EXHIBIT 10.14
EXECUTION COPY
TFM, S.A. de C.V.
U.S.$180,000,000
12.50% Senior Notes Due 2012
Purchase Agreement
New York, New York
June 6, 2002
Xxxxxxx Xxxxx Xxxxxx Inc.
X.X. Xxxxxx Securities Inc.
As Initial Purchasers
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
TFM, S.A. de C.V., a sociedad anonima de capital variable organized
under the laws of the United Mexican States (the "Company"), proposes to issue
and sell to the several parties named in Schedule I hereto (the "Initial
Purchasers"), for whom you (the "Representatives") are acting as
representatives, U.S.$180,000,000 principal amount of its 12.50% Senior Notes
Due 2012 (the "Securities"). The Securities are to be issued under an indenture
(the "Indenture"), to be dated as of the Closing Date, among the Company, The
Bank of New York, as trustee (the "Trustee") and Deutsche Bank Luxembourg S.A.,
as Luxembourg paying agent. The Securities will have the benefit of a
registration rights agreement (the "Registration Rights Agreement"), to be dated
as of the Closing Date, between the Company and the Initial Purchasers, pursuant
to which the Company will agree to register the Securities under the Act subject
to the terms and conditions therein specified. To the extent there are no
additional parties listed on Schedule I other than you, the term Representatives
as used herein shall mean you as the Initial Purchasers, and the terms
Representatives and Initial Purchasers shall mean either the singular or plural
as the context requires. The use of the neuter in this Agreement shall include
the feminine and masculine wherever appropriate. Certain terms used herein are
defined in Section 20 hereof.
The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities under the Act in reliance upon exemptions
from the registration requirements of the Act. The amount of the fee owed by the
Company pursuant to Schedule A to the Dealer Manager Agreement dated May 9, 2002
between the Company and Xxxxxxx Xxxxx Xxxxxx (the "Dealer Manager Agreement")
shall be reduced by an amount equal to the excess of (x) the price of the
Securities to the public as set forth on the cover of the Final Offering
Circular above (y) the price of the Securities to the Initial Purchasers set
forth in Section 2 hereof. For purposes of relations between the Initial
Purchasers, this Agreement shall be deemed to constitute the "Wire" referred to
in the Xxxxxxx Xxxxx Barney Master Agreement Among Underwriters to which the
Initial Purchasers are both signatories.
In connection with the sale of the Securities, the Company has prepared
a preliminary offering circular, dated May 28, 2002 (as amended or supplemented
at the date thereof, including any and all exhibits thereto, and any information
incorporated by reference therein, the "Preliminary Offering Circular"), and a
final offering circular, dated June 6, 2002 (as amended or supplemented at the
Execution Time, including any and all exhibits thereto and any information
incorporated by reference therein, the "Final Offering Circular"). Each of the
Preliminary Offering Circular and the Final Offering Circular sets forth certain
information concerning the Company and the Securities. The Company hereby
confirms that it has authorized the use of the Preliminary Offering Circular and
the Final Offering Circular, and any amendment or supplement thereto, in
connection with the offer and sale of the Securities by the Initial Purchasers.
Unless stated to the contrary, any references herein to the terms "amend",
"amendment" or "supplement" with respect to the Final Offering Circular shall be
deemed to refer to and include any information filed under the Exchange Act
subsequent to the Execution Time that is incorporated by reference therein.
1. Representations and Warranties. The Company represents and
warrants to each Initial Purchaser as set forth below in this Section 1.
(a) The Preliminary Offering Circular, at the date thereof, did
not contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
At the Execution Time and on the Closing Date the Final Offering
Circular did not and will not (and any amendment or supplement thereto,
at the date thereof and at the Closing Date, will not) contain any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representation or warranty as to the
information contained in or omitted from the Preliminary Offering
Circular or the Final Offering Circular, or any amendment or supplement
thereto, in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of the Initial Purchasers
through the Representatives specifically for inclusion therein.
(b) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf has (i) directly or indirectly, made
offers or sales of any security, or solicited offers to buy, any
security under circumstances that would require the registration of the
Securities under the Act; or (ii) engaged in any directed selling
efforts with respect to any of the Securities, provided that the
Company makes no representation or warranty as to any actions of the
Initial Purchasers or any person acting on their behalf. Terms used in
this paragraph have the meanings given to them by Regulation S.
(c) The Company is a "foreign issuer" (as defined in Regulation S)
and the Company reasonably believes that there is no substantial U.S.
market interest (as defined in Regulation S) in its debt securities.
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(d) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation
D) in connection with any offer or sale of the Securities in the United
States, provided that the Company makes no representation or warranty
as to any actions of the Initial Purchasers or any person acting on
their behalf.
