Exhibit 10.12
Execution Copy
AGREEMENT OF ASSIGNMENT AND ASSUMPTION OF RIGHTS, AND AGENCY AGREEMENT WITH
UNDISCLOSED PRINCIPAL, DUTIES AND OBLIGATIONS, DATED AS OF December 15, 2004
AMONG THE FOLLOWING PARTIES:
I. Grupo TMM, S.A., a SOCIEDAD ANONIMA organized under the laws of the United
Mexican States ("GTMM"), as successor in interest to Transportacion
Maritima Mexicana, S.A. de C.V., represented in this act by its Chairman
and attorney-in-fact Ing. Jose Francisco Serrano Segovia and its CEO and
attorney-in-fact Lic. Javier Segovia Serrano;
II. Kansas City Southern, a Delaware corporation ("KCS"), represented in this
act by its Chairman, President and CEO, Mr. Michael R. Haverty; and
III. Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V., a SOCIEDAD ANONIMA
DE CAPITAL VARIABLE organized under the laws of the United Mexican States
("GTFM"), formerly known as Transportacion Ferroviaria Mexicana, S. de R.L.
de C. V., represented in this act by Lic. Mario Mohar Ponce and Mr. Michael
R. Haverty.
In consideration of and in conformity with the following recitals and
agreements:
RECITALS
1. On January 31, 1997, the Federal Government of the United Mexican States
(the "GOVERNMENT") and GTFM entered into an agreement (the "PURCHASE
AGREEMENT") for the purchase of 80% of the capital stock of the Ferrocarril
del Noreste, S.A. de C.V., currently known as TFM, S.A. de C.V. ("TFM");
2. Pursuant to the Purchase Agreement, the Government retained 20% of the
capital stock of TFM, represented by Class III limited voting shares, with
the Government retaining the option under the Purchase Agreement to all or
a portion of those shares to the public, and in accordance with the terms
of the Purchase Agreement to sell any shares not sold to the public prior
to the date fixed in the Purchase Agreement to GTFM at a price determined
by the formula stated in the Purchase Agreement (the "PUT Shares");
3. On June 9, 1997, the Government, GTFM, GTMM and KCS entered into an
amendment of the Purchase Agreement (hereinafter, the "PUT AGREEMENT"),
through which, among other matters, the term during which the Government
may sell the Put Shares to the public and require GTFM to acquire the Put
Shares was extended, and GTMM and KCS jointly and severally agreed with the
Government in Section 3.02 of the Put Agreement that in the event that GTFM
did not acquire the Put Shares in accordance with the terms of the Put
Agreement, GTMM and KCS would be jointly and severally obligated to acquire
the Put Shares;
4. In May 1997, GTMM and KCS, and certain of their affiliates and
subsidiaries, entered into a Shareholders Agreement ("SHAREHOLDERS
AGREEMENT") that included, among other provisions, Section 7,
Indemnification, which created rights, duties and obligations of
indemnification between GTMM and KCS with respect to the Put Shares;
5. On October 31, 2003, the Ministry of Communications and Transportation (the
"SCT") purported through official letter 4.620 to notify TFM of the
existence of the obligation to purchase the Put Shares, and GTFM, TMM and
KCS were advised of that purported notification;
6. As GTFM and TFM believe that the Government has not satisfied its
obligations under the Purchase Agreement and the Put Agreement, and that
the purported notification by the SCT of TFM of the obligation to purchase
the Put Shares was defective, GTFM and TFM filed on October 16, 2003 a
lawsuit, case number 166/2003-V (the "PUT LAWSUIT"), naming the Treasury of
the Mexican Federation, the SCT, the General Attorney of the United Mexican
States as necessary parties, and seeking a judicial interpretation of
GTFM's and TFM's obligations under the Purchase Agreement and the Put
Agreement. TMM and KCS, among others, were called to the Put Lawsuit as
interested third parties;
7. GTFM and TFM filed on November 26, 2003 a constitutional appeal (AMPARO,
the "AMPARO"), case number 1628/2003, against the Treasury of the
Federation, the SCT, and the General Attorney of the United Mexican States
with respect to official letter 4.620 of October 31, 2003, which resulted
in an injunction being issued against the defendants;
8. The Government has indicated that it may file additional proceedings
against GTFM, TFM, GTMM and KCS related to the Put Agreement and the VAT
Claim;
9. GTMM and KCS have entered into the Amended and Restated Acquisition
Agreement by and among KCS, KARA Sub, Inc., a Delaware corporation, GTMM
and certain other parties (the "ACQUISITION AGREEMENT"); and
10. Pursuant to the Acquisition Agreement, the Shareholders Agreement and all
rights, duties and obligations arising from the Shareholders Agreement,
including Section 7 thereof, shall terminate and shall be of no further
force and effect as of the Closing (as defined in the Acquisition
Agreement).
AGREEMENTS
For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto, intending to be legally bound hereby,
agree as follows:
1) ASSIGNMENT AND ASSUMPTION OF PUT OBLIGATION. GTMM hereby irrevocably
assigns and transfers to KCS, and KCS hereby irrevocably accepts and
assumes, all of GTMM's rights, duties and obligations with respect to the
purchase of the Put Shares under the Put Agreement, effective upon the
Closing of the Acquisition.
