EXHIBIT 4.22
TERM CREDIT AGREEMENT
among
CEMEX, S.A. de C.V.,
as Borrower
and
CEMEX MEXICO, S.A. de C.V.,
as Guarantor
and
EMPRESAS TOLTECA de MEXICO, S.A. de C.V.,
as Guarantor
and
BARCLAYS BANK PLC,
as Administrative Agent
and
BARCLAYS CAPITAL,
THE INVESTMENT BANKING DIVISION
OF BARCLAYS BANK PLC,
as Joint Lead Arranger and Joint Bookrunner
and
CITIGROUP GLOBAL MARKETS INC.,
as Documentation Agent, Joint Lead Arranger and Joint Bookrunner
and
BARCLAYS BANK PLC,
CITIBANK, N.A.,
and
CITIBANK, N.A., NASSAU, BAHAMAS BRANCH
as Lenders
US$1,000,000,000
Dated as of April 5, 2005
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.....................................................................................1
1.01 Certain Definitions................................................................................1
1.02 Other Definitional Provisions.....................................................................17
1.03 Accounting Terms and Determinations...............................................................17
ARTICLE II THE LOAN FACILITIES............................................................................17
2.01 Loans.............................................................................................17
2.02 Interest..........................................................................................21
ARTICLE III TERMINATION AND REDUCTION OF COMMITMENTS; FEES, TAXES, PAYMENT PROVISIONS......................22
3.01 Termination or Reduction of Commitments...........................................................22
3.02 Fees..............................................................................................23
3.03 Taxes.............................................................................................23
3.04 General Provisions as to Payments.................................................................25
3.05 Funding Losses....................................................................................27
3.06 Basis for Determining Interest Rate Inadequate or Unfair..........................................27
3.07 Capital Adequacy..................................................................................28
3.08 Illegality........................................................................................28
3.09 Requirements of Law...............................................................................29
3.10 Substitute Lenders................................................................................30
3.11 Sharing of Payments, Etc..........................................................................30
ARTICLE IV CONDITIONS PRECEDENT...........................................................................31
4.01 Conditions to Effectiveness.......................................................................31
4.02 Conditions Precedent to Borrowings and Continuation or
Conversion of the Loans..........................................................................33
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BORROWER.................................................33
5.01 Corporate Existence and Power.....................................................................33
5.02 Power and Authority; Enforceable Obligations......................................................33
5.03 Compliance with Law and Other Instruments.........................................................34
5.04 Consents/Approvals................................................................................34
5.05 Financial Information.............................................................................34
5.06 Litigation........................................................................................35
5.07 No Immunity.......................................................................................35
5.08 Governmental Regulations..........................................................................35
5.09 Direct Obligations; Pari Passu; Liens.............................................................35
5.10 Subsidiaries......................................................................................35
5.11 Ownership of Property.............................................................................35
5.12 No Recordation Necessary..........................................................................35
5.13 Taxes.............................................................................................36
5.14 Compliance with Laws..............................................................................36
5.15 Absence of Default................................................................................37
5.16 Full Disclosure...................................................................................37
5.17 Choice of Law; Submission to Jurisdiction and
Waiver of Sovereign Immunity.....................................................................37
5.18 Total Outstandings................................................................................37
5.19 Pension and Welfare Plans.........................................................................37
5.20 Environmental Matters.............................................................................37
5.21 Margin Regulations................................................................................38
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE GUARANTORS...............................................39
6.01 Corporate Existence and Power.....................................................................39
6.02 Power and Authority; Enforceable Obligations......................................................39
6.03 Compliance with Law and Other Instruments.........................................................39
6.04 Consents/Approvals................................................................................40
6.05 Litigation; Material Adverse Effect...............................................................40
6.06 No Immunity.......................................................................................40
6.07 Governmental Regulations..........................................................................40
6.08 Direct Obligations; Pari Passu....................................................................40
6.09 No Recordation Necessary..........................................................................40
6.10 Choice of Law; Submission to Jurisdiction and
Waiver of Sovereign Immunity.....................................................................41
ARTICLE VII AFFIRMATIVE COVENANTS..........................................................................41
7.01 Financial Reports and Other Information...........................................................41
7.02 Notice of Default and Litigation..................................................................42
7.03 Compliance with Laws and Contractual Obligations, Etc.............................................42
7.04 Payment of Obligations............................................................................43
7.05 Maintenance of Insurance..........................................................................43
7.06 Conduct of Business and Preservation of Corporate Existence.......................................43
7.07 Books and Records.................................................................................43
7.08 Maintenance of Properties, Etc....................................................................43
7.09 Use of Proceeds...................................................................................44
7.10 Pari Passu Ranking................................................................................44
7.11 Transactions with Affiliates......................................................................44
7.12 Maintenance of Governmental Approvals.............................................................44
7.13 Inspection of Property............................................................................44
ARTICLE VIII NEGATIVE COVENANTS.............................................................................45
8.01 Financial Conditions..............................................................................45
8.02 Liens.............................................................................................45
8.03 Consolidations and Mergers........................................................................47
8.04 Sales of Assets, Etc..............................................................................48
8.05 Change in Nature of Business......................................................................48
8.06 Margin Regulations................................................................................48
ARTICLE IX OBLIGATIONS OF GUARANTORS......................................................................48
9.01 The Guaranty......................................................................................48
9.02 Nature of Liability...............................................................................48
9.03 Unconditional Obligations.........................................................................48
9.04 Independent Obligation............................................................................49
9.05 Waiver of Notices.................................................................................49
9.06 Waiver of Defenses................................................................................50
9.07 Bankruptcy and Related Matters....................................................................50
9.08 No Subrogation....................................................................................52
9.09 Right of Contribution.............................................................................52
9.10 General Limitation on Guaranty....................................................................52
9.11 Covenants of the Guarantors.......................................................................52
ARTICLE X EVENTS OF DEFAULT..............................................................................53
10.01 Events of Default................................................................................53
10.02 Remedies.........................................................................................55
10.03 Notice of Default................................................................................55
10.04 Default Interest.................................................................................55
ARTICLE XI THE ADMINISTRATIVE AGENT.......................................................................56
11.01 Appointment and Authorization....................................................................56
11.02 Delegation of Duties.............................................................................56
11.03 Liability of Administrative Agent................................................................56
11.04 Reliance by Administrative Agent.................................................................57
11.05 Notice of Default................................................................................57
11.06 Credit Decision..................................................................................57
11.07 Indemnification..................................................................................58
11.08 Administrative Agent in Individual Capacity......................................................58
11.09 Successor Administrative Agent...................................................................59
ARTICLE XII THE JOINT BOOKRUNNERS..........................................................................59
12.01 The Joint Bookrunners............................................................................59
12.02 Liability of Joint Bookrunners...................................................................60
12.03 Joint Bookrunners in their respective Individual Capacities......................................60
12.04 Credit Decision..................................................................................60
ARTICLE XIII MISCELLANEOUS..................................................................................61
13.01 Notices..........................................................................................61
13.02 Amendments and Waivers...........................................................................61
13.03 No Waiver; Cumulative Remedies...................................................................62
13.04 Payment of Expenses, Etc.........................................................................62
13.05 Indemnification..................................................................................63
13.06 Successor and Assigns............................................................................63
13.07 Right of Set-off.................................................................................65
13.08 Confidentiality..................................................................................65
13.09 Use of English Language..........................................................................66
13.10 Governing Law....................................................................................66
13.11 Submission to Jurisdiction.......................................................................66
13.12 Appointment of Agent for Service of Process......................................................67
13.13 Waiver of Sovereign Immunity.....................................................................67
13.14 Judgment Currency................................................................................67
13.15 Counterparts.....................................................................................68
13.16 USA Patriot Act..................................................................................68
13.17 Severability.....................................................................................68
13.18 Survival of Agreements and Representations.......................................................68
SCHEDULES
Schedule 1.01(a) -- Commitments
Schedule 1.01(b) -- Lending Offices
Schedule 5.06 -- Litigation
Schedule 5.10 -- Subsidiaries
Schedule 6.05 -- Litigation
Schedule 8.02 -- Liens
EXHIBITS
Exhibit A -- Form of Note
Exhibit B -- Notice of Borrowing
Exhibit C -- Form of Notice of Extension/Conversion
Exhibit D -- Form of Assignment and Assumption Agreement
Exhibit E -- Form of Opinion of Special New York Counsel to the
Borrower and the Guarantors
Exhibit F -- Form of Opinion of Mexican Counsel to the Borrower
and the Guarantors
Exhibit G -- Mandatory Cost Formula
TERM CREDIT AGREEMENT
TERM CREDIT AGREEMENT, dated as of April 5, 2005 among
CEMEX, S.A. de C.V., a sociedad anonima de capital variable organized and
existing pursuant to the laws of the United Mexican States (the "Borrower"),
CEMEX MEXICO, S.A. de C.V., a sociedad anonima de capital variable organized
and existing pursuant to the laws of the United Mexican States, EMPRESAS
TOLTECA DE MEXICO, S.A. de C.V., a sociedad anonima de capital variable
organized and existing pursuant to the laws of the United Mexican States (each
a "Guarantor" and together, the "Guarantors"), CITIGROUP GLOBAL MARKETS INC.,
as Documentation Agent, BARCLAYS BANK PLC, as Administrative Agent and as a
Lender, CITIBANK, N.A., as a Lender and CITIBANK, N.A., NASSAU, BAHAMAS
BRANCH, as a Lender.
RECITALS
WHEREAS, the Borrower desires that the Lenders extend a
multi-currency, multi-draw term credit facility to the Borrower to fund the
repayment of certain indebtedness of the Borrower; and
WHEREAS, the Guarantors are willing to guaranty all of the
Obligations of the Borrower.
NOW, THEREFORE, each of the Parties hereto hereby agrees as
follows:
ARTICLE I
DEFINITIONS
-----------
1.01 Certain Definitions. As used in this Agreement, the
following terms shall have the following meanings:
"Acquired Subsidiary" means any Subsidiary acquired by the
Borrower or any other Subsidiary after the date hereof in an
Acquisition, and any Subsidiaries of such Acquired Subsidiary on the
date of such Acquisition.
"Acquiring Subsidiary" means any Subsidiary of the Borrower
or any one of its Subsidiaries solely for the purpose of
participating as the acquiring party in any Acquisition, and any
Subsidiaries of such Acquiring Subsidiary acquired in such
Acquisition.
"Acquisition" means any merger, consolidation, acquisition
or lease of assets, acquisition of securities or business combination
or acquisition, or any two or more of such transactions, if upon the
completion of such transaction or transactions, the Borrower or any
Subsidiary thereof has acquired an interest in any Person who is
deemed to be a Subsidiary under this Agreement and was not a
Subsidiary prior thereto.
"Adjusted Consolidated Net Tangible Assets" means, with
respect to any Person, the total assets of such Person and its
Subsidiaries (less applicable depreciation, amortization and other
valuation reserves), including any write-ups or restatements required
under Mexican GAAP (other than with respect to items referred to in
clause (ii) below), after deducting therefrom (i) all current
liabilities of such Person and its Subsidiaries (excluding the
current portion of long-term debt) and (ii) all goodwill, trade
names, trademarks, licenses, concessions, patents, unamortized debt
discount and expense and other intangibles, all as determined on a
consolidated basis in accordance with Mexican GAAP.
"Administrative Agent" means Barclays Bank PLC, in its
capacity as administrative agent for the Lenders, and its successors
in such capacity.
"Administrative Agent's Payment Office" means the
Administrative Agent's address for payments set forth on the
signature pages hereof or such other address as the Administrative
Agent may from time to time specify to the other Parties hereto
pursuant to the terms of this Agreement.
"Affected Lender" has the meaning specified in Section
3.08(a).
"Affiliate" means, in relation to any Person, a Subsidiary
of that Person or a Holding Company of that Person or any other
Subsidiary of that Holding Company.
"Aggregate Committed Amount" means the aggregate amount of
all of the Commitments.
"Aggregate Exposure" means the aggregate principal amount of
all Loans outstanding.
"Agreement" means this Credit Agreement, as the same may
hereafter be amended, supplemented or otherwise modified from time to
time.
"Applicable Margin" means, at any date, the applicable
margin set forth below:
Applicable Margin
LIBOR and
Date Base Rate Loans Euribor Loans
- --------------------------------------------------------------------------- --------------- -------------
Effective Date up to and including the date 90 days following the 0.30% 0.30%
Effective Date
Commencing on and including the date 91 days following the Effective Date 0.40% 0.40%
until the Termination Date
"Assignee" has the meaning specified in Section 13.06(b).
"Assignment and Assumption Agreement" means an assignment
and assumption agreement in substantially the form of Exhibit D.
"Base Rate" means, for any day, the higher of (a) the Prime
Rate or (b) the Federal Funds Rate plus 1/2% per annum, in each case
as in effect for such day. Any change in the Prime Rate announced by
the Reference Banks shall take effect at the opening of business on
the day specified in the public announcement of such change.
"Base Rate Loan" means any Loan made or maintained at a rate
of interest calculated with reference to the Base Rate.
"Bookrunners" or "Joint Bookrunners" means Barclays Capital,
the Investment Banking Division of Barclays Bank PLC, and Citigroup
Global Markets Inc., in their capacity as joint bookrunners
hereunder, and each of their successors in such capacity.
"Borrower" has the meaning specified in the preamble hereto.
"Borrowing" means the aggregate amount of Loans hereunder to
be made to the Borrower pursuant to Article II on a particular date
by each of the Lenders.
"Borrowing Request" means a Notice of Borrowing.
"Business Day" means any day other than a Saturday or Sunday
or other day on which commercial banks in New York City are
authorized or required by law to close and
(i) (in relation to any date for payment or lending or
purchase of, or the determination of an interest rate or rate of
exchange in relation to, Japanese Yen) a day on which the Tokyo
interbank market is also open for dealings in Japanese Yen; or
(ii) (in relation to any date for payment or lending or
purchase of, or the determination of an interest rate or rate of
exchange in relation to, Sterling) a day on which the London
interbank market is also open for dealings in Sterling; or
(iii) (in relation to any date for payment or lending or
purchase of, or the determination of an interest rate or rate of
exchange in relation to, Euro), any TARGET Day.
"Capital Lease" means, as to any Person, the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or
a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of
such Person under Mexican GAAP and, for the purposes of this
Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with
Mexican GAAP.
"Capital Stock" means any and all shares, interests,
participations or other equivalents (however designed) of capital
stock of a corporation, any and all equivalent ownership interests in
a Person (other than a corporation) and any and all warrants, rights
or options to purchase any of the foregoing.
"Commitment" means, with respect to each Lender, the
aggregate principal amount set forth opposite the name of such Lender
in Schedule 1.01(a) or in any Assignment and Assumption Agreement, as
such amount may be reduced or increased from time to time in
accordance with the provisions hereof.
"Commitment Percentage" means, with respect to each Lender,
a fraction (expressed as a decimal) the numerator of which is the
Commitment of such Lender at such time and the denominator of which
is the Aggregate Committed Amount at such time. The initial
Commitment Percentages are set out on Schedule 1.01(a).
"Commitment Period" means the period from and including the
Effective Date to but excluding the earlier of (i) the Termination
Date, or (ii) the date on which the Commitments terminate in
accordance with the provisions of this Agreement.
"Confidential Information" means information that the
Borrower or a Guarantor furnishes to the Administrative Agent, the
Joint Bookrunners or any Lender in a writing designated as
confidential, but does not include any such information that is or
becomes generally available to the public or that is or becomes
available to the Administrative Agent or the Joint Bookrunners or
such Lender from a source other than the Borrower or a Guarantor that
is not, to the best of the Administrative Agent's, the Joint
Bookrunners' or such Lender's knowledge, acting in violation of a
confidentiality agreement with the Borrower or Guarantor or any other
Person.
"Consolidated" refers to the consolidation of accounts in
accordance with Mexican GAAP.
"Consolidated Fixed Charges" means, for any period, the sum
(without duplication) of (a) Consolidated Interest Expense for such
period and (b) to the extent not included in (a) above, payments
during such period in respect of the financing costs of financial
derivatives in the form of equity swaps.
"Consolidated Fixed Charge Coverage Ratio" means, for any
period, the ratio of (a) EBITDA for such period to (b) Consolidated
Fixed Charges for such period.
"Consolidated Interest Expense" means, for any period, the
total gross interest expense of the Borrower and its consolidated
Subsidiaries allocable to such period in accordance with Mexican
GAAP.
"Consolidated Leverage Ratio" means, at any time during any
fiscal quarter, the ratio of (a) Consolidated Net Debt at such time
to (b) EBITDA for the four consecutive fiscal quarters immediately
preceding such fiscal quarter.
"Consolidated Net Debt" means, at any date, the sum (without
duplication) of (a) the aggregate amount of all Debt of the Borrower
and its Subsidiaries at such date, plus (b) to the extent not
included in Debt, the aggregate amount of all derivative financing in
the form of equity swaps outstanding at such date (save to the extent
cash collateralized) minus (d) all Temporary Investments of the
Borrower and its Subsidiaries at such date.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any indenture,
mortgage, deed of trust, loan agreement or other agreement to which
such Person is a party or by which it or any of its property or
assets is bound.
"Credit Party" means any of the Borrower or the Guarantors.
"Debt" of any Person means, without duplication, (i) all
obligations 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 to pay the deferred
purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, (iv) all obligations of
such Person as lessee under Capital Leases, (v) all Debt of others
secured by a Lien on any asset of such Person, up to the value of
such asset, as recorded in such Person's most recent balance sheet,
(vi) all obligations of such Person with respect to product invoices
incurred in connection with export financing, and (vii) all
obligations of such Person under repurchase agreements for the stock
issued by such Person or another Person. For the avoidance of doubt,
Debt does not include Derivatives. With respect to the Borrower and
its subsidiaries, the aggregate amount of Debt outstanding shall be
adjusted by the Value of Debt Currency Derivatives solely for the
purposes of calculating the Consolidated Leverage Ratio. If the Value
of Debt Currency Derivatives is a positive mark-to-market valuation
for the Borrower and its subsidiaries, then Debt shall decrease
accordingly, and if the Value of Debt Currency Derivatives is a
negative mark-to-market valuation for the Borrower and its
subsidiaries, then Debt shall increase by the absolute value thereof.
"Debt Currency Derivatives" means derivatives of the
Borrower and its subsidiaries related to currency entered into for
the purposes of hedging exposures under outstanding Debt of the
Borrower and its subsidiaries, including but not limited to
cross-currency swaps and currency forwards.
"Default" means any condition, event or circumstance which,
with the giving of notice or lapse of time or both, would, unless
cured or waived, become an Event of Default.
"Defaulting Lender" has the meaning specified in Section
2.01(d).
"Derivatives" means any type of derivative obligations,
including but not limited to equity forwards, capital hedges,
cross-currency swaps, currency forwards, interest rate swaps and
swaptions.
"Disbursement Date" means the date on which such Loan is
made by the Lenders.
"Disposition" means, with respect to any property, any sale,
lease, sale and leaseback, assignment, conveyance, transfer or other
disposition thereof. The terms "Dispose" and "Disposed of" shall have
correlative meanings.
"Dollar Amount" shall mean, at any time with respect to the
Loan, (a) with respect to Dollars or an amount denominated in
Dollars, such amount and (b) with respect to an amount of any Foreign
Currency or an amount denominated in a Foreign Currency, the
equivalent amount thereof in Dollars as determined by the
Administrative Agent at such time on the basis of the Spot Rate that
has been in effect two Business Days prior to the Disbursement Date
for such Loan (without regard to any subsequent fluctuations in the
Spot Rate) for the purchase of Dollars with such Foreign Currency.
"Dollars", "$" and "U.S.$" each means the lawful currency of
the United States.
"EBITDA" means, for any period, the sum for the Borrower and
its Subsidiaries, determined on a consolidated basis of (a) operating
income (utilidad de operacion), (b) cash interest income and (c)
depreciation and amortization expense, in each case determined in
accordance with Mexican GAAP consistently applied for such period.
For the purposes of calculating EBITDA for any period of four
consecutive fiscal quarters (each, a "Reference Period") pursuant to
any determination of the Consolidated Leverage Ratio (but not
Consolidated Fixed Charge Coverage Ratio), (i) if at any time during
such Reference Period the Borrowers or any of its Subsidiaries shall
have made any Material Disposition, the EBITDA for such Reference
Period shall be reduced by an amount equal to the EBITDA (if
positive) attributable to the property that is the subject of such
Material Disposition for such Reference Period (but when the Material
Disposition is by way of a lease, income received by the Borrower or
any of its Subsidiaries under such lease shall be included in EBITDA
and (ii) if at any time during such Reference Period the Borrower or
any of its Subsidiaries shall have made any Material Acquisition,
EBITDA for such Reference Period shall be calculated after giving pro
forma effect thereto (including the incurrence or assumption of any
Debt) as if such Material Acquisition had occurred on the first day
of such Reference Period. Additionally, if since the beginning of
such Reference Period any Person that subsequently shall have become
a Subsidiary or was merged or consolidated with the Borrower or any
of its Subsidiaries as a result of a Material Acquisition occurring
during such Reference Period shall have made any Disposition or
Acquisition of property that would have required an adjustment
pursuant to clause (i) or (ii) above if made by the Borrower or any
of its Subsidiaries during such Reference Period, EBITDA for such
period shall be calculated after giving pro forma effect thereto as
if such Disposition or Acquisition had occurred on the first day of
such Reference Period.
"Effective Date" has the meaning specified in Section 4.01.
"Environmental Action" means any audit procedure, action,
suit, demand, demand letter, claim, notice of non-compliance or
violation, notice of liability or potential liability, investigation,
proceeding, consent order or consent agreement relating in any way to
any Environmental Law, Environmental Permit or Hazardous Materials or
arising from alleged injury or threat of injury to health, safety or
the environment, including (a) by any Governmental Authority for
enforcement, cleanup, removal, response, remedial or other actions or
damages and (b) by any Governmental Authority or any third party for
damages, contribution, indemnification, cost recovery, compensation
or injunctive relief.
"Environmental Law" means any federal, state, local or
foreign statute, law, ordinance, rule, regulation, technical standard
(norma tecnica or norma oficial Mexicana), code, order, judgment,
decree or judicial agency interpretation, policy or guidance relating
to pollution or protection of the environment, health, safety or
natural resources, including those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge of
Hazardous Materials.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required under
any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted
by the rules and regulations thereunder, all as the same may be in
effect from time to time. References to sections of ERISA shall be
construed also to refer to any successor sections.
"ERISA Affiliate" means an entity, whether or not
incorporated, that is under common control with the Borrower within
the meaning of Section 4001(a)(14) of ERISA, or is a member of a
group that includes the Borrower and that is treated as a single
employer under Sections 414(b) or (c) of the Code.
"Euro" shall mean the single currency of Participating
Member States.
"Euribor" means, in relation to any Loan in Euro:
(a) the applicable Screen Rate; or
(b) (if no Screen Rate is available for the currency or
Interest Period of that Loan) the arithmetic mean
of the rates (rounded upwards to four decimal
places) as supplied to the Administrative Agent at
its request quoted by the Reference Banks to
leading banks in the European interbank market,
as of approximately 11:00 a.m. (New York City time) on the Quotation
Day for the offering of deposits in Euro and for a period comparable
to the Interest Period for that Loan.
"Euribor Business Day" means any day other than a Saturday
or Sunday or other day on which commercial banks in New York City are
authorized or required by law to close that is also a TARGET Day.
"Euribor Loan" means any Loan made or maintained at a rate
of interest calculated with reference to Euribor.
"Event of Default" has the meaning specified in Section
10.01.
"Facility Fee" has the meaning specified in Section 3.02.
"Federal Funds Rate" means, for any relevant day, the
overnight Federal funds rate as published for such day in the Federal
Reserve Statistical Release H.15 (519) or any successor publication,
or, if such rate is not published for any day, the rate for such day
will be the rate set forth in the daily statistical release
designated as the Composite 3:30 p.m. Quotation for U.S. Government
Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the
"Composite 3:30 p.m. Quotation" for such day under the caption
"Federal Funds Effective Rate"). If on any relevant day the
appropriate rate for such previous day is not yet published in either
H.15 (519) or the Composite 3:30 p.m. Quotations, the rate for such
day will be the arithmetic mean as determined by the Administrative
Agent of the rates for the last transaction in overnight Federal
funds arranged prior to 9:00 a.m. (New York City time) on that day by
each of three leading brokers of recognized standing of Federal funds
transactions in New York City selected by the Administrative Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System of the United States.
"Fee Letter" means the fee letter entered into by the
Borrower and the Lenders dated as of March 30, 2005 referred to in
Section 3.02.
"Foreign Currency" means each of (a) Euros, (b) Japanese Yen
and (c) Sterling.
"Foreign Financial Institution" means an institution
registered as a foreign financial institution with the Ministry of
Finance in the Mexican Banking and Financial Institutions, Pensions,
Retirement and Foreign Investment Funds Registry for purposes of
Article 195, Section I of the Mexican Income Tax Law.
"Funding Default" means a default by a Lender pursuant to
Section 2.01(d).
"Funding Losses" has the meaning specified in Section 3.05.
"Governmental Authority" means any branch of power or
government or any state, department or other political subdivision
thereof, or any governmental body, agency, authority (including any
central bank or taxing or environmental authority), any entity or
instrumentality (including any court or tribunal) exercising
executive, legislative, judicial, regulatory, administrative or
investigative functions of or pertaining to government.
"Guarantor" has the meaning specified in the preamble
hereto.
"Hazardous Materials" means (a) radioactive materials,
asbestos-containing materials, polychlorinated biphenyls, radon gas
and (b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant or
contaminant under any applicable Environmental Law.
"Holding Company" means, in relation to a company or a
corporation, any other company or corporation in respect of which it
is a Subsidiary.
"Indemnified Party" has the meaning specified in Section
13.05.
"Interest Payment Date" means (i) with respect to any Base
Rate Loan, the last day of each calendar month commencing in April
2005, the date of repayment of such Loan and the Termination Date
and, (ii) with respect to any LIBOR Loan, and, if applicable, any
Euribor Loan, the last day of each Interest Period for such Loan, the
date of repayment of principal of such Loan and on the Termination
Date. If an Interest Payment Date falls on a date that is not a
Business Day, such Interest Payment Date shall be deemed to be the
next succeeding Business Day, except that in the case of LIBOR Loans
or, if applicable, Euribor Loans, where the next succeeding Business
Day falls in the next succeeding calendar month, then on the
immediately preceding Business Day.
"Interest Period" means, with respect to each Borrowing of
LIBOR Loans, and, if applicable, Euribor Loans, the period (i)
commencing (A) on the date of such Borrowing or conversion of Base
Rate Loans into LIBOR Loans and, if applicable, Euribor Loans, or (B)
in the case of the continuation of LIBOR Loans and, if applicable,
Euribor Loans, for a further Interest Period, on the last day of the
immediately preceding Interest Period and (ii) ending one month
thereafter as stated by the Borrower in the applicable Notice of
Borrowing or Notice of Continuation/Conversion; provided, however,
that:
(1) any Interest Period which would otherwise end on a day
which is not a LIBOR Business Day or, if applicable, a Euribor
Business Day, shall, subject to paragraph (3) below, be extended to
the next succeeding LIBOR Business Day or, if applicable, the next
succeeding Euribor Business Day, unless such LIBOR Business Day or,
if applicable, Euribor Business Day, falls in another calendar month,
in which case such Interest Period shall end on the immediately
preceding LIBOR Business Day or, if applicable, Euribor Business Day;
(2) any Interest Period which begins on the last LIBOR
Business Day or, if applicable, Euribor Business Day, of a calendar
month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall,
subject to paragraph (3) below, end on the last LIBOR Business Day
or, if applicable, Euribor Business Day, of a calendar month;
(3) any Interest Period which would otherwise end after the
last day of the Commitment Period shall end on the last day of the
Commitment Period; and
(4) any Interest Period which would otherwise end after
the Termination Date shall end on the Termination Date.
"Japanese Yen" means the lawful currency of Japan.
"Lender" means each financial institution designated as such
on the signature pages hereof, each Assignee which becomes a Lender
pursuant to Section 13.06(b), each Substitute Lender and each of
their respective successors or assigns.
"Lending Office" means, with respect to any Lender, (a) the
office or offices of such Lender specified as its "Lending Office" or
"Lending Offices" in Schedule 1.01(b) or (b) such other office or
offices of such Lender as it may designate as its Lending Office by
notice to the Borrower and the Administrative Agent.
"LIBOR" means, in relation to any Loan (other than a Loan
denominated in Euros):
(a) the applicable Screen Rate; or
(b) (if no Screen Rate is available for the currency or
Interest Period of that Loan) the arithmetic mean
of the rates (rounded upwards to four decimal
places) as supplied to the Administrative Agent at
its request quoted by the Reference Banks to
leading banks in the London interbank market,
as of approximately 11:00 a.m. (New York City time) on the
Quotation Day for the offering of deposits in the currency of that
Loan and for a period comparable to the Interest Period for that
Loan.
"LIBOR Business Day" means any Business Day on which
commercial banks are open in London for the transaction of
international business, including dealings in Dollar deposits in the
international interbank markets.
"LIBOR Loan" means any Loan made or maintained at a rate of
interest calculated with reference to LIBOR.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in
respect of such asset. The Borrower or any Subsidiary of the Borrower
shall be deemed to own, subject to a Lien, any asset that it has
acquired or holds subject to the interest of a vendor or lessor under
any conditional sale agreement, Capital Lease or other title
retention lease relating to such asset, or any account receivable
transferred by it with recourse (including any such transfer subject
to a holdback or similar arrangement that effectively imposes the
risk of collectability on the transferor).
"Loans" has the meaning specified in Section 2.01(a) hereof.
"Mandatory Cost" means the percentage rate per annum
calculated by the Administrative Agent in accordance with Exhibit G.
"Material Acquisition" any (a) acquisition of property or
series of related acquisitions of property that constitutes assets
comprising all or substantially all of an operating unit, division or
line of business or (b) acquisition of or other investment in the
Capital Stock of any Subsidiary or any Person which becomes a
Subsidiary or is merged or consolidated with the Borrower or any of
its Subsidiaries, in each case, which involves the payment of
consideration by the Borrower and its Subsidiaries in excess of
U.S.$25,000,000 (or the equivalent in other currencies).
"Material Adverse Effect" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower and its
Subsidiaries taken as a whole, (b) the validity or enforceability of
this Agreement or any of the Notes or the rights and remedies of the
Administrative Agent or any Lender under this Agreement or any of the
Notes or (c) the ability of the Borrower and/or the Guarantors to
perform their Obligations under this Agreement or any other
Transaction Document.
"Material Debt" means Debt (other than the Loans) of the
Borrower and/or one or more of its Subsidiaries, arising in one or
more related or unrelated transactions, in an aggregate principal
amount outstanding exceeding U.S.$50,000,000 (or the equivalent
thereof in other currencies).
"Material Disposition" means any Disposition of property or
series of related Dispositions of property that yields gross proceeds
to the Borrower or any of its Subsidiaries in excess of
U.S.$25,000,000 (or the equivalent in other currencies).
"Material Subsidiary" means, at any date, (a) each
Subsidiary of the Borrower (if any) (i) the assets of which, together
with those of its Subsidiaries, on a consolidated basis, without
duplication, constitute 5% or more of the consolidated assets of the
Borrower and its Subsidiaries as of the end of the then most recently
ended fiscal quarter for which quarterly financial statements have
been prepared or (ii) the operating profit of which, together with
that of its Subsidiaries, on a consolidated basis, without
duplication, constitutes 5% or more of the consolidated operating
profit of the Borrower and its Subsidiaries for the then most
recently ended fiscal quarter for which quarterly financial
statements have been prepared and (b) each Guarantor.
"Mexican GAAP" means, generally accepted accounting
principles in Mexico as in effect from time to time, except that for
purposes of Section 8.01, Mexican GAAP shall be determined on the
basis of such principles in effect on the date hereof and consistent
with those used in the preparation of the most recent audited
financial statements referred to in Section 7.01. In the event that
any change in Mexican GAAP shall occur and such change results in a
change in the method of calculation of financial covenants, standards
or terms in this Agreement, then the Borrower and the Administrative
Agent agree to enter into negotiations in order to amend such
provisions of this Agreement so as to equitably reflect such change
in Mexican GAAP with the desired result that the criteria for
evaluating the Borrower's financial condition shall be the same after
such change as if such change had not been made. Until such time as
such an amendment shall have been executed and delivered by the
Borrower, the Administrative Agent and the Required Lenders, all
financial covenants, standards and terms in this Agreement shall
continue to be calculated or construed as if such change in Mexican
GAAP had not occurred.