(e) Assuming that the representations and warranties of the
Initial Purchasers set forth in Section 4 are true and accurate and
that the Initial Purchasers will comply with the agreements set forth
in Section 4, it is not necessary in connection with the offer,
issuance and delivery of the Securities to the Initial Purchasers in
the manner contemplated by this Agreement to register the Securities
under the Securities Act or to qualify the Indenture under the Trust
Indenture Act.
(f) On or prior to the Closing Date, the Company shall have been
advised by the NASD's PORTAL Market that the Securities have been
designated PORTAL-eligible securities in accordance with the rules and
regulations of the NASD.
(g) The Company is not, and after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof
as described in the Final Offering Circular will not be, an
"investment company" as defined in the Investment Company Act, without
taking account of any exemption arising out of the number of holders of
the Company's securities.
(h) The Company is not and does not expect to become a "passive
foreign investment company" as defined in Section 1297 of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated
thereunder.
(i) The Company is subject to and is reporting in accordance with
the requirements of Section 13 or Section 15(d) of the Exchange Act.
(j) The Company has not paid or agreed to pay to any person any
compensation for soliciting another to purchase any securities of the
Company (except as contemplated in this Agreement).
(k) The Company has not taken, directly or indirectly, any action
designed to cause or to result in, or that has constituted or that
might reasonably be expected to constitute or result, under the
Exchange Act or otherwise, in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Securities.
(l) Except as described in the Final Offering Circular, the
Company does not have any subsidiaries or otherwise the decision-making
ability or control over any other entity, whether by majority ownership
of voting shares or otherwise.
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(m) The Company has been duly incorporated and is validly existing
as a corporation under the laws of the jurisdiction in which it is
chartered or organized with full corporate power and authority to own
or lease, as the case may be, and to operate its properties and conduct
its business as described in the Final Offering Circular, and is duly
qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification, except to the extent that the failure to so qualify
would not have a Material Adverse Effect.
(n) The Company's authorized equity capitalization is as set forth
in the Final Offering Circular and the capital stock of the Company
conforms in all material respects to the description thereof contained
in the Final Offering Circular.
(o) The statements in the Final Offering Circular under the
headings "The Concession", "Certain Transactions", "Description of
Significant Indebtedness", "Description of the New Notes" and
"Taxation" fairly summarize the matters therein described.
(p) This Agreement has been duly authorized, executed and
delivered by the Company; the Indenture has been duly authorized and,
assuming due authorization, execution and delivery thereof by the
Trustee, when executed and delivered by the Company, will constitute a
legal, valid, binding instrument enforceable against the Company in
accordance with its terms (subject, as to the enforcement of remedies,
to applicable bankruptcy, concurso mercantil, reorganization,
insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of
equity); the Securities have been duly authorized, and, when executed
and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchasers, will have
been duly executed and delivered by the Company and will constitute the
legal, valid and binding obligations of the Company entitled to the
benefits of the Indenture (subject, as to the enforcement of remedies,
to applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from time to time in
effect and to general principles of equity); and the Registration
Rights Agreement has been duly authorized by the Company.
(q) Except as set forth or contemplated by the Preliminary
Offering Circular (exclusive of any amendment or supplement thereto),
no consent, approval, authorization, filing with or order of any court
or governmental agency or body is required in connection with the
transactions contemplated herein, in the Indenture or in the
Registration Rights Agreement, except (i) such as may be required (x)
under the blue sky laws of any jurisdiction in which the Securities
are offered and sold, (y) in connection with the registration of the
Securities pursuant to the Registration Rights Agreement, including the
qualification of the Indenture pursuant to the Trust Indenture Act, and
(z) in connection with the registration of the Securities in the
Seccion Especial (Special Section) of the Registro Nacional
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de Valores (National Registry of Securities) maintained by the Comision
Nacional Bancaria y de Valores of Mexico (the "CNBV") (which shall be
obtained by the Closing Date) and (ii) such consents, approvals
authorizations, filings or orders as have been obtained.
(r) Neither the execution and delivery of the Indenture, this
Agreement or the Registration Rights Agreement, the issuance and sale
of the Securities, nor the consummation of any other of the
transactions herein or therein contemplated, nor the fulfillment of the
terms hereof or thereof will conflict with, result in a breach or
violation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company pursuant to: (i) its charter or
by-laws; (ii) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company is a
party or bound or to which its property is subject; or (iii) any
statute, law, rule, regulation, judgment, order or decree applicable to
the Company of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction
over the Company or any of its properties, except, in the cases of
clauses (i) and (ii) of this subsection, for those that would not have
a Material Adverse Effect or a material adverse effect on the holders
of the Securities or the consummation of any of the transactions
contemplated herein, in the Indenture or in the Registration Rights
Agreement.