2) PURCHASE RIGHT. In the event that following Closing of the Acquisition GTFM
or GTMM are required to purchase the Put Shares held by the Government (or
any person to which the Government delegates, transfers or assigns any such
Put Shares and/or the Put Option), including upon final determination that
either of them is required to purchase the Put Shares pursuant to the Put
Agreement, KCS or its designee shall purchase, in accordance with the terms
of the Put Agreement all of the Put Shares that GTMM would have been
required to purchase pursuant to the Put Agreement.. KCS shall have the
right to cause any KCS subsidiary to purchase the Put Shares or it may
designate another party to be the purchaser of the Put Shares, but no such
designation shall relieve KCS of its obligation to pay the purchase price
for such Put Shares or to indemnify any person under Section 5 hereof.
3) PAYMENT OF PURCHASE PRICE; NON-ASSIGNABLE OBLIGATIONS; AGENCY WITH
UNDISCLOSED PRINCIPAL AGREEMENT. In the event that, notwithstanding the
provisions of Section 2, GTMM is legally required following Closing of the
Acquisition to purchase the Put Shares then KCS shall provide GTMM with
immediately available funds sufficient to purchase the Put Shares and to
pay all costs and expenses associated with such purchase (including any
taxes that may become payable in connection with such purchase) not later
than three (3) business days prior to the date of such purchase, and GTMM
shall purchase such Put Shares on behalf of KCS, but in its own name,
pursuant to Articles 2560 and 2561 of the Federal Civil Code of the United
Mexican States. Transfer of such amount shall not affect KCS' obligations
under Section 6 of this Agreement. Once GTMM acquires the PUT Shares on
behalf of KCS, but in its own name, it shall immediately endorse in
property the relevant certificates in favor of KCS or its designee.
Pursuant to Article 2596 of the Federal Civil Code of the United Mexican
States, GTMM hereby irrevocably agrees not to renounce the obligations
assumed in this Section 3, to act as undisclosed agent (MANDATARIO SIN
REPRESENTACION) of KCS.
4) CONTROL AND MANAGEMENT OF LITIGATION. Following the Closing under the
Acquisition Agreement, KCS shall have the sole and exclusive right to
control any and all litigation related to the Put Agreement, including
without limitation the Put Lawsuit and the Amparo. For such purposes, GTMM
hereby agrees to grant, within 10 (ten) business days after the Closing
under the Acquisition Agreement, an irrevocable power of attorney in favor
of KCS for lawsuits and collections (PLEITOS Y COBRANZAS) limited to (i)
the Put Lawsuit, (ii) the Amparo, in the form attached hereto as Exhibit
"A", and (iii) and any other litigation related to or derived from this
litigation.
5) INDEMNIFICATION. KCS shall following Closing of the Acquisition indemnify,
defend and hold harmless GTMM and its Affiliates, and their respective
officers, directors, employees and shareholders, from and against any and
all losses, damages, liabilities, claims, demands, obligations,
deficiencies, payments, judgments, settlements,
costs and expenses of any nature whatsoever (including the costs and
expenses of any and all investigations, actions, suits, proceedings,
demands, assessments, judgments, orders, settlements and compromises
relating thereto), and reasonable attorneys', accountants', experts' and
other fees and expenses in connection therewith ("LOSSES") resulting from,
arising out of or due directly to KCS' failure to fully discharge the
obligations of GTMM and KCS under the Put Agreement, including, without
limitation, KCS' failure to purchase, when required by the Government to do
so in accordance with the Put Agreement, the Put Shares or any requirement
to fund amounts to GTFM to permit GTFM to purchase the Put Shares; provided
that KCS may set off against and reduce the amount of any indemnification
obligation under this paragraph by the amount of any indemnification
obligation of GTMM pursuant to Article 10 of the Acquisition Agreement,
except with respect to any indemnification obligations of GTFM under
Sections 10.2(a)(i) or (a)(ii), which amounts may not be offset.
6) REMEDIES. Subject to the provisions contemplated in this Agreement: (a) in
the event that one party materially fails to perform its obligations
pursuant to this Agreement, the other party may bring any action,
proceeding or court action seeking (i) specific performance of the
obligations of the party in default hereunder, which the parties hereto
agree shall be available to the extent permitted by applicable law, (ii)
damages as a result of any such failure to perform pursuant to this
Agreement, with the parties hereto agreeing that damages to the damaged
party arising as a result of any material breach by the part in default of
its obligations hereunder shall be recoverable by them in any such action,
and/or (iii) any other remedy available under applicable law; and (b) to
the extent permitted by applicable law, all of the remedies set forth
herein and or the Acquisition Agreement or at law shall be equally
available to each of the parties hereto.
7) NOTIFICATION. GTMM shall promptly, and in any event within 24 hours, notify
KCS of any notifications given to GTMM under or concerning the Put
Agreement.