"Mexico" means the United Mexican States.
"Ministry of Finance" means the Ministry of Finance and Public
Credit of Mexico.
"Notice of Borrowing" has the meaning specified in Section
2.01(c).
"Notice of Extension/Conversion" has the meaning specified
in Section 2.01(e).
"Note" means a promissory note of the Borrower in
substantially the form of Exhibit A, evidencing the obligation of the
Borrower to repay the Loans made by a Lender.
"Obligations" means, (a) with respect to the Borrower, all
of its indebtedness, obligations and liabilities to the Lenders, the
Joint Bookrunners and the Administrative Agent now or in the future
existing under or in connection with the Transaction Documents,
whether direct or indirect, absolute or contingent, due or to become
due, and (b) with respect to each Guarantor, all of its indebtedness,
obligations and liabilities to the Lenders, the Joint Bookrunners and
the Administrative Agent now or in the future existing under or in
connection with the Transaction Documents, in each case whether
direct or indirect, absolute or contingent, due or to become due.
"Obligors" means the Borrower and each Guarantor.
"Other Taxes" means any present or future stamp or
documentary taxes or any other excise or property taxes, charges,
imposts, duties, fees, or similar levies which arise from any payment
made hereunder or under the Notes or from the execution, delivery,
registration, performance or enforcement of, or otherwise with
respect to, this Agreement or any other Transaction Document and
which are imposed, levied, collected or withheld by any Governmental
Authority.
"Participant" has the meaning specified in Section 13.06(d).
"Participating Member State" means any member state of the
European Union that adopts or has adopted the euro as its lawful
currency in accordance with legislation of the European Union
relating to Economic and Monetary Union.
"Pension Plan" means a "pension plan", as such term is
defined in Section 3(2) of ERISA, which is subject to Title IV of
ERISA (other than a multiemployer plan as defined in Section
4001(a)(3) of ERISA), and to which any Credit Party or any of its
ERISA Affiliates has any liability.
"Permitted Liens" has the meaning specified in Section 8.02.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, limited liability company,
trust, unincorporated association, joint venture or other business
entity or Governmental Authority, whether or not having a separate
legal personality.
"Prime Rate" means the average of the rate of interest
publicly announced by each of the Reference Banks from time to time
as its Prime Rate in New York City, the Prime Rate to change as and
when such designated rate changes. The Prime Rate is not intended to
be the lowest rate of interest charged by the Administrative Agent or
any Lender in connection with extensions of credit to debtors of any
class, or generally.
"Process Agent" has the meaning specified in Section
13.12(a).
"Qualified Receivables Transaction" means any transaction or
series of transactions that may be entered into by the Borrower or
any Subsidiary pursuant to which the Borrower or any Subsidiary may
sell, convey or otherwise transfer to a Special Purpose Vehicle (in
the case of a transfer by the Borrower or any other Seller) and any
other person (in the case of a transfer by a Special Purpose
Vehicle), or may grant a security interest in, any Receivables
Program Assets (whether now existing or arising in the future);
provided that:
(a) no portion of the indebtedness or any other obligations (contingent or
otherwise) of a Special Purpose Vehicle (i) is guaranteed by the
Borrower or any other Seller or (ii) is recourse to or obligates the
Borrower or any other Seller in any way such that the requirements for
off balance sheet treatment under Financial Accounting Standards
Bulletin 140 are not satisfied; and
(b) the Borrower and the other Sellers do not have any obligation to
maintain or preserve the financial condition of a Special Purpose
Vehicle or cause such entity to achieve certain levels of operating
results.
"Quotation Day" means, in relation to any period in which an
interest rate is to be determined:
(a) (if the currency is Sterling) the first day of that
period;
(b) (if the currency is Euro) two TARGET Days before the
first day of that period; or
(c) (for any other currency) two Business Days before the
first day of that period.
"Receivables" means all rights of the Borrower or any other
Seller to payments (whether constituting accounts, chattel paper,
instruments, general intangibles or otherwise, and including the
right to payment of any interest or finance charges), which rights
are identified in the accounting records of the Borrower or such
Seller as accounts receivable.
"Receivables Documents" means (a) a receivables purchase
agreement, pooling and servicing agreement, credit agreement,
agreements to acquire undivided interests or other agreement to
transfer, or create a security interest in, Receivables Program
Assets, in each case as amended, modified, supplemented or restated
and in effect from time to time entered into by the Borrower, another
Seller and/or a Special Purpose Vehicle, and (b) each other
instrument, agreement and other document entered into by the
Borrower, any other Seller or a Special Purpose Vehicle relating to
the transactions contemplated by the items referred to in clause (a)
above, in each case as amended, modified, supplemented or restated
and in effect from time to time.
"Receivables Program Assets" means (a) all Receivables which
are described as being transferred by the Borrower, another Seller or
a Special Purpose Vehicle pursuant to the Receivables Documents, (b)
all Receivables Related Assets in respect of such Receivables, and
(c) all collections (including recoveries) and other proceeds of the
assets described in the foregoing clauses.
"Receivables Program Obligations" means (a) notes, trust
certificates, undivided interests, partnership interests or other
interests representing the right to be paid a specified principal
amount from the Receivables Program Assets and (b) related
obligations of the Borrower, a Subsidiary of the Borrower or a
Special Purpose Vehicle (including, without limitation, rights in
respect of interest or yield hedging obligations, breach of warranty
claims and expense reimbursement and indemnity provisions).
"Receivables Related Assets" means with respect to any
"Receivables" (i) any rights arising under the documentation
governing or relating to such Receivables (including rights in
respect of liens securing such Receivables), (ii) any proceeds of
such Receivables, (iii) other assets which are customarily
transferred or in respect of which security interests are customarily
granted in connection with asset securitization transactions
involving accounts receivable.
"Reference Banks" means two banks in the London interbank
market, initially Barclays Bank PLC, and Citibank, N.A..
"Regulation T, U, or X" means Regulation T, U, or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"Required Lenders" means, at any time, Lenders (other than
Defaulting Lenders) whose Total Exposures, when aggregated, equal or
exceed 50.01% of the Aggregate Exposure minus the Total Exposure of
any Defaulting Lender at such time.
"Requirement of Law" means, as to any Person, any law,
ordinance, rule, regulation or requirement of any Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is
subject.
"Responsible Officer" of any Person means the Chief
Financial Officer, the Corporate Planning and Finance Director, the
Finance Director or the Comptroller of such Person.
"Screen Rate" means:
(a) in relation to LIBOR, the British Bankers
Association Interest Settlement Rate for the
relevant currency and period; and
(b) in relation to Euribor, the percentage rate per
annum determined by the Banking Federation of the
European Union for the relevant period,
displayed on the appropriate page of the Reuters screen. If
the agreed page is replaced or service ceases to be available, the
Administrative Agent may specify another page or service displaying
the appropriate rate after consultation with the Borrower and the
Lenders.
"Seller" means the Borrower and any Subsidiary or other
affiliate of the Borrower (other than a Subsidiary or affiliate that
is a Special Purpose Vehicle) which is a party to a Receivables
Document.
"Special Purpose Vehicle" means a trust, partnership or
other special purpose person established by the Borrower and/or its
Subsidiaries to implement a Qualified Receivables Transaction.
"Spot Rate" means, on any date, with respect to any Foreign
Currency, the rate quoted by the Administrative Agent as the spot
rate for the purchase by the Administrative Agent of such Foreign
Currency with Dollars through its principal foreign exchange trading
office at approximately 11:00 a.m. on the date two Business Days
prior to the date as of which the foreign exchange computation is
made.
"Sterling" means the lawful currency of the United Kingdom.
"Subsidiary" means with respect to any Person, any
corporation, partnership, joint venture, limited liability company,
trust, estate or other entity of which (or in which) more than 50% of
(a) in the case of a corporation, the issued and outstanding capital
stock having ordinary voting power to elect a majority of the board
of directors of such corporation (irrespective of whether at the time
capital stock of any other class or classes of such corporation shall
or might have voting power upon the occurrence of any contingency not
in the control of such Person), (b) in the case of a limited
liability company, partnership or joint venture, the interest in the
capital or profits of such limited liability company, partnership or
joint venture or (c) in the case of a trust or estate, the beneficial
interest in such trust or estate, is at the time directly or
indirectly owned or controlled by (X) such Person, (Y) such Person
and one or more of its other Subsidiaries or (Z) one or more of such
Person's other Subsidiaries. For purposes of determining whether a
trust formed in connection with a Qualified Receivables Transaction
is a Subsidiary, notes, trust certificates, undivided interests,
partnership interests or other interests of the type described in
clause (a) of the definition of Receivables Program Obligations shall
be counted as beneficial interests in such trust.
"Substitute Lender" means a commercial bank or other
financial institution, acceptable to the Borrower, the Lenders and
the Administrative Agent, each in its sole discretion, and approved
by the Joint Bookrunners (including such a bank or financial
institution that is already a Lender hereunder), which assumes all or
a portion of the Commitment of a Lender pursuant to the terms of this
Agreement.
"TARGET" means Trans-European Automated Real-time Gross
Settlement Express Transfer payment system.
"TARGET Day" means any day on which TARGET is open for the
settlement of payments in Euro.
"Taxes" means any and all present or future income, stamp,
sales or other taxes, levies, imposts, duties, deductions, fees,
charges or withholdings, and all liabilities with respect thereto
collected, withheld or assessed by any Governmental Authority,
excluding, (a) in the case of each Lender the Administrative Agent,
and any Tax Related Persons, such taxes (including income taxes or
franchise taxes) as are imposed on or measured by its net income or
capital by the jurisdiction (or any political subdivision thereof)
under the laws of which it is organized or maintains a Lending Office
or its principal office or performs its functions as Administrative
Agent or as are imposed on such Lender or the Administrative Agent or
any of their Tax Related Persons (as the case may be) as a result of
a present or former connection between the Lender, the Administrative
Agent, or such Tax Related Person and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision
or taxing authority thereof or therein (other than any such
connection arising solely from the Lender or such Administrative
Agent having executed, delivered or performed its obligations or
received a payment under, or enforced, the Transaction Documents) and
(b) any taxes, levies, imposts, deductions, charges or withholdings
imposed by reason of any Lender's or Administrative Agent's failure
to (i) register as a Foreign Financial Institution with the Ministry
of Finance and (ii) be a resident (or have a principal office which
is a resident, if such Lender lends through a branch or agency) for
tax purposes of a jurisdiction with which Mexico has in effect a
treaty for the avoidance of double taxation (but only in respect of
those taxes payable in excess of taxes that would have been payable
had such Lender complied with those conditions).
"Tax Related Person" means any Person whose income is
realized through, or determined by reference to, the Administrative
Agent or a Lender.
"Temporary Investments" means, at any date, all amounts that
would, in conformity with Mexican GAAP consistently applied, be set
forth opposite the caption "cash and cash equivalent" ("efectivo y
equivalentes de efectivo") or "temporary investments" ("inversiones
temporales") on a consolidated balance sheet of the Borrower at such
date.
"Termination Date" means the date which is the earliest of
(a) the date 180 days following the Effective Date, or if extended
with the written consent of such Lender, such later date or (b) if no
Loans are outstanding, the date the Commitments are terminated in
accordance with this Agreement.
"Total Exposure" means at any time, as to any Lender, the
amount of its Commitment at such time, or, if the Commitments shall
have terminated, it's Total Outstandings at such time.
"Total Outstandings" means at any time, as to any Lender,
the sum of the aggregate outstanding principal amount of such
Lender's Loans.
"Transaction Documents" means a collective reference to this
Credit Agreement, the Notes, any Assignment and Assumption Agreement,
the Fee Letter, and all other related agreements and documents issued
or delivered hereunder or thereunder or pursuant hereto or thereto.
"United States" means the United States of America,
including the States and the District of Columbia, but excluding its
territories and possessions.
"Value of Debt Currency Derivatives" means, on any given
date, the aggregate mark-to-market value of Debt Currency
Derivatives, expressed as a positive number (if, on a mark-to-market
basis, such aggregate amount reflects a net amount owed to the
Borrower and its subsidiaries) or as a negative number (if, on a
mark-to-market basis, such aggregate amount reflects a net amount
owed by the Borrower and its subsidiaries).
"Welfare Plan" means a "welfare plan", as such term is
defined in Section 3(1) of ERISA.
1.02 Other Definitional Provisions.
(a) The terms "including" and "include" are not limiting and
mean "including but not limited to" and "include but are not limited
to".
(b) The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement refer to this Agreement
as a whole and not to any particular provision of this Agreement, and
Article, Section, paragraph, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
(c) The meanings given to terms defined herein are equally
applicable to both the singular and plural forms of such terms.
(d) In this Agreement, in the computation of periods of time
from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each means
"to but excluding". Periods of days referred to in this Agreement
shall be counted in calendar days unless Business Days, LIBOR
Business Days or Euribor Business Days are expressly prescribed.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation
of this Agreement.
1.03 Accounting Terms and Determinations. All accounting and
financing terms not specifically defined herein shall be construed in
accordance with Mexican GAAP.
ARTICLE II
THE LOAN FACILITIES
-------------------
2.01 Loans.
(a) Commitment. During the Commitment Period, subject to the
terms and conditions hereof, each Lender, severally and not jointly
with any other Lender, agrees to make loans in Dollars and/or in
Foreign Currencies (as specified by the Borrower) (the "Loans") to
the Borrower from time to time in an aggregate principal Dollar
Amount of up to such Lender's Commitment; provided that (i) with
regard to the Lenders collectively, the aggregate principal amount of
Loans outstanding at any one time shall not exceed the Aggregate
Committed Amount, and (ii) with regard to each Lender individually,
the aggregate principal Dollar Amount of such Lender's Commitment
Percentage of all the Loans shall not exceed the Commitment of such
Lender. Loans may consist of Base Rate Loans, LIBOR Loans, Euribor
Loans, or a combination thereof, as the Borrower may request, and may
be prepaid in accordance with the provisions hereof; provided that
(A) Loans denominated in Japanese Yen or Sterling shall consist
solely of LIBOR Loans, subject to Section 3.06 and Section 3.08, and
(B) Loans denominated in Euro shall consist solely of Euribor Loans,
subject to Section 3.06 and Section 3.08.
(b) Loans and Borrowings. Each Loan shall be made as part of
a Borrowing consisting of Loans made by the Lenders ratably in
accordance with their Commitment Percentage. The failure of any
Lender to make any Loan required to be made by it shall not relieve
any other Lender of its obligations hereunder; provided that the
Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required.
(c) Loan Borrowings.
(i) Requests for Borrowings. (A) To request a
Borrowing, the Borrower shall notify the Administrative Agent of such
request by telephone, not later than 10:00 a.m., New York City time,
(1) in the case of a request for a Base Rate Loan denominated in
Dollars, on the Business Day prior to the day the Borrower designates
therein as the Disbursement Date, and (2) in the case of a request
for a LIBOR Loan or Euribor Loan, on the third LIBOR Business Day, or
Euribor Business Day, if applicable, prior to the Disbursement Date.
Each such telephonic Borrowing request shall be irrevocable and shall
be confirmed promptly by hand delivery or facsimile to the
Administrative Agent of a written notice (the "Notice of Borrowing")
in the form attached as Exhibit B approved by the Administrative
Agent and signed by a duly authorized representative of the Borrower.
Each such telephonic request and written Notice of Borrowing shall
specify the following information in compliance with this Section
2.01:
(1) that a Loan is requested;
(2) the requested Disbursement Date, which
shall be a Business Day;
(3) the currency and the aggregate principal
amount to be borrowed; and
(4) whether the Borrowing shall be composed of
Base Rate Loans, LIBOR Loans, Euribor
Loans, or a combination thereof, and if
LIBOR Loans or Euribor Loans are requested,
the Interest Period(s) therefor.
(B) If the Borrower shall fail to specify in any
such Notice of Borrowing (i) an applicable Interest
Period in the case of a LIBOR Loan or Euribor Loan, then
such notice shall be deemed to be a request for an
Interest Period of one (1) month, (ii) the type of Loan
requested, then such notice shall be deemed to be a
request for a LIBOR Loan hereunder, provided, however,
that if the notice requests Euro, then such notice shall
be deemed to be a request for a Euribor Loan hereunder,
or (iii) the currency requested, then such notice shall
be deemed to be a request for a Loan in Dollars.
(C) Not later than 1:00 p.m. New York City time on
the Business Day on which the Notice of Borrowing is
received, the Administrative Agent shall promptly advise
each Lender of the details thereof and shall advise each
Lender of the amount of such Lender's Loan to be made as
part of the requested Borrowing.
(ii) Minimum Amounts. Each Loan shall be in a minimum
aggregate principal Dollar Amount of $5,000,000, in the case of LIBOR
Loans or Euribor Loans, or $1,000,000 (or the remaining Aggregate
Committed Amount, if less), in the case of Base Rate Loans, and
integral multiples of $1,000,000 in excess thereof.
(iii) Maximum Borrowings. The Borrower may receive
Borrowings pursuant to up to six (6) Notices of Borrowing. For
avoidance of doubt, a Notice of Extension/Conversion is not a Notice
of Borrowing. Amounts repaid hereunder may not be reborrowed.
(d) Funding of Borrowings. Each Lender shall make each Loan
to be made by it hereunder on the Disbursement Date by wire transfer
of immediately available funds by 1:00 p.m., New York City time, to
the account held by the Administrative Agent for such purpose most
recently designated by it by notice to the Lenders. The
Administrative Agent will make such Loans available to the Borrower
by promptly crediting on the same day the amounts so received, in
like funds, to the account designated by the Borrower in the
applicable Notice of Borrowing (the "Funding Account"). Unless the
Administrative Agent shall have received notice from a Lender, prior
to the time of any Borrowing, that such Lender will not make
available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may, but shall not be required
to, assume that such Lender has made such share available on such
date in accordance with Section 2.01(c) and may in its sole
discretion, but shall not be required to, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If
any Lender either does not make its share of the applicable Borrowing
available to the Administrative Agent or delays in doing so past 4:00
p.m., New York City time, on the Disbursement Date (such Lender
hereinafter referred to as a "Defaulting Lender"), then the
Administrative Agent shall immediately notify the Borrower of such
default. If the Administrative Agent has, in its sole discretion,
made available to the Borrower an amount corresponding to such
Defaulting Lender's share of the Borrowing, then the Defaulting
Lender and the Borrower jointly and severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount
with interest thereon, on each day from and including the date such
amount is made available to the Borrower to but excluding the date of
payment to the Administrative Agent, at:
(i) in the case of the Defaulting Lender, the
Federal Funds Rate; or
(ii) in the case of the Borrower, the interest rate
applicable to Base Rate Loans.
If, with respect to the immediately preceding sentence, the Borrower
pays such amount to the Administrative Agent, then the Defaulting
Lender shall indemnify and hold harmless the Borrower from and against
such amount, and if such Defaulting Lender pays such amount to the
Administrative Agent, then such amount shall constitute such
Defaulting Lender's Loan included in such Borrowing. If the
Administrative Agent, in its discretion, does not make available to
the Borrower an amount corresponding to the Defaulting Lender's share
of the Borrowing then (x) the Defaulting Lender shall indemnify and
hold harmless the Borrower from and against such amount as well as any
and all losses, liabilities (including liabilities for penalties),
actions, suits, judgments, demands, costs, and expenses (including
reasonable fees and disbursements for counsel including allocated cost
of internal counsel) resulting from any failure on the part of the
Defaulting Lender to provide, or from any delay in providing, the
Administrative Agent with such Defaulting Lender's pro rata share of
the Borrowing, but no Lender shall be so liable for any such failure
on the part of or caused by any other Lender or the Administrative
Agent or the Borrower, and (y) such share of the applicable Borrowing
that was not made available shall be disregarded for purposes of
calculating the Facility Fee pursuant to Section 3.02 and in the event
such share has not been disregarded for such purposes, any amount paid
by the Borrower in respect of such share shall be reimbursed to the
Borrower by the applicable Defaulting Lender with interest thereon at
the Federal Funds Rate for each day from and including the date such
share of the Facility Fee was paid by the Borrower to but excluding
the date of reimbursement by the Defaulting Lender. The Administrative
Agent, upon notice by the Borrower that such reimbursement is due from
the applicable Defaulting Lender, shall notify such Defaulting Lender
of the amount of the reimbursement due, including interest thereon,
and shall forward such amount to the Borrower upon receipt from the
Defaulting Lender. The Administrative Agent shall not, however, be
liable to the Borrower for any failure by any Defaulting Lender to
reimburse the Borrower for any amounts in respect of such Facility
Fee.
(e) Extension and Conversion. The Borrower shall have the
option, on any Business Day, to extend existing Loans into a
subsequent permissible Interest Period or to convert Loans
denominated in Dollars into Loans of another interest rate type or to
convert Loans in Foreign Currencies into Dollars or to convert Loans
in Dollars into Foreign Currencies; provided, however, that (i)
except as provided in Section 3.08, LIBOR Loans may be converted into
Base Rate Loans only on the last day of the Interest Period
applicable thereto unless the Borrower agrees to pay all Funding
Losses, (ii) LIBOR Loans may be extended, and Base Rate Loans may be
converted into LIBOR Loans, only if the conditions in Section 4.02
have been satisfied, (iii) Loans extended as, or converted into,
LIBOR Loans shall be subject to the terms of the definition of
"Interest Period" set forth in Section 1.01 and shall be in such
minimum amounts as provided in Section 2.01(c)(ii), and (iv) any
request for extension or conversion of a LIBOR Loan that shall fail
to specify an Interest Period shall be deemed to be a request for an
Interest Period of one month. Each such extension or conversion shall
be effected by the Borrower by giving a written notice (or telephone
notice promptly confirmed in writing) (a "Notice of
Extension/Conversion") to the Administrative Agent prior to 10:00
a.m., New York City time, on the LIBOR Business Day of, in the case
of the conversion of a LIBOR Loan into a Base Rate Loan, and on the
third LIBOR Business Day prior to, in the case of the extension of a
LIBOR Loan as, or conversion of a Base Rate Loan into, a LIBOR Loan,
the date of the proposed extension or conversion, substantially in
the form of Exhibit C hereto, specifying (A) the date of the proposed
extension or conversion, (B) the Loans to be so extended or
converted, (C) the types of Loans into which such Loans are to be
converted, (D) if appropriate, the applicable Interest Periods with
respect thereto, and (E) the currency of such Loans. Each Notice of
Extension/Conversion shall be irrevocable and shall constitute a
representation and warranty by the Borrower of the matters specified
in Sections 4.02(a) through (d). So long as there is no Default or
Event of Default, in the event the Borrower does not request
extension or conversion of any LIBOR Loan in accordance with this
Section, or any such conversion or extension is not required by this
Section, then such LIBOR Loan shall be continued as a Base Rate Loan
at the end of each Interest Period applicable thereto, until the
Borrower selects an alternate Interest Period or converts such Loans
to LIBOR Loans. It being hereby understood and agreed that such
failure by the Borrower to request such extension or conversion
resulting in the automatic conversion of a LIBOR Loan into a Base
Rate Loan shall also constitute a representation and warranty by the
Borrower of the matters specified in Sections 4.02(a) through (d). In
the event any LIBOR Loans are not permitted to be converted into
another LIBOR Loan hereunder, such LIBOR Loans shall automatically be
converted to Base Rate Loans at the end of the applicable Interest
Period with respect thereto. The Administrative Agent shall give each
Lender notice as promptly as practicable of any such proposed
extension or conversion affecting any Loan.
(f) Repayment. The principal amount of all Loans shall be
due and payable in full on the Termination Date.
(g) Notes. Each Lender's Commitment Percentage of the Loans
shall be evidenced by a duly executed note in favor of such Lender in
the form of Exhibit A attached hereto.
(h) Maximum Number of LIBOR Loans. The Borrower will be
limited to a maximum number of six (6) LIBOR Loans and Euribor Loans
outstanding at any time. For purposes hereof, LIBOR Loans and Euribor
Loans with separate or different Interest Periods will be considered
as separate LIBOR Loans, or, as applicable, Euribor Loans even if
their Interest Periods expire on the same date.
2.02 Interest.
(a) Base Rate Loans. Each Base Rate Loan shall bear interest
at a rate per annum equal to the Base Rate plus the Applicable
Margin.
(b) LIBOR Loans. (i) Each LIBOR Loan (other than LIBOR Loans
denominated in Sterling) shall bear interest at a rate per annum
equal to LIBOR plus the Applicable Margin. (ii) Each LIBOR Loan
denominated in Sterling shall bear interest at a rate per annum equal
to LIBOR plus the Applicable Margin, plus Mandatory Costs, if any.
(c) Euribor Rate Loans. Each Euribor Loan shall bear
interest at a rate per annum equal to Euribor plus the Applicable
Margin, plus Mandatory Costs, if any.
(d) Default Interest. Notwithstanding the foregoing, if any
principal of, or interest on, any Loan or any fee or other amount
payable by the Borrower hereunder is not paid when due, whether at
stated maturity, upon acceleration, by mandatory prepayment or
otherwise, such overdue amount shall bear interest, after as well as
before judgment, at a rate per annum equal to (i) in the case of
overdue principal of any Loan, 2% plus the rate otherwise applicable
to such Loan as provided above or (ii) in the case of any other
amount, 2% plus the rate applicable to Base Rate Loans as provided in
Section 2.02(a).
(e) Payment of Interest. Accrued interest on each Loan shall
be payable in arrears on each Interest Payment Date for such Loan and
upon termination of the Commitments; provided that (i) in the event
of any repayment or prepayment of any Loan, accrued interest on the
principal amount repaid or prepaid shall be payable on the date of
such repayment or prepayment and (ii) in the event of any conversion
of any LIBOR Loan prior to the end of the Interest Period therefore,
accrued interest on such Loan shall be payable on the effective date
of such conversion. Interest with respect to each Loan shall be paid
in the currency in which such Loan is denominated.
(f) Computation. All interest hereunder shall be computed on
the basis of a year of 360 days, except that (i) interest computed by
reference to the Base Rate at times when the Base Rate is based on
the Prime Rate shall be computed on the basis of a year of 365 days
(or 366 days in a leap year), and in each case shall be payable for
the actual number of days elapsed (including the first day but
excluding the last day) and (ii) where the interest, is to accrue in
respect of any amount denominated in Sterling, interest shall be
computed on the basis of a year of 365 days. The applicable Base Rate
or LIBOR shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
ARTICLE III
TERMINATION AND REDUCTION OF
COMMITMENTS; FEES, TAXES, PAYMENT PROVISIONS
--------------------------------------------
3.01 Termination or Reduction of Commitments.
(a) Mandatory Termination. The Commitments shall terminate
on the Termination Date.
(b) Voluntary Termination. Upon at least three Business
Days' notice to the Administrative Agent and the Joint Bookrunners,
the Borrower may terminate the existing Commitments; provided,
however, that the existing Commitments may not be terminated so long
as (i) any Loan is outstanding or (ii) any interest, fee or expenses
remain unpaid.
(c) Any reduction of the Commitments shall reduce the
Commitment of each Lender pro rata.
3.02 Fees. The Borrower agrees to pay to the Administrative
Agent, on the Effective Date, for the account of the Lenders ratably in
accordance with their Commitment Percentage a facility fee (the "Facility
Fee") as agreed in the Fee Letter.
3.03 Taxes.
(a) Any and all payments by the Borrower or the Guarantor,
as the case may be, to any Lender, the Joint Bookrunners or the
Administrative Agent under this Agreement and the other Transaction
Documents shall be made free and clear of, and without deduction or
withholding for or on account of, any Taxes. In addition, the
Borrower shall promptly pay all Other Taxes.
(b) Except as otherwise provided in Section 3.03(c), the
Borrower and the Guarantors agree to indemnify and hold harmless each
Lender and the Administrative Agent for the full amount of Taxes or
Other Taxes (without duplication) excluding in each case United
States backup withholding Taxes imposed because of payee
underreporting (including any Taxes or Other Taxes (without
duplication) imposed by any jurisdiction on amounts payable under
this Section 3.03) paid by or assessed against any Lender or the
Administrative Agent in respect of any sum payable hereunder and any
liability (including penalties, interest, additions to tax and
expenses) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally asserted, except
to the extent that such penalties, interest, additions to tax or
expenses are incurred solely as a result of any gross negligence or
willful misconduct of such Lender or Administrative Agent, as the
case may be. Payment under this indemnification shall be made within
30 days after the date any Lender or the Administrative Agent makes
written demand therefore, setting forth in reasonable detail the
basis and calculation of such amounts (such written demand shall be
presumed correct, absent significant error).
(c) If the Borrower or the Guarantors, as the case may be,
shall be required by law to deduct or withhold any Taxes or Other
Taxes from or in respect of any sum payable hereunder to any Lender
or the Administrative Agent, then:
(i) the sum payable shall be increased as necessary so
that after making all required deductions and withholdings
(including deductions and withholdings applicable to additional
sums payable under this Section 3.03, but excluding in each case
United States backup withholding Taxes imposed because of payee
underreporting) such Lender or the Administrative Agent receives
an amount equal to the sum it would have received had no such
deductions or withholdings been made; provided, that, the
Borrower shall not be required to increase any amounts payable
to such Lender or the Administrative Agent to the extent such
increased amounts would be in excess of the amounts that would
have been payable to such Lender or the Administrative Agent had
such Lender or Administrative Agent complied with the
requirements of Section 3.03(f) or to the extent provided in
Section 3.03(g);
(ii) the Borrower or the Guarantors, as the case may
be, shall make such deductions and withholdings; and
(iii) the Borrower or the Guarantors, as the case may
be, shall pay the full amount deducted or withheld to the
relevant taxing authority or other authority in accordance with
applicable law.
(d) Within 30 days after the date of any payment by the
Borrower or the Guarantors, as the case may be, of Taxes or Other
Taxes, the Borrower or the Guarantors, as the case may be, shall
furnish to the Administrative Agent the original or a certified copy
of a receipt evidencing payment thereof or other evidence of payment
reasonably satisfactory to the Administrative Agent.
(e) If the Borrower or the Guarantors, as the case may be,
is required to pay additional amounts to the Administrative Agent or
any Lender pursuant to Section 3.03(c) other than amounts related to
the withholding of Mexican tax at the rate applicable to interest
payments received by foreign financial institutions registered with
the Secretaria de Hacienda y Credito Publico as a Foreign Financial
Institution for the purposes of Article 195, Section I of the Mexican
Income Tax law, then the Administrative Agent or such Lender shall
use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office,
issuing office, or office for receipt of payments by the Borrower and
Guarantors hereunder, as the case may be, so as to eliminate or
reduce the obligation of the Borrower or the Guarantor, as the case
may be, to pay any such additional amounts which may thereafter
accrue or to indemnify the Administrative Agent or such Lender in the
future, if such change in the reasonable judgment of the
Administrative Agent or such Lender is not otherwise disadvantageous
to such Lender.
(f) Each Lender and the Administrative Agent shall, from
time to time at the request of the Borrower or the Administrative
Agent (as the case may be), promptly furnish to the Borrower and the
Administrative Agent (as the case may be), such forms, documents or
other information (which shall be accurate and complete) as may be
reasonably required to establish any available exemption from, or
reduction in the amount of, applicable Taxes; provided, however, that
none of any Lender or the Administrative Agent shall be obliged to
disclose information regarding its tax affairs or computations to the
Borrower in connection with this paragraph (f), it being understood
that the identity of any Person shall not be considered for these
purposes as information regarding its tax affairs or computations.
Each of the Borrower and the Administrative Agent shall be entitled
to rely on the accuracy of any such forms, documents or other
information furnished to it by any Person and shall have no
obligation to make any additional payment or indemnify any Person for
any Taxes, interest or penalties that would not have became payable
by such Person had such documentation been accurate.
(g) In the case of an assignment, transfer, grant of a
participation, designation of a new Lending Office or Administrative
Agent's Payment Office or appointment of a successor Administrative
Agent, the Borrower and Guarantors shall not be required to pay or
increase any amounts, pursuant to this Section 3.03 following such
event, in excess of the amounts the Borrower and Guarantors were
required to pay or increase immediately prior to such an event,
except to the extent such event occurs pursuant to Section 3.10 or to
the extent of increases in such amounts resulting from a change in
applicable law occurring after such event.