(s) The historical financial statements and notes of the Company
included in the Final Offering Circular present fairly in all material
respects the financial condition, results of operations and cash flows
of the Company as of the dates and for the periods indicated, comply
as to form in all material respects with the applicable accounting
requirements of the Act and have been prepared in conformity with the
accounting principles issued by the International Accounting Committee
("IAS") applied on a consistent basis throughout the periods involved
(except as otherwise noted therein); the selected financial data set
forth under the caption "Selected Financial Data" in the Final Offering
Circular fairly present, on the basis stated in the Final Offering
Circular, the information included or incorporated by reference
therein.
(t) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or its property is pending or, to the best knowledge of the
Company, threatened that (i) could reasonably be expected to have a
material adverse effect on the performance by the Company of this
Agreement, the Indenture, or the Registration Rights Agreement, or the
consummation of any of the transactions contemplated hereby or thereby
or (ii) could reasonably be expected to have a material adverse effect
on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company, whether or not arising from
transactions in the ordinary course of business (a "Material Adverse
Effect"), except as set forth in or contemplated in the Final Offering
Circular (exclusive of any amendment or supplement thereto).
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(u) The Company owns or leases or operates under its concession
all such properties as are necessary to the conduct of its operations
as presently conducted.
(v) The Company is not in violation or default of (i) any
provision of its charter or bylaws; (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or
instrument to which it is a party or bound or to which its property is
subject; or (iii) any statute, law, rule, regulation, judgment, order
or decree applicable to the Company of any court, regulatory body,
administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or any of its properties, except,
in the cases of clauses (ii) and (iii) of this subsection, for those
that would not have a Material Adverse Effect and except as set forth
in or contemplated by the Final Offering Circular.
(w) PricewaterhouseCoopers (the "Company Auditors"), who have
certified certain financial statements of the Company and delivered
their report with respect to the audited financial statements of the
Company included in the Final Offering Circular, are independent public
accountants with respect to the Company within the meaning of the Act
and the applicable published rules and regulations thereunder.
(x) There are no stamp or other issuance or transfer taxes or
duties or other similar fees or charges required to be paid in
connection with the execution and delivery of this Agreement or the
issuance or sale by the Company of the Securities, other than fees
payable by the Company to the CNBV (as defined below) in connection
with the registration of the Securities in the Special Section of the
National Registry of Securities maintained by the CNBV.
(y) The Company has filed all tax returns (foreign, national,
local or other) required to be filed (except in any case in which the
failure so to file would not have a Material Adverse Effect and except
as set forth in or contemplated in the Final Offering Circular
(exclusive of any amendment or supplement thereto)) and has paid all
taxes required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing is
due and payable, except for any such assessment, fine or penalty that
is currently being contested in good faith or as would not have a
Material Adverse Effect and except as set forth in or contemplated in
the Final Offering Circular (exclusive of any amendment or supplement
thereto).
(z) No labor problem or dispute with the employees of the Company
exists or is threatened or imminent, and the Company is not aware of
any existing or imminent labor disturbance by the employees of any of
its principal suppliers, contractors or customers, except as would not
have a Material Adverse Effect, and except as set forth in or
contemplated in the Final Offering Circular (exclusive of any amendment
or supplement thereto).
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(aa) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
customary for companies engaged in the same or similar businesses; all
policies of insurance and fidelity or surety bonds insuring the Company
or its business, assets, employees, officers and directors are in full
force and effect; the Company is in compliance with the terms of such
policies and instruments in all material respects; and there are no
claims by the Company under any such policy or instrument as to which
any insurance company is denying liability or defending under a
reservation of rights clause which in either case would have a Material
Adverse Effect; and the Company has no reason to believe that it will
not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business at a cost that would not have
a Material Adverse Effect except as set forth in or contemplated in the
Final Offering Circular (exclusive of any amendment or supplement
thereto).
(bb) The Company possesses all licenses, certificates, permits and
other authorizations issued by the appropriate national, local or
foreign regulatory authorities necessary to conduct its business, and
the Company has not received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse
Effect, except as set forth in or contemplated in the Final Offering
Circular (exclusive of any amendment or supplement thereto).
(cc) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with IAS
and to maintain asset accountability; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
(dd) The Company is (i) in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"); (ii) has received and is in compliance with all permits,
licenses or other approvals required of it under applicable
Environmental Laws to conduct its business; and (iii) has not received
notice of any actual or potential liability for the investigation or
remediation of any disposal or release of hazardous or toxic
substances or wastes, pollutants or contaminants, except where such
non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or liability would not,
individually or in the aggregate, have a Material Adverse Effect,
except as set
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forth in or contemplated in the Final Offering Circular (exclusive of
any amendment or supplement thereto).
