be an Event of Default on and after the date the
conditions set forth below are satisfied (hereinafter, "Covenant Defeasance").
For this purpose, such Covenant Defeasance means that the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such section or clause whether directly or
indirectly by reason of any reference elsewhere herein to any such section or
clause or by reason of any reference in any such section; to any other provision
herein or in any other document, but the remainder of this Indenture and such
Securities shall be unaffected thereby.
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SECTION 1204. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section 1202 or
Section 1203 to the then Outstanding Securities:
(1) The Company shall irrevocably have deposited or caused to
be deposited with the Trustee (or another trustee satisfying the
requirements of Section 609 who shall agree to comply with the
provisions of this Article Twelve applicable to it) as trust funds in
trust for the purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of such Securities, (A) money, denominated in U.S. dollars in
an amount, or (B) U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before
the due date of any payment, money, denominated in U.S. dollars, in an
amount, or (C) a combination thereof, sufficient, in the opinion of a
firm of independent public accountants nationally recognized in the
United States expressed in a written certification thereof delivered to
the Trustee, to pay and discharge, and which shall be applied by the
Trustee (or other qualifying trustee) to pay and discharge, the
principal of and each installment of interest on the Securities on the
Stated Maturity of such principal or installment of interest in
accordance with the terms of this Indenture and of such Securities,
including Additional Amounts, if any. For this purpose, "U.S.
Government Obligations" means securities that are (x) direct
obligations of the United States of America for the payment of which
its full faith and credit is pledged or (y) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality
of the United States of America the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States
of America, which, in either case, are not callable or redeemable at
the option of the issuer thereof, and shall also include a depository
receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act) as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any
such U.S. Government Obligation held by such custodian for the account
of the holder of such depository receipt, provided that (except as
required by law) such custodian is not authorized to make any deduction
from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal of or interest on the
U.S. Government Obligation evidenced by such depository receipt.
(2) In the case of an election under Section 1202, the Company
shall have delivered to the Trustee an Opinion of U.S. Counsel stating
that (x) the Company has received from or there has been published by,
the Internal Revenue Service a ruling, or (y) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such opinion
shall confirm that, the Holders of the Outstanding Securities will not
recognize gain or loss for U.S. federal income tax purposes as a result
of such deposit, Defeasance and discharge and will be subject to U.S.
federal income tax on the same amount, in the same manner and at the
same times as would have been the case if such deposit, Defeasance and
discharge had not occurred.
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(3) In the case of an election under Section 1203, the Company
shall have delivered to the Trustee an Opinion of U.S. Counsel to the
effect that the Holders of the Outstanding Securities will not
recognize gain or loss for U.S. federal income tax purposes as a result
of such deposit and Covenant Defeasance and will be subject to U.S.
federal income tax on the same amount, in the same manner and at the
same times as would have been the case if such deposit and Covenant
Defeasance had not occurred.
(4) The Company shall have delivered to the Trustee an
Officers' Certificate to the effect that the Securities, if then listed
on any securities exchange, will not be delisted as a result of such
deposit.
(5) Such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the Trust
Indenture Act (assuming all Securities are in default within the
meaning of such Act).
(6) No Event of Default or event which with notice or passage
of time or both would become an Event of Default shall have occurred
and be continuing on the date of such deposit or, insofar as
subsections 501(7) and (8) are concerned, at any time during the period
ending on the 90th day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until
after such 90th day).
(7) Such Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under, any other
agreement or instrument to which the Company is a party or by which it
is bound.
(8) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of U.S. Counsel, each stating that
all conditions precedent provided for relating to either the Defeasance
under Section 1202 or the Covenant Defeasance under Section 1203 (as
the case may be) have been complied with.
(9) Such Defeasance or Covenant Defeasance shall not result in
the trust arising from such deposit constituting an investment company
as defined in the Investment Company Act of 1940, as amended, or such
trust shall be qualified under such act or exempt from regulation
thereunder, in each case as set forth in an Opinion of U.S. Counsel
delivered by the Company to the Trustee.
(10) In the case of an election under Section 1202 or 1203,
the Company shall have delivered to the Trustee an Opinion of Mexican
Counsel stating that the Holders of the Outstanding Securities will not
recognize gain or loss for Mexican income tax purposes as a result of
such deposit, Defeasance and discharge and will be subject to Mexican
income tax on the same amount in the same manner and at the same times
as would have been the case if such deposit, Defeasance and discharge
had not occurred.
SECTION 1205. Deposited Money and U.S. Government Obligations
to Be Held in Trust, Other Miscellaneous Provisions. Subject to the provisions
of the last paragraph of Section 1003, all money and U.S.
Government Obligations (including the proceeds thereof)
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deposited with the Trustee (or other qualifying trustee--collectively, for
purposes of this Section 1205, the "Trustee") pursuant to Section 1204 in
respect of the Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities, of all sums due and to become due thereon in respect of
principal and interest, but such money need not be segregated from other funds
except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1204 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of the Outstanding Securities.
Anything in this Article Twelve to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon Company Request any money or U.S. Government Obligations held by it as
provided in Section 1204 which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent Defeasance or Covenant
Defeasance.
SECTION 1206. Reinstatement. If the Trustee or the Paying
Agent is unable to apply any money in accordance with Section 1202 or 1203 by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to this Article Twelve
until such time as the Trustee or Paying Agent is permitted to apply all such
money in accordance with Section 1202 or 1203; provided, however, that if the
Company makes any payment of principal of or interest on any Security following
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the money
held by the Trustee or the Paying Agent.
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This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
-72-
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and the Trustee has caused its corporate seals to
be hereunto affixed and attested, all as of the day and year first above
written.
GRUPO INDUSTRIAL DURANGO, S.A. de C.V.
By:
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Name: Dr. JOSE A. RINCON
Title: President and Chief Operating Officer
THE CHASE MANHATTAN BANK,
as Trustee
By:
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Name:
Title:
Attest:
SCHEDULE A
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Indebtedness/Lender Amount (000)
------------------- ------------
Flooring Rate Notes* $ 7,524
Commisiones y Representaciones 10,000
Delk (Dabdoub)*
Banamex 13,000
Manuel Arellano 8,340
Arrendadora Bankamerica* 8,800
Arrendadora Bankamerica 767
Banco Bilbao 1,508
Grupo Garcia Franco 3,643
Ponderosa Industrial* 15,000
Derivados Forestales* 12,000
Cerveceria Cuantemoc 2,089
Bancomer+* 7,000
Chase* 10,000
Bancomer+* 6,580
Probursa+* 750
Probursa+* 750
Probursa+ 500
Probursa+ 484
Cremi+* 424
California Commerce Bank+* 3,500
Union+ 1,698
Ponderosa Industrial+ 1,200
Banamex+ 3,820
------
$119,377
* Indebtedness being refinanced with proceeds from issuance of the Securities.
+ Indebtedness of Subsidiaries under Section 1011(ii)(e).