(h) If the Administrative Agent or any Lender receives a
refund or credit in respect of Taxes or Other Taxes as to which it
has been indemnified by the Borrower or a Guarantor, as the case may
be, pursuant to Section 3.03(b) and such refund or credit is directly
and clearly attributable to this Agreement, it shall notify the
Borrower or such Guarantor, as the case may be, of the amount of such
refund or credit and shall return to the Borrower or such Guarantor,
as the case may be, such refund or the benefit of such credit;
provided, however, that (A) the Administrative Agent or such Lender,
as the case may be, shall not be obligated to make any effort to
obtain such refund or credit or to provide the Borrower or the
Guarantors with any information on or justification for the
arrangement of its tax affairs or otherwise disclose to the Borrower,
the Guarantors or any other Person any information that it considers
to be proprietary or confidential, and (B) the Borrower or such
Guarantor, as the case may be, upon the request of the Administrative
Agent or such Lender, as the case may be, shall return the amount of
such refund or the benefit of such credit to the Administrative Agent
or such Lender, as the case may be, if the Administrative Agent or
such Lender, as the case may be, is required to repay the amount of
such refund or the benefit of such credit to the relevant authorities
within six years of the date the Borrower or such Guarantor, as the
case may be, is paid such amount by the Administrative Agent or such
Lender, as the case may be.
(i) The agreements in this Section 3.03 shall survive the
termination of this Credit Agreement and the payment of the
Borrower's Obligations.
3.04 General Provisions as to Payments.
(a) All payments to be made by the Borrower or the
Guarantors, as the case may be, shall be made without set-off,
counterclaim or other defense. Except as otherwise expressly provided
herein, all payments by the Borrower shall be made to the
Administrative Agent for the account of the Lenders at the
Administrative Agent's Payment Office, and shall be made in Dollars
and in immediately available funds, no later than 3:30 p.m. (New York
City time) on the dates specified herein. The Administrative Agent
will promptly distribute to each Lender its Commitment Percentage (or
other applicable share as expressly provided herein) of each payment
in like funds as received. Any payment received by the Administrative
Agent later than 3:30 p.m. (New York City time) shall be deemed to
have been received on the following Business Day and any applicable
interest or fee shall continue to accrue until such following
Business Day.
(b) Except and to the extent otherwise specifically provided
herein, whenever any payment to be made hereunder is due on a day
which is not a Business Day, the date for payment thereof shall be
extended to the immediately following Business Day and, if interest
is stated to be payable in respect thereof, interest shall continue
to accrue to such immediately following Business Day.
(c) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is
due to the Lenders hereunder that the Borrower will not make such
payment in full, the Administrative Agent may assume that the
Borrower has made such payment in full to the Administrative Agent on
such date and the Administrative Agent may (but shall not be so
required), in reliance upon such assumption, cause to be distributed
to each Lender, as the case may be, on such due date an amount equal
to the amount then due to such Lender. If and to the extent that the
Borrower shall not have made such payment, each Lender shall repay to
the Administrative Agent forthwith on demand such amount distributed
to such Lender together with accrued interest thereon, for each day
from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Administrative Agent, at
the Federal Funds Rate; provided, however, that if any amount remains
unpaid by any Lender for more than five Business Days after the
Administrative Agent has made a demand for such amount, such Lender
shall, commencing on the day next following such fifth Business Day,
pay interest to the Administrative Agent at a rate per annum equal to
the Federal Funds Rate plus 1%, and, provided further, that if any
such amount remains unpaid by any Lender for more than ten Business
Days, such Lender shall, commencing on the day next following such
tenth Business Day, pay interest to the Administrative Agent at a
rate per annum equal to the Federal Funds Rate plus 2.00%.
(d) Currency of account
(i) Subject to paragraphs (ii) through (v) below,
Dollars are the currency of account and payment for any sum due
from parties under any Transaction Document.
(ii) A repayment of an Obligation or a part of an
Obligation shall be made in the currency in which that
Obligation is denominated on its due date.
(iii) Each payment of interest shall be made in the
currency in which the sum in respect of which the interest is
payable was denominated when that interest accrued.
(iv) Each payment in respect of costs, expenses or
Taxes shall be made in the currency in which the costs,
expenses or Taxes are incurred.
(v) Any amount expressed to be payable in a currency
other than Dollars shall be paid in that other currency.
(e) Change of currency
Unless otherwise prohibited by law or regulation,
if more than one currency or currency unit are at the same time
recognized by the central bank of any country as the lawful currency
of that country, then:
(A) any reference in the Transaction Documents
to, and any Obligations arising under the
Transaction Documents in, the currency of
that country shall be translated into, or
paid in, the currency or currency unit of
that country as agreed by the
Administrative Agent and the Borrower; and
(B) any translation from one currency or
currency unit to another shall be at the
official rate of exchange recognized by
the central bank for the conversion of
that currency or currency unit into the
other, rounded up or down by the
Administrative Agent (acting reasonably).
If a change in any currency of a country occurs, this
Agreement will, to the extent the Administrative Agent and the Borrower deem
necessary, be amended to comply with any generally accepted conventions and
market practice in the relevant interbank market and otherwise to reflect the
change in currency.
3.05 Funding Losses. If the Borrower makes any payment of
principal with respect to any LIBOR Loan on any day other than the last day of
the Interest Period applicable thereto, or if the Borrower fails to borrow any
LIBOR Loans after notice has been given to any Lender in accordance with
Section 2.01 or to convert or continue a Loan as a LIBOR Loan after a Notice
of Extension/Conversion has been delivered by the Borrower pursuant to Section
2.01(e), or if the Borrower fails to prepay any LIBOR Loans after notice has
been given pursuant to Section 2.01, the Borrower shall reimburse each Lender
within 15 days after demand for any resulting loss or expense incurred by it,
including any loss incurred in obtaining, liquidating or reemploying deposits
bearing interest by reference to LIBOR from third parties ("Funding Losses"),
provided such Lender shall have delivered to the Borrower a certificate
setting forth in reasonable detail the computations for the amount of such
loss or expense, which certificate shall be conclusive in the absence of
manifest error.
3.06 Basis for Determining Interest Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period for any LIBOR
Loan:
(a) the Administrative Agent determines that by reason of
circumstances affecting the London interbank market, reasonably
adequate means do not exist for ascertaining LIBOR applicable to such
Interest Period or that deposits in Dollars (in the applicable
amounts) are not being offered in the London interbank market for
such Interest Period, or
(b) the Required Lenders advise the Administrative Agent
that LIBOR as determined by the Administrative Agent will not
adequately and fairly reflect the cost to any Lender of making or
maintaining its Loan for such Interest Period,
(c) then the Administrative Agent shall forthwith give
notice thereof to the Borrower and the Lenders. In the event of any
such determination or advise, until the Administrative Agent shall
have notified the Borrower and the Lenders that the circumstances
giving rise to such notice no longer exist, any request by the
Borrower for a Loan of the affected amount or Interest Period, or a
conversion to or continuation of a Loan of the affected amount or
Interest Period shall be deemed rescinded and such request shall
instead be considered a request for a Base Rate Loan. Each
determination by the Administrative Agent hereunder shall be
conclusive absent manifest error.
3.07 Capital Adequacy.
If any Lender has determined, after the date hereof, that
the adoption or the becoming effective of, or any change in, or any change by
any Governmental Authority, central bank, or comparable agency charged with
the interpretation or administration thereof in the interpretation or
administration of, any applicable law, rule, or regulation regarding capital
adequacy, or compliance by such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
authority, central bank, or comparable agency, has or would have the effect of
increasing such Lender's cost of maintaining its Commitment or making or
maintaining any Loans or reducing the rate of return on such Lender's capital
or assets as a consequence of its commitments or obligations hereunder to a
level below that which such Lender could have achieved but for such adoption,
effectiveness, change, or compliance (taking into consideration such Lender's
policies with respect to capital adequacy), then, upon notice from such Lender
to the Borrower, the Borrower shall be obligated to pay to such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction in amount received. Each determination by any such Lender of
amounts owing under this Section shall, absent manifest error, be conclusive
and binding on the parties hereto. The relevant Lender will, upon request,
provide a certificate in reasonable detail as to the amount of such increased
cost or reduction in amount received and method of calculation.
Upon any Lender's making a claim for compensation under this
Section 3.07, (i) such Lender shall use commercially reasonable efforts
(consistent with legal and regulatory restrictions) to change the jurisdiction
of its Lending Office or assign its rights and obligations hereunder to
another of its offices, branches or affiliates so as to eliminate or reduce
any such additional payment by the Borrower which may thereafter accrue, if
such change is not otherwise disadvantageous to such Lender, and (ii) the
Borrower may replace such Lender in accordance with Section 3.11.
3.08 Illegality.
(a) Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the
interpretation or application thereof occurring after the Effective
Date shall make it unlawful for any Lender to make or maintain any
Commitment or any Loan as contemplated by this Agreement, then such
Lender, together with Lenders giving notice under Section 3.06(c),
shall be an "Affected Lender" and by written notice to the Borrower
and to the Administrative Agent:
(i) such Lender may declare that such Loans will not
thereafter (for the duration of such unlawfulness or
impossibility) be made by such Lender hereunder, whereupon, in
the case of any request for a LIBOR Loan, as to such Lender,
such request shall only be deemed a request for a Base Rate
Loan (unless it should also be illegal for the Affected Lender
to provide a Base Rate Loan, in which case such Loan shall bear
interest at a commensurate rate to be agreed upon by the
Administrative Agent and the Affected Lender, and so long as no
Event of Default shall have occurred and be continuing, the
Borrower), unless such declaration shall be subsequently
withdrawn;
(ii) such Lender may require that all outstanding LIBOR
Loans, made by it be converted to Base Rate Loans, in which
event all such LIBOR Loans shall be automatically converted to
Base Rate Loans as of the effective date of such notice as
provided in paragraph (b) below; and
(iii) if it is also illegal for the Affected Lender to
make Base Rate Loans, such Lender may declare all amounts owed
to them by the Borrower to the extent of such illegality to be
due and payable; provided, however, the Borrower has the right,
with the consent of the Administrative Agent to find an
additional Lender to purchase the Affected Lenders' rights and
obligations.
In the event any Lender shall exercise its rights under (i) or (ii) above with
respect to any Loans, all payments and prepayments of principal that would
otherwise have been applied to repay the LIBOR Loans that would have been made
by such Lender or the converted LIBOR Loans of such Lender shall instead be
applied to repay the Base Rate Loans made by such Lender in lieu of, or
resulting from the conversion, of such LIBOR Loans.
(b) For purposes of this Section 3.08, a notice to the
Borrower by any Lender shall be effective as to each such Loan, if
lawful, on the last day of the Interest Period currently applicable
to such Loan; in all other cases such notice shall be effective on
the date of receipt by the Borrower.
3.09 Requirements of Law.
If, after the date hereof, the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof
applicable to any Lender, or compliance by any Lender with any request or
directive (whether or not having the force of law) from any central bank or
other Governmental Authority, in each case made subsequent to the Effective
Date (or, if later, the date on which such Lender becomes a Lender):
(a) shall impose, modify, or hold applicable any reserve,
special deposit, compulsory loan, or similar requirement against
assets held by, deposits or other liabilities in or for the account
of, advances, loans, or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender that is not
otherwise included in the determination of the LIBOR hereunder; or
(b) shall impose on such Lender any other condition
(excluding any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender reasonably deems to be material, of making,
converting into, continuing, or maintaining LIBOR Loans or to reduce any
amount receivable hereunder in respect thereof, then, in any such case, upon
notice delivered to the Borrower from such Lender, through the Administrative
Agent, in accordance herewith, the Borrower shall be obligated to promptly pay
such Lender, upon its demand, any additional amounts necessary to compensate
such Lender for such increased cost or reduced amount receivable; provided
that, in any such case, the Borrower may elect to convert the LIBOR Loans made
by such Lender hereunder to Base Rate Loans by giving the Administrative Agent
at least one (1) Business Day's notice of such election. If any Lender becomes
entitled to claim any additional amounts pursuant to this Section, it shall
provide notice thereof to the Borrower, promptly upon occurrence of such
event, but in any case within three (3) days from the date of such event,
through the Administrative Agent, certifying (x) that one of the events
described in this paragraph (a) has occurred and describing in reasonable
detail the nature of such event, (y) as to the increased cost or reduced
amount resulting from such event and (z) as to the additional amount demanded
by such Lender and a reasonably detailed explanation of the calculation
thereof. Such a certificate as to any additional amounts payable pursuant to
this subsection submitted by such Lender, through the Administrative Agent, to
the Borrower shall be conclusive and binding on the parties hereto in the
absence of manifest error. This covenant shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable
hereunder. If any Lender becomes aware of a proposed change in any Requirement
of Law that would entitle it to claim any additional amounts pursuant to this
Section it shall promptly, upon the Lender becoming aware of such event,
provide notice to the Borrower through the Administrative Agent.
3.10 Substitute Lenders. If any Lender has demanded
compensation (or if the Borrower is required to increase amounts payable
hereunder) pursuant to Sections 3.03, 3.07, 3.08 or to 3.09, and such Lender
does not waive its right to future additional compensation pursuant to Section
3.03, 3.07, 3.08 or 3.09, the Borrower shall have the right (i) to replace
such Lender with a Substitute Lender or Substitute Lenders that shall succeed
to the rights of such Lender under this Agreement upon execution of an
Assignment and Assumption Agreement and payment by the Borrower of the related
processing fee of U.S.$3,500 to the Administrative Agent; or (ii) to remove
such Lender, reduce the Commitments by the amount of the Commitment of such
Lender, and adjust the Commitment Percentage of each Lender such that the
percentage of each other Lender shall be increased to equal the percentage
equivalent of a fraction. The numerator of which is the Commitment of such
other Lender and the denominator of which is the Commitments of the Lenders
minus the Commitments of the Lender who demanded payment pursuant to Sections
3.03, 3.07, 3.08 or 3.09; provided, however, that such Lender shall not be
replaced or removed hereunder until such Lender has been repaid in full all
amounts owed to it pursuant to this Agreement and the other Transaction
Documents (including Sections 3.07) unless any such amount is being contested
by the Borrower in good faith.
3.11 Sharing of Payments, Etc.
(a) If, other than as expressly provided elsewhere herein,
any Lender shall obtain on account of the Obligations owing to it any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) in excess of its Commitment Percentage of payments on account of
the Obligations obtained by all the Lenders (an "excess payment"), such Lender
shall forthwith (i) notify the Administrative Agent of such fact, and (ii)
purchase from the other Lenders such participations in such Obligations owing
to them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that if all or
any portion of such excess payment is thereafter -------- ------- recovered
from the purchasing Lender, such purchase shall to that extent be rescinded
and each other Lender shall repay to the purchasing Lender the purchase price
paid therefor, together with an amount equal to such paying Lender's
Commitment Percentage (according to the proportion of (A) the amount of such
paying Lender's required repayment to (B) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The
Administrative Agent will keep records (which shall be conclusive and binding
in the absence of demonstrable error) of participations purchased pursuant to
this Section 3.11 and will in each case notify the Lenders following any such
purchases.
(b) If any Lender shall commence any action or proceeding in
any court to enforce its rights hereunder after consultation with the other
Lenders and, as a result thereof or in connection therewith, it shall receive
any excess payment, then such Lender shall not be required to share any
portion of such excess payment with any Lender which has the legal right to,
but does not, join in any such action or proceeding or commence and diligently
prosecute a separate action or proceeding to enforce its rights in another
court.
(c) The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 3.11 may exercise
all its rights of set-off with respect to such participation as fully as if
such Lender were the direct creditor of the Borrower in the amount of such
participation.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
4.01 Conditions to Effectiveness. The obligations of the
Lenders under this Agreement are subject to the satisfaction or waiver of the
following conditions precedent (the date on which all such conditions
precedent are satisfied or waived being the "Effective Date"):
(a) Agreement. The Administrative Agent shall have received
counterparts of this Agreement duly executed by each party hereto.
(b) Opinions of Borrower's and each Guarantor's Counsel. The
Administrative Agent shall have received (i) the opinion of Skadden,
Arps, Slate, Meagher & Flom LLP, New York counsel to the Borrower and
the Guarantors, in substantially the form of Exhibit E, and (ii) the
opinion of Lic. Ramiro G. Villareal Morales, Mexican counsel to the
Borrower, in substantially the form of Exhibit F.
(c) Opinion of Counsel to the Administrative Agent. The
Administrative Agent shall have received (i) a favorable opinion of
Ritch, Heather y Mueller, S.C., special Mexican counsel to the
Administrative Agent and the Lenders, and (ii) the opinion of
Sullivan & Cromwell LLP, New York counsel to the Lenders.
(d) Governmental Approvals. The Administrative Agent shall
have received certified copies of any and all necessary approvals,
authorizations, or consents of, or notices to, or registrations with
any Governmental Authority required for the Borrower and each
Guarantor to enter into, or perform its obligations under, the
Transaction Documents.
(e) Organizational Documents of the Borrower and the
Guarantors. The Administrative Agent shall have received certified
copies of (i) the acta constitutiva and estatutos sociales in effect
on the Effective Date of the Borrower and each Guarantor, (ii) the
powers-of-attorney of each Person executing any Transaction Document
on behalf of the Borrower and each Guarantor, together with specimen
signatures of such Person and (iii) all documents evidencing other
necessary corporate action and governmental approvals, if any, with
respect to the authorization for the execution, delivery and
performance of each such Transaction Document and the transactions
contemplated hereby and thereby. All certificates shall state that
the resolutions or other information referred to in such certificates
have not been amended, modified, revoked or rescinded as of the date
of such certificates (which shall not be earlier than five Business
Days before the Effective Date).
(f) Agent for Service of Process. The Administrative Agent
shall have received a power of attorney, notarized under Mexican law,
granted by the Borrower and each Guarantor to the Process Agent in
respect of the Transaction Documents together with evidence that the
Process Agent has accepted its appointment as Process Agent pursuant
to Section 13.12.
(g) Fees and Expenses. The Borrower shall have paid all fees
and expenses owing to the Lenders, the Joint Bookrunners and the
Administrative Agent to the extent of and payable on or before the
Effective Date of the Agreement, and all other fees and expenses
owing hereunder and under the Fee Letter to the extent due and
payable on or before the Effective Date of the Agreement.
(h) No Default. No Default or Event of Default shall have
occurred and be continuing either prior to or after giving effect to
the transactions contemplated on the Effective Date, and the Borrower
and each Guarantor shall have provided a certificate from a
Responsible Officer of the Borrower to such effect to the
Administrative Agent.
(i) Representations and Warranties. The representations and
warranties of the Borrower and of each Guarantor contained in this
Agreement and each other Transaction Document shall be true on and as
of the Effective Date, and the Borrower and each Guarantor shall have
provided a certificate to such effect to the Administrative Agent.
(j) No Material Adverse Effect. No Material Adverse Effect
shall have occurred since December 31, 2003 and there shall have
occurred no circumstance and/or event of a financial, political or
economic nature in Mexico that has a reasonable likelihood of having
a material adverse effect on the ability of the Borrower or the
Guarantors to perform their obligations under this Agreement and the
other Transaction Documents.
(k) Other Documents. The Administrative Agent shall have
received such other certificates, powers of attorney and other
documents and undertakings relating to the authority for, and the
execution, delivery and validity of, the Transaction Documents, as
may be reasonably requested by the Administrative Agent or any Lender
through the Administrative Agent.
4.02 Conditions Precedent to Borrowings and Continuation or
Conversion of the Loans. The obligation of any Lender to make a Loan on the
occasion of any Borrowing or to continue or convert any Loan is subject to the
satisfaction of the following conditions:
(a) Notes. If requested by a Lender, there shall have been
delivered to the Administrative Agent for the account of such Lender,
a Note, executed by the Borrower;
(b) Notices. In the case of Borrowings, continuance or
conversion of Loans, the Administrative Agent shall have received a
Notice of Borrowing or a Notice of Extension/Conversion as required
by Section 2.01(c) or 2.01(e), respectively;
(c) Availability. Immediately after such Borrowing or the
continuation or conversion of any Loan, the Total Outstandings shall
not exceed the Aggregate Committed Amount;
(d) No Default. Immediately before and after giving effect
to such Borrowing or the continuation or conversion of any Borrowing,
no Default or Event of Default shall have occurred and be continuing
and such Borrowing or continuation or conversion of any Loan will not
cause or result in a Default or Event of Default; and
(e) Representations and Warranties. The representations and
warranties of the Borrower contained in this Agreement and in each
other Transaction Document and of each Guarantor contained in this
Agreement shall be true and correct in all material respects on and
as of the date of any Borrowing or continuation or conversion of any
Loan.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
----------------------------------------------
The Borrower represents and warrants that:
5.01 Corporate Existence and Power.
(a) The Borrower is a corporation (sociedad anonima de
capital variable) duly incorporated, validly existing and in good
standing under the laws of Mexico and has all requisite corporate
power and authority (including all governmental licenses, permits and
other approvals except for such licenses, permits and approvals the
absence of which will not have a Material Adverse Effect) to own its
assets and carry on its business as now conducted and as proposed to
be conducted.
(b) All of the outstanding stock of the Borrower has been
validly issued and is fully paid and non-assessable.
5.02 Power and Authority; Enforceable Obligations.
(a) The execution, delivery and performance by the Borrower
of each Transaction Document to which it is or will be a party, and
the consummation of the transactions contemplated hereby and thereby,
are within the Borrower's corporate powers and have been duly
authorized by all necessary corporate action pursuant to the
estatutos sociales of the Borrower.
(b) This Agreement and the other Transaction Documents to
which the Borrower is a party have been duly executed and delivered
by the Borrower and constitute the legal, valid and binding
obligations of the Borrower enforceable in accordance with their
respective terms, except as enforceability may be limited by
applicable concurso mercantil, bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors'
rights generally or general equity principles.
5.03 Compliance with Law and Other Instruments. The
execution, delivery of and performance under this Agreement and each of the
other Transaction Documents to which the Borrower is a party and the
consummation of the transactions herein or therein contemplated, and
compliance with the terms and provisions hereof and thereof, do not and will
not (a) conflict with, or result in a breach or violation of, or constitute a
default under, or result in the creation or imposition of any Lien upon the
assets of the Borrower pursuant to, any Contractual Obligation of the Borrower
or (b) result in any violation of the estatutos sociales of the Borrower or
any provision of any Requirement of Law applicable to the Borrower.
5.04 Consents/Approvals. No order, permission, consent,
approval, license, authorization, registration or validation of, or notice to
or filing with, or exemption by, any Governmental Authority or third party is
required to authorize, or is required in connection with, the execution,
delivery and performance by the Borrower of this Agreement and the other
Transaction Documents to which the Borrower is a party or the taking of any
action contemplated hereby or by any other Transaction Document.
5.05 Financial Information.
(a) The consolidated balance sheet of the Borrower and its
Subsidiaries as at December 31, 2003, and the related consolidated
statements of income and cash flows of the Borrower and its
Subsidiaries for the fiscal year then ended, accompanied by an
opinion of KPMG Cardenas Dosal, S.C., independent public accountants,
copies of which have been furnished to each Lender, fairly present,
the consolidated financial condition of the Borrower and its
Subsidiaries as at such date and the consolidated results of the
operations of the Borrower and its Subsidiaries for the period ended
on such date, all in accordance with Mexican GAAP, consistently
applied.
(b) The unaudited consolidated balance sheet of the Borrower
and its Subsidiaries as at December 31, 2004 and the related
consolidated statements of income, changes in equity and changes in
financial position for the fiscal year then ended, copies of which
have been furnished to each Lender, were prepared in conformity with
Mexican GAAP and fairly present the consolidated financial condition
of the Borrower and its Subsidiaries as at December 31, 2004 and the
results of operations for the fiscal period ended on such date.
(c) Since December 31, 2003 there has been no development or
event which has had or is reasonably likely to have a Material
Adverse Effect.
5.06 Litigation. Except as set forth in Schedule 5.06, there
is no pending or threatened action, suit, investigation, litigation or
proceeding, including any Environmental Action, affecting the Borrower or any
of its Subsidiaries before any court, Governmental Authority or arbitrator
that (a) would be reasonably likely to have a Material Adverse Effect or (b)
purports to affect the legality, validity or enforceability of any Transaction
Document or the consummation of the transactions contemplated thereby, and
there has been no adverse change in the status, or financial effect on the
Borrower or any of its Subsidiaries, of the litigation described in Schedule
5.06.
5.07 No Immunity. The Borrower is subject to civil and
commercial law with respect to its obligations under this Agreement and each
other Transaction Document to which it is a party and the execution, delivery
and performance of this Agreement or any such other Transaction Document by
the Borrower constitute private and commercial acts rather than public or
governmental acts. Under the laws of Mexico neither the Borrower nor any of
its property has any immunity from jurisdiction of any court or any legal
process (whether through service or notice, attachment prior to judgment or
attachment in aid of execution).
5.08 Governmental Regulations. The Borrower is not, and is
not controlled by, (a) an "investment company" within the meaning of the
United States Investment Company Act of 1940, as amended or (b) a "holding
company", or of a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary" of a "holding
company", within the meaning of the Public Utility Holding Company Act of
1935, as amended.
5.09 Direct Obligations; Pari Passu; Liens.
(a) (i) This Agreement constitutes a direct, unconditional
unsubordinated and unsecured obligation of the Borrower, and (ii) the
Loans, when made, will constitute direct, unconditional
unsubordinated and unsecured obligations of the Borrower.
(b) The obligations of the Borrower under this Agreement and
the Loans rank and will rank in priority of payment at least pari
passu with all other senior unsecured Debt of the Borrower.
(c) There are no Liens on the property of the Borrower or
any of its Subsidiaries other than Permitted Liens.
5.10 Subsidiaries. All Material Subsidiaries of the Borrower
are listed on Schedule 5.10.
5.11 Ownership of Property. (a) Except as, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect, each of
the Borrower and its Subsidiaries has title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of such property is
subject to any Lien except Permitted Liens and (b) each Credit Party maintains
insurance as required by Section 7.05.
5.12 No Recordation Necessary.
(a) This Agreement and the Notes are in proper legal form
under the law of Mexico for the enforcement thereof against the
Borrower under the law of Mexico. To ensure the legality, validity,
enforceability or admissibility in evidence of this Agreement and
each other Transaction Document in Mexico, it is not necessary that
this Agreement or any other Transaction Document be filed or recorded
with any Governmental Authority in Mexico or that any stamp or
similar tax be paid on or in respect of this Agreement or any other
document to be furnished under this Agreement, unless such stamp or
similar taxes have been paid by the Borrower; provided, however, that
in the event any legal proceedings are brought in the courts of
Mexico, an official Spanish translation of the documents required in
such proceedings, including this Agreement, would have to be approved
by the court after the defendant is given an opportunity to be heard
with respect to the accuracy of the translation, and proceedings
would thereafter be based upon the translated documents.
(b) It is not necessary (i) in order for the Administrative
Agent or any Lender to enforce any rights or remedies under the
Transaction Documents or (ii) solely by reason of the execution,
delivery and performance of this Agreement by the Administrative
Agent or any Lender, that the Administrative Agent or such Lender be
licensed or qualified with any Mexican Governmental Authority or be
entitled to carry on business in Mexico.
5.13 Taxes.
(a) Each Obligor has filed all material tax returns which
are required to be filed by it and has paid all taxes due pursuant to
such returns or pursuant to any material assessment received by the
Borrower, except where the same may be contested in good faith by
appropriate proceedings and as to which such Obligor maintains
reserves to the extent it is required to do so by law or pursuant to
Mexican GAAP. The charges, accruals and reserves on the books of each
Obligor in respect of taxes or other governmental charges are, in the
opinion of the Borrower, adequate.
(b) Except for tax imposed by way of withholding on
interest, fees and commissions remitted from Mexico, there is no tax
(other than taxes on, or measured by, income or profits), levy,
impost, deduction, charge or withholding imposed, levied, charged,
assessed or made by or in Mexico or any political subdivision or
taxing authority thereof or therein either (i) on or by virtue of the
execution or delivery of this Agreement or any of the other
Transaction Documents or (ii) on any payment to be made by the
Borrower pursuant to this Agreement or any of the other Transaction
Documents. The Borrower and each Guarantor is permitted to pay any
additional amounts payable pursuant to Section 3.03.
5.14 Compliance with Laws. The Borrower and its Subsidiaries
are in compliance in all material respects with all applicable Requirements of
Law (including with respect to the licenses, certificates, permits,
franchises, and other governmental authorizations necessary to the ownership
of their respective properties or to the conduct of their respective
businesses, antitrust laws or Environmental Laws and the rules and regulations
and laws with respect to social security, workers' housing funds, and pension
funds obligations), except where the failure to so comply would not have a
Material Adverse Effect.
5.15 Absence of Default. No Default or Event of Default has
occurred and is continuing.
5.16 Full Disclosure. All information heretofore furnished
by the Borrower to the Administrative Agent, the Joint Bookrunners or any
Lender for purposes of or in connection with this Agreement or any transaction
contemplated hereby (other than projections and other "forward-looking"
information that have been prepared on a reasonable basis and in good faith by
the Borrower) is, and all such information hereafter furnished by the Borrower
to the Administrative Agent, the Joint Bookrunners or any Lender will be, true
and accurate in all material respects on the date as of which such information
is stated or certified and does not omit to state any material fact necessary
in order to make the statements contained herein or therein, taken as a whole,
not misleading. The Borrower has disclosed to the Lenders in writing any and
all facts which may have a Material Adverse Effect.
5.17 Choice of Law; Submission to Jurisdiction and Waiver of
Sovereign Immunity. In any action or proceeding involving the Borrower arising
out of or relating to this Agreement in any Mexican court or tribunal, any
Lender, the Joint Bookrunners and the Administrative Agent would be entitled
to the recognition and effectiveness of the choice of law, submission to
jurisdiction and waiver of sovereign immunity provisions of Sections 13.10,
13.11 and 13.13.
5.18 Total Outstandings. The Total Outstandings do not
exceed the aggregate amount of the Commitments.
5.19 Pension and Welfare Plans. During the consecutive
twelve-month period prior to the date of the execution and delivery of this
Agreement and prior to the date of any Borrowing hereunder, no steps have been
taken to terminate any Pension Plan, and no contribution failure has occurred
with respect to any Pension Plan sufficient to give rise to a Lien under
Section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which would reasonably be expected
to result in the incurrence by any Credit Party, any of its Subsidiaries, or
any its ERISA Affiliates of any material liability (other than liabilities
incurred in the ordinary course of maintaining the Pension Plan), fine or
penalty. No Credit Party, nor any of its Subsidiaries, has any contingent
liability with respect to any post-retirement benefit under a Welfare Plan
which would reasonably be expected to have a Material Adverse Effect, other
than liability for continuation coverage described in Part 6 of Title I of
ERISA.
5.20 Environmental Matters.
Except as would not have or be reasonably expected to have a
Material Adverse Effect:
(a) Each of the properties owned or leased by a Credit Party
or any of its Subsidiaries (the "Real Properties") and all operations
at the Real Properties are in compliance with all applicable
Environmental Laws, and there is no violation of any Environmental
Law with respect to the Real Properties or the businesses operated by
the Credit Parties or any of their Subsidiaries (the "Businesses"),
and there are no conditions relating to the Businesses or Real
Properties that would reasonably be expected to give rise to
liability under any applicable Environmental Laws.
(b) No Credit Party has received any written notice of, or
inquiry from any Governmental Authority regarding, any violation,
alleged violation, non-compliance or liability regarding Hazardous
Materials or compliance with Environmental Laws with regard to any of
the Real Properties or the Businesses, nor, to the knowledge of a
Credit Party or any of its Subsidiaries, is any such notice being
threatened.
(c) Hazardous Materials have not been transported or
disposed of from the Real Properties, or generated, treated, stored
or disposed of at, on or under any of the Real Properties or any
other location, in each case by, or on behalf or with the permission
of, a Credit Party or any of its Subsidiaries in a manner that would
give rise to liability under any applicable Environmental Laws.
(d) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of a Credit Party or any of
its Subsidiaries, threatened, under any Environmental Law to which a
Credit Party or any of its Subsidiaries is or will be named as a
party, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any
Environmental Law with respect to a Credit Party or any of its
Subsidiaries, the Real Properties or the Businesses.
(e) There has been no release (including, without
limitation, disposal) or to the Borrower's knowledge, threat of
release of Hazardous Materials at or from the Real Properties, or
arising from or related to the operations of a Credit Party or any of
its Subsidiaries in connection with the Real Properties or otherwise
in connection with the Businesses where such release constituted a
violation of, or would give rise to liability under, any applicable
Environmental Laws.
(f) None of the Real Properties contains any Hazardous
Materials at, on or under the Real Properties in amounts or
concentrations that, if released, constitute a violation of, or could
give rise to liability under, Environmental Laws.
(g) No Credit Party, nor any of its Subsidiaries, has
assumed any liability of any Person (other than another Credit Party
or one of its Subsidiaries) under any Environmental Law.