(ee) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company, in the course of which it
identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws,
or any permit, license or approval, any related constraints on
operating activities and any potential liabilities to third parties);
on the basis of such review, the Company has reasonably concluded that
such associated costs and liabilities would not, individually or in the
aggregate, have a Material Adverse Effect, except as set forth in or
contemplated in the Final Offering Circular (exclusive of any amendment
or supplement thereto).
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Initial Purchasers in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Initial Purchaser.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
97.356% of the principal amount thereof, plus accrued interest, if any, from
June 13, 2002 to the Closing Date, the principal amount of Securities set forth
opposite such Initial Purchaser's name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the Securities
shall be made at 10:00 A.M., New York City time, on June 13, 2002, or at such
time on such later date not more than two Business Days after the foregoing date
as the Representatives shall designate in writing, which date and time may be
postponed by agreement between the Representatives and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for the
Securities being herein called the "Closing Date"). Delivery of the Securities
shall be made to the Representatives for the respective accounts of the several
Initial Purchasers against payment by the several Initial Purchasers through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same day funds to the account specified by
the Company. Delivery of the Securities sold pursuant to Clauses 4(b)(i)(A) and
(C) shall be made through the facilities of The Depository Trust Company unless
the Representatives shall otherwise instruct. The Securities sold pursuant to
Clause 4(b)(i)(B) shall be delivered in certificated form at such location as
Xxxxxxx Xxxxx Xxxxxx shall reasonably designate at least one Business Day in
advance of the Closing Date. Certificates for such Securities shall be
registered in such names and in such denominations as Xxxxxxx Xxxxx Barney may
request in writing not less than two Business Days in advance of the Closing
Date. The Company agrees to have the Securities available for inspection,
checking and packaging by the Representatives in New York, New York, not later
than 1:00 PM on the Business Day prior to the Closing Date.
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4. Offering by Initial Purchaser. (a) Each Initial Purchaser
acknowledges that the Securities have not been and will not be registered under
the Act and may not be offered or sold within the United States except pursuant
to an exemption from, or in a transaction not subject to, the registration
requirements of the Act.
(b) Each Initial Purchaser, severally and not jointly, represents
and warrants to and agrees with the Company that:
(i) it has not offered or sold, and will not offer or sell, any
Securities as part of their distribution at any time except:
(A) within the United States, to those it reasonably believes to
be "qualified institutional buyers" (as defined in Rule 144A under the
Act);
(B) within the United States, to other institutional "accredited
investors" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation
D) who provide to it and to the Company a letter in the form of Exhibit
A hereto; or
(C) in accordance with Rule 903 of Regulation S and the
restrictions set forth in Exhibit B hereto;
(ii) neither it nor any person acting on its behalf has made or will
make offers or sales of the Securities in the United States by means of any form
of general solicitation or general advertising (within the meaning of Regulation
D);
(iii) in connection with each sale pursuant to Section 4(b)(i)(A), it
has taken or will take reasonable steps to ensure that the purchaser of such
Securities is aware that such sale is being made in reliance on Rule 144A; and
(iv) it is an "institutional accredited investor" within the meaning
of Rule 501(a) of Regulation D.
5. Agreements. The Company agrees with each Initial Purchaser that:
(a) The Company will furnish to each Initial Purchaser and to counsel
for the Initial Purchasers, without charge, during the period referred to
in paragraph (c) below, as many copies of the Final Offering Circular and
any amendments and supplements thereto as they may reasonably request.
(b) The Company will not amend or supplement the Final Offering
Circular, other than by filing documents under the Exchange Act that are
incorporated by reference therein, without the prior written consent of the
Representatives; provided, however, that, prior to the completion of the
distribution of the Securities by the Initial Purchasers (as determined by
the Initial Purchasers and notified to the Company), the Company will not
file any document under the Exchange Act that is incorporated by reference
in the Final Offering Circular unless, prior to such proposed filing, the
Company has furnished the Representatives with a copy of such document for
their review and the Representatives have not reasonably objected to the
filing of such document. The Company will
9
promptly advise the Representatives when any document filed under the
Exchange Act that is incorporated by reference in the Final Offering
Circular shall have been filed with the Commission.