8) INCORPORATION OF PARTS OF THE AGREEMENT. Article 12 of the Acquisition
Agreement is hereby incorporated MUTATIS MUTANDIS into and made a part of
this Agreement. Defined terms used in this Agreement not defined herein,
shall have the meanings ascribed to those terms in the Acquisition
Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their authorized representatives of the date first above written.
GRUPO TMM, S.A.
By:
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Name:
Title:
By:
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Name:
Title:
GRUPO TRANSPORTACION FERROVIARIA
MEXICANA, S.A. DE C.V.
By:
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Name:
Title:
By:
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Name:
Title:
KANSAS CITY SOUTHERN
By:
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Name:
Title:
EXHIBIT "A"
FORM OF IRREVOCABLE POWER OF ATTORNEY
IRREVOCABLE SPECIAL POWER OF ATTORNEY
The Undersigned, Mr. [*], appearing on behalf of Grupo TMM,
S.A. de C.V. (hereinafter the "PRINCIPAL"), does hereby
grant and confer a IRREVOCABLE SPECIAL POWER OF ATTORNEY,
in favor of Kansas City Southern, (hereinafter "KCS"), in
order to act on behalf of the Principal as its
representative in connection with any present or future
controversies related or derived from the joint and several
obligation of the Principal to purchase all of the shares
owned by the Federal Government in TFM, S.A. de C.V.
("TFM"), including, without limitation: (i) Case number
166/2003-V, initiated by Grupo Transportacion Ferroviaria [Spanish
Mexicana, S.A. de C.V. ("GTFM"), and TFM, on October 16, language
2003, naming the Treasury of the Mexican Federation, the version of
Ministry of Communications and Transportation (SECRETARIA Irrevocable
DE COMUNICACIONES Y TRANSPORTES or "SCT"), the General Power of
Attorney of the Mexican Republic as necessary parties; and Attorney]
(ii) the constitutional appeal (AMPARO) initiated by GTFM
and TFM filed on November 26, 2003, case number 1628/2003,
against the Treasury of the Federation, the SCT, and the
General Attorney of the Mexican Republic with respect to
official letter 4.620 of October 31, 2003.
To carry out the above, the Principal grants to KCS, within
the specialty of this mandate, a power of attorney for
Lawsuits and Collections with all the powers referred to in
the last paragraph of Article 2554 of the Federal Civil
Code and its corresponding provisions in all of the civil
codes of the Federal District and the Federal Entities of
the United Mexican States.
This special power of attorney is irrevocable, since it is
granted as a means to comply with a previously acquired
obligation by the Principal, pursuant to the provisions of
Article 2596 of the Federal Civil Code and its
corresponding provisions in all of the civil codes of the
Federal District and the Federal Entities of the United
Mexican States.
FOR THE PURPOSE OF COMPLYING WITH CERTAIN REQUIREMENTS OF
MEXICAN LAW, I HEREBY TRANSCRIBE AD VERBATIM, THAT WHICH
THE GRANTOR HEREOF HAS REPRESENTED TO ME, TO BE ARTICLE
2554 OF THE FEDERAL CIVIL CODE OF THE UNITED MEXICAN STATES:
"ARTICLE 2554. IN ALL GENERAL POWERS-OF-ATTORNEY FOR
LAW-SUITS AND COLLECTIONS, IT SHALL BE SUFFICIENT TO SAY
THAT THE POWER IS GRANTED WITH ALL THE GENERAL POWERS AND
WITH THE SPECIAL POWERS WHICH REQUIRE A SPECIAL CLAUSE
PURSUANT TO THE LAW, IN ORDER THAT THEY MAY BE CONSIDERED
AS CONFERRED WITHOUT ANY LIMITATION.
IN GENERAL POWERS-OF-ATTORNEY TO ADMINISTER PROPERTY, IT
SHALL BE SUFFICIENT TO STATE THAT THEY ARE GIVEN WITH THAT
CHARACTER IN ORDER THAT THE ATTORNEY-IN-FACT MAY HAVE ALL
MANNER OF ADMINISTRATIVE POWERS
IN GENERAL POWERS-OF-ATTORNEY TO EXERCISE ACTS OF
OWNERSHIP, IT SHALL BE SUFFICIENT THAT THEY ARE GIVEN WITH
THAT CHARACTER IN ORDER THAT THE ATTORNEY-IN-FACT MAY HAVE
ALL POWERS OF AN OWNER, BOTH WITH RESPECT TO PROPERTY and
IN ORDER TO TAKE ALL MANNER OF STEPS TO DEFEND IT.
IN ANY OF THE THREE CASES ABOVE-MENTIONED, IF IT IS DESIRED
TO LIMIT THE POWERS OF THE ATTORNEYS-IN-FACT, THE
LIMITATIONS SHALL BE SET OUT OR THE POWER-OF-ATTORNEY SHALL
BE A SPECIAL POWER-OF-ATTORNEY.
NOTARIES SHALL INSERT, THIS ARTICLE IN THE NOTARIAL COPIES
OF THE POWERS-OF-ATTORNEY WHICH THEY EXECUTE."
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GRUPO TMM, S.A. DE C.V.
By/Por: [o]
Position/Cargo: [o]