(h) This Section 5.20 constitutes the only representations
and warranties of the Credit Parties with respect to any
Environmental Law or Hazardous Substance.
5.21 Margin Regulations. No part of the proceeds of the
Loans hereunder will be used, directly or indirectly, for the purpose of
purchasing or carrying any "margin stock" within the meaning of Regulation U,
or for the purpose of purchasing or carrying or trading in any securities. If
requested by any Lender or the Administrative Agent, the Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form U-1 referred to in said
Regulation U. No indebtedness being reduced or retired out of the proceeds of
the Loans hereunder was or will be incurred for the purpose of purchasing or
carrying any margin stock within the meaning of Regulation U or any "margin
security" within the meaning of Regulation T. "Margin stock" within the
meaning of Regulation U does not constitute more than 25% of the value of the
consolidated assets of the Borrower and its Subsidiaries. Neither the
execution and delivery hereof by the Borrower, nor the performance by it of
any of the transactions contemplated by this Agreement (including, without
limitation, the direct or indirect use of the proceeds of the Loans) will
violate or result in a violation of the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, or regulations issued
pursuant thereto, or Regulation T, U, or X.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE GUARANTORS
------------------------------------------------
Each of the Guarantors separately represents and warrants
that:
6.01 Corporate Existence and Power.
(a) Such Guarantor is a corporation (sociedad anonima de
capital variable) duly incorporated, validly existing and in good
standing under the laws of Mexico and has all requisite corporate
power and authority (including all governmental licenses, permits and
other approvals except for such licenses, permits and approvals the
absence of which will not have a Material Adverse Effect) to own its
assets and carry on its business as now conducted and as proposed to
be conducted.
(b) All of the outstanding stock of such Guarantor has been
validly issued and is fully paid and non-accessible.
6.02 Power and Authority; Enforceable Obligations.
(a) The execution, delivery and performance by such
Guarantor of each Transaction Document to which it is or will be a
party, and the consummation of the transactions contemplated hereby
and thereby, are within such Guarantor's corporate powers and have
been duly authorized by all necessary corporate action pursuant to
the estatutos sociales of such Guarantor.
(b) This Agreement and the other Transaction Documents to
which such Guarantor is a party have been duly executed and delivered
by such Guarantor and constitute legal, valid and binding obligations
of such Guarantor enforceable in accordance with their respective
terms, except as enforceability may be limited by applicable concurso
mercantil, bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally or general equity
principals.
6.03 Compliance with Law and Other Instruments. The
execution, delivery and performance of this Agreement and any of the other
Transaction Documents to which such Guarantor is a party and the consummation
of the transactions herein or therein contemplated, and compliance with the
terms and provisions hereof and thereof, do not and will not (a) conflict
with, or result in a breach or violation of, or constitute a default under, or
result in the creation or imposition of any Lien upon the assets of such
Guarantor pursuant to, any Contractual Obligation of such Guarantor or (b)
result in any violation of the estatutos sociales of such Guarantor or any
provision of any Requirement of Law applicable to such Guarantor.
6.04 Consents/Approvals. No order, permission, consent,
approval, license, authorization, registration or validation of, or notice to
or filing with, or exemption by, any Governmental Authority or third party is
required to authorize, or is required in connection with, the execution,
delivery and performance by such Guarantor of this Agreement and the other
Transaction Documents to which such Guarantor is a party or the taking of any
action contemplated hereby or by any other Transaction Document.
6.05 Litigation; Material Adverse Effect. (a) Except as set
forth in Schedule 6.05, there is no pending or threatened action, suit,
investigation, litigation or proceeding, including any Environmental Action,
affecting the Borrower or any of its Subsidiaries before any court,
Governmental Authority or arbitrator that (i) would be reasonably likely to
have a Material Adverse Effect or (ii) purports to affect the legality,
validity or enforceability of any Transaction Document or the consummation of
the transactions contemplated thereby, and there has been no adverse change in
the status, or financial effect on the Borrower or any of its Subsidiaries, of
the litigation described in Schedule 6.05.
(b) Since December 31, 2003 there has been no development or
event which has had or is reasonably likely to have a Material
Adverse Effect.
6.06 No Immunity. Such Guarantor is subject to civil and
commercial law with respect to its obligations under this Agreement and each
other Transaction Document to which it is a party and the execution, delivery
and performance of this Agreement or any such other Transaction Document by
such Guarantor constitute private and commercial acts rather than public or
governmental acts. Under the laws of Mexico neither such Guarantor nor any of
its property has any immunity from jurisdiction of any court or any legal
process (whether through service or notice, attachment prior to judgment or
attachment in aid of execution).
6.07 Governmental Regulations. Such Guarantor is not, and is
not controlled by, (a) an "investment company" within the meaning of the
United States Investment Company Act of 1940, as amended or (b) a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate"
of a "holding company" or of a "subsidiary" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
6.08 Direct Obligations; Pari Passu.
(a) This Agreement constitutes a direct, unconditional
unsubordinated and unsecured obligation of such Guarantor.
(b) The obligations of such Guarantor under this Agreement
rank and will rank in priority of payment at least pari passu with
all other senior unsecured Debt of such Guarantor.
6.09 No Recordation Necessary. This Agreement is in proper
legal form under the law of Mexico for the enforcement thereof against such
Guarantor under the law of Mexico. To ensure the legality, validity,
enforceability or admissibility in evidence of this Agreement and each other
Transaction Document in Mexico, it is not necessary that this Agreement or any
other Transaction Document be filed or recorded with any Governmental
Authority in Mexico or that any stamp or similar tax be paid on or in respect
of this Agreement or any other document to be furnished under this Agreement
unless such stamp or similar taxes have been paid by the Borrower or the
Guarantors; provided, however, that in the event any legal proceedings are
brought in the courts of Mexico, an official Spanish translation of the
documents required in such proceedings, including this Agreement, would have
to be approved by the court after the defendant is given an opportunity to be
heard with respect to the accuracy of the translation, and proceedings would
thereafter be based upon the translated documents.
6.10 Choice of Law; Submission to Jurisdiction and Waiver of
Sovereign Immunity. In any action or proceeding involving such Guarantor
arising out of or relating to this Agreement in any Mexican court or tribunal,
the Lenders, the Joint Bookrunners and the Administrative Agent would be
entitled to the recognition and effectiveness of the choice of law, submission
to jurisdiction and waiver of sovereign immunity provisions of Sections 13.10,
13.11 and 13.13.
ARTICLE VII
AFFIRMATIVE COVENANTS
---------------------
The Borrower covenants and agrees that for so long as any
Obligation under this Agreement or any other Transaction Document remains
unpaid or any Lender has any Commitment hereunder:
7.01 Financial Reports and Other Information. The Borrower
will deliver to the Administrative Agent (with a copy for each Lender):
(a) as soon as available and in any event within 120 days
after the end of each fiscal year of the Borrower, a copy of the
annual audit report for such year for the Borrower and its
Subsidiaries containing consolidated and consolidating balance sheets
of the Borrower and its Subsidiaries, as of the end of such fiscal
year and consolidated statements of income and cash flows of the
Borrower and its Subsidiaries, for such fiscal year, in each case
accompanied by an opinion acceptable to the Required Lenders by KPMG
Cardenas Dosal, S.C. or other independent public accountants of
recognized standing acceptable to the Required Lenders, together with
(i) a certificate of such accounting firm to the Lenders stating that
in the course of the regular audit of the business of the Borrower
and its Subsidiaries, which audit was conducted by such accounting
firm in accordance with Mexican GAAP, such accounting firm has
obtained no knowledge that a Default or Event of Default has occurred
and is continuing, or if, in the opinion of such accounting firm a
Default or Event of Default has occurred and is continuing, a
statement as to the nature thereof and (ii) a certificate of a
Responsible Officer of the Borrower, stating that no Default or Event
of Default has occurred and is continuing or, if a Default or Event
of Default has occurred and is continuing, a statement as to the
nature thereof and the action that the Borrower has taken and
proposes to take with respect thereto; provided that in the event of
any change in the Mexican GAAP used in the preparation of such
financial statements, -------- the Borrower shall also provide, for
informational purposes only, a statement of reconciliation conforming
such financial statements to Mexican GAAP consistent with those
applied in the preparation of the financial statements referred to in
Section 5.05 and provided further that all such documents will be
prepared in English; and
(b) as soon as available and in any event within 60 days
after the end of each of the first three quarters of each fiscal year
of the Borrower, consolidated balance sheets of the Borrower and its
Subsidiaries, as of the end of such quarter and consolidated
statements of income and cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the previous
fiscal year and ending with the end of such quarter, duly certified
(subject to year-end audit adjustments) by any Responsible Officer of
the Borrower as having been prepared in accordance with Mexican GAAP
and together with a certificate of a Responsible Officer of the
Borrower, as to compliance with the terms of this Agreement and
stating that no Default or Event of Default has occurred and is
continuing or, if a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action that
the Borrower has taken and proposes to take with respect thereto;
provided that in the event of any change in the Mexican GAAP used in
the preparation of such financial statements, the Borrower shall also
provide, for informational purposes only, a statement of
reconciliation conforming such financial statements to Mexican GAAP
consistent with those applied in the preparation of the financial
statements referred to in Section 5.05 and provided further that all
such documents will be prepared in English.
7.02 Notice of Default and Litigation. The Borrower will
furnish to the Administrative Agent (and the Administrative Agent will notify
each Lender):
(a) as soon as practicable and in any event within five days
after the occurrence of each Default or Event of Default continuing
on the date of such statement, a statement of the chief financial
officer of the Borrower setting forth details of such Default or
Event of Default and the action that the Borrower has taken and
proposes to take with respect thereto; and
(b) promptly after the commencement thereof, notice of all
litigation, actions, investigations and proceedings before any court,
Governmental Authority or arbitrator affecting the Borrower or any of
its Subsidiaries of the type described in Section 5.06 or the receipt
of written notice by the Borrower or any of its subsidiaries of
potential liability or responsibility for violation, or alleged
violation of any federal, state or local law, rule or regulation
(including but not limited to Environmental Laws) the violation of
which could reasonably be expected to have a Material Adverse Effect.
7.03 Compliance with Laws and Contractual Obligations, Etc.
The Borrower will comply, and cause each of its Subsidiaries to comply, in all
material respects, with all applicable Requirements of Law (including with
respect to the licenses, approvals, certificates, permits, franchises,
notices, registrations and other governmental authorizations necessary to the
ownership of its respective properties or to the conduct of its respective
business, antitrust laws or Environmental Laws and laws with respect to social
security and pension funds obligations) and all material Contractual
Obligations, except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect.
7.04 Payment of Obligations. The Borrower will pay and
discharge, and cause each of its Subsidiaries to pay and discharge, before the
same shall become delinquent, (a) all taxes, assessments and governmental
charges or levies assessed, charged or imposed upon it or upon its property
and (b) all lawful claims that, if unpaid, might by law become a Lien upon its
property, except where the failure to make such payments or effect such
discharges could not reasonably be expected to have a Material Adverse Effect;
provided, however, that neither the Borrower nor any of its Subsidiaries shall
be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim that is being contested in good faith and by
proper proceedings and as to which appropriate reserves are being maintained,
unless and until any Lien resulting therefrom attaches to its property and
becomes enforceable against its other creditors.
7.05 Maintenance of Insurance. The Borrower will maintain,
and cause each of its Subsidiaries to maintain, insurance with reputable
insurance companies or associations in such amounts and covering such risks as
is usually carried by companies of established reputation engaged in similar
businesses and owning similar properties in the same general areas in which
the Borrower or such Subsidiary operates.
7.06 Conduct of Business and Preservation of Corporate
Existence. The Borrower will continue to engage in business of the same
general type as now conducted by the Borrower and will preserve and maintain,
and cause each of its Material Subsidiaries to preserve and maintain, its
corporate existence, rights (charter and statutory), licenses, consents,
permits, notices or approvals and franchises deemed material to its business;
provided that neither the Borrower nor any of its Subsidiaries shall be
required to maintain its corporate existence in connection with a merger or
consolidation in compliance with Section 8.03; and provided, further that
neither the Borrower nor any of its Subsidiaries shall be required to preserve
any right or franchise if the Borrower or any such Subsidiary shall in its
good faith judgment, determine that the preservation thereof is no longer in
the best interests of the Borrower or such Subsidiary, as the case may be, and
that the loss thereof could not reasonably be expected to have a Material
Adverse Effect.
7.07 Books and Records. The Borrower will keep, and cause
each of its Subsidiaries to keep, proper books of record and account, in which
full and correct entries shall be made of all financial transactions and the
assets and business of the Borrower and each such Subsidiary in accordance
with Mexican GAAP, consistently applied.
7.08 Maintenance of Properties, Etc. The Borrower will:
(a) maintain and preserve, and cause each of its
Subsidiaries to maintain and preserve, all of its properties that are
used or useful in the conduct of its business in good working order
and condition, ordinary wear and tear excepted, and
(b) maintain, preserve and protect all intellectual property
and all necessary governmental and third party approvals, franchises,
licenses and permits, material to the business of the Borrower or its
Subsidiaries, provided neither paragraph (a) nor this paragraph (b)
shall prevent the Borrower or any of its Subsidiaries from
discontinuing the operation and maintenance of any of its properties
or allowing to lapse certain approvals, licenses or permits which
discontinuance is desirable in the conduct of its business and which
discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
7.09 Use of Proceeds. The Borrower will use the proceeds of
all Loans made hereunder to repay amounts outstanding under the credit
agreement of New Sunward Holding B.V. dated September 24, 2004 or the credit
agreement of New Sunward Holding B.V. dated October 15, 2003 and to pay fees
and expenses related to this Agreement.
7.10 Pari Passu Ranking. The Borrower will ensure that at
all times the Obligations of the Borrower and each of the Guarantors under the
Transaction Documents constitute unconditional general obligations of such
Obligor ranking in priority of payment at least pari passu with all other
senior unsecured, unsubordinated Debt of such Obligor.
7.11 Transactions with Affiliates. The Borrower will
conduct, and cause each of its Subsidiaries to conduct, all transactions
otherwise permitted under this Agreement with any of its Affiliates on terms
that are commercially reasonable and no less favorable to the Borrower or such
Subsidiary than it would obtain in a comparable arm's-length transaction with
a Person not an Affiliate.
7.12 Maintenance of Governmental Approvals. The Borrower
will maintain in full force and effect at all times all approvals of and
filings with any Governmental Authority or third Party required under
applicable law for the conduct of its business (including, without limitation,
antitrust laws or Environmental Laws) and the performance of the Obligors'
obligations hereunder and under the other Transaction Documents by the
Borrower and/or the Guarantors, as applicable, and for the validity or
enforceability hereof and thereof, except where failure to maintain any such
approvals or filings could not reasonably be expected to have a Material
Adverse Effect.
7.13 Inspection of Property. At any reasonable time during
normal business hours and from time to time with at least ten Business Days
prior notice, or at any time if a Default or Event of Default shall have
occurred and be continuing, permit the Administrative Agent or any of the
Lenders or any agents or representatives thereof to examine and make abstracts
from the records and books of account of, and visit the properties of, each of
the Borrower or the Guarantors, and to discuss the affairs, finances and
accounts of the Borrower or such Guarantor with any of its officers or
directors and with its independent certified public accountants. All expenses
associated with such inspection shall be borne by the inspecting Lenders;
provided that if a Default or an Event of Default shall have occurred and be
continuing, any expenses associated with such inspection shall be borne
jointly and severally by the Borrower and the Guarantors.
ARTICLE VIII
NEGATIVE COVENANTS
------------------
The Borrower covenants and agrees that for so long as any
Obligation under this Agreement or any other Transaction Document remains
unpaid or any Lender has any Commitment hereunder:
8.01 Financial Conditions.
(a) The Borrower shall not permit the Consolidated Leverage
Ratio at any time to exceed 3.5 to 1.
(b) The Borrower shall not permit the Consolidated Fixed
Charge Coverage Ratio for any period of four consecutive fiscal
quarters to be less than 2.5 to 1.
(c) Concurrently with the delivery by the Borrower of any
financial statements pursuant to Section 7.01, the Borrower shall
deliver to the Administrative Agent (with a copy to each Lender) a
certificate from a Responsible Officer containing all information and
calculations necessary for determining compliance by the Borrower
with Sections 8.01 (a) and (b) above.
8.02 Liens. The Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, create, incur, assume or
permit to exist any Lien on or with respect to any property or asset of the
Borrower or any Subsidiary, whether now owned or held or hereafter acquired,
other than the following Liens ("Permitted Liens"):
(a) Liens for taxes, assessments and other governmental
charges the payment of which is being contested in good faith by
appropriate proceedings promptly initiated and diligently conducted
and for which such reserves or other appropriate provision, if any,
as shall be required by Mexican GAAP shall have been made;
(b) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics and materialmen incurred in the ordinary
course of business for sums not yet due or the payment of which is
being contested in good faith by appropriate proceedings promptly
initiated and diligently conducted and for which such reserves or
other appropriate provision, if any, as shall be required by Mexican
GAAP shall have been made;
(c) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security;
(d) any attachment or judgment Lien, unless the judgment it
secures shall not, within 60 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall not
have been discharged within 60 days after the expiration of any such
stay;
(e) Liens existing on the date of this Agreement as
described in Schedule 8.02 hereto; (f) any Lien on property acquired
by the Borrower after the date hereof that was existing on the date
of acquisition of such property; provided that such Lien was not
incurred in anticipation of such acquisition, and any Lien created to
secure all or any part of the purchase price, or to secure Debt
incurred or assumed to pay all or any part of the purchase price, of
property acquired by the Borrower or any of its Subsidiaries after
the date hereof; provided, further, that (A) any such Lien permitted
pursuant to this clause (f) shall be confined solely to the item or
items of property so acquired (including, in the case of any
Acquisition of a corporation through the acquisition of 51% or more
of the voting stock of such corporation, the stock and assets of any
Acquired Subsidiary or Acquiring Subsidiary) and, if required by the
terms of the instrument originally creating such Lien, other property
which is an improvement to, or is acquired for specific use with,
such acquired property; and (B) if applicable, any such Lien shall be
created within nine months after, in the case of property, its
acquisition, or, in the case of improvements, their completion;
(g) any Lien renewing, extending or refunding any Lien
permitted by clause (f) above; provided that the principal amount of
Debt secured by such Lien immediately prior thereto is not increased
or the maturity thereof reduced and such Lien is not extended to
other property;
(h) any Liens created on shares of capital stock of the
Borrower or any of its Subsidiaries solely as a result of the deposit
or transfer of such shares into a trust or a special purpose vehicle
(including any entity with legal personality) of which such shares
constitute the sole assets; provided that (A) any shares of
Subsidiary stock held in such trust, corporation or entity could be
sold by the Borrower; and (B) proceeds from the deposit or transfer
of such shares into such trust, corporation or entity and from any
transfer of or distributions in respect of the Borrower's or any
Subsidiary's interest in such trust, corporation or entity are
applied as provided under Section 8.04; and provided, further that
such Liens may not secure Debt of the Borrower or any Subsidiary
(unless permitted under another clause of this Section 8.02);
(i) any Liens on securities securing repurchase obligations
in respect of such securities;
(j) any Liens in respect of any Receivables Program Assets
which are or may be sold or transferred pursuant to a Qualified
Receivables Transaction; and
(k) in addition to the Liens permitted by the foregoing
clauses (a) through (j), Liens securing Debt of the Borrower and its
Subsidiaries (taken as a whole) not in excess of 5% of the Adjusted
Consolidated Net Tangible Assets of the Borrower and its
Subsidiaries;
unless, in each case, the Borrower has made or caused to be made effective
provision whereby the Obligations hereunder are secured equally and ratably
with, or prior to, the Debt secured by such Liens (other than Permitted Liens)
for so long as such Debt is so secured.
8.03 Consolidations and Mergers. The Borrower shall not, and
shall not permit any Material Subsidiary to, in one or more related
transactions, (x) consolidate with or merge into any other Person or permit
any other Person to merge into it or (y), directly or indirectly, transfer,
convey, sell, lease or otherwise dispose of all or substantially all of its
properties or assets to any Person, unless, with respect to any transaction
described in clause (x) or (y), immediately after giving effect to such
transaction:
(a) the Person formed by any such consolidation or merger,
if it is not the Borrower or such Material Subsidiary, or the Person
that acquires by transfer, conveyance, sale, lease or other
disposition all or substantially all of the properties and assets of
the Borrower or such Material Subsidiary (any such Person, a
"Successor") (i) shall be a corporation organized and validly
existing under the laws of its place of incorporation, which in the
case of a Successor to the Borrower shall be Mexico, the United
States, Canada, France, Belgium, Germany, Italy, Luxembourg, the
Netherlands, Portugal, Spain, Switzerland or the United Kingdom, or
any political subdivision thereof, (ii) in the case of a Successor to
the Borrower, shall expressly assume, pursuant to a written agreement
in form and substance satisfactory to the Required Lenders, the
Obligations of the Borrower pursuant to this Agreement and the
performance of every covenant on part of the Borrower to be performed
and observed and (iii) in the case of a Successor to any Guarantor,
shall expressly assume, pursuant to a written agreement in form and
substance satisfactory to the Required Lenders, the performance of
every covenant of this Agreement on part of such Guarantor to be
performed and observed;
(b) in the case of any such transaction involving the
Borrower or any Guarantor, the Borrower or such Guarantor, or the
Successor of any thereof, as the case may be, shall expressly agree
to indemnify each Lender and the Administrative Agent against any
tax, levy, assessment or governmental charge payable by withholding
or deduction thereafter imposed on such Lender and/or the
Administrative Agent solely as a consequence of such transaction with
respect to payments under the Transaction Documents;
(c) immediately after giving effect to such transaction,
including for purposes of this clause (c) the substitution of any
Successor to the Borrower for the Borrower or the substitution of any
Successor to a Subsidiary for such Subsidiary and treating any Debt
or Lien incurred by the Borrower or any Successor to the Borrower, or
by a Subsidiary of the Borrower or any Successor to such Subsidiary,
as a result of such transactions as having been incurred at the time
of such transaction, no Default or Event of Default shall have
occurred and be continuing; and
(d) the Borrower shall have delivered to the Administrative
Agent an officer's certificate and an opinion of counsel, each
stating that such consolidation, merger, conveyance, transfer or
lease and, if a written agreement is required in connection with such
transaction, such written agreement comply with the relevant
provisions of this Article VIII and that all conditions precedent
provided for in this Agreement relating to such transaction have been
complied with.
8.04 Sales of Assets, Etc. The Borrower will not, and will
not permit any of its Material Subsidiaries to, sell, lease or otherwise
dispose of any of its assets (including the capital stock of any Subsidiary),
other than (a) inventory, trade receivables and assets surplus to the needs of
the business of the Borrower or any Subsidiary sold in the ordinary course of
business and (b) assets not used, usable or held for use in connection with
cement operations and related operations, unless the proceeds of the sale of
such assets are retained by the Borrower or such Subsidiary, as the case may
be, and, as promptly as practicable after such sale (but in any event within
180 days of such sale), the proceeds are applied to (i) expenditures for
property, plant and equipment usable in the cement industry or related
industries; (ii) the repayment of senior Debt of the Borrower or any of its
Subsidiaries, whether secured or unsecured; or (iii) investments in companies
engaged in the cement industry or related industries.
8.05 Change in Nature of Business. The Borrower shall not
make, or permit any of its Material Subsidiaries to make, any material change
in the nature of its business as carried on at the date hereof.
8.06 Margin Regulations. The Borrower shall not use any part
of the proceeds of the Loans for any purpose which would result in any
violation (whether by the Borrower, the Administrative Agent or the Lenders)
of Regulation T, U or X of the Federal Reserve Board or to extend credit to
others for any such purpose. The Borrower shall not engage in, or maintain as
one of its important activities, the business of extending credit for the
purpose of purchasing or carrying any margin stock (as defined in such
regulations).
ARTICLE IX
OBLIGATIONS OF GUARANTORS
-------------------------
9.01 The Guaranty. Each of the Guarantors jointly and
severally hereby unconditionally and irrevocably guarantee (as a primary
obligor and not merely as surety) payment in full as provided herein of all
Obligations payable by the Borrower to each Lender, the Administrative Agent
and the Joint Bookrunners under this Agreement and the other Transaction
Documents and the Fee Letter, as and when such amounts become payable (whether
at stated maturity, by acceleration or otherwise).
9.02 Nature of Liability. The obligations of the Guarantors
hereunder are guarantees of payment and shall remain in full force and effect
until all Obligations of the Borrower have been validly, finally and
irrevocably paid in full, and shall not be affected in any way by the absence
of any action to obtain such amounts from the Borrower or by any variation,
extension, waiver, compromise or release of any or all Obligations from time
to time therefor. Each Guarantor waives all requirements as to promptness,
diligence, presentment, demand for payment, protest and notice of any kind
with respect to this Agreement and the other Transaction Documents.
9.03 Unconditional Obligations. Notwithstanding any contrary
principles under the laws of any jurisdiction other than the State of New
York, the obligations of each of the Guarantors hereunder shall be
unconditional, irrevocable and absolute and, without limiting the generality
of the foregoing, shall not be impaired, terminated, released, discharged or
otherwise affected by the following:
(a) the existence of any claim, set-off or other right which
either of the Guarantors may have at any time against the Borrower,
the Administrative Agent, any Lenders or any other Person, whether in
connection with this transaction or with any unrelated transaction;
(b) any invalidity or unenforceability of this Agreement or
any other Transaction Document relating to or against the Borrower or
either of the Guarantors for any reason;
(c) any provision of applicable law or regulation purporting
to prohibit the payment by the Borrower of any amount payable by the
Borrower under this Agreement or any of the other Transaction
Documents or the payment, observance, fulfillment or performance of
any other Obligations;
(d) any change in the name, purposes, business, capital
stock (including the ownership thereof) or constitution of the
Borrower;
(e) any amendment, waiver or modification of any Transaction
Document in accordance with the terms hereof and thereof; or
(f) any other act or omission to act or delay of any kind by
the Borrower, the Administrative Agent, the Lenders or any other
Person or any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge of or defense to either of
the Guarantors' obligations hereunder.
9.04 Independent Obligation. The obligations of each of the
Guarantors hereunder are independent of the Borrower's obligations under the
Transaction Documents and of any guaranty or security that may be obtained for
the Obligations. The Administrative Agent and the Lenders may neglect or
forbear to enforce payment hereunder, under any Transaction Document or under
any guaranty or security, without in any way affecting or impairing the
liability of each Guarantor hereunder. The Administrative Agent or the Lenders
shall not be obligated to exhaust recourse or take any other action against
the Borrower or under any agreement to purchase or security which the
Administrative Agent or the Lenders may hold before being entitled to payment
from the Guarantors of the obligations hereunder or proceed against or have
resort to any balance of any deposit account or credit on the books of the
Administrative Agent or the Lenders in favor of the Borrower or each of the
Guarantors. Without limiting the generality of the foregoing, the
Administrative Agent or the Lenders shall have the right to bring suit
directly against either of the Guarantors, either prior or subsequent to or
concurrently with any lawsuit against, or without bringing suit against, the
Borrower and/or the other Guarantor.
9.05 Waiver of Notices. Each of the Guarantors hereby waives
notice of acceptance of this ARTICLE IX and notice of any liability to which
it may apply, and waives presentment, demand for payment, protest, notice of
dishonor or nonpayment of any such liability, suit or the taking of other
action by the Administrative Agent or the Lenders against, and any other
notice, to the Guarantors.
9.06 Waiver of Defenses. To the extent permitted by New York
law and notwithstanding any contrary principles under the laws of any other
jurisdiction, each of the Guarantors hereby waives any and all defenses to
which it may be entitled, whether at common law, in equity or by statute which
limits the liability of, or exonerates, guarantors or which may conflict with
the terms of this ARTICLE IX, including failure of consideration, breach of
warranty, statute of frauds, merger or consolidation of the Borrower, statute
of limitations, accord and satisfaction and usury. Without limiting the
generality of the foregoing, each of the Guarantors consents that, without
notice to such Guarantor and without the necessity for any additional
endorsement or consent by such Guarantor, and without impairing or affecting
in any way the liability of such Guarantor hereunder, the Administrative Agent
and the Lenders may at any time and from time to time, upon or without any
terms or conditions and in whole or in part, (a) change the manner, place or
terms of payment of, and/or change or extend the time or payment of, renew or
alter, any of the Obligations, any security therefor, or any liability
incurred directly or indirectly in respect thereof, and this ARTICLE IX shall
apply to the Obligations as so changed, extended, renewed or altered; (b)
exercise or refrain from exercising any right against the Borrower or others
(including the Guarantors) or otherwise act or refrain from acting, (c) settle
or compromise any of the Obligations, any security therefor or any liability
(including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and may subordinate the payment of all or any part thereof
to the payment of any such liability (whether due or not) of the Borrower to
creditors of the Borrower other than the Administrative Agent and the Lenders
and the Guarantors, (d) apply any sums by whomsoever paid or howsoever
realized, other than payments of the Guarantors of the Obligations, to any
liability or liabilities of the Borrower under the Transaction Documents or
any instruments or agreements referred to herein or therein, to the
Administrative Agent and the Lenders regardless of which of such liability or
liabilities of the Borrower under the Transaction Documents or any instruments
or agreements referred to herein or therein remain unpaid; (e) consent to or
waive any breach of, or any act, omission or default under the Obligations or
any of the instruments or agreements referred to in this Agreement and the
other Transaction Documents, or otherwise amend, modify or supplement the
Obligations or any of such instruments or agreements, including the
Transaction Documents; and/or (f) request or accept other support of the
Obligations or take and hold any security for the payment of the Obligations
or the obligations of the Guarantors under this ARTICLE IX, or allow the
release, impairment, surrender, exchange, substitution, compromise,
settlement, rescission or subordination thereof. Furthermore, each of the
Guarantors hereby waives to the extent permitted by law any right to which it
may be entitled to under Articles 2830, 2836, 2842, 2845, 2846, 2848 and 2849
of the Mexican Federal Civil Code and related Articles contained in the Civil
Codes of the States in Mexico. The Guarantors further expressly waive the
benefits of order, excusion y division contained in Articles 2814, 2815, 2817,
2818, 2820, 2821, 2822, 2823, 2837, 2838, 2840, 2841 and other related
Articles of the Mexican Federal Civil Code and related Articles contained in
other Civil Codes of the States of Mexico. The Guarantors hereby represent
that the terms of each such provision of each such civil code as known of form
and substance to each such Guarantor.
9.07 Bankruptcy and Related Matters.
(a) So long as any of the Obligations remain outstanding,
each of the Guarantors shall not, without the prior written consent
of the Administrative Agent (acting with the consent of the Required
Lenders), commence or join with any other Person in commencing any
bankruptcy, liquidation, reorganization, concurso mercantil or
insolvency proceedings of, or against, the Borrower.
(b) If acceleration of the time for payment of any amount
payable by the Borrower under this Agreement or the Notes is stayed
upon the insolvency, bankruptcy, reorganization, concurso mercantil
or any similar event of the Borrower or otherwise, all such amounts
otherwise subject to acceleration under the terms of this Agreement
shall nonetheless be payable by the Guarantors hereunder forthwith on
demand by the Administrative Agent made at the request of the
Lenders.
(c) The obligations of each of the Guarantors under this
ARTICLE IX shall not be reduced, limited, impaired, discharged,
deferred, suspended or terminated by any proceeding or action,
voluntary or involuntary, involving the bankruptcy, insolvency,
concurso mercantil, receivership, reorganization, marshalling of
assets, assignment for the benefit of creditors, readjustment,
liquidation or arrangement of the Borrower or similar proceedings or
actions or by any defense which the Borrower may have by reason of
the order, decree or decision of any court or administrative body
resulting from any such proceeding or action. Without limiting the
generality of the foregoing, the Guarantors' liability shall extend
to all amounts and obligations that constitute the Obligations and
would be owed by the Borrower but for the fact that they are
unenforceable or not allowable due to the existence of any such
proceeding or action.
(d) Each of the Guarantors acknowledges and agrees that any
interest on any portion of the Obligations which accrues after the
commencement of any proceeding or action referred to above in Section
9.07(c) (or, if interest on any portion of the Obligations ceases to
accrue by operation of law by reason of the commencement of said
proceeding or action, such interest as would have accrued on such
portion of the Obligations if said proceedings or actions had not
been commenced) shall be included in the Obligations, it being the
intention of the Guarantors, the Administrative Agent, and the
Lenders that the Obligations which are to be guaranteed by the
Guarantors pursuant to this ARTICLE IX shall be determined without
regard to any rule of law or order which may relieve the Borrower of
any portion of such Obligations. The Guarantors will take no action
to prevent any trustee in bankruptcy, receiver, debtor in possession,
assignee for the benefit of creditors or similar person from paying
the Administrative Agent, or allowing the claim of the Administrative
Agent, for the benefit of the Administrative Agent, and the Lenders,
in respect of any such interest accruing after the date of which such
proceeding is commenced, except to the extent any such interest shall
already have been paid by the Guarantors.