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the
Representatives), any event occurs as a result of which the Final Offering
Circular, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it should be necessary to
amend or supplement the Final Offering Circular to comply with applicable
law, the Company will promptly (i) notify the Representatives of any such
event; (ii) subject to the requirements of paragraph (b) of this Section
5, prepare an amendment or supplement to correct such statement or
omission or effect such compliance; and (iii) supply any supplemented or
amended Final Offering Circular to the Initial Purchasers and counsel for
the Initial Purchasers without charge in such quantities as they may
reasonably request.
(d) The Company will arrange, if necessary, for the qualification of
the Securities for sale by the Initial Purchasers under the laws of such
jurisdictions as the Representatives may reasonably designate and will
maintain such qualifications in effect so long as required to complete the
distribution of the Securities; provided that in no event shall the Company
be obligated to qualify to do business or to qualify as a dealer in
securities in any jurisdiction in which it is not now so qualified or to
take any action that would subject it to taxation or service of process in
suits, in any jurisdiction in which it is not now so subject. The Company
will promptly advise the Representatives of the receipt by the Company of
any notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose.
(e) The Company will not, will not permit any of its Affiliates that
are under its control to, and will use its best efforts not to permit any
of its other Affiliates to, resell any Securities which constitute
"restricted securities" within the meaning of Rule 144(a)(3) under the Act
that have been acquired by any of them.
(f) The Company will not, will not permit any of its Affiliates that
are under its control to, and will use its best efforts not to permit any
of its other Affiliates and any person acting on its or their behalf to,
directly or indirectly, make offers or sales of any security, or solicit
offers to buy any security, under circumstances that would require the
registration of the Securities under the Act, provided that the Company
undertakes no such obligation as to any actions of the Initial Purchasers
or any person acting on their behalf.
(g) The Company will not, will not permit any of its Affiliates that
are under its control to, and will use its best efforts not to permit any
of its other Affiliates and any person acting on its or their behalf to,
engage in any form of general solicitation or general advertising (within
the meaning of Regulation D) in connection with any offer or
10
sale of the Securities in the United States, provided that the Company
undertakes no such obligation as to any actions of the Initial Purchasers
or any person acting on their behalf.
(h) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) under the Act, the Company will,
during any period in which it is not subject to and in compliance with
Section 13 or 15(d) of the Exchange Act or it is not exempt from such
reporting requirements pursuant to and in compliance with Rule 12g3-2(b)
under the Exchange Act, provide to each holder of such restricted
securities and to each prospective purchaser (as designated by such holder)
of such restricted securities, upon the request of such holder or
prospective purchaser, any information required to be provided by Rule
144A(d)(4) under the Act. This covenant is intended to be for the benefit
of the holders, and the prospective purchasers designated by such holders,
from time to time of such restricted securities.
(i) The Company will not, will not permit any of its Affiliates that
are under its control to, and will use its best efforts not to permit any
of its other Affiliates and any person acting on its or their behalf to,
engage in any directed selling efforts with respect to the Securities,
provided that the Company undertakes no such obligation as to any actions
of the Initial Purchasers or any person acting on their behalf. Terms used
in this paragraph have the meanings given to them by Regulation S.
(j) The Company will cooperate with the Representatives and use its
best efforts to permit the Securities to be eligible for clearance and
settlement through The Depository Trust Company.
(k) The Company will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities.
(l) The Company agrees to pay the costs and expenses relating to the
following matters: (i) the preparation of this Agreement, the Indenture and
the Registration Rights Agreement, the issuance of the Securities and the
fees of the Trustee and any information agent or exchange agent; (ii) the
preparation, printing or reproduction of the Preliminary Offering Circular
and the Final Offering Circular and each amendment or supplement thereto;
(iii) the printing (or reproduction) and delivery (including postage, air
freight charges and charges for counting and packaging) of such copies of
the Preliminary Offering Circular and the Final Offering Circular, (and all
amendments or supplements thereto), as may, in each case, be reasonably
requested for use in connection with the offering and sale of the
Securities; (iv) the preparation, printing, authentication, issuance and
delivery of certificates for the Securities, including any stamp or
transfer taxes in connection with the original issuance and sale of the
Securities; (v) the printing (or reproduction) and delivery of this
Agreement, any blue sky memorandum and all other agreements or documents
printed (or reproduced) and delivered in connection with the offering of
the Securities; (vi) any registration or qualification of the Securities
for offer and sale under the securities or blue sky laws of the several
states or any non-U.S. jurisdiction (including filing fees and the
reasonable
11
fees and expenses of counsel for the Initial Purchasers relating to such
registration and qualification); (vii) admitting the Securities for trading
in the PORTAL Market; (viii) the transportation and other expenses incurred
by or on behalf of Company representatives in connection with presentations
to prospective purchasers of the Securities; (ix) the fees and expenses of
the Company's accountants and the fees and expenses of counsel (including
local and special counsel) for the Company; and (x) all other costs and
expenses incident to the performance by the Company of its obligations
hereunder.