(e) Notwithstanding anything to the contrary contained
herein, if all or any portion of the Obligations are paid by or on
behalf of the Borrower, the obligations of the Guarantors hereunder
shall continue and remain in full force and effect or be reinstated,
as the case may be, in the event that all or any part of such
payment(s) are rescinded or recovered, directly or indirectly, from
the Administrative Agent and/or the Lenders as a preference,
preferential transfer, fraudulent transfer or otherwise, and any such
payments which are so rescinded or recovered shall constitute
Obligations for all purposes under this ARTICLE IX, to the extent
permitted by applicable law.
9.08 No Subrogation. Notwithstanding any payment or payments
made by any of the Guarantors hereunder or any set-off or application of funds
of any of the Guarantors by the Administrative Agent or any Lender, no
Guarantor shall be entitled to be subrogated to any of the rights of the
Administrative Agent or any Lender against the Borrower or any other Guarantor
or any collateral security or guarantee or right of offset held by the
Administrative Agent or any Lender for the payment of the Obligations, nor
shall any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Borrower or any other Guarantor in respect of payments
made by such Guarantor hereunder, until all amounts owing to the
Administrative Agent and the Lenders by the Borrower on account of the
Obligations shall have been indefeasibly paid in full in cash. If any amount
shall be paid to any Guarantor on account of such subrogation rights at any
time when all of the Obligations shall not have been indefeasibly paid in full
in cash, such amount shall be held by such Guarantor in trust for the
Administrative Agent and the Lenders, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over
to the Administrative Agent in the exact form received by such Guarantor (duly
indorsed by such Guarantor to the Administrative Agent, if required), to be
applied against the Obligations, whether matured or unmatured, in such order
as the Administrative Agent may determine.
9.09 Right of Contribution. Subject to Section 9.08, each
Guarantor hereby agrees that to the extent that a Guarantor shall have paid
more than its proportionate share of any payment made hereunder, such
Guarantor shall be entitled to seek and receive contribution from and against
any other Guarantor hereunder who has not paid its proportionate share of such
payment. The provisions of this Section 9.09 shall in no respect limit the
obligations and liabilities of any Guarantor to the Administrative Agent, the
Joint Bookrunners and the Lenders, and each Guarantor shall remain liable to
the Administrative Agent, the Joint Bookrunners and the Lenders for the full
amount guaranteed by such Guarantor hereunder.
9.10 General Limitation on Guaranty. In any action or
proceeding involving any applicable corporate law, or any applicable
bankruptcy, insolvency, reorganization, concurso mercantil or other law
affecting the rights of creditors generally, if the obligations of any
Guarantor under this Section 9.10 would otherwise, taking into account the
provisions of Section 9.09, be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of any other creditors, on
account of the amount of its liability under Section 9.01, then,
notwithstanding any other provision hereof to the contrary, the amount of such
liability shall, without any further action by such Guarantor, any Lender, the
Administrative Agent or any other Person, be automatically limited and reduced
to the highest amount that is valid and enforceable and not subordinated to
the claims of other creditors as determined in such action or proceeding.
9.11 Covenants of the Guarantors. Each Guarantor hereby
covenants and agrees that, so long as any Obligations under this Agreement and
any other Transaction Document remains unpaid or any Lender has any Commitment
hereunder, it shall comply with the covenants contained or incorporated by
reference in this Agreement to the extent applicable to it as a Subsidiary of
the Borrower.
ARTICLE X
EVENTS OF DEFAULT
-----------------
10.01 Events of Default. The following specified events
shall constitute "Events of Default" for the purposes of this Agreement:
(a) Payment Defaults. The Borrower shall (i) fail to pay any
principal of any Loan when due in accordance with the terms hereof or
(ii) fail to pay any interest on any Loan, any fee or any other
amount payable under this Agreement or any Note within three Business
Days after the same becomes due and payable; or
(b) Representation and Warranties. Any representation or
warranty made by the Borrower herein or in any other Transaction
Document on or made by either Guarantor herein or which is contained
in any certificate, document or financial or other statement
furnished at any time under or in connection with this Agreement or
any other Transaction Document, as applicable, shall prove to have
been incorrect in any material respect on or as of the date made if
such failure shall remain unremedied for 30 days after the earlier of
the date on which (i) the chief financial officer of the Borrower or
such Guarantor, as the case may be, becomes aware of such
incorrectness or (ii) written notice thereof shall have been given to
the Borrower by the Administrative Agent; or
(c) Specific Defaults. The Borrower or a Guarantor, as
applicable, shall fail to perform or observe any term, covenant or
agreement contained in Section 7.01, 7.02(a), 7.06 (with respect to
the Borrower's and each Guarantor's existence only), 7.10 or 7.14 or
ARTICLE VIII; or
(d) Other Defaults. The Borrower or a Guarantor, as
applicable, shall fail to perform or observe any term, covenant or
agreement contained in this Agreement or any other Transaction
Document (other than as provided in paragraphs (a) and (c) above) and
such failure shall continue unremedied for a period of 30 days after
the earlier of the date on which (i) the chief financial officer of
the Borrower becomes aware of such failure or (ii) written notice
thereof shall have been given to the Borrower by the Administrative
Agent at the request of any Lender; or
(e) Defaults under Other Agreements. The occurrence of a
default or event of default under any indenture, agreement or
instrument relating to any Material Debt of the Borrower or any of
its Subsidiaries, and (unless any principal amount of such Material
Debt is otherwise due and payable) such default or event of default
results in the acceleration of the maturity of any principal amount
of such Material Debt prior to the date on which it would otherwise
become due and payable; or
(f) Voluntary Bankruptcy. The Borrower or any Material
Subsidiary shall commence a voluntary case or other proceeding
seeking liquidation, reorganization, concurso mercantil or other
relief with respect to itself or its debts under any bankruptcy,
insolvency, reorganization or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing or the equivalent
thereof under Mexican law (including the Ley de Concursos
Mercantiles); or
(g) Involuntary Bankruptcy. An involuntary case or other
proceeding shall be commenced against the Borrower or any Material
Subsidiary seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency, concurso
mercantil or other similar law now or hereafter in effect (including
but not limited to the Ley de Concursos Mercantiles) or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed
and unstayed for a period of 60 consecutive days; or an order for
relief shall be entered against the Borrower or any Material
Subsidiaries under any bankruptcy, insolvency suspension de pagos or
other similar law as now or hereafter in effect; or
(h) Monetary Judgment. A final judgment or judgments or
order or orders not subject to further appeal for the payment of
money in an aggregate amount in excess of U.S.$50,000,000 shall be
rendered against the Borrower and/or any of its one or more
Subsidiaries of the Borrower that are neither discharged nor bonded
in full within 30 days thereafter; or
(i) Pari Passu. The Obligations of the Borrower under this
Agreement or of any Guarantor under this Agreement shall fail to rank
at least pari passu with all other senior unsecured Debt of the
Borrower or such Guarantor, as the case may be; or
(j) Validity of Agreement. The Borrower shall contest the
validity or enforceability of any Transaction Document or shall deny
generally the liability of the Borrower under any Transaction
Documents or either Guarantor shall contest the validity of or the
enforceability of their guarantee hereunder or any obligation of
either Guarantor under ARTICLE IX hereof shall not be (or is claimed
by either Guarantor not to be) in full force and effect;
(k) Governmental Authority. Any governmental or other
consent, license, approval, permit or authorization which is now or
may in the future be necessary or appropriate under any applicable
Requirement of Law for the execution, delivery, or performance by the
Borrower or either Guarantor of any Transaction Document to which it
is a party or to make such Transaction Document legal, valid,
enforceable and admissible in evidence shall not be obtained or shall
be withdrawn, revoked or modified or shall cease to be in full force
and effect or shall be modified in any manner that would have an
adverse effect on the rights or remedies of the Administrative Agent
or the Lenders; or
(l) Expropriation, Etc. Any Governmental Authority shall
condemn, nationalize, seize or otherwise expropriate all or any
substantial portion of the property of, or capital stock issued or
owned by, the Borrower or either Guarantor or take any action that
would prevent the Borrower or either Guarantor from performing its
obligations under the Transaction Documents; or
(m) Moratorium; Availability of Foreign Exchange. A
moratorium shall be agreed or declared in respect of any Debt of the
Borrower or either Guarantor or any restriction or requirement not in
effect on the date hereof shall be imposed, whether by legislative
enactment, decree, regulation, order or otherwise, which limits the
availability or the transfer of foreign exchange by the Borrower or
either Guarantor for the purpose of performing any material
obligation under any Transaction Document to which it is a party; or
(n) Material Adverse Effect. There shall occur any
circumstance, event or condition of a financial or other nature which
the Lenders determine in good faith is reasonably likely to have a
material adverse effect on the ability of the Borrower or either
Guarantor to perform its obligations under this Agreement or any of
the other Transaction Documents; or
(o) Change of Ownership or Control. The beneficial ownership
(within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as
amended) of 20% or more in voting power of the outstanding voting
stock of the Borrower or either Guarantor is acquired by any Person;
provided that the acquisition of beneficial ownership of capital
stock of the Borrower or either Guarantor by Lorenzo H. Zambrano or
any member of his immediate family shall not constitute an Event of
Default.
10.02 Remedies. If any Event of Default has occurred and is
continuing, the Administrative Agent shall, at the request of, or may, with
the consent of, the Lenders:
declare by notice to the Borrower the principal amount of all
outstanding Loans to be forthwith due and payable, whereupon such
principal amount, together with accrued interest thereon and any fees
and all other Obligations accrued hereunder, shall become immediately
due and payable, without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived; provided,
however, that in the case of any Event of Default specified in
Section 10.01(f) or (g), without notice or any other act by the
Lenders, the Loans (together with accrued interest thereon) and all
other Obligations of the Borrower hereunder shall become immediately
due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower;
10.03 Notice of Default. The Administrative Agent shall give
notice to the Borrower of any event occurring under Section 10.01(a), (b), (c)
or (d) promptly upon being requested to do so by any Lender and shall
thereupon notify all the Lenders thereof.
10.04 Default Interest. In the event of default by the
Borrower in the payment on the due date of any sum due under this Agreement,
the Borrower shall pay interest on demand on such sum from the date of such
default to the day of actual receipt of such sum by the Administrative Agent
(as well after as before judgment) at the rate specified in Section 2.02(c).
So long as the default continues, the default interest rate shall be
recalculated on the same basis at intervals of such duration as the
Administrative Agent may select, provided that the amount of unpaid interest
at the above rate accruing during the preceding period (or such longer period
as may be the shortest period permitted by applicable law for the
capitalization of interest) shall be added to the amount in respect of which
the Borrower is in default.
ARTICLE XI
THE ADMINISTRATIVE AGENT
------------------------
11.01 Appointment and Authorization. Each Lender hereby
irrevocably designates and appoints Barclays Bank PLC as the Administrative
Agent of such Lender under this Agreement, and each Lender hereby irrevocably
authorizes the Administrative Agent to take such action on its behalf under
the provisions of this Agreement and each other Transaction Document and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement or any other Transaction
Document, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary contained elsewhere in
this Agreement or in any other Transaction Document, the Administrative Agent
shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Transaction Document or otherwise exist against the
Administrative Agent.
11.02 Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement or any other Transaction
Document by or through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such
duties. The Administrative Agent shall not be responsible for the negligence
or misconduct of any agent or attorney-in-fact that it selects with reasonable
care.
11.03 Liability of Administrative Agent. Neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (a) liable for any action taken or
omitted to be taken by it or any such Person under or in connection with this
Agreement or any other Transaction Document or the transactions contemplated
hereby (except for its or such Person's own gross negligence or willful
misconduct), or (b) responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by the Borrower, the
Guarantors or any officer thereof contained in this Agreement or in any other
Transaction Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement or any other Transaction
Document, or for the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Transaction Document, or for any
failure of the Borrower, the Guarantors or any other party to any Transaction
Document to perform its obligations hereunder or thereunder. Except as
otherwise expressly stated herein, the Administrative Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance
or performance of any of the agreements contained in, or conditions of, this
Agreement or any other Transaction Document, or to inspect the properties,
books or records of the Borrower or the Guarantors.
11.04 Reliance by Administrative Agent.
(a) The Administrative Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, telegram, facsimile,
telex or teletype message, statement, order or other document or
telephone conversation believed by it in good faith to be genuine and
correct and to have been signed, sent or made by the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Administrative Agent.
The Administrative Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other
Transaction Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and, if
it so requests, it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be
incurred by it by reason of failing to take, taking or continuing to
take any such action. The Administrative Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this
Agreement or any other Transaction Document in accordance with a
request or consent of the Required Lenders and such request and any
action taken or failure to act pursuant thereto shall be binding upon
all the Lenders.
(b) For purposes of determining compliance with the
conditions specified in Section 4.01, each Lender that has executed
this Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter sent
by the Administrative Agent to such Lender for consent, approval,
acceptance or satisfaction on or before the Effective Date.
11.05 Notice of Default. The Administrative Agent shall not
be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default (except with respect to defaults in the payment of principal,
interest and fees required to be paid to the Administrative Agent for the
account of the Lenders) unless the Administrative Agent shall have received
written notice from a Lender or the Borrower referring to this Agreement and
describing such Default or Event of Default and stating that such notice is a
"Notice of Default". The Administrative Agent shall promptly notify the
Lenders of its receipt of any such notice. The Administrative Agent shall take
such action with respect to such Default or Event of Default as may be
requested by the Lenders; provided, however, that unless and until the
Administrative Agent has received any such request, the Administrative Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable or in the best interest of the Lenders.
11.06 Credit Decision. Each Lender expressly acknowledges
that neither the Administrative Agent nor any of its Affiliates, officers,
directors, employees, agents or attorneys-in-fact has made any representation
or warranty to it, and that no act by the Administrative Agent hereafter
taken, including any review of the affairs of the Borrower, the Guarantors, or
any of their Affiliates, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Lender. Each Lender acknowledges
to the Administrative Agent that it has, independently and without reliance
upon the Administrative Agent or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial
and other condition and creditworthiness of the Borrower, the Guarantors, and
their Affiliates and all applicable Lender regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking
or not taking action under this Agreement and the other Transaction Documents,
and to make such investigations as it deems necessary to inform itself as to
the business, prospects, operations, property, financial and other condition
and creditworthiness of the Borrower or the Guarantors. Except for notices,
reports and other documents expressly herein required to be furnished to the
Lenders by the Administrative Agent, the Administrative Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Borrower or the
Guarantors which may come into the possession of the Administrative Agent or
any of its Affiliates, officers, directors, employees, agents or
attorneys-in-fact.
11.07 Indemnification. Whether or not the transactions
contemplated hereby are consummated, the Lenders agree to indemnify upon
demand the Administrative Agent and its Affiliates, directors, officers,
agents and employees (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to the
respective amounts of their Commitment Percentages in effect on the date the
cause for indemnification arose, from and against any and all claims,
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at
any time (including at any time following the payment of the Obligations or
the Termination Date) be imposed on, incurred by or asserted against the
Administrative Agent (or any of its Affiliates, directors, officers, agents
and employees) in any way relating to or arising out of this Agreement or any
other Transaction Document, or any documents contemplated by or referred to
herein or the transactions contemplated hereby or any action taken or omitted
by the Administrative Agent under or in connection with any of the foregoing;
provided, however, that no Lender shall be liable for the payment of any
portion of such claims, liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent it
results from the gross negligence or willful misconduct of the Administrative
Agent or its Affiliates, directors, officers, agents or employees. Without
limitation of the foregoing, each Lender shall reimburse the Administrative
Agent upon demand for its ratable share of any reasonable and documented costs
or out-of-pocket expenses (including legal fees) incurred by the
Administrative Agent in connection with the preparation, execution,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Transaction Document, or any
document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of
the Borrower.
11.08 Administrative Agent in Individual Capacity. Barclays
Bank PLC may make loans to, issue letters of credit for the account of, accept
deposits from and generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with the Borrower, the Guarantors or
any of their Affiliates as though Barclays Bank PLC were not the
Administrative Agent hereunder and without notice to or consent of the
Lenders. The Lenders acknowledge that, pursuant to such activities, Barclays
Bank PLC or its Affiliates may receive information regarding the Borrower, the
Guarantors and their Affiliates (including information that may be subject to
confidentiality obligations in favor of the Borrower or the Guarantors) and
acknowledge that the Administrative Agent shall be under no obligation to
provide such information to them. With respect to the Obligations, Barclays
Bank PLC shall have the same rights and powers under this Agreement as any
other Lender, and the terms "Lender" and "Lenders" include Barclays Bank PLC
in its individual capacity.
11.09 Successor Administrative Agent. The Administrative
Agent may, and at the request of the Required Lenders shall, resign as
Administrative Agent upon 30 days' notice to the Lenders and the Borrower. If
the Administrative Agent resigns under this Agreement, the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
appointment shall be subject to the approval of the Borrower, such approval
not to be unreasonably withheld (unless a Default or Event of Default shall
have occurred and be continuing, in which case such approval shall not be
required). If no successor agent is appointed prior to the effective date of
the resignation of the Administrative Agent, the Administrative Agent may
appoint, after consulting with the Lenders and the Borrower, a successor agent
from among the Lenders. Upon the acceptance of its appointment as successor
agent hereunder, such successor agent shall succeed to all the rights, powers
and duties of the retiring Administrative Agent and the term "Administrative
Agent" shall mean such successor agent effective upon its appointment, and the
retiring Administrative Agent's rights, powers and duties as Administrative
Agent shall be terminated, without any other or further act on the part of
such retiring Administrative Agent. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of this ARTICLE
XI and Sections 13.04 and 13.05 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under
this Agreement. If no successor Administrative Agent has accepted the
appointment as Administrative Agent by the date which is 30 days following a
retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective and either the Borrower or the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, which shall
be a commercial bank organized or licensed under the laws of the United States
or of any State thereof and having a combined capital and surplus of at least
U.S.$400,000,000.
ARTICLE XII
THE JOINT BOOKRUNNERS
---------------------
12.01 The Joint Bookrunners. The Borrower hereby confirms
the designation of Barclays Capital, the Investment Banking Division of
Barclays Bank PLC, and Citigroup Global Markets Inc., as arrangers and Joint
Bookrunners for this term credit facility. The Joint Bookrunners assume no
responsibility or obligation hereunder for servicing, enforcement or
collection of the Obligations, or any duties as agent for the Lenders. The
title "Joint Bookrunner" or "Book-runner" implies no fiduciary responsibility
on the part of the Joint Bookrunners to the Administrative Agent, or the
Lenders and the use of either such title does not impose on the Joint
Bookrunners any duties or obligations under this Agreement except as may be
expressly set forth herein.
12.02 Liability of Joint Bookrunners. Neither the Joint
Bookrunners nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or Affiliates shall be (a) liable for any action
lawfully taken or omitted to be taken by them or any such Person under or in
connection with this Agreement or any other Transaction Document (except for
such Joint Bookrunner's own gross negligence or willful misconduct), or (b)
responsible in any manner to any Lender for any recital, statement,
representation or warranty made by the Borrower or any officer thereof,
contained in this Agreement or in any other Transaction Document, or in any
certificate, report, statement or other document referred to or provided for
in, or received by the Arrangers under or in connection with, this Agreement
or any other Transaction Document or for the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
Transaction Document or for any failure of the Borrower or any other party to
any other Transaction Document to perform its obligations hereunder or
thereunder. Except as otherwise expressly stated herein, the Joint Bookrunners
shall not be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Transaction Document, or to inspect
the properties, books or records of the Borrower.
12.03 Joint Bookrunners in their respective Individual
Capacities. Each of Barclays Capital, the Investment Banking Division of
Barclays Bank PLC and its Affiliates, and Citigroup Global Markets Inc. and
its Affiliates may make loans to, accept deposits from and generally engage in
any kind of business with the Borrower or any of its Affiliates as though they
were not the Joint Bookrunners hereunder.
12.04 Credit Decision. Each Lender expressly acknowledges
that neither the Joint Bookrunners nor any of their respective Affiliates,
officers, directors, employees, agents or attorneys-in-fact have made any
representation or warranty to it, and that no act by the Joint Bookrunners
hereafter taken, including any review of the affairs of the Borrower or the
Guarantors, shall be deemed to constitute any representation or warranty by
the Joint Bookrunners to any Lender. Each Lender acknowledges to the Joint
Bookrunners that it has, independently and without reliance upon the Joint
Bookrunners, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower or the Guarantors and their Affiliates and
made its own decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Joint
Bookrunners, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the
other Transaction Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower
or the Guarantors. The Joint Bookrunners shall not have any duty or
responsibility to provide any Lender with any information concerning the
business, prospects, operations, property, financial and other condition or
creditworthiness of the Borrower which may come into the possession of the
Joint Bookrunners or any of their respective officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
ARTICLE XIII
MISCELLANEOUS
-------------
13.01 Notices.
(a) Except as otherwise expressly provided herein, all
notices, requests, demands or other communications to or upon any
party hereunder shall be in writing (including facsimile
transmission) and shall be sent by an overnight courier service,
transmitted by facsimile or delivered by hand to such party: (i) in
the case of the Borrower, the Guarantors, the Joint Bookrunners or
the Administrative Agent, at its address or facsimile number set
forth on the signature pages hereof or at such other address or
facsimile number as such party may designate by notice to the other
parties hereto and (ii) in the case of any Lender, at its address or
facsimile number set forth in Schedule 1.01(b) or at such other
address or facsimile number as such Lender may designate by notice to
the Borrower, the Joint Bookrunners and the Administrative Agent.
(b) Unless otherwise expressly provided for herein, each
such notice, request, demand or other communication shall be
effective (i) if sent by overnight courier service or delivered by
hand, upon delivery, (ii) if given by facsimile, when transmitted to
the facsimile number specified pursuant to paragraph (a) above and
confirmation of receipt of a legible copy thereof is received, or
(iii) if given by any other means, when delivered at the address
specified pursuant to paragraph (a) above; provided, however, that
notices to the Administrative Agent under ARTICLE II, III, IV or XI
shall not be effective until received.
13.02 Amendments and Waivers. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by the Borrower
or any Guarantor from the terms of this Agreement, shall in any event be
effective unless the same shall be in writing, consented to by the Borrower or
the applicable Guarantors, as the case may be, and acknowledged by the
Administrative Agent (which shall be a purely ministerial action), and signed
or consented to by the Required Lenders, and then such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or
consent shall:
(a) (i) except as specifically provided herein, increase or
decrease the Commitment of any Lender;
(ii) extend the maturity of any of the Obligations,
extend the time of payment of interest thereon, or extend the
Termination Date;
(iii) forgive any Obligation, reduce the principal
amount of the Obligations, reduce the rate of interest thereon,
reduce the amount or change the method of calculation of any
Fee hereunder, or change the provisions of Section 3.04(a);
in each case without the consent of the Borrower and each Lender directly
affected thereby;
(b) (i) amend, modify or waive any provision of this Section
13.02;
(ii) change the percentage specified in the
definition of Required Lenders or the number of Lenders which
shall be required for the Lenders or any of them to take any
action under this Agreement; or
(iii) amend, modify or waive any provision of Section
4.01; or
(iv) amend, modify or waive any provision of Section
13.06;
in each case without the consent of the Borrower and all the Lenders;
(c) amend, modify or waive any provision of ARTICLE XI
without the written consent of the Administrative Agent; and
(d) amend, modify or waive any provision of ARTICLE XII
without the consent of the Joint Bookrunners.
13.03 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under any other
Transaction Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder or
thereunder preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights and remedies herein
provided are cumulative and not exclusive of any rights or remedies provided
by law.
13.04 Payment of Expenses, Etc. The Borrower agrees to pay
on demand
(a) all reasonable and docume nted out-of-pocket costs and
expenses (including reasonable leg al fees and disbursements of
special Mexican and New York counsel to t he Administrative Agent),
syndication (including printing, distribution and bank meetings),
travel, telephone and duplication expenses and other reasonable and
documented costs and out of- pocket expenses in connection with the
arrangement, documentation, negotiation and closing of the
Transactions Documents, subject to the maximum amount set forth in a
letter agreement between the Borrower and the Joint Bookrunners;
(b) all reasonable and documented out-of-pocket costs and
expenses incurred by the Administrative Agent in connection with any
amendment to, waiver of, or consent to any Transaction Document or
the transactions contemplated hereby, including the reasonable fees
and reasonable and documented out-of-pocket expenses of counsel for
the Administrative Agent and the allocated cost of in-house counsel
thereof; and
(c) all reasonable and documented, out-of-pocket costs and
expenses incurred by the Administrative Agent or any Lender in
connection with the enforcement of and/or preservation of any rights
under this Agreement or any other Transaction Document (whether
through negotiations, legal proceedings or otherwise), including the
reasonable fees and reasonable and documented out-of-pocket expenses
of counsel for the Administrative Agent, such Lender and the
allocated costs of in-house counsel thereof.
13.05 Indemnification. The Borrower agrees to indemnify and
hold harmless the Joint Bookrunners, the Administrative Agent and each Lender
and each of their Affiliates and their officers, directors, employees, agents
and advisors (each, an "Indemnified Party") from and against any and all
claims, damages, losses, liabilities and expenses (including reasonable fees
and expenses of counsel and the allocated cost of in-house counsel), but
excluding taxes that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including in connection with any investigation, litigation or
proceeding or preparation of a defense in connection therewith) (a) the
Transaction Documents, any of the transactions contemplated herein or the
actual or proposed use of the proceeds of the Loans or (b) or any
Environmental Action relating in any way to the Borrower or any of its
Subsidiaries, except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence
or willful misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 13.05 applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by the Borrower, its directors, shareholders or
creditors or an Indemnified Party or any other Person or any Indemnified Party
is otherwise a party thereto and whether or not the transactions contemplated
hereby are consummated. The Borrower also agrees not to assert any claim
against the Joint Bookrunners, the Administrative Agent, any Lender, any of
their Affiliates, or any of their respective directors, officers, employees,
attorneys and agents, on any theory of liability, for special, indirect,
consequential or punitive damages arising out of or otherwise relating to the
Transaction Documents, any of the transactions contemplated herein or the
actual or proposed use of the proceeds of the Transaction Documents. Neither
the Joint Bookrunner, the Administrative Agent, nor any Lender shall be deemed
to have any fiduciary relationship with the Borrower or the Guarantor.
13.06 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon
the Borrower, the Guarantors, their successors and assigns and shall
inure to the benefit of the Joint Bookrunners, the Administrative
Agent and the Lenders and their respective successors and assigns,
except that the Borrower and the Guarantors may not assign or
otherwise transfer any of their rights or obligations under this
Agreement without the prior written consent of all Lenders except
pursuant to the terms of this Agreement.
(b) Any Lender may at any time, and any Lender, if demanded
by the Borrower pursuant to Section 2.01(d) or Section 3.09 upon at
least five Business Days' notice to such Lender and the
Administrative Agent, shall, assign to one or more commercial banks
either (i) registered as a Foreign Financial Institution and a
resident (or having its principal office as a resident, if lending
through a branch or agency) for tax purposes in a jurisdiction that
is a party to an income tax treaty to avoid double taxation with
Mexico on the date of such assignment, qualified to receive the
benefits of said treaty or (ii) organized and existing under the laws
of Mexico on the date of such assignment (each an "Assignee") all, or
a proportionate part of all, of its Commitment and its rights and
obligations under this Agreement and the Notes, and such Assignee
shall assume such rights and obligations, pursuant to an Assignment
and Assumption Agreement executed by such Assignee and such
transferor Lender, with (and subject to) the subscribed consent of
the Borrower and the Administrative Agent (which consents shall not
be unreasonably withheld or delayed, and if a Default or Event of
Default has occurred and is continuing, the consent of the Borrower
shall not be required); provided, however, that if an Assignee is an
Affiliate of such transferor Lender, which Affiliate is registered as
a Foreign Financial Institution and meets the tax residence and
qualification requirements of clause (ii) above and, at the time of
such assignment, the additional amounts payable with respect to Taxes
to such Assignee will not exceed such amounts payable to the
transferor Lender, no such consent shall be required; and provided
further that, in the case of an assignment of only part of such
rights and obligations, the Assignee shall acquire a Total Exposure
of not less than U.S.$3,000,000 and integral multiples of
U.S.$1,000,000 in excess thereof. Upon execution and delivery of an
Assignment and Assumption Agreement and payment by the Assignee to
the transferor Lender of an amount equal to the purchase price agreed
between such transferor Lender and such Assignee, such Assignee shall
be a Lender party to this Agreement and shall have all the rights and
obligations of a Lender with a Commitment as set forth in such
instrument of assumption (in addition to any Commitment previously
held by it), and the transferor Lender shall be released from its
obligations hereunder to a corresponding extent (except to the extent
the same arose prior to the assignment), and no further consent or
action by any party shall be required. Upon the consummation of any
assignment pursuant to this paragraph (b), the transferor Lender, the
Administrative Agent and the Borrower shall make appropriate
arrangements so that a new Note is issued to the Assignee at the
expense of the Assignee. In connection with any such assignment
(other than a transfer by a Lender to one of its Affiliates), the
transferor Lender (or in the case of Section 3.09, the Borrower),
without prejudice to any claims the Borrower may have against any
Defaulting Lender, shall pay to the Administrative Agent an
administrative fee for processing such assignment in the amount of
U.S.$2,000.
(c) Nothing herein shall prohibit any Lender from pledging
or assigning any Note to any Federal Reserve Bank of the United
States in accordance with applicable law and without compliance with
the foregoing provisions of this Section 13.06; provided, however,
that such pledge or assignment shall not release such Lender from its
obligations hereunder.
(d) Any Lender may, without any consent of the Borrower, the
Administrative Agent or any other third party at any time grant to
one or more banks or other institutions (i) registered as a Foreign
Financial Institution and (ii) resident (or having its principal
office as a resident, if lending through a branch or agency) for tax
purposes in a jurisdiction that is a party to an income tax treaty to
avoid double taxation with Mexico on the date of such assignment and
qualified to receive the benefits of said treaty and having (at the
time such Lender or financial institution becomes a Participant) a
withholding tax rate under such treaty applicable to payments
hereunder no higher than that applicable to payments to such Lender
(each a "Participant") participating interests in its Commitment or
any or all of its Loans. In the event of any such grant by a Lender
of a participating interest to a Participant, whether or not upon
notice to the Borrower and the Administrative Agent, such Lender
shall remain responsible for the performance of its obligations
hereunder, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement. Any
agreement pursuant to which any Lender may grant such a participating
interest shall provide that such Lender shall retain the sole right
and responsibility to enforce the obligations of the Borrower
hereunder, including the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided, however, that
such participation agreement may provide that such Lender will not
agree to any modification, amendment or waiver of this Agreement
extending the maturity of any Obligation in respect of which the
participation was granted, or reducing the rate or extending the time
for payment of interest thereon or reducing the principal thereof, or
reducing the amount or basis of calculation of any fees to accrue in
respect of the participation, without the consent of the Participant.
The Borrower agrees that each Participant shall, to the extent
provided in its participation agreement, be entitled to the benefits
of Sections 3.06 and 3.09 with respect to its participating interest
as if it were a Lender named herein; provided, however, that the
Borrower shall not be required to pay any greater amounts pursuant to
such Sections than it would have been required to pay but for the
sale to such Participant of such Participant's participation
interest. An assignment or other transfer which is not permitted by
paragraph (b) or (c) above shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in
accordance with this paragraph (d).
(e) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to
this Section 13.06, disclose to the Assignee or Participant or
proposed Assignee or Participant, any information relating to the
Borrower furnished to such Lender by or on behalf of the Borrower;
provided that, prior to any such disclosure, the Assignee or
Participant or proposed Assignee or Participant shall agree to
preserve the confidentiality of any Confidential Information relating
to the Borrower received by it from such Lender.
13.07 Right of Set-off. In addition to any rights and
remedies of the Lenders provided by law, each such Lender shall have the
right, without prior notice to the Borrower or the Guarantors, any such notice
being expressly waived by the Borrower and the Guarantors to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrower or the Guarantors hereunder (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional
or final), in any currency, and any other credits, indebtedness or claims, in
any currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender, or any branch
or agency thereof to or for the credit or the account of the Borrower or the
Guarantors. Each Lender agrees promptly to notify the Borrower, or such
Guarantor, as the case may be, and the Administrative Agent after any such
set-off and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such set-off and application.
13.08 Confidentiality. Neither the Administrative Agent nor
any Lender shall disclose any Confidential Information to any other Person
without the prior written consent of the Borrower, other than (a) to the
Administrative Agent's, or such Lender's Affiliates and their officers,
directors, employees, agents and advisors and, as contemplated by Section
13.06(e), to actual or prospective Assignees and Participants, and then only
on a confidential basis, (b) as required by any law, rule or regulation
(including as may be required in connection with an audit by the
Administrative Agent's, or such Lender's independent auditors, and as may be
required by any self-regulating organizations) or as may be required by or
necessary in connection with any judicial process and (c) as requested by any
state, federal or foreign authority or examiner regulating banks or banking.
13.09 Use of English Language. All certificates, reports,
notices and other documents and communications given or delivered pursuant to
this Agreement shall be in the English language (other than the documents
required to be provided pursuant to Section 4.01(e)(iii), Section 7.01 and
Section 7.02 which shall be in the English language or in the Spanish language
accompanied by an English translation or summary). Except in the case of the
laws of, or official communications of, Mexico, the English language version
of any such document shall control the meaning of the matters set forth
therein.
13.10 GOVERNING LAW. THIS AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAW OF THE STATE OF NEW YORK.
13.11 Submission to Jurisdiction
(a) Each of the parties hereto hereby irrevocably and
unconditionally submits to the non-exclusive jurisdiction of the
United States District Court for the Southern District of New York
and of any New York State court located in the Borough of Manhattan
in New York City and any appellate court thereof for purposes of any
suit, legal action or proceeding arising out of or relating to this
Agreement, any other Transaction Document or the transactions
contemplated hereby, and each of the parties hereto hereby
irrevocably agrees that all claims in respect of such suit, action or
proceeding may be heard and determined in such federal or New York
State court and, with respect to the Borrower and the Guarantors, as
well as in the competent court of their own corporate domicile.
(b) Each of the parties hereto hereby irrevocably waives, to
the fullest extent it may effectively do so, any objection that it
may now or hereafter have to the laying of venue of any such suit,
action or proceeding in any such federal or New York State court and
irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of any such suit,
action or proceeding.
(c) Each of the parties hereto irrevocably waives the right
to object, with respect to such claim, suit, action or proceeding
brought in any such court, that such court does not have jurisdiction
over it.
(d) Each of the parties hereto agrees, to the fullest extent
it may effectively do so under applicable law, that a final judgment
in any suit, action or proceeding of the nature referred to in
paragraph (a) above brought in any such court shall be conclusive and
binding upon such party and may be enforced in other jurisdictions by
suit on the judgment or in any manner provided by law.
(e) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR THE ACTIONS OF ANY ARRANGER, THE
ADMINISTRATIVE AGENT OR ANY LENDER IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
13.12 Appointment of Agent for Service of Process.
(a) The Borrower and each Guarantor hereby irrevocably
appoints CT Corporation System, with an office on the date hereof at
111 Eighth Avenue, 13th Floor, New York, New York 10011, as its agent
(the "Process Agent") to receive on behalf of itself and its
property, service of copies of the summons and complaint and any
other process which may be served in any such action or proceeding
brought in any New York State or federal court sitting in New York
City. Such service may be made by delivering a copy of such process
to the Borrower or any Guarantor, as the case may be, in care of the
Process Agent at its address specified above, and the Borrower and
each Guarantor, as the case may be, hereby authorizes and directs the
Process Agent to accept such service on its behalf. The appointment
of the Process Agent shall be irrevocable until the appointment of a
successor Process Agent. The Borrower and each Guarantor, further
agrees to promptly appoint a successor Process Agent in New York City
prior to the termination for any reason of the appointment of the
initial Process Agent.
(b) Nothing in Section 13.11 or in this Section 13.12 shall
affect the right of any party hereto to serve process in any manner
permitted by law or limit any right that any party hereto may have to
enforce in any lawful manner a judgment obtained in one jurisdiction
in any other jurisdiction.
13.13 Waiver of Sovereign Immunity. To the extent that the
Borrower or a Guarantor has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service
or notice, attachment prior to judgment, attachment in aid of execution, or
otherwise) with respect to itself or its property, the Borrower or the
Guarantor, as the case may be, hereby irrevocably waives such immunity in
respect of its obligations hereunder to the extent permitted by applicable
law. Without limiting the generality of the foregoing, the Borrower and each
Guarantor agrees that the waivers set forth in this Section 13.13 shall have
force and effect to the fullest extent permitted under the Foreign Sovereign
Immunities Act of 1976 of the United States and are intended to be irrevocable
for purposes of such Act.
13.14 Judgment Currency.
(a) All payments made under this Agreement and the other
Transaction Documents shall be made in Dollars unless specified
otherwise herein. If for the purposes of obtaining judgment in any
court it is necessary to convert a sum due from the Borrower in one
currency ("Currency X") into another currency ("Currency Y"), the
parties hereto agree to the fullest extent that they may legally and
effectively do so that the rate of exchange used shall be that at
which in accordance with normal banking procedures (based on
quotations from four major dealers in the relevant market) the
Administrative Agent or each Lender, as the case may be, could
purchase Currency X with Currency Y at or about 11:00 a.m. (New York
City time) on the Business Day preceding that on which final judgment
is given.
(b) The Obligations in respect of any sum due to any Lender
or the Administrative Agent hereunder or under any other Transaction
Document shall, to the extent permitted by applicable law
notwithstanding any judgment expressed in a currency other than the
applicable Currency X, be discharged only to the extent that on the
Business Day following receipt by such Lender or the Administrative
Agent of any sum adjudged to be so due in Currency Y such Lender or
the Administrative Agent may in accordance with normal banking
procedures purchase Currency X with Currency Y. If the amount of
Currency X so purchased is less than the sum originally due to such
Lender or the Administrative Agent, the Borrower and each of the
Guarantors agree, to the fullest extent it may legally do so, as a
separate obligation and notwithstanding any such judgment, to
indemnify such Lender or the Administrative Agent against such
resulting loss.
13.15 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
facsimile shall be effective as delivery of a manually executed counterpart of
this Agreement.
13.16 USA PATRIOT Act. The Lenders, to the extent that they
are subject to the requirements of the USA PATRIOT Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the "Act"), hereby notify the
Borrower that pursuant to the requirements of the Act, it is required to
obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other
information that will allow the Lenders to identify the Borrower in accordance
with the Act.
13.17 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction, and the remaining portion of such provision and all other
remaining provisions hereof will be construed to render them enforceable to
the fullest extent permitted by law.
13.18 Survival of Agreements and Representations.
(a) All representations and warranties made herein or in any
other Transaction Document shall survive the execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby.
(b) The covenants and agreements contained in Sections 3.04,
3.06, 3.08, 3.09, 13.04, 13.05, 13.08, 13.09, 13.11 and 13.12, and
the obligations of the Lenders under Section 11.07, shall survive the
termination of the Commitments and, in the case of any Lender that
may assign any interest in its Commitment or obligations hereunder,
with respect to matters occurring before such assignment, shall
survive the making of such assignment to the extent any claim arising
thereunder relates to any period prior to such assignment,
notwithstanding that such assigning Lender may cease to be a "Lender"
hereunder.
THIS PAGE IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED AS OF APRIL 5,
2005, AMONG CEMEX, S.A. DE C.V., AS BORROWER, CEMEX MEXICO, S.A. DE C.V. AND
EMPRESAS TOLTECA DE MEXICO, S.A. DE C.V., AS GUARANTORS, BARCLAYS BANK PLC, AS
ADMINISTRATIVE AGENT AND AS A LENDER, CITIBANK, N.A., AS A LENDER, CITIBANK,
N.A., NASSAU, BAHAMAS BRANCH, AS A LENDER, BARCLAYS CAPITAL, THE INVESTMENT
BANKING DIVISION OF BARCLAYS BANK PLC, AS JOINT LEAD ARRANGER AND JOINT
BOOKRUNNER AND CITIGROUP GLOBAL MARKETS INC., AS DOCUMENTATION AGENT, JOINT
LEAD ARRANGER AND JOINT BOOKRUNNER.
CEMEX, S.A. DE C.V.,
as Borrower
By /s/ Humberto Lozano
----------------------------------
Name: Humberto Lozano
Title:
THIS PAGE IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED AS OF APRIL 5,
2005, AMONG CEMEX, S.A. DE C.V., AS BORROWER, CEMEX MEXICO, S.A. DE C.V. AND
EMPRESAS TOLTECA DE MEXICO, S.A. DE C.V., AS GUARANTORS, BARCLAYS BANK PLC, AS
ADMINISTRATIVE AGENT AND AS A LENDER, CITIBANK, N.A., AS A LENDER, CITIBANK,
N.A., NASSAU, BAHAMAS BRANCH, AS A LENDER, BARCLAYS CAPITAL, THE INVESTMENT
BANKING DIVISION OF BARCLAYS BANK PLC, AS JOINT LEAD ARRANGER AND JOINT
BOOKRUNNER AND CITIGROUP GLOBAL MARKETS INC., AS DOCUMENTATION AGENT, JOINT
LEAD ARRANGER AND JOINT BOOKRUNNER.
CEMEX MEXICO, S.A. DE C.V.,
as Guarantor
By /s/ Humberto Lozano
----------------------------------
Name: Humberto Lozano
Title: Attorney-in-Fact
THIS PAGE IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED AS OF APRIL 5,
2005, AMONG CEMEX, S.A. DE C.V., AS BORROWER, CEMEX MEXICO, S.A. DE C.V. AND
EMPRESAS TOLTECA DE MEXICO, S.A. DE C.V., AS GUARANTORS, BARCLAYS BANK PLC, AS
ADMINISTRATIVE AGENT AND AS A LENDER, CITIBANK, N.A., AS A LENDER, CITIBANK,
N.A., NASSAU, BAHAMAS BRANCH, AS A LENDER, BARCLAYS CAPITAL, THE INVESTMENT
BANKING DIVISION OF BARCLAYS BANK PLC, AS JOINT LEAD ARRANGER AND JOINT
BOOKRUNNER AND CITIGROUP GLOBAL MARKETS INC., AS DOCUMENTATION AGENT, JOINT
LEAD ARRANGER AND JOINT BOOKRUNNER.
EMPRESAS TOTLECA DE MEXICO,
S.A. DE C.V.,
as Guarantor
By /s/ Humberto Lozano
----------------------------------
Name: Humberto Lozano
Title: Attorney-in-Fact
THIS PAGE IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED AS OF APRIL 5,
2005, AMONG CEMEX, S.A. DE C.V., AS BORROWER, CEMEX MEXICO, S.A. DE C.V. AND
EMPRESAS TOLTECA DE MEXICO, S.A. DE C.V., AS GUARANTORS, BARCLAYS BANK PLC, AS
ADMINISTRATIVE AGENT AND AS A LENDER, CITIBANK, N.A., AS A LENDER, CITIBANK,
N.A., NASSAU, BAHAMAS BRANCH, AS A LENDER, BARCLAYS CAPITAL, THE INVESTMENT
BANKING DIVISION OF BARCLAYS BANK PLC, AS JOINT LEAD ARRANGER AND JOINT
BOOKRUNNER AND CITIGROUP GLOBAL MARKETS INC., AS DOCUMENTATION AGENT, JOINT
LEAD ARRANGER AND JOINT BOOKRUNNER.
BARCLAYS BANK PLC,
as Administrative Agent
By /s/ Vidal H. Ramirez
----------------------------------
Name: Vidal H. Ramirez
Title: Director
THIS PAGE IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED AS OF APRIL 5,
2005, AMONG CEMEX, S.A. DE C.V., AS BORROWER, CEMEX MEXICO, S.A. DE C.V. AND
EMPRESAS TOLTECA DE MEXICO, S.A. DE C.V., AS GUARANTORS, BARCLAYS BANK PLC, AS
ADMINISTRATIVE AGENT AND AS A LENDER, CITIBANK, N.A., AS A LENDER, CITIBANK,
N.A., NASSAU, BAHAMAS BRANCH, AS A LENDER, BARCLAYS CAPITAL, THE INVESTMENT
BANKING DIVISION OF BARCLAYS BANK PLC, AS JOINT LEAD ARRANGER AND JOINT
BOOKRUNNER AND CITIGROUP GLOBAL MARKETS INC., AS DOCUMENTATION AGENT, JOINT
LEAD ARRANGER AND JOINT BOOKRUNNER.
BARCLAYS CAPITAL, THE INVESTMENT
BANKING DIVISION OF BARCLAYS BANC PLC,
as Joint Lead Arranger and Joint
Bookrunner
By /s/ Vidal H. Ramirez
----------------------------------
Name: Vidal H. Ramirez
Title: Director
THIS PAGE IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED AS OF APRIL 5,
2005, AMONG CEMEX, S.A. DE C.V., AS BORROWER, CEMEX MEXICO, S.A. DE C.V. AND
EMPRESAS TOLTECA DE MEXICO, S.A. DE C.V., AS GUARANTORS, BARCLAYS BANK PLC, AS
ADMINISTRATIVE AGENT AND AS A LENDER, CITIBANK, N.A., AS A LENDER, CITIBANK,
N.A., NASSAU, BAHAMAS BRANCH, AS A LENDER, BARCLAYS CAPITAL, THE INVESTMENT
BANKING DIVISION OF BARCLAYS BANK PLC, AS JOINT LEAD ARRANGER AND JOINT
BOOKRUNNER AND CITIGROUP GLOBAL MARKETS INC., AS DOCUMENTATION AGENT, JOINT
LEAD ARRANGER AND JOINT BOOKRUNNER.
CITIGROUP GLOBAL MARKETS INC.,
as Documentation Agent, Joint Lead
Arranger and Joint Bookrunner
By /s/ Carlos Corona
----------------------------------
Name: Carlos Corona
Title: Director
THIS PAGE IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED AS OF APRIL 5,
2005, AMONG CEMEX, S.A. DE C.V., AS BORROWER, CEMEX MEXICO, S.A. DE C.V. AND
EMPRESAS TOLTECA DE MEXICO, S.A. DE C.V., AS GUARANTORS, BARCLAYS BANK PLC, AS
ADMINISTRATIVE AGENT AND AS A LENDER, CITIBANK, N.A., AS A LENDER, CITIBANK,
N.A., NASSAU, BAHAMAS BRANCH, AS A LENDER, BARCLAYS CAPITAL, THE INVESTMENT
BANKING DIVISION OF BARCLAYS BANK PLC, AS JOINT LEAD ARRANGER AND JOINT
BOOKRUNNER AND CITIGROUP GLOBAL MARKETS INC., AS DOCUMENTATION AGENT, JOINT
LEAD ARRANGER AND JOINT BOOKRUNNER.
BARCLAYS BANK PLC,
as a Lender
By /s/ Vidal H. Ramirez
----------------------------------
Name: Vidal H. Ramirez
Title: Director
THIS PAGE IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED AS OF APRIL 5,
2005, AMONG CEMEX, S.A. DE C.V., AS BORROWER, CEMEX MEXICO, S.A. DE C.V. AND
EMPRESAS TOLTECA DE MEXICO, S.A. DE C.V., AS GUARANTORS, BARCLAYS BANK PLC, AS
ADMINISTRATIVE AGENT AND AS A LENDER, CITIBANK, N.A., AS A LENDER, CITIBANK,
N.A., NASSAU, BAHAMAS BRANCH, AS A LENDER, BARCLAYS CAPITAL, THE INVESTMENT
BANKING DIVISION OF BARCLAYS BANK PLC, AS JOINT LEAD ARRANGER AND JOINT
BOOKRUNNER AND CITIGROUP GLOBAL MARKETS INC., AS DOCUMENTATION AGENT, JOINT
LEAD ARRANGER AND JOINT BOOKRUNNER.
CITIBANK, N.A,
as a Lender
By /s/ Carlos Corona
----------------------------------
Name: Carlos Corona
Title: Vice President
THIS PAGE IS A SIGNATURE PAGE TO THE CREDIT AGREEMENT, DATED AS OF APRIL 5,
2005, AMONG CEMEX, S.A. DE C.V., AS BORROWER, CEMEX MEXICO, S.A. DE C.V. AND
EMPRESAS TOLTECA DE MEXICO, S.A. DE C.V., AS GUARANTORS, BARCLAYS BANK PLC, AS
ADMINISTRATIVE AGENT AND AS A LENDER, CITIBANK, N.A., AS A LENDER, CITIBANK,
N.A., NASSAU, BAHAMAS BRANCH, AS A LENDER, BARCLAYS CAPITAL, THE INVESTMENT
BANKING DIVISION OF BARCLAYS BANK PLC, AS JOINT LEAD ARRANGER AND JOINT
BOOKRUNNER AND CITIGROUP GLOBAL MARKETS INC., AS DOCUMENTATION AGENT, JOINT
LEAD ARRANGER AND JOINT BOOKRUNNER.
CITIBANK, N.A, NASSAU, BAHAMAS
BRANCH,
as a Lender
By /s/ Leslie Munroe
----------------------------------
Name: Leslie Munroe
Title: Attorney-in-Fact
Mandatory Cost Formula
1. The Mandatory Cost is an addition to the interest rate to
compensate Lenders for the cost of compliance with (a) the requirements of the
Bank of England and/or the Financial Services Authority (or, in either case,
any other authority which replaces all or any of its functions) or (b) the
requirements of the European Central Bank.
2. For the purposes of this Exhibit G:
"Additional Cost Rate" has the meaning provided in paragraph 3 below;
"Eligible Liabilities" has the meaning provided from time to time
under or pursuant to the Bank of England Act 1998 or (as may be appropriate)
by the Bank of England;
"Fees Rules" means the rules on periodic fees contained in the FSA
Supervision Manual or such other law or regulation as may be in force from
time to time in respect of the payment of fees for the acceptance of deposits;
"Fee Tariffs" means the fee tariffs specified in the Fees Rules under
the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero
rated fee required pursuant to the Fees Rules but taking into account any
applicable discount rate);
"Special Deposits" has the meaning given to it from time to time
under or pursuant to the Bank of England Act 1998 or (as may be appropriate)
by the Bank of England; and
"Tariff Base" has the meaning given to it in, and will be calculated
in accordance with, the Fees Rules.
3. On the first day of each Interest Period (or as soon as possible
thereafter) the Administrative Agent shall calculate, as a percentage rate, a
rate (the "Additional Cost Rate") for each Lender, in accordance with the
paragraphs set out below. The Mandatory Cost will be calculated by the
Administrative Agent as a weighted average of the Lenders' Additional Cost
Rates (weighted in proportion to the percentage participation of each Lender
in the relevant Loan) and will be expressed as a percentage rate per annum.
4. The Additional Cost Rate for any Lender lending from a Lending
Office in a Participating Member State will be the percentage notified by that
Lender to the Administrative Agent. This percentage will be certified by that
Lender in its notice to the Administrative Agent to be its reasonable
determination of the cost (expressed as a percentage of that Lender's
participation in all Loans made from that Lending Office) of complying with
the minimum reserve requirements of the European Central Bank in respect of
loans made from that Lending Office.
5. The Additional Cost Rate for any Lender lending from a Lending
Office in the United Kingdom will be calculated by the Administrative Agent as
follows:
in relation to a Loan denominated in Sterling:
[GRAPHIC OMITTED] percent per annum
in relation to a Loan in any currency other than Sterling:
[GRAPHIC OMITTED] percent per annum.
Where:
A is the percentage of Eligible Liabilities (assuming these to
be in excess of any stated minimum) which that Lender is
from time to time required to maintain as an interest free
cash ratio deposit with the Bank of England to comply with
cash ratio requirements.
B is the percentage rate of interest (excluding the Applicable
Margin and the Mandatory Cost and, if the Loan is an Unpaid
Sum, the additional rate of interest specified in paragraph
(a) of Section 2.10 (Default Interest)) payable for the
relevant Interest Period on the Loan.
C is the percentage (if any) of Eligible Liabilities which
that Lender is required from time to time to maintain as
interest bearing Special Deposits with the Bank of England.
D is the percentage rate per annum payable by the Bank of
England to the Administrative Agent on interest bearing
Special Deposits.
E is designed to compensate Lenders for amounts payable under
the Fees Rules and is calculated by the Administrative Agent
as being the average of the most recent rates of charge
supplied by the Reference Banks to the Administrative Agent
pursuant to paragraph 7 below and expressed in pounds per
(pound)1,000,000.
6. In application of the above formula, A, B, C and D will be
included in the formula as percentages (i.e. 5 per cent. will be included in
the formula as 5 and not as 0.05). A negative result obtained by subtracting D
from B shall be taken as zero. The resulting figures shall be rounded to four
decimal places.
7. If requested by the Administrative Agent, each Reference Bank
shall, as soon as practicable after publication by the Financial Services
Authority, supply to the Administrative Agent, the rate of charge payable by
that Reference Bank to the Financial Services Authority pursuant to the Fees
Rules in respect of the relevant financial year of the Financial Services
Authority (calculated for this purpose by that Reference Bank as being the
average of the Fee Tariffs applicable to that Reference Bank for that
financial year) and expressed in pounds per Sterling 1,000,000 of the Tariff
Base of that Reference Bank.
8. Each Lender shall supply any information required by the
Administrative Agent for the purpose of calculating its Additional Cost Rate.
In particular, but without limitation, each Lender shall supply the following
information on or prior to the date on which it becomes a Lender:
the jurisdiction of its Lending Office; and
any other information that the Administrative Agent may reasonably
require for such purpose.
Each Lender shall promptly notify the Administrative Agent of any
change to the information provided by it pursuant to this paragraph.
9. The percentages of each Lender for the purpose of A and C above
and the rates of charge of each Reference Bank for the purpose of E above
shall be determined by the Administrative Agent based upon the information
supplied to it pursuant to paragraphs 7 and 8 above and on the assumption
that, unless a Lender notifies the Administrative Agent to the contrary, each
Lender's obligations in relation to cash ratio deposits and Special Deposits
are the same as those of a typical Lender from its jurisdiction of
incorporation with a Lending Office in the same jurisdiction as its Lending
Office.
10. The Administrative Agent shall have no liability to any person if
such determination results in an Additional Cost Rate which over or under
compensates any Lender and shall be entitled to assume that the information
provided by any Lender or Reference Bank pursuant to paragraphs 3, 7 and 8
above is true and correct in all respects.
11. The Administrative Agent shall distribute the additional amounts
received as a result of the Mandatory Cost to the Lenders on the basis of the
Additional Cost Rate for each Lender based on the information provided by each
Lender and each Reference Bank pursuant to paragraphs 3, 7 and 8 above.
12. Any determination by the Administrative Agent pursuant to this
Exhibit G in relation to a formula, the Mandatory Cost, an Additional Cost
Rate or any amount payable to a Lender shall, in the absence of manifest
error, be conclusive and binding on all Parties.
13. The Administrative Agent may from time to time, after
consultation with the Borrower and the Lenders, determine and notify to all
parties to the Agreement any amendments which are required to be made to this
Exhibit G in order to comply with any change in law, regulation or any
requirements from time to time imposed by the Bank of England, the Financial
Services Authority or the European Central Bank (or, in any case, any other
authority which replaces all or any of its functions) and any such
determination shall, in the absence of manifest error, be conclusive and
binding on all parties to the Agreement.
SCHEDULE 1.01(a)
----------------
Commitment
----------
- ------------------------------ ----------------- -----------------------
Commitment
Amount
Lender (in USD) Commitment Percentage
- ------------------------------ ----------------- -----------------------
$650,000,000 65%
Barclays Bank PLC
- ------------------------------ ----------------- -----------------------
Citibank, N.A. $250,000,000 25%
- ------------------------------ ----------------- -----------------------
Citibank, N.A. Nassau, $100,000,000 10%
Bahamas Branch
- ------------------------------ ----------------- -----------------------
SCHEDULE 1.01(b)
----------------
Lending Offices
---------------
- ------------------------------------------------------- -----------------------------------------------------
Lender Lending Offices
- ------------------------------------------------------- -----------------------------------------------------
Barclays Bank PLC 200 Park Avenue
New York, New York 10166
Attention: Nicholas A. Bell
Telephone: 212-412-4029
Fax: 212-412-7600
Email: Nicholas.Bell@barclayscapital.com
- ------------------------------------------------------- -----------------------------------------------------
Citibank, N.A. 2 Penns Way Suite 110
New Castle, DE 19720
Attention: Paul Joseph
F: 212-994-0849
P: 302-894-6016
Email: paul.o.joseph@citigroup.com
- ------------------------------------------------------- -----------------------------------------------------
Citibank, N.A. Nassau, Thompson Boulevard At Oaks Field
Bahamas Branch P.O. Box N-1576 Nassau, Bahamas
Attention: Maria Antonieta Zertuche / Jesus Cantu
Telephone: (81) 1226-8526 / 8505
Fax: (81) 1226-8560
Email: mzertucheiz@banamex.com / jcantu@banamex.com
- ------------------------------------------------------- -----------------------------------------------------
Schedule 5.06
-------------
Litigation
----------
A description of material regulatory and legal matters affecting
CEMEX and its Subsidiaries is provided below.
U.S. Anti-Dumping Sunset Reviews
Under the U.S. anti-dumping and countervailing duty laws, the
Commerce Department and the International Trade Commission are required to
conduct "sunset reviews" of outstanding anti-dumping and countervailing duty
orders and suspension agreements every five years. At the conclusion of these
reviews, the Commerce Department is required to terminate the order or
suspension agreement unless the agencies have found that termination is likely
to lead to continuation or recurrence of dumping, or a subsidy in the case of
countervailing duty orders, and material injury. Under special transition
rules, the first sunset reviews commenced in August 1999 for cases involving
gray Portland cement and clinker from Mexico and Venezuela (described below),
which had orders and agreements issued before 1995, and were concluded by the
Commerce Department in July 2000 and by the ITC in October 2000.
In July 2000, the Commerce Department determined not to revoke the
anti-dumping order on imports from Mexico. On October 5, 2000, the ITC found
likelihood of injury to the U.S. industry and determined not to revoke this
anti-dumping order. Thus, the order remains in place. On September 19, 2001,
CEMEX filed a petition for a "changed circumstances" review. The International
Trade Commission decided in December 2001 not to initiate such a review. CEMEX
has appealed the ITC's decision in the "sunset review" and the "changed
circumstances" review to NAFTA. In January of 2005, a NAFTA Panel was formed
to review the ITC's sunset review determination. The NAFTA Panel has scheduled
oral argument for April 7, 2005.
On October 5, 2000, the ITC determined that terminating the
Anti-Dumping Suspension Agreement involving imports from Venezuela would not
likely lead to a continuation or recurrence of injury to the U.S. market, and
voted to terminate the agreement. Consequently, on November 8, 2000, the
Commerce Department issued a notice terminating the Anti-Dumping Suspension
Agreement covering imports of cement from Venezuela. On July 28, 2003, the
United States Court of International Trade upheld the Commerce Department's
decision to terminate the Suspension Agreement. The U.S. cement industry has
appealed the decision of the Court of International Trade to the Court of
Appeals for the Federal Circuit. On December 14, 2004 the Court of Appeals for
the federal Circuit upheld the CIT's decision affirming the DOC's termination
of the Suspension Agreement. Thus, all litigation involving the Venezuelan
suspension agreement has been completed and imports of cement from Venezuela
are free of all anti-dumping restrictions.
U.S. Anti-Dumping Rulings--Mexico
Our exports of Mexican gray cement from Mexico to the United States
are subject to an anti-dumping order that was imposed by the Commerce
Department on August 30, 1990. Pursuant to this order, firms that import gray
Portland cement from us in the United States must make cash deposits with the
U.S. Customs Service to guarantee the eventual payment of anti-dumping duties.
Mexican importers' deposits are being liquidated in stages, as
appeals are exhausted for each annual review period. When the final
anti-dumping rate for any review period causes the amount due to exceed the
amount that was deposited, the Mexican importers are required to pay the
difference with interest. When the final anti-dumping rate for any review
period is lower than the amount that was deposited, the U.S. Customs Service
refunds the difference, with interest, to the Mexican importers.
As of December 31, 2004, CEMEX Corp., as the parent company to our
U.S. subsidiaries that import Mexican cement into the United States, had
accrued liabilities of U.S.$103.6 million, including accrued interest, for the
difference between the amount of anti-dumping duties paid on imports and the
latest findings by the Commerce Department in its administrative reviews.
The Commerce Department has published its final dumping
determinations for the first, second third, fourth, fifth and seventh review
periods. The Commerce Department's final results of its final determinations
for the sixth, eighth, ninth, tenth, eleventh, twelfth and thirteenth review
periods have also been published, but have been suspended pending review by
NAFTA panels.
On October 20, 2003, the NAFTA Extraordinary Challenge Committee
upheld the NAFTA Panel reviewing the final results of the fifth administrative
review, covering the period August 1, 1994 - July 1 1995. The NAFTA Panel
upheld the Commerce Department's remand results which lowered the anti-dumping
duty margin for imports during the fifth review period to 44.9% ad valorem.
The Custom's Service has begun liquidating entries of cement from Mexico made
during the fifth review period.
On November 25, 2003, the NAFTA Panel reviewing the final results of
the seventh review period upheld the Commerce Department's remand results of
the seventh review period. The remand results lowered the anti-dumping margin
for imports made during the seventh review period to 37.3% ad valorem The
Customs Service has begun liquidating all entries of cement from Mexico made
during the seventh review period.
On September 16, 2003, the Commerce Department issued its final
determination covering the twelfth review period commencing on August 1, 2001
and ending on July 31, 2002. The Commerce Department determined that the
anti-dumping margin was 80.75% ad valorem. The final results for the twelfth
review period establish the cash deposit rate for imports of gray Portland
cement and cement clinker from Mexico made on or after September 16, 2003. The
cash deposit rate was established at $52.41: per metric ton, which remained in
effect until the final results of the thirteenth review period were published.
The latest final determination by the Commerce Department covering
thirteenth review period commencing on August 1, 2002 and ending on July 31,
2003, was issued on December 29, 2004. The Commerce Department determined that
the anti-dumping margin was 57.97% ad valorem. The final results for the
thirteenth review period establish the cash deposit rate for imports of gray
Portland cement and cement clinker from Mexico made on or after December 29,
2004. The cash deposit rate was established at $52.41 per metric ton, which
will remain in effect until the final results of the fourteenth review period
are published.
The status of each period still under review or appeal is as follows:
Period Cash Deposits Status
- --------------------- --------------------------- --------------------------------------------------
8/1/95-7/31/96 61.85% 37.49% determined by the Commerce Department upon
(effective 5/5/1997) review. Liquidation suspended pending NAFTA panel
review.
8/1/97-7/31/98 73.69%, 35.88% and 37.49% 45.98% determined by the Commerce Department upon
(effective 5/4/1998) review. Liquidation suspended pending NAFTA panel
review.
8/1/98-7/31/99 37.49%, 49.58% 38.65% determined by the Commerce Department upon
(effective 3/17/1999) review. Liquidation suspended pending NAFTA panel
review.
8/1/99-7/31/00 49.58%, 45.98% (effective 50.98% determined by the Commerce Department upon
3/16/2000) review. Liquidation suspended pending appeal to NAFTA
panel review.
8/1/00-7/31/01 49.58%, 38.65% (effective 73.74% determined by the Commerce Department upon
5/14/2001) review. Liquidation suspended pending appeal to NAFTA
panel review.
8/1/01-7/31/02 38.65%, 50.98% (effective 80.75% determined by the Commerce Department upon
3/19/2002) review. Liquidation suspended pending appeal to NAFTA
panel review.
8/1/02 - 7/31/03 50.98%, 73.74% 54.97% determined by the Commerce Department upon
(effective 1/14/2003) review. Liquidation suspended pending appeal to NAFTA
Panel.
8/1/03 - 7/31/04 73.74%, U.S.$52.41 per Subject to review by the Commerce Department.
metric ton (effective
10/15/2003)
8/1/04 - to date U.S.$52.41 per metric ton, Subject to review by the Commerce Department.
U.S.$32.85 per metric ton
(effective 12/29/2004)
U.S. Anti-Dumping Rulings--Venezuela
On May 21, 1991, U.S. producers of gray cement and clinker filed
petitions with the Commerce Department and the International Trade Commission,
or ITC, claiming that imports of gray cement and clinker from Venezuela were
subsidized by the Venezuelan government and were being dumped into the U.S.
market. The producers asked the U.S. government to impose anti-dumping and
countervailing duties on these imports. These claims arose prior to our
acquisition of our Venezuelan operations in 1994, but for purposes of the
following discussion, we refer to the actions taken by the predecessor company
as actions taken by CEMEX Venezuela. CEMEX Venezuela contested the dumping
claim and the countervailing duty claim, and both cases were suspended.