6. Conditions to the Obligations of the Initial Purchasers. The
obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company contained herein at the Execution Time and the Closing Date, to the
accuracy of the statements of the Company made in any certificates pursuant to
the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) At the Closing Date, the Company shall have requested and caused
the following opinions dated the Closing Date and addressed to the
Representatives, to be furnished to the Representatives, in form and substance
satisfactory to, the Representatives:
(i) an opinion of Xxxxxx and Xxxxx, S.C., special Mexican
counsel to the Company ("Mexican Counsel"), addressing the matters set
forth in Exhibit C;
(ii) an opinion of Xxxxx, Sainz y Erreguerena, S.C., special
Mexican tax counsel to the Company ("Mexican Tax Counsel"), addressing
the matters set forth in Exhibit D;
(iii) an opinion of Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle LLP,
U.S. counsel to the Company ("U.S. Counsel"), addressing the matters
set forth in Exhibit E.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than, in the case of
Mexican Counsel and Mexican Tax Counsel, Mexico or, in the case of U.S. Counsel,
the State of New York or the federal laws of the United States, to the extent
they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Initial Purchasers; and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
the Company and public officials.
References to the Final Offering Circular in this Section 6(a) include
any amendment or supplement thereto at the Closing Date.
(b) The Representatives shall have received from Cleary, Gottlieb,
Xxxxx & Xxxxxxxx, counsel for the Initial Purchasers, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Indenture, the Registration Rights
Agreement, the Final Offering Circular (as amended or supplemented at the
Closing Date) and other related matters as the Representatives may reasonably
require, and the Company shall have furnished to such counsel such documents as
they reasonably request for the purpose of enabling them to pass upon such
matters.
12
(c) The Company shall have furnished to the Representatives a
certificate of the Company, signed by its Chairman of the Board or President and
its principal financial or accounting officer, dated as of the Closing Date, to
the effect that the signatories of such certificate have carefully examined the
Final Offering Circular, any amendment or supplement to the Final Offering
Circular and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date with the
same effect as if made on the Closing Date, and the Company has
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied hereunder at or prior to the
Closing Date; and
(ii) since the date of the most recent financial statements
included in the Final Offering Circular (exclusive of any amendment or
supplement thereto), there has been no Material Adverse Effect, except
as set forth in or contemplated in the Final Offering Circular
(exclusive of any amendment or supplement thereto).
(d) At the Execution Time and at the Closing Date, the Company shall
have requested and caused the Company Auditors to furnish to the Representatives
letters, dated respectively as of the Execution Time and as of the Closing Date,
substantially in the form attached hereto as Exhibit F and in form and substance
satisfactory to the Representatives. All references in this Section 6(d) to the
Final Offering Circular include any amendment or supplement thereto at the date
of the applicable letter.
(e) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Offering Circular (exclusive of any
amendment or supplement thereto), there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph (d) of this
Section 6; or (ii) any change, or any development involving a prospective
change, in or affecting the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and its subsidiaries taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final Offering Circular
(exclusive of any amendment or supplement thereto), the effect of which, in any
case referred to in clause (i) or (ii) above, is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated in the Final Offering Circular (exclusive of any amendment or
supplement thereto).
(f) The Securities shall have been designated as PORTAL-eligible
securities in accordance with the rules and regulations of the NASD and the
Securities shall be eligible for clearance and settlement through The Depository
Trust Company.
(g) Subsequent to the Execution Time, there shall not have occurred
any downgrading, nor shall any notice have been given to the Company of (i) any
intended or potential downgrading or (ii) any review or possible change that
does not indicate the direction of a possible change, in the rating accorded any
of the Company's securities by any of Standard & Poor's ratings Group ("S&P"),
Xxxxx'x Investors Service, Inc. ("Moody's") or any other
13
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act) or any notice given of a possible change in any
such rating that does not indicate the direction of the possible change.
(h) Prior to the Closing Date, the Securities shall have received the
ratings from S&P and Moody's of BB- and B1, respectively.
(i) Prior to the Closing Date, the Company shall have obtained all
consents, approvals, authorizations and orders of, and shall have duly made all
registrations, qualifications and filing with, any court or regulatory authority
or other governmental agency or instrumentality, including with limitation the
CNBV, required in connection with the issuance and sale of the Securities and
the execution, delivery and performance of this Agreement.
(i) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents as the
Representatives may reasonably request.
If (i) any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement or (ii) if any of the
opinions and certificates mentioned above or elsewhere in this Agreement shall
not be reasonably satisfactory in form and substance to the Representatives and
counsel for the Initial Purchasers, this Agreement and all obligations of the
Initial Purchasers hereunder may be cancelled at, or at any time prior to, the
Closing Date by the Representatives. Notice of such cancellation shall be given
to the Company in writing or by telephone or facsimile, in either case confirmed
in writing.
The documents required to be delivered by this Section 6 will be
delivered at the office of counsel for the Initial Purchasers, at Xxx Xxxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities provided
for herein is not consummated because any condition to the obligations of the
Initial Purchasers set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof other than by reason of a default by any of
the Initial Purchasers, the Company will reimburse the Initial Purchasers
severally through Xxxxxxx Xxxxx Xxxxxx on demand for all reasonable and duly
documented out-of-pocket expenses (including reasonable fees and disbursements
of counsel; provided that the Company's obligation to reimburse the Initial
Purchasers for fees of counsel under this Section 7 and otherwise hereunder
shall be limited to fees not exceeding the excess of $400,000 over the amount of
such fees reimbursed under the Dealer Manager Agreement) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Securities.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Initial Purchaser, the directors, officers,
employees and agents of each Initial Purchaser and each person who controls any
Initial Purchaser within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Act, the Exchange Act or
14
other federal, state or foreign statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) relate to or arise out of or are based upon (1) any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Circular, the Final Offering Circular (or in any amendment
or supplement thereto) or any information provided by the Company to any holder
or prospective purchaser of Securities pursuant to Section 5(h), or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by it in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the Company
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made in the Preliminary
Offering Circular or the Final Offering Circular, or in any amendment thereof or
supplement thereto, in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Initial Purchaser through the
Representatives specifically for inclusion therein. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
(b) Each Initial Purchaser severally, and not jointly, agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers, and each person who controls the Company within the meaning of either
the Act or the Exchange Act, to the same extent as the foregoing indemnity from
the Company to each Initial Purchaser, but only with reference to written
information relating to such Initial Purchaser furnished to the Company by or on
behalf of such Initial Purchaser through the Representatives specifically for
inclusion in the Preliminary Offering Circular or the Final Offering Circular
(or in any amendment or supplement thereto). This indemnity agreement will be in
addition to any liability which any Initial Purchaser may otherwise have. The
Company acknowledges that the statements set forth (i) in the last paragraph of
the cover page and (ii) under the heading "Plan of Distribution", (A) the list
of Initial Purchasers and their respective participation in the sale of the
Securities and (B) the ninth paragraph in the Preliminary Offering Circular and
the Final Offering Circular, constitute the only information furnished in
writing by or on behalf of the Initial Purchasers for inclusion in the
Preliminary Offering Circular or the Final Offering Circular (or in any
amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against the indemnifying party under
this Section 8, notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from liability under paragraph (a) or (b) above unless and to the
extent it did not otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses and (ii)
will not, in any event, relieve the indemnifying party from any obligations to
any indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint
counsel (including local counsel) of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which
15
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel,
other than local counsel if not appointed by the indemnifying party, retained by
the indemnified party or parties except as set forth below); provided, however,
that such counsel shall be satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint counsel (including
local counsel) to represent the indemnified party in an action, the indemnified
party shall have the right to employ one firm of separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest; (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party; (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action; or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Initial Purchasers
severally agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which the
Company and one or more of the Initial Purchasers may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and by the Initial Purchasers on the other from the
offering of the Securities; provided, however, that in no case shall any Initial
Purchaser (except as may be provided in any agreement among the Initial
Purchasers relating to the offering of the Securities) be responsible for any
amount in excess of the purchase discount or commission applicable to the
Securities purchased by such Initial Purchaser hereunder. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the Company and the Initial Purchasers severally shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and of the Initial Purchasers
on the other in connection with the statements or omissions which resulted in
such Losses, as well as any other relevant equitable considerations. Benefits
received by the Company shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses) received by it, and benefits
received by the Initial Purchasers shall be deemed to be equal to the total
purchase discounts and commissions in each case set forth on the cover of the
Final Offering Circular. Relative fault shall be determined by reference to,
among other things, whether any untrue or any alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information provided by the Company on the one hand or the Initial
Purchasers on the
16
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Company and the Initial Purchasers agree that it would not be just
and equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls an Initial Purchaser within the meaning
of either the Act or the Exchange Act and each director, officer, employee and
agent of an Initial Purchaser shall have the same rights to contribution as such
Initial Purchaser, and each person who controls the Company within the meaning
of either the Act or the Exchange Act and each officer and director of the
Company shall have the same rights to contribution as the Company, subject in
each case to the applicable terms and conditions of this paragraph (d).