The Commerce Department's preliminary determination regarding the
dumping claim was published on November 4, 1991. The Commerce Department
initially found that CEMEX Venezuela had a dumping margin of 49.2%. Rather
than proceeding with the final Commerce Department and ITC determinations,
CEMEX Venezuela and the Commerce Department entered into an Anti-Dumping
Suspension Agreement on February 11, 1992. Under the Anti-Dumping Suspension
Agreement, CEMEX Venezuela agreed not to sell gray cement or clinker in the
United States at a price less than the "foreign market value." The foreign
market value was determined by the Commerce Department based on information
provided by CEMEX Venezuela each quarter. CEMEX Venezuela was required to
report to the Commerce Department sales in the U.S. market, costs of
production and related data. During its sunset review of the Anti-Dumping
Suspension Agreement, the ITC determined that terminating the agreement would
not likely lead to a continuation or recurrence of injury to the U.S. market,
and voted to terminate the Anti-Dumping Suspension Agreement on October 5,
2000. Consequently, on November 8, 2000, the Commerce Department issued a
notice terminating the Anti-Dumping Suspension Agreement.
On July 28, 2003, the Court of International Trade upheld the
Commerce Department's termination of the Suspension Agreement. The domestic
petitioners have appealed the court's decision to the U.S. Court of Appeals
for the Federal Circuit, which, on December 14, 2004, upheld the CIT's
decision affirming the DOC's termination of the Suspension Agreement. Thus,
all litigation involving the Venezuelan suspension agreement has been
completed and imports of cement from Venezuela are free of all anti-dumping
restrictions.
Anti-Dumping in Taiwan
Five Taiwanese cement producers--Asia Cement Corporation, Taiwan
Cement Corporation, Lucky Cement Corporation, Hsing Ta Cement Corporation and
China Rebar--filed before the Tariff Commission under the Ministry of Finance
(MOF) of Taiwan an anti-dumping case involving imported gray Portland cement
and clinker from the Philippines and Korea.
In a letter dated July 19, 2001, the MOF informed the petitioners and
the respondent producers in exporting countries that a formal investigation
had been initiated. Among the respondents in the petition are APO Cement
Corporation or APO, Rizal and Solid, indirect subsidiaries of CEMEX, which
received their anti-dumping questionnaires from the International Trade
Commission under the Ministry of Economic Affairs (ITC-MOEA) on August 2,
2001, and from the MOF on August 16, 2001.
Rizal and Solid replied to the ITC-MOEA by confirming that they were
not exporting cement/clinker during the covered period. On the other hand, in
its position paper filed on August 18, 2001 and in the public hearing held on
August 20, 2001, APO contested the allegation of "injury" in the anti-dumping
proceedings before the ITC-MOEA.
In a letter dated October 2, 2001, the ITC-MOEA notified the
respondent producers about the result of the preliminary injury investigation
and its determination that there is a reasonable indication that the domestic
industry in Taiwan was materially injured by reason of imports of Portland
cement and clinker from South Korea and the Philippines that are alleged to be
sold in Taiwan at less than normal value. In keeping with the implementing
regulations on the imposition of anti-dumping duties in Taiwan, the ITCMOEA
has transferred the case to the MOF for further investigation.
On October 12, 2001 and November 2, 2001, APO filed its replies to
the MOF questionnaire to contest the allegation of "dumping" in the
anti-dumping proceedings before the MOF. In a letter dated January 22, 2002,
the MOF notified the petitioner and respondents that it adopted on January 15,
2002 a resolution preliminarily finding that there was "dumping" and resolving
that investigation on the issue of "dumping" would continue, but that no
provisional anti-dumping duty would be imposed.
In a letter dated June 26, 2002, the ITC-MOEA notified respondent
producers that its final injury investigation concluded that the imports from
South Korea and the Philippines have caused material injury to the domestic
industry in Taiwan.
In a letter dated July 12, 2002, the MOF notified the respondent
producers that a dumping duty would be imposed on Portland cement and clinker
imports from the Philippines and South Korea commencing from July 19, 2002.
The duty rate imposed on imports from APO, Rizal and Solid was 42%.
On September 17, 2002, APO, Rizal and Solid filed before the Taipei
High Administrative Court an appeal in opposition to the anti-dumping duty
imposed by the MOF. The decision of the MOF was confirmed and has become
final.
Tax Matters
As of December 31, 2004, we and some of our Mexican subsidiaries have
been notified of several tax assessments determined by the Mexican tax office
with respect to the tax years from 1992 through 1996 in a total amount of
Ps3,638.6 million. The tax assessments are based primarily on: (i)
recalculation of the inflationary tax deduction, since the tax authorities
claim that "Advance Payments to Suppliers" and "Guaranty Deposits" are not by
their nature credits, (ii) disallowed restatement of tax loss carryforwards in
the same period in which they occurred, (iii) disallowed determination of tax
loss carryforwards, and (iv) disallowed amounts of business asset tax,
commonly referred to as BAT, creditable against the controlling entity's
income tax liability on the grounds that the creditable amount should be in
proportion to the equity interest that the controlling entity has in its
relevant controlled entities. We have filed an appeal for each of these tax
claims before the Mexican federal tax court, and the appeals are pending
resolution.
As of December 31, 2004, the Philippine Bureau of Internal Revenue,
or BIR, assessed APO Cement Corp. for a deficiency in the amount of income tax
paid in the tax years 1998 through 2001 amounting to PhP959.58 million
(U.S.$16.92 million as of December 31, 2004, based on an exchange rate of
PhP56.702 to U.S.$1.00, which was the Philippine Peso/Dollar exchange rate on
December 31, 2004 as published by the Bangko Sentral ng Pilipinas, the central
bank of the Republic of the Philippines). The assessment disallows APO's
income tax holiday related income. We have contested BIR's findings with the
Court of Tax Appeal, or CTA. In the same manner, Solid also questioned before
the CTA the tax assessment for taxable year 1997 amounting to PhP 132.02
million (U.S.$2.33 million) at an exchange rate of PhP 56.702 to US$1.00. We
also brought to the CTA the APO 1997 tax assessment amounting to PhP 84.31
million (U.S.$1.49 million). We believe that these claims will not have a
material adverse effect on us. However, an adverse resolution of these claims
could have a material adverse effect on our results of operations in the
Philippines. As of December 31, 2004, the cases are still with the CTA and
BIR, and APO and Solid have already presented their respective witnesses and
documentary evidence.
The BIR also finalized its tax assessments for Solid's 1999 tax year
amounting to PhP849.59 million (U.S.$14.98 million) as of December 31, 2003,
based on an exchange rate of PhP56.702 to U.S.$1.0. The BIR also finalized its
tax assessments for Solid's 2000 tax year amount to PhP1,670.37 million
(U.S.$29.46 million) as of December 31, 2004 at an exchange rate of PhP56.702
to U.S.$1.0. We continue to submit relevant evidence to the BIR to contest
these assessments. Our next recourse is to contest these assessments with the
CTA if the BIR issues a final collection letter.
In addition, Solid's 1998 tax year amounting to PhP359.02 million
(U.S.$6.33 million) and APO's 1997-1998 tax years amounting to PhP196.42
million (U.S.$3.46 million) are under preliminary review for deficiency taxes.
Finalization of the assessment was held in abeyance by the BIR as we continue
to present evidence to dispute their findings. We continue to support
documentary evidence to reduce the amount.
Other Legal Proceedings
In May 1999, several companies filed a civil liability suit in the
civil court of the circuit of Ibague, Colombia, against two of our Colombian
subsidiaries, alleging that these subsidiaries were responsible for
deterioration in the rice production capacity of land of the plaintiffs,
caused by pollution emanating from our cement plants located in Ibague,
Colombia. On January 13, 2004, we were notified of a judgment entered against
us under which we were ordered to pay to the plaintiffs an amount equal to
CoP21,114 million (U.S.$9.09 million as of February 28, 2005, based on an
exchange rate of CoP2,323.77 to U.S.$1.00, which was the Colombian Peso/Dollar
exchange rate on February 28, 2005 as published by the Banco de la Republica
de Colombia, the central bank of Colombia). We filed an appeal on January 15,
2004, and the case was sent to the Superior Court of Ibague for review.
Typically, proceedings of this nature continue for several years before final
resolution.
In March 2001, 42 transporters filed a civil liability suit in the
civil court of Ibague, Colombia, against three of our Colombian subsidiaries.
The plaintiffs contend that these subsidiaries are responsible for the alleged
damages caused by breach of raw material transportation contracts. The
plaintiffs asked for relief in the amount of CoP127,242 million (U.S.$54.76
million as of February 28, 2005, based on an exchange rate of CoP2,323.77 to
U.S.$1.00, which was the Colombian Peso/Dollar exchange rate on February 28,
2005 as published by the Banco de la Republica de Colombia, the central bank
of Colombia). This proceeding has reached the evidentiary stage. Typically,
proceedings of this nature continue for several years before final resolution.
As of December 31, 2003, CEMEX, Inc. had accrued liabilities
specifically relating to environmental matters in the aggregate amount of
U.S.$ 28.3 million. The environmental matters relate to (i) the disposal of
various materials in accordance with past industry practice, which might be
categorized as hazardous substances or wastes, and (ii) the cleanup of sites
used or operated by CEMEX, Inc., including discontinued operations, in regard
to the disposal of hazardous substances or wastes, either individually or
jointly with other parties. Most of the proceedings are in the preliminary
stage, and a final resolution might take several years. For purposes of
recording the provision, CEMEX, Inc. considers that it is probable that a
liability has been incurred and the amount of the liability is reasonably
estimable, whether or not claims have been asserted, and without giving effect
to any possible future recoveries. Based on information developed to date,
CEMEX, Inc. does not believe it will be required to spend significant sums on
these matters in excess of the amounts previously recorded. Until all
environmental studies, investigations, remediation work, and negotiations with
or litigation against potential sources of recovery have been completed, the
ultimate cost that might be incurred to resolve these environmental issues
cannot be assured.
In December 2002, an ex-maritime broker for Puerto Rican Cement
Company, Inc. filed a civil liability lawsuit in Puerto Rico against CEMEX,
S.A. de C.V., PRCC and other unaffiliated entities, including Puerto Rican
authorities. The plaintiff contends that the defendants conspired to violate
state and federal antitrust laws so that one of the defendants, who is not
affiliated with us, could gain control of the maritime broker market in Port
of Ponce, Puerto Rico. The plaintiff has asked for relief in the amount of
approximately U.S.$18 million. In September 2003, the United States District
Court for the District of Puerto Rico dismissed all claims against us, and
entered judgment accordingly. The plaintiff has subsequently filed two post
judgment motions requesting reconsideration of the court's opinion, and we
have requested the denial of such motions. Resolution of these motions is
still pending before the court.
In March 2003, a lawsuit was filed in the Indonesian province of West
Sumatra in the Padang District Court against (i) Gresik, an Indonesian cement
producer in which we own a 25.5% interest through Cemex Asia Holdings Ltd. or
CAH and the Republic of Indonesia owns a 51% interest, (ii) Semen Padang, a
99.9%-owned subsidiary of Gresik that owns and operates Gresik's Padang cement
plant, and (iii) several Indonesian government agencies. The lawsuit, which
was filed by a foundation purporting to act in the interest of the people of
West Sumatra, challenged the validity of the sale of Semen Padang by the
Indonesian government to Gresik in 1995 on the grounds that the Indonesian
government did not obtain the necessary approvals for such sale. On May 9,
2003, the Padang District Court issued an interim decision suspending Gresik's
rights as a shareholder in Semen Padang on the grounds that ownership of Semen
Padang was an issue in dispute. On March 31, 2004, the Padang District Court
announced its final decision in favor of the foundation. On April 12, 2004,
Gresik filed an appeal of this decision with the Padang District Court, which
will in turn forward the appeal to the High Court of the West Sumatra
province.
After the failure of several attempts to reach a negotiated or
mediated solution to these problems involving Gresik, on December 10, 2003,
CAH filed a request for arbitration against the Republic of Indonesia and the
Government of Indonesia (the "GOI") before the International Centre for
Settlement of Investment Disputes, or ICSID, based in Washington D.C. ICSID
was established by the Convention on the Settlement of Investment Disputes
between States and Nationals of other States, and is intended to facilitate
the resolution of international investment disputes. ICSID is an autonomous
international organization with close links to the World Bank. CAH is seeking,
among other things, rescission of the purchase agreement entered into with the
Republic of Indonesia in 1998, plus repayment of all costs and expenses, and
compensatory damages. ICSID has accepted and registered CAH's request for
arbitration and issued a formal notice of registration on January 27, 2004. On
May 2004, an Arbitral Tribunal was established to hear the dispute. The GOI
has objected to the Tribunal's jurisdiction over the claims asserted in CAH's
request for arbitration, and a hearing to resolve these jurisdictional
objections is expected to take place in July 2005. We cannot predict what
effect, if any, this action will have on our investment in Gresik or how the
Arbitral Tribunal will rule on the GOI's jurisdictional objections or the
merits of the dispute. We cannot predict what effect, if any, the arbitration
will have on our investment in Gresik or what the ruling of the Arbitral
Tribunal will be.
During 2004, four "public interest lawsuits, which include CEMEX
Colombia as a codefendant, were filed. The first and last of these lawsuits
was filed on April 14, 2004 and December 16, 2004, respectively. All
Plaintiffs argue that the use of a base material which the ready mix industry
offers resulted in premature distress of the roads built for the mass public
transportation system of Bogota known as Transmilenio. In connection with
CEMEX Colombia and other materials suppliers, the lawsuits allege that the
base material they supplied failed to fulfill technical standards offered by
the producers thereof (quality deficiencies) and/or that they provided
insufficient or inaccurate information in connection with the product. The
four lawsuits seek road repairs in a manner which guarantees its service
during the period for which it was originally designed (20 years); however,
the lawsuits do not estimate the alleged damages (cost of repairs). CEMEX
Colombia has timely contested each of the lawsuits and will continue to
vigorously defend its interests. One of the lawsuits has been dismissed based
on arguments presented to the court by CEMEX Colombia; all others are in the
initial stage of the proceedings. At this early stage it is not possible to
estimate the alleged damages nor the portion thereof which could be assessed
to CEMEX Colombia, but we believe that it is unlikely to have a material
adverse effect on our results of operations. Typically, proceedings of this
nature continue for several years before final resolution.
An administrative case is pending with the Philippine Department of
Trade and Industry ("DTI") against Solid Cement Corporation ("Solid") for
alleged violation of consumer product and quality safety standards. In August
12, 2004, and prior to the trial of the main case, the Philippine Department
of Trade and Industry ("DTI") issued a Preliminary Order (hereinafter referred
to as the "CDO") enjoining Solid from selling, distributing, delivering and
disposing of Island Cement or any brand manufactured by the Solid Cement plant
in Antipolo, Rizal, in bulk and in bags, to customers, dealers, and
distributors, including but not limited to, batching plants and hardware
outlets/stores. It must be emphasized that said CDO is preliminary in nature
and was issued by the DTI without a finding of any violation on the part of
Solid. Solid has contested the propriety of the issuance of the CDO.
Subsequently, the DTI ordered the conduct of a factory/product audit of
Solid's plant in Antipolo, Rizal. Several samples of Island Cement were taken
by the DTI Audit Group and were sent to a third party laboratory for testing.
Soon after the complete results of the tests came out which confirmed the fact
that Island Cement indeed complies with the standards set by the DTI, the DTI
lifted the CDO. The main case is still pending trial with the Office of Legal
Affairs of the DTI, with the prosecution presenting its evidence-in-chief.
Notably, despite the allegations hurled against Solid regarding the quality of
its Island Cement, no judicial action has yet been filed against Solid to
date.
In the ordinary course of our business, we are party to various legal
proceedings. Other than as disclosed herein, we are not currently involved in
any litigation or arbitration proceedings, including any such proceedings
which are pending, which we believe will have, or have had, a material adverse
effect on us, nor, so far as we are aware, are any proceedings of that kind
threatened.
Schedule 5.10
-------------
Subsidiaries
------------
Name Jurisdiction of Incorporation
---- -----------------------------
Cemex Mexico, S.A. de C.V. Mexico
Empresas Tolteca de Mexico, S.A. de C.V. Mexico
Cemex Concretos, S.A. de C.V. Mexico
Sunward Acquisitions N.V. Netherlands
Cemex Trademarks Worldwide Switzerland
Cemex Espana, S.A. Spain
Cemex Corp. Delaware
Cemex, Inc. Louisiana
Cemex Construction Materials, L.P. Texas
Cemex Colombia, S.A. Colombia
Schedule 6.05
-------------
Litigation
----------
A description of material regulatory and legal matters affecting
CEMEX and its Subsidiaries is provided below.
U.S. Anti-Dumping Sunset Reviews
Under the U.S. anti-dumping and countervailing duty laws, the
Commerce Department and the International Trade Commission are required to
conduct "sunset reviews" of outstanding anti-dumping and countervailing duty
orders and suspension agreements every five years. At the conclusion of these
reviews, the Commerce Department is required to terminate the order or
suspension agreement unless the agencies have found that termination is likely
to lead to continuation or recurrence of dumping, or a subsidy in the case of
countervailing duty orders, and material injury. Under special transition
rules, the first sunset reviews commenced in August 1999 for cases involving
gray Portland cement and clinker from Mexico and Venezuela (described below),
which had orders and agreements issued before 1995, and were concluded by the
Commerce Department in July 2000 and by the ITC in October 2000.
In July 2000, the Commerce Department determined not to revoke the
anti-dumping order on imports from Mexico. On October 5, 2000, the ITC found
likelihood of injury to the U.S. industry and determined not to revoke this
anti-dumping order. Thus, the order remains in place. On September 19, 2001,
CEMEX filed a petition for a "changed circumstances" review. The International
Trade Commission decided in December 2001 not to initiate such a review. CEMEX
has appealed the ITC's decision in the "sunset review" and the "changed
circumstances" review to NAFTA. In January of 2005, a NAFTA Panel was formed
to review the ITC's sunset review determination. The NAFTA Panel has scheduled
oral argument for April 7, 2005.
On October 5, 2000, the ITC determined that terminating the
Anti-Dumping Suspension Agreement involving imports from Venezuela would not
likely lead to a continuation or recurrence of injury to the U.S. market, and
voted to terminate the agreement. Consequently, on November 8, 2000, the
Commerce Department issued a notice terminating the Anti-Dumping Suspension
Agreement covering imports of cement from Venezuela. On July 28, 2003, the
United States Court of International Trade upheld the Commerce Department's
decision to terminate the Suspension Agreement. The U.S. cement industry has
appealed the decision of the Court of International Trade to the Court of
Appeals for the Federal Circuit. On December 14, 2004 the Court of Appeals for
the federal Circuit upheld the CIT's decision affirming the DOC's termination
of the Suspension Agreement. Thus, all litigation involving the Venezuelan
suspension agreement has been completed and imports of cement from Venezuela
are free of all anti-dumping restrictions.
U.S. Anti-Dumping Rulings--Mexico
Our exports of Mexican gray cement from Mexico to the United States
are subject to an anti-dumping order that was imposed by the Commerce
Department on August 30, 1990. Pursuant to this order, firms that import gray
Portland cement from us in the United States must make cash deposits with the
U.S. Customs Service to guarantee the eventual payment of anti-dumping duties.
Mexican importers' deposits are being liquidated in stages, as
appeals are exhausted for each annual review period. When the final
anti-dumping rate for any review period causes the amount due to exceed the
amount that was deposited, the Mexican importers are required to pay the
difference with interest. When the final anti-dumping rate for any review
period is lower than the amount that was deposited, the U.S. Customs Service
refunds the difference, with interest, to the Mexican importers.
As of December 31, 2004, CEMEX Corp., as the parent company to our
U.S. subsidiaries that import Mexican cement into the United States, had
accrued liabilities of U.S.$103.6 million, including accrued interest, for the
difference between the amount of anti-dumping duties paid on imports and the
latest findings by the Commerce Department in its administrative reviews.
The Commerce Department has published its final dumping
determinations for the first, second, third, fourth, fifth and seventh review
periods. The Commerce Department's final results of its final determinations
for the sixth, eighth, ninth, tenth, eleventh, twelfth and thirteenth review
periods have also been published, but have been suspended pending review by
NAFTA panels.
On October 20, 2003, the NAFTA Extraordinary Challenge Committee
upheld the NAFTA Panel reviewing the final results of the fifth administrative
review, covering the period August 1, 1994 - July 1, 1995. The NAFTA Panel
upheld the Commerce Deparment's remand results which lowered the anti-dumping
duty margin for imports during the fifth review period to 44.9% ad valorem.
The Customs Service has begun liquidating entries of cement from Mexico made
during the fifth review period.
On November 25, 2003, the NAFTA Panel reviewing the final results of
the seventh review period upheld the Commerce Department's remand results of
the seventh review period. The remand results lowered the anti-dumping margin
for imports made during the seventh review period to 37.3% ad valorem. The
Customs Service has begun liquidating all entries of cement from Mexico made
during the seventh review period.
On September 16, 2003, the Commerce Department issued its final
determination covering the twelfth review period commencing on August 1, 2001
and ending on July 31, 2002. The Commerce Department determined that the
anti-dumping margin was 80.75% ad valorem. The final results for the twelfth
review period establish the cash deposit rate for imports of gray Portland
cement and cement clinker from Mexico made on or after September 16, 2003. The
cash deposit rate was established at $52.41 per metric ton, which remained in
effect until the final results of the thirteenth review period were published.
The latest final determination by the Commerce Department covering
thirteenth review period, commencing on August 1, 2002 and ending on July 31,
2003, was issued on December 29, 2004. The Commerce Department determined that
the anti-dumping margin was 57.97% ad valorem. The final results for the
thirteenth review period establish the cash deposit rate for imports of gray
Portland cement and cement clinker from Mexico made on or after December 29,
2004. The cash deposit rate was established at $52.41 per metric ton, which
will remain in effect until the final results of the fourteenth review period
are published.
The status of each period still under review or appeal is as follows:
Period Cash Deposits Status
- ----------------------- ------------------------- --------------------------------------------------------------
8/1/95-7/31/96 61.85% 37.49% determined by the Commerce Department upon review.
(effective 5/5/1997) Liquidation suspended pending NAFTA panel review.
8/1/97-7/31/98 73.69%, 35.88% and 45.98% determined by the Commerce Department upon review.
37.49% Liquidation suspended pending NAFTA panel review.
(effective 5/4/1998)
8/1/98-7/31/99 37.49%, 49.58% 38.65% determined by the Commerce Department upon review.
(effective 3/17/1999) Liquidation suspended pending NAFTA panel review.
8/1/99-7/31/00 49.58%, 45.98% 50.98% determined by the Commerce Department upon review.
(effective 3/16/2000) Liquidation suspended pending appeal to NAFTA panel
review.
8/1/00-7/31/01 49.58%, 38.65% 73.74% determined by the Commerce Department upon review.
(effective 5/14/2001) Liquidation suspended pending appeal to NAFTA panel
review.
8/1/01-7/31/02 38.65%, 50.98% 80.75% determined by the Commerce Department upon review.
(effective 3/19/2002) Liquidation suspended pending appeal to NAFTA panel
review.
8/1/02 - 7/31/03 50.98%, 73.74% 54.97% determined by the Commerce Department upon review.
(effective 1/14/2003) Liquidation suspended pending appeal to NAFTA Panel.
8/1/03 - 7/31/04 73.74%, U.S.$52.41 per Subject to review by the Commerce Department.
metric ton (effective
10/15/2003)
8/1/04 - to date U.S.$52.41 per metric Subject to review by the Commerce Department.
ton, U.S.$32.85 per
metric ton (effective
12/29/2004)
U.S. Anti-Dumping Rulings--Venezuela
On May 21, 1991, U.S. producers of gray cement and clinker filed
petitions with the Commerce Department and the International Trade Commission,
or ITC, claiming that imports of gray cement and clinker from Venezuela were
subsidized by the Venezuelan government and were being dumped into the U.S.
market. The producers asked the U.S. government to impose anti-dumping and
countervailing duties on these imports. These claims arose prior to our
acquisition of our Venezuelan operations in 1994, but for purposes of the
following discussion, we refer to the actions taken by the predecessor company
as actions taken by CEMEX Venezuela. CEMEX Venezuela contested the dumping
claim and the countervailing duty claim, and both cases were suspended.
The Commerce Department's preliminary determination regarding the
dumping claim was published on November 4, 1991. The Commerce Department
initially found that CEMEX Venezuela had a dumping margin of 49.2%. Rather
than proceeding with the final Commerce Department and ITC determinations,
CEMEX Venezuela and the Commerce Department entered into an Anti-Dumping
Suspension Agreement on February 11, 1992. Under the Anti-Dumping Suspension
Agreement, CEMEX Venezuela agreed not to sell gray cement or clinker in the
United States at a price less than the "foreign market value." The foreign
market value was determined by the Commerce Department based on information
provided by CEMEX Venezuela each quarter. CEMEX Venezuela was required to
report to the Commerce Department sales in the U.S. market, costs of
production and related data. During its sunset review of the Anti-Dumping
Suspension Agreement, the ITC determined that terminating the agreement would
not likely lead to a continuation or recurrence of injury to the U.S. market,
and voted to terminate the Anti-Dumping Suspension Agreement on October 5,
2000. Consequently, on November 8, 2000, the Commerce Department issued a
notice terminating the Anti-Dumping Suspension Agreement.
On July 28, 2003, the Court of International Trade upheld the
Commerce Department's termination of the Suspension Agreement. The domestic
petitioners have appealed the court's decision to the U.S. Court of Appeals
for the Federal Circuit, which, on December 14, 2004, upheld the CIT's
decision affirming the DOC's termination of the Suspension Agreement. Thus,
all litigation involving the Venezuelan suspension agreement has been
completed and imports of cement from Venezuela are free of all anti-dumping
restrictions.
Anti-Dumping in Taiwan
Five Taiwanese cement producers--Asia Cement Corporation, Taiwan
Cement Corporation, Lucky Cement Corporation, Hsing Ta Cement Corporation and
China Rebar--filed before the Tariff Commission under the Ministry of Finance
(MOF) of Taiwan an anti-dumping case involving imported gray Portland cement
and clinker from the Philippines and Korea.
In a letter dated July 19, 2001, the MOF informed the petitioners and
the respondent producers in exporting countries that a formal investigation
had been initiated. Among the respondents in the petition are APO Cement
Corporation or APO, Rizal and Solid, indirect subsidiaries of CEMEX, which
received their anti-dumping questionnaires from the International Trade
Commission under the Ministry of Economic Affairs (ITC-MOEA) on August 2,
2001, and from the MOF on August 16, 2001.
Rizal and Solid replied to the ITC-MOEA by confirming that they were
not exporting cement/clinker during the covered period. On the other hand, in
its position paper filed on August 18, 2001 and in the public hearing held on
August 20, 2001, APO contested the allegation of "injury" in the anti-dumping
proceedings before the ITC-MOEA.
In a letter dated October 2, 2001, the ITC-MOEA notified the
respondent producers about the result of the preliminary injury investigation
and its determination that there is a reasonable indication that the domestic
industry in Taiwan was materially injured by reason of imports of Portland
cement and clinker from South Korea and the Philippines that are alleged to be
sold in Taiwan at less than normal value. In keeping with the implementing
regulations on the imposition of anti-dumping duties in Taiwan, the ITCMOEA
has transferred the case to the MOF for further investigation.
On October 12, 2001 and November 2, 2001, APO filed its replies to
the MOF questionnaire to contest the allegation of "dumping" in the
anti-dumping proceedings before the MOF. In a letter dated January 22, 2002,
the MOF notified the petitioner and respondents that it adopted on January 15,
2002 a resolution preliminarily finding that there was "dumping" and resolving
that investigation on the issue of "dumping" would continue, but that no
provisional anti-dumping duty would be imposed.
In a letter dated June 26, 2002, the ITC-MOEA notified respondent
producers that its final injury investigation concluded that the imports from
South Korea and the Philippines have caused material injury to the domestic
industry in Taiwan.
In a letter dated July 12, 2002, the MOF notified the respondent
producers that a dumping duty would be imposed on Portland cement and clinker
imports from the Philippines and South Korea commencing from July 19, 2002.
The duty rate imposed on imports from APO, Rizal and Solid was 42%.
On September 17, 2002, APO, Rizal and Solid filed before the Taipei
High Administrative Court an appeal in opposition to the anti-dumping duty
imposed by the MOF. The decision of the MOF was confirmed and has become
final.
Tax Matters
As of December 31, 2004, we and some of our Mexican subsidiaries have
been notified of several tax assessments determined by the Mexican tax office
with respect to the tax years from 1992 through 1996 in a total amount of
Ps3,638.6 million. The tax assessments are based primarily on: (i)
recalculation of the inflationary tax deduction, since the tax authorities
claim that "Advance Payments to Suppliers" and "Guaranty Deposits" are not by
their nature credits, (ii) disallowed restatement of tax loss carryforwards in
the same period in which they occurred, (iii) disallowed determination of tax
loss carryforwards, and (iv) disallowed amounts of business asset tax,
commonly referred to as BAT, creditable against the controlling entity's
income tax liability on the grounds that the creditable amount should be in
proportion to the equity interest that the controlling entity has in its
relevant controlled entities. We have filed an appeal for each of these tax
claims before the Mexican federal tax court, and the appeals are pending
resolution.
As of December 31, 2004, the Philippine Bureau of Internal Revenue,
or BIR, assessed APO Cement Corp. for a deficiency in the amount of income tax
paid in the tax years 1998 through 2001 amounting to PhP959.58 million
(U.S.$16.92 million as of December 31, 2004, based on an exchange rate of
PhP56.702 to U.S.$1.00, which was the Philippine Peso/Dollar exchange rate on
December 31, 2004 as published by the Bangko Sentral ng Pilipinas, the central
bank of the Republic of the Philippines). The assessment disallows APO's
income tax holiday related income. We have contested BIR's findings with the
Court of Tax Appeal, or CTA. In the same manner, Solid also questioned before
the CTA the tax assessment for taxable year 1997 amounting to PhP 132.02
million (U.S.$2.33 million) at an exchange rate of PhP 56.702 to US$1.00. We
also brought to the CTA the APO 1997 tax assessment amounting to PhP 84.31
million (U.S.$1.49 million). We believe that these claims will not have a
material adverse effect on us. However, an adverse resolution of these claims
could have a material adverse effect on our results of operations in the
Philippines. As of December 31, 2004, the cases are still with the CTA and
BIR, and APO and Solid have already presented their respective witnesses and
documentary evidence.
The BIR also finalized its tax assessments for Solid's 1999 tax year
amounting to PhP849.59 million (U.S.$14.98 million) as of December 31, 2003,
based on an exchange rate of PhP56.702 to U.S.$1.0. The BIR also finalized its
tax assessments for Solid's 2000 tax year amount to PhP1,670.37 million
(U.S.$29.46 million) as of December 31, 2004 at an exchange rate of PhP56.702
to U.S.$1.0. We continue to submit relevant evidence to the BIR to contest
these assessments. Our next recourse is to contest these assessments with the
CTA if the BIR issues a final collection letter.
In addition, Solid's 1998 tax year amounting to PhP359.02 million
(U.S.$6.33 million) and APO's 1997-1998 tax years amounting to PhP196.42
million (U.S.$3.46 million) are under preliminary review for deficiency taxes.
Finalization of the assessment was held in abeyance by the BIR as we continue
to present evidence to dispute their findings. We continue to support
documentary evidence to reduce the amount.
Other Legal Proceedings
In May 1999, several companies filed a civil liability suit in the
civil court of the circuit of Ibague, Colombia, against two of our Colombian
subsidiaries, alleging that these subsidiaries were responsible for
deterioration in the rice production capacity of land of the plaintiffs,
caused by pollution emanating from our cement plants located in Ibague,
Colombia. On January 13, 2004, we were notified of a judgment entered against
us under which we were ordered to pay to the plaintiffs an amount equal to
CoP21,114 million (U.S.$9.09 million as of February 28, 2005, based on an
exchange rate of CoP2,323.77 to U.S.$1.00, which was the Colombian Peso/Dollar
exchange rate on February 28, 2005 as published by the Banco de la Republica
de Colombia, the central bank of Colombia). We filed an appeal on January 15,
2004, and the case was sent to the Superior Court of Ibague for review.
Typically, proceedings of this nature continue for several years before final
resolution.
In March 2001, 42 transporters filed a civil liability suit in the
civil court of Ibague, Colombia, against three of our Colombian subsidiaries.
The plaintiffs contend that these subsidiaries are responsible for the alleged
damages caused by breach of raw material transportation contracts. The
plaintiffs asked for relief in the amount of CoP127,242 million (U.S.$54.76
million as of February 28, 2005, based on an exchange rate of CoP2,323.77 to
U.S.$1.00, which was the Colombian Peso/Dollar exchange rate on February 28,
2005 as published by the Banco de la Republica de Colombia, the central bank
of Colombia). This proceeding has reached the evidentiary stage. Typically,
proceedings of this nature continue for several years before final resolution.
As of December 31, 2003, CEMEX, Inc. had accrued liabilities
specifically relating to environmental matters in the aggregate amount of
U.S.$ 28.3 million. The environmental matters relate to (i) the disposal of
various materials in accordance with past industry practice, which might be
categorized as hazardous substances or wastes, and (ii) the cleanup of sites
used or operated by CEMEX, Inc., including discontinued operations, in regard
to the disposal of hazardous substances or wastes, either individually or
jointly with other parties. Most of the proceedings are in the preliminary
stage, and a final resolution might take several years. For purposes of
recording the provision, CEMEX, Inc. considers that it is probable that a
liability has been incurred and the amount of the liability is reasonably
estimable, whether or not claims have been asserted, and without giving effect
to any possible future recoveries. Based on information developed to date,
CEMEX, Inc. does not believe it will be required to spend significant sums on
these matters in excess of the amounts previously recorded. Until all
environmental studies, investigations, remediation work, and negotiations with
or litigation against potential sources of recovery have been completed, the
ultimate cost that might be incurred to resolve these environmental issues
cannot be assured.
In December 2002, an ex-maritime broker for Puerto Rican Cement
Company, Inc. filed a civil liability lawsuit in Puerto Rico against CEMEX,
S.A. de C.V., PRCC and other unaffiliated entities, including Puerto Rican
authorities. The plaintiff contends that the defendants conspired to violate
state and federal antitrust laws so that one of the defendants, who is not
affiliated with us, could gain control of the maritime broker market in Port
of Ponce, Puerto Rico. The plaintiff has asked for relief in the amount of
approximately U.S.$18 million. In September 2003, the United States District
Court for the District of Puerto Rico dismissed all claims against us, and
entered judgment accordingly. The plaintiff has subsequently filed two
post-judgment motions requesting reconsideration of the court's opinion, and
we have requested the denial of such motions. Resolution of these motions is
still pending before the court.
In March 2003, a lawsuit was filed in the Indonesian province of West
Sumatra in the Padang District Court against (i) Gresik, an Indonesian cement
producer in which we own a 25.5% interest through Cemex Asia Holdings Ltd. or
CAH and the Republic of Indonesia owns a 51% interest, (ii) Semen Padang, a
99.9%-owned subsidiary of Gresik that owns and operates Gresik's Padang cement
plant, and (iii) several Indonesian government agencies. The lawsuit, which
was filed by a foundation purporting to act in the interest of the people of
West Sumatra, challenged the validity of the sale of Semen Padang by the
Indonesian government to Gresik in 1995 on the grounds that the Indonesian
government did not obtain the necessary approvals for such sale. On May 9,
2003, the Padang District Court issued an interim decision suspending Gresik's
rights as a shareholder in Semen Padang on the grounds that ownership of Semen
Padang was an issue in dispute. On March 31, 2004, the Padang District Court
announced its final decision in favor of the foundation. On April 12, 2004,
Gresik filed an appeal of this decision with the Padang District Court, which
will in turn forward the appeal to the High Court of the West Sumatra
province.
After the failure of several attempts to reach a negotiated or
mediated solution to these problems involving Gresik, on December 10, 2003,
CAH filed a request for arbitration against the Republic of Indonesia and the
Government of Indonesia (the "GOI") before the International Centre for
Settlement of Investment Disputes, or ICSID, based in Washington D.C. ICSID
was established by the Convention on the Settlement of Investment Disputes
between States and Nationals of other States, and is intended to facilitate
the resolution of international investment disputes. ICSID is an autonomous
international organization with close links to the World Bank. CAH is seeking,
among other things, rescission of the purchase agreement entered into with the
Republic of Indonesia in 1998, plus repayment of all costs and expenses, and
compensatory damages. ICSID has accepted and registered CAH's request for
arbitration and issued a formal notice of registration on January 27, 2004. On
May 2004, an Arbitral Tribunal was established to hear the dispute. The GOI
has objected to the Tribunal's jurisdiction over the claims asserted in CAH's
request for arbitration, and a hearing to resolve these jurisdictional
objections is expected to take place in July 2005. We cannot predict what
effect, if any, this action will have on our investment in Gresik or how the
Arbitral Tribunal will rule on the GOI's jurisdictional objections or the
merits of the dispute. We cannot predict what effect, if any, the arbitration
will have on our investment in Gresik or what the ruling of the Arbitral
Tribunal will be.
During 2004, four "public interest" lawsuits, which include CEMEX
Colombia as a codefendant, were filed. The first and last of these lawsuits
was filed on April 14, 2004 and December 16, 2004, respectively. All
Plaintiffs argue that the use of a base material which the ready mix industry
offers resulted in premature distress of the roads built for the mass public
transportation system of Bogota known as Transmilenio. In connection with
CEMEX Colombia and other materials suppliers, the lawsuits allege that the
base material they supplied failed to fulfill technical standards offered by
the producers thereof (quality deficiencies) and/or that they provided
insufficient or inaccurate information in connection with the product. The
four lawsuits seek road repairs in a manner which guarantees its service
during the period for which it was originally designed (20 years); however,
the lawsuits do not estimate the alleged damages (cost of repairs). CEMEX
Colombia has timely contested each of the lawsuits and will continue to
vigorously defend its interests. One of the lawsuits has been dismissed based
on arguments presented to the court by CEMEX Colombia; all others are in the
initial stage of the proceedings. At this early stage it is not possible to
estimate the alleged damages nor the portion thereof which could be assessed
to CEMEX Colombia, but we believe that it is unlikely to have a material
adverse effect on our results of operations. Typically, proceedings of this
nature continue for several years before final resolution.
An administrative case is pending with the Philippine Department of
Trade and Industry ("DTI") against Solid Cement Corporation ("Solid") for
alleged violation of consumer product and quality safety standards. In August
12, 2004, and prior to the trial of the main case, the Philippine Department
of Trade and Industry ("DTI") issued a Preliminary Order (hereinafter referred
to as the "CDO") enjoining Solid from selling, distributing, delivering and
disposing of Island Cement or any brand manufactured by the Solid Cement plant
in Antipolo, Rizal, in bulk and in bags, to customers, dealers, and
distributors, including but not limited to, batching plants and hardware
outlets/stores. It must be emphasized that said CDO is preliminary in nature
and was issued by the DTI without a finding of any violation on the part of
Solid. Solid has contested the propriety of the issuance of the CDO.
Subsequently, the DTI ordered the conduct of a factory/product audit of
Solid's plant in Antipolo, Rizal. Several samples of Island Cement were taken
by the DTI Audit Group and were sent to a third party laboratory for testing.
Soon after the complete results of the tests came out which confirmed the fact
that Island Cement indeed complies with the standards set by the DTI, the DTI
lifted the CDO. The main case is still pending trial with the Office of Legal
Affairs of the DTI, with the prosecution presenting its evidence-in-chief.
Notably, despite the allegations hurled against Solid regarding the quality of
its Island Cement, no judicial action has yet been filed against Solid to
date.
In the ordinary course of our business, we are party to various legal
proceedings. Other than as disclosed herein, we are not currently involved in
any litigation or arbitration proceedings, including any such proceedings
which are pending, which we believe will have, or have had, a material adverse
effect on us, nor, so far as we are aware, are any proceedings of that kind
threatened.
Schedule 8.02
CEMEX, S.A. de C.V.
LIEN SCHEDULE
as of Dec 31, 2004
(Figures in millions of US Dollars)
COMPANY LENDER LIEN CONCEPT BALANCE
CEMEX, Inc. GE Capital Equipment related with the credit 0.893
Kosmos Cement Company First Corp. Equipment related with the credit 0.021
CEMEX, Inc. Hampton Land related with the credit 0.267
Mineral Resource Technologies, Inc. Met-South, Inc. Ash storage facility 0.181
Centro Distribuidor de Cemento, S.A de C.V. Bank of America Cash Collateral 0.823
-------------
2.184
EXHIBIT A
---------
FORM OF NOTE
U.S.$ Date _____________
New York, New York
FOR VALUE RECEIVED, the undersigned, CEMEX, S.A. de C.V., a
sociedad anonima de capital variable organized and existing under the laws of
the United Mexican States and located at Ave. Ricardo Margain Zozaya #325,
Col. Valle Del Campestre, Garza Garcia, N.L. 66265, Mexico (the "Borrower"),
unconditionally promises to pay, without setoff or counterclaim, to the order
of (the "Lender") on the Termination Date, as defined in the Term Credit
Agreement (as defined below), at the office of Barclays Bank PLC, 200 Park
Avenue, New York, New York 10166 in lawful money of the United States of
America, or, if one or more advances is made in a Foreign Currency, in the
applicable Foreign Currency, and in immediately available funds, the aggregate
unpaid principal amount of all Loans made by the Lender to the undersigned
pursuant to the Term Credit Agreement that are then due and payable to the
Lender pursuant thereto. The undersigned further unconditionally agrees to
pay, without setoff or counterclaim, interest in like money at such office
from the date hereof until paid in full on the unpaid principal amount hereof
from time to time outstanding at the applicable interest rate per annum
determined as provided in, and payable as specified in, the Term Credit
Agreement. The Lender is authorized to record the date, type, amount and
currency of each Loan made by the Lender pursuant to the Term Credit
Agreement, the date and amount of each repayment of principal hereof, and the
date and currency of each interest rate conversion and each continuation
pursuant to Section 2.01(e) of the Term Credit Agreement and the principal
amount subject thereto, and, in the case of LIBOR Loans and Euribor Loans, the
interest rate and interest period with respect thereto on the schedules
annexed hereto and made a part hereof or on any other record customarily
maintained by the Lender with respect to this Note and any such recordation
shall constitute prima facie evidence of the accuracy of the information so
recorded; provided, however, that the failure of the Lender to make such
recordation (or any error in such recordation) shall not affect the
obligations of the Borrower hereunder or under the Term Credit Agreement.
This Note is one of the Notes referred to in the Term Credit
Agreement dated as of April 5, 2005, among the Borrower, the Guarantors, the
several Lenders party thereto, Barclays Bank PLC, as Administrative Agent,
Barclays Capital, the Investment Banking Division of Barclays Bank PLC, as
Joint Lead Arranger and Joint Bookrunner and Citigroup Global Markets Inc., as
Documentation Agent, Joint Lead Arranger and Joint Bookrunner (as the same may
from time to time be amended, supplemented or otherwise modified, the "Term
Credit Agreement"; terms defined therein being used herein as so defined), and
is entitled to the benefits thereof and is subject to optional and mandatory
prepayment in whole or in part as provided therein.
Upon the occurrence of any one or more of the Events of
Default specified in the Term Credit Agreement, all amounts remaining unpaid
on this Note shall become, or may be declared to be, immediately due and
payable, all as provided therein.
The Borrower agrees to pay all reasonable costs and
expenses, including all reasonable fees and disbursements of counsel
(including the allocated cost of internal counsel), incurred by the Lender in
connection with the enforcement of the Lender's rights and remedies under the
Term Credit Agreement and this Note.
The Borrower hereby irrevocably and unconditionally submits
for itself and its property in any legal suit, action or proceeding relating
to this Note or for recognition and enforcement of any judgment in respect
thereof, to the jurisdiction of the United States District Court for the
Southern District of New York and of any New York State court located in the
Borough of Manhattan in New York City, to the jurisdiction of any competent
court in the place of its corporate domicile and any appellate courts thereof,
and consents that any such suit, action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
laying of venue of any such suit, action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and agrees
not to plead or claim the same. The Borrower hereby irrevocably agrees that
service of all writs, process and summonses in any such suit, action or
proceeding brought in the State of New York may be made upon CT Corporation
System having offices on the date hereof at 111 Eighth Avenue, 13th Floor, New
York, New York 10011, U.S.A. (the "Process Agent"), and the Borrower hereby
irrevocably appoints the Process Agent as its authorized agent to accept such
service of any and all such writs, process and summonses and agrees that the
failure of the Process Agent to give any notice of any such service of process
to the Borrower shall not impair or affect the validity of such service or of
any judgment based thereon.
The obligations of the Borrower hereunder to make payments
in Dollars, or, if one or more advances is made in a Foreign Currency, in the
applicable Foreign Currency, shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or converted into any
other currency except to the extent that such tender or recovery results in
the effective receipt by the Lender of the full Dollar Amount payable
hereunder and the Borrower shall be obligated to indemnify the Lender (and the
Lender shall have an additional legal claim) for any difference between such
full amount and the amount effectively received by the Lender pursuant to any
such tender or recovery. The Lender's determination of amounts effectively
received by it shall be presumptively correct in the absence of manifest
error.
To the extent that the Borrower has or hereafter may acquire
any immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, the
Borrower hereby irrevocably waives such immunity in respect of its obligations
under this Note and the other Transaction Documents. The foregoing waiver and
consent are intended to be effective to the fullest extent now or hereafter
permitted by applicable law of any jurisdiction in which any suit, action or
proceeding with respect to this Note may be commenced.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
CEMEX, S.A. de C.V.
By: _____________________
Title: __________________
Guaranteed:
CEMEX MEXICO, S.A. de C.V.,
in its capacity as Guarantor
Under Article IX of the Term Credit
Agreement
By: _________________________________
Title: ______________________________
Guaranteed:
EMPRESAS TOLTECA DE MEXICO,
S.A. de C.V., in its capacity as
Guarantor under Article IX of the Term Credit
Agreement
By: _________________________________
Title: ______________________________
Schedule 1 to Note
------------------
LOANS AND PAYMENTS OF PRINCIPAL
-------------------------------
- -------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------- ----------- ------------
Principal
Amount of Currency Type of Interest Interest Maturity Paid or Principal Notation
Date Loan of Loan Loan(1) Rate Period Date Converted Balance Made By
- -------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------- ----------- ------------
- -------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------- ----------- ------------
- -------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------- ----------- ------------
- -------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------- ----------- ------------
- -------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------- ----------- ------------
- -------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------- ----------- ------------
- -------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------- ----------- ------------
- -------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------- ----------- ------------
- -------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------- ----------- ------------
- -------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------- ----------- ------------
- -------------- ------------ ------------ ----------- ------------ ------------ ------------ ------------- ----------- ------------
- -------------------
(1) The type of Loan may be represented by "L" for LIBOR Loans, "E" for
Euribor Loans or "BR" for Base Rate Loans.
EXHIBIT B
---------
FORM OF NOTICE OF BORROWING
---------------------------
BARCLAYS BANK PLC,
as Administrative Agent
200 Park Avenue
New York, New York 10016
Attention: Global Services Unit
Reference is made to the Term Credit Agreement, dated as of
April 5, 2005, among Cemex, S.A. de C.V., as Borrower (the "Borrower"), Cemex
Mexico, S.A. de C.V., as Guarantor, Empresas Tolteca de Mexico, S.A. de C.V.,
as Guarantor, Barclays Capital, the Investment Banking Division of Barclays
Bank PLC, as Joint Lead Arranger and Joint Bookrunner, Citigroup Global
Markets Inc., as Documentation Agent, Joint Lead Arranger and Joint
Bookrunner, Barclays Bank PLC, as a Lender and as Administrative Agent,
Citibank, N.A., as a Lender and Citibank, N.A., Nassau, Bahamas Branch, as a
Lender (as the same may be amended, supplemented or otherwise modified from
time to time, the "Term Credit Agreement"). Terms used but not otherwise
defined herein shall have the meanings provided in the Term Credit Agreement.
The undersigned hereby gives notice pursuant to Section 2.01 of the Term
Credit Agreement of its request for [a] Loan[s] with the following terms:
(A) Requested Disbursement Date
(which is a Business Day) ________________________
(B) Principal amount of Borrowing
and currency ________________________
(C) Interest rate basis ________________________
(D) (If a LIBOR loan or Euribor Loan
is requested) Interest Period
and the last date thereof ________________________
The disbursement shall be deposited in the following account
and in accordance with the requirements of Section 2.01(d) of the Term Credit
Agreement:
Bank Name: __________________________________
Bank Address: __________________________________
Bank ABA #: __________________________________
Account Name: __________________________________
Account #: __________________________________
Reference: __________________________________
The Borrower hereby represents and warrants that each
condition specified in Section 4.02 of the Term Credit Agreement has been
satisfied or waived.
IN WITNESS WHEREOF, the undersigned has hereto set his name
on this _______ day of ____________, _________
CEMEX, S.A. DE C.V.,
as Borrower
By: ________________________________
Name:___________________________
Title:__________________________
EXHIBIT C
---------
FORM OF NOTICE OF EXTENSION/CONVERSION
--------------------------------------
BARCLAYS BANK PLC,
as Administrative Agent
200 Park Avenue
New York, New York 10016
Attention: Global Services Unit
Reference is made to the Term Credit Agreement, dated as of
April 5, 2005, among Cemex, S.A. de C.V., as Borrower (the "Borrower"), Cemex
Mexico, S.A. de C.V., as Guarantor, Empresas Tolteca de Mexico, S.A. de C.V.,
as Guarantor, Barclays Capital, the Investment Banking Division of Barclays
Bank PLC, as Joint Lead Arranger and Joint Bookrunner, Citigroup Global
Markets Inc., as Documentation Agent, Joint Lead Arranger and Joint
Bookrunner, Barclays Bank PLC, as a Lender and as Administrative Agent,
Citibank, N.A., as a Lender and Citibank, N.A., Nassau, Bahamas Branch, as a
Lender (as amended, supplemented or otherwise modified from time to time, the
"Term Credit Agreement"). Terms used but not otherwise defined herein shall
have the meanings provided in the Term Credit Agreement. The undersigned
hereby gives notice pursuant to Section 2.01(e) of the Term Credit Agreement
that it requests an extension or conversion of [a] Loan[s] outstanding under
the Term Credit Agreement, and in connection therewith sets forth below the
terms on which such extension or conversion is requested to be made:
(A) Date of Extension or
Conversion _______________________
(B) The Loan[s] to be Extended/
Converted and the
Principal Amount thereof _______________________
(C) Interest rate basis _______________________
(D) (If a LIBOR loan or Euribor loan)
Interest Period
and the last date thereof _______________________
(E) Currency _______________________
The Borrower hereby represents and warrants that each
condition specified in Section 4.02 of the Term Credit Agreement has been
satisfied or waived.
IN WITNESS WHEREOF, the undersigned has hereto set his name
on this _______ day of ____________, _________
CEMEX, S.A. DE C.V.,
as Borrower
By: ________________________________
Name:___________________________
Title:__________________________
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
-------------------------------------------
ASSIGNMENT AND ASSUMPTION AGREEMENT dated as of
____________, ______________ among [ASSIGNOR] (the "Assignor"), [ASSIGNEE]
(the "Assignee"), CEMEX, S.A. de C.V. (the "Borrower"), CEMEX MEXICO, S.A. de
C.V. (a "Guarantor"), EMPRESAS TOLTECA DE MEXICO, S.A. de C.V. (a
"Guarantor"), and BARCLAYS BANK PLC as Administrative Agent (in such capacity,
the "Administrative Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, this Assignment and Assumption Agreement (this
"Agreement") relates to the Term Credit Agreement dated as of April 5, 2005
among the Borrower, the Guarantors, the Administrative Agent, Barclays
Capital, the Investment Banking Division of Barclays Bank PLC, as Joint Lead
Arranger and Joint Bookrunner, Citigroup Global Markets Inc., as Documentation
Agent, Joint Lead Arranger and Joint Bookrunner, the Assignor and the other
Lenders party thereto (as from time to time further amended, supplemented or
otherwise modified, the "Term Credit Agreement");
WHEREAS, as provided in the Term Credit Agreement, the
Assignor has a Commitment to make Loans to the Borrower in an aggregate
principal amount at any time outstanding not to exceed U.S.$__________(the
"Assignor's Commitment");
[WHEREAS, Loans made to the Borrower by the Assignor under
the Term Credit Agreement in the aggregate principal amount of [insert U.S.$
or applicable Foreign Currency and the amount for each advance] are
outstanding on the date hereof;]
WHEREAS, the Assignor proposes to assign to the Assignee all
of the rights of the Assignor under the Term Credit Agreement in respect of [a
portion of] its Commitment thereunder in an amount equal to U.S.$____ (the
"Assigned Amount"), [together with a corresponding portion of its outstanding
Loans] and the Assignee proposes to accept assignment of such rights and
assume the corresponding obligations from the Assignor on the terms set forth
herein;
NOW, THEREFORE, in consideration of the foregoing and the
mutual agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise
defined herein shall have the respective meanings set forth in the Term Credit
Agreement.
SECTION 2. Assignment. The Assignor hereby irrevocably
assigns and sells to the Assignee all of the rights of the Assignor under the
Term Credit Agreement [to the extent of the Assigned Amount], and the Assignee
hereby irrevocably accepts such assignment from the Assignor and assumes all
of the obligations of the Assignor under the Term Credit Agreement [to the
extent of the Assigned Amount] [, including the purchase from the Assignor of
the corresponding portion of the principal amount of the Loans made by the
Assignor]. Upon the execution and delivery hereof by the Assignor, the
Assignee, [the Borrower,][and the Administrative Agent] and the payment of the
amounts specified in Section 3 hereof required to be paid on the date hereof
(a) the Assignee shall, as of the date hereof, succeed to the rights and be
obligated to perform the obligations of a Lender under the Term Credit
Agreement with a Commitment in an amount equal to the Assigned Amount [in
addition to its existing Commitment], and (b) the Commitment of the Assignor
shall, as of the date hereof, be reduced by a like amount and the Assignor
released from its obligations under the Term Credit Agreement to the extent
such obligations have been assumed by the Assignee. The assignment provided
for herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and
sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor
on the date hereof in Federal funds the amount heretofore agreed between
them.* Each of the Assignor and the Assignee hereby agrees that if either
party receives any amount under the Term Credit Agreement that is for the
account of the other party, it shall receive the same for the account of such
other party to the extent of such other party's interest therein and shall
promptly pay the same to such other party.
- -------------------
* Amount should combine principal together with accrued interest and
breakage compensation, if any, to be paid by the Assignee, net of any
portion of any upfront fee to be paid by the Assignor to the
Assignee. It may be preferable in an appropriate case to specify
these amounts generically or by formula rather than as a fixed sum.
SECTION 4. Consent Of [The Borrower] [And The Administrative
Agent]. This Agreement is conditioned upon the consent of [the Borrower] [and
the Administrative Agent] pursuant to Section 3.10 of the Term Credit
Agreement and the payment of a processing fee of U.S.$3,500 to the
Administrative Agent. The execution of this Agreement by [the Borrower] [and
the Administrative Agent] is evidence of this consent. Pursuant to Section
13.06(b) of the Term Credit Agreement, the Borrower agrees to execute and
deliver a new Note to the Assignee.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
(a) The Assignor (i) represents and warrants that it is
legally authorized to enter into this Agreement; (ii) makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Term Credit
Agreement or with respect to the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Term Credit
Agreement, any other Transaction Document or any other instrument or document
furnished pursuant thereto, other than that the Assignor has not created any
adverse claim upon the interest being assigned by it hereunder and that such
interest is free and clear of any such adverse claim and (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, the Guarantors, any of their Affiliates
or any other obligor or the performance or observance by the Borrower, the
Guarantors, any of their Affiliates or any other obligor of any of their
respective obligations under the Term Credit Agreement or any other
Transaction Document or any other instrument or document furnished pursuant
hereto or thereto.
(b) The Assignee (i) represents and warrants that it is
legally authorized to enter into this Agreement; (ii) confirms that it has
received a copy of the Term Credit Agreement, together with copies of the
financial statements delivered pursuant to Section 7.01 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Agreement; (iii) agrees that it will,
independently and without reliance upon the Assignor, the Administrative
Agent, or any Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Term Credit Agreement, the other
Transaction Documents or any other instrument or document furnished pursuant
hereto or thereto; (iv) appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers and
discretion under the Term Credit Agreement, the other Transaction Documents or
any other instrument or document furnished pursuant hereto or thereto as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are incidental thereto; and (v) agrees that it will be bound by the
provisions of the Term Credit Agreement and will perform in accordance with
its terms all the obligations which by the terms of the Term Credit Agreement
are required to be performed by it as a Lender.
SECTION 6. NON-RELIANCE ON ASSIGNOR. The Assignor makes no
representation or warranty in connection with, and shall have no
responsibility with respect to, the solvency, financial condition or
statements of the Borrower and the Guarantors, or the validity and
enforceability of the obligations of the Borrower in respect of the Term
Credit Agreement or any Note. The Assignee acknowledges that it has,
independently and without reliance on the Assignor, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the business, affairs
and financial condition of the Borrower.
SECTION 7. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon, and inure to the benefit of the parties hereto and their
respective successor and assigns.
SECTION 8. GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the law of the State of New York.
SECTION 9. COUNTERPARTS. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
Delivery of an executed counterpart of a signature page of this Assignment by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed and delivered by their duly authorized officers as of the date
first above written.
[ASSIGNOR]
By: ________________________________________
Title:_______________________________________
[ASSIGNEE]
By: ________________________________________
Title:_______________________________________
CEMEX, S.A. de C.V.,
as Borrower
By: ________________________________________
Title:_______________________________________
CEMEX MEXICO, S.A. de C.V.,
as Guarantor
By: ________________________________________
Title:_______________________________________
EMPRESAS TOLTECA DE MEXICO, S.A. de C.V.,
as Guarantor
By: ________________________________________
Title:_______________________________________
BARCLAYS BANK PLC,
as Administrative Agent
By: ________________________________________
Title:_______________________________________
EXHIBIT E
---------
FORM OF OPINION OF SPECIAL NEW YORK COUNSEL
TO THE BORROWER AND GUARANTORS
EXHIBIT F
---------
FORM OF OPINION OF MEXICAN COUNSEL
TO THE BORROWER AND THE GUARANTORS
EXHIBIT G
TO TERM CREDIT AGREEMENT
Mandatory Cost Formula
1. The Mandatory Cost is an addition to the interest rate to compensate
Lenders for the cost of compliance with (a) the requirements of the Bank of
England and/or the Financial Services Authority (or, in either case, any other
authority which replaces all or any of its functions) or (b) the requirements
of the European Central Bank.
2. For the purposes of this Exhibit G:
"Additional Cost Rate" has the meaning provided in paragraph 3 below;
"Eligible Liabilities" has the meaning provided from time to time under or
pursuant to the Bank of England Act 1998 or (as may be appropriate) by the
Bank of England;
"Fees Rules" means the rules on periodic fees contained in the FSA Supervision
Manual or such other law or regulation as may be in force from time to time in
respect of the payment of fees for the acceptance of deposits;
"Fee Tariffs" means the fee tariffs specified in the Fees Rules under the
activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated
fee required pursuant to the Fees Rules but taking into account any applicable
discount rate);
"Special Deposits" has the meaning given to it from time to time under or
pursuant to the Bank of England Act 1998 or (as may be appropriate) by the
Bank of England; and
"Tariff Base" has the meaning given to it in, and will be calculated in
accordance with, the Fees Rules.
3. On the first day of each Interest Period (or as soon as possible
thereafter) the Administrative Agent shall calculate, as a percentage rate, a
rate (the "Additional Cost Rate") for each Lender, in accordance with the
paragraphs set out below. The Mandatory Cost will be calculated by the
Administrative Agent as a weighted average of the Lenders' Additional Cost
Rates (weighted in proportion to the percentage participation of each Lender
in the relevant Loan) and will be expressed as a percentage rate per annum.
4. The Additional Cost Rate for any Lender lending from a Lending Office in a
Participating Member State will be the percentage notified by that Lender to
the Administrative Agent. This percentage will be certified by that Lender in
its notice to the Administrative Agent to be its reasonable determination of
the cost (expressed as a percentage of that Lender's participation in all
Loans made from that Lending Office) of complying with the minimum reserve
requirements of the European Central Bank in respect of loans made from that
Lending Office.
5. The Additional Cost Rate for any Lender lending from a Lending Office in
the United Kingdom will be calculated by the Administrative Agent as follows:
in relation to a Loan denominated in Sterling:
AB+C(B-D+Ex0.01
----------------percent per annum
100-(A+C)
in relation to a Loan in any currency other than Sterling:
E x 0.01
--------percent per annum
300
Where:
A is the percentage of Eligible Liabilities (assuming
these to be in excess of any stated minimum) which
that Lender is from time to time required to
maintain as an interest free cash ratio deposit
with the Bank of England to comply with cash ratio
requirements.
B is the percentage rate of interest (excluding the
Applicable Margin and the Mandatory Cost and, if
the Loan is an Unpaid Sum, the additional rate of
interest specified in paragraph (a) of Section 2.10
(Default Interest)) payable for the relevant
Interest Period on the Loan.
C is the percentage (if any) of Eligible Liabilities
which that Lender is required from time to time to
maintain as interest bearing Special Deposits with
the Bank of England.
D is the percentage rate per annum payable by the
Bank of England to the Administrative Agent on
interest bearing Special Deposits.
E is designed to compensate Lenders for amounts
payable under the Fees Rules and is calculated by
the Administrative Agent as being the average of
the most recent rates of charge supplied by the
Reference Banks to the Administrative Agent
pursuant to paragraph 7 below and expressed in
pounds per (pound)1,000,000.
6. In application of the above formula, A, B, C and D will be included in the
formula as percentages (i.e. 5 per cent. will be included in the formula as 5
and not as 0.05). A negative result obtained by subtracting D from B shall be
taken as zero. The resulting figures shall be rounded to four decimal places.
7. If requested by the Administrative Agent, each Reference Bank shall, as
soon as practicable after publication by the Financial Services Authority,
supply to the Administrative Agent, the rate of charge payable by that
Reference Bank to the Financial Services Authority pursuant to the Fees Rules
in respect of the relevant financial year of the Financial Services Authority
(calculated for this purpose by that Reference Bank as being the average of
the Fee Tariffs applicable to that Reference Bank for that financial year) and
expressed in pounds per Sterling 1,000,000 of the Tariff Base of that
Reference Bank.
8. Each Lender shall supply any information required by the Administrative
Agent for the purpose of calculating its Additional Cost Rate. In particular,
but without limitation, each Lender shall supply the following information on
or prior to the date on which it becomes a Lender:
the jurisdiction of its Lending Office; and
any other information that the Administrative Agent may reasonably require for
such purpose.
Each Lender shall promptly notify the Administrative Agent of any
change to the information provided by it pursuant to this paragraph.
9. The percentages of each Lender for the purpose of A and C above and the
rates of charge of each Reference Bank for the purpose of E above shall be
determined by the Administrative Agent based upon the information supplied to
it pursuant to paragraphs 7 and 8 above and on the assumption that, unless a
Lender notifies the Administrative Agent to the contrary, each Lender's
obligations in relation to cash ratio deposits and Special Deposits are the
same as those of a typical Lender from its jurisdiction of incorporation with
a Lending Office in the same jurisdiction as its Lending Office.
10. The Administrative Agent shall have no liability to any person if such
determination results in an Additional Cost Rate which over or under
compensates any Lender and shall be entitled to assume that the information
provided by any Lender or Reference Bank pursuant to paragraphs 3, 7 and 8
above is true and correct in all respects.
11. The Administrative Agent shall distribute the additional amounts received
as a result of the Mandatory Cost to the Lenders on the basis of the
Additional Cost Rate for each Lender based on the information provided by each
Lender and each Reference Bank pursuant to paragraphs 3, 7 and 8 above.
12. Any determination by the Administrative Agent pursuant to this Exhibit G
in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any
amount payable to a Lender shall, in the absence of manifest error, be
conclusive and binding on all Parties.
13. The Administrative Agent may from time to time, after consultation with
the Borrower and the Lenders, determine and notify to all parties to the
Agreement any amendments which are required to be made to this Exhibit G in
order to comply with any change in law, regulation or any requirements from
time to time imposed by the Bank of England, the Financial Services Authority
or the European Central Bank (or, in any case, any other authority which
replaces all or any of its functions) and any such determination shall, in the
absence of manifest error, be conclusive and binding on all parties to the
Agreement.