9. Default by an Initial Purchaser. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Initial Purchasers) the Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase; provided,
however, that in the event that the aggregate principal amount of Securities
which the defaulting Initial Purchaser or Initial Purchasers agreed but failed
to purchase shall exceed 10% of the aggregate principal amount of Securities set
forth in Schedule I hereto, the remaining Initial Purchasers shall have the
right to purchase all, but shall not be under any obligation to purchase any, of
the Securities, and if such nondefaulting Initial Purchasers do not purchase all
the Securities, this Agreement will terminate without liability to any
nondefaulting Initial Purchaser or the Company. In the event of a default by any
Initial Purchaser as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the Final
Offering Circular or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Initial
Purchaser of its liability, if any, to the Company or any nondefaulting Initial
Purchaser for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if at any time prior to
such time (i) trading in the Company's Common Stock shall have been suspended by
the Commission or the New York Stock Exchange or trading in securities generally
on the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such exchange; (ii) a banking moratorium
shall have been declared either by Mexican, U.S. federal or New York State
authorities; or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives,
17
impractical or inadvisable to proceed with the offering or delivery of the
Securities as contemplated in the Final Offering Circular (exclusive of any
amendment or supplement thereto).
11. Survival. The respective agreements, representations, warranties,
indemnities and other statements of the Company or its officers and of the
Initial Purchasers set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation made by or on behalf
of the Initial Purchasers or the Company or any of the officers, directors or
controlling persons referred to in Section 8 hereof, and will survive delivery
of and payment for the Securities. The provisions of Sections 7 and 8 hereof
shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Xxxxxxx Xxxxx Barney General Counsel (fax no.:
(000) 000-0000) and confirmed to Xxxxxxx Xxxxx Xxxxxx at 000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel; or, if sent to the
Company, will be mailed, delivered or telefaxed to:
Attn: Xxxxxxx Xxxxxx, Director and Acting Chief Financial Officer, and Xxxx
Xxxxx, Financial Director and Treasurer and confirmed to it at
TFM, S.A. de C.V., Periferico Sur 4829, 4(degree) Piso, Col. Parques del
Pedregal, X.X. 00000 Xxxxxxxxxx Xxxxxxx, Xxxxxx D.F., telefax no.: 011 525
00 000-0000 (voice contact 000 000 00 000-0000 or 000 000 00 000-0000)).
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and,
except as expressly set forth in Section 5(h) hereof, no other person will have
any right or obligation hereunder.
14. Jurisdiction. Each of the parties hereto (a) agrees that any
suit, controversy or dispute arising out of or based upon this Agreement or the
transactions contemplated hereby shall be subject to the jurisdiction of the
courts of the State or Federal courts sitting in The City of New York, New York
and each of the parties hereby expressly and irrevocably submits, for itself and
for its property, to such jurisdiction for such purpose, and (b) waives any
objection that it may now or hereafter have to the laying of venue of any such
proceeding, and irrevocably submits to the jurisdiction of such courts in any
suit, action or proceeding. Each of the parties hereby expressly and irrevocably
waives all rights of objection to jurisdiction in any such action or hereby
appoints CT Corporation System, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, as
its authorized agent (the "Authorized Agent") upon whom process may be served in
any suit, action or proceeding arising out of or based upon this Agreement or
the transactions contemplated herein which may be instituted in any State or
Federal court in The City of New York, New York, County of New York, by any
Initial Purchaser, the directors, officers, employees and agents of any Initial
Purchaser, or by any person who controls any Initial Purchaser, and expressly
accepts the jurisdiction of any such court in respect of any suit, action or
proceeding. The Company hereby represents and warrants that the Authorized Agent
has accepted such appointment and has agreed to act as said agent for service of
process, and the Company agrees to take any and all action, including the filing
of any and all documents that
18
may be necessary to continue such appointment in full force and effect as
aforesaid. Service of process upon the Authorized Agent shall be deemed, in
every respect, effective service of process upon the Company.
15. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
16. Currency. Each reference in this Agreement to U.S. dollars (the
"relevant currency") is of the essence. To the fullest extent permitted by law,
the obligation of the Company in respect of any amount due under this Agreement
will, notwithstanding any payment in any other currency (whether pursuant to a
judgment or otherwise), be discharged only to the extent of the amount in the
relevant currency that the party entitled to receive such payment may, in
accordance with its normal procedures, purchase with the sum paid in such other
currency (after any premium and costs of exchange) on the Business Day
immediately following the day on which such party receives such payment. If the
amount in the relevant currency that may be so purchased for any reason falls
short of the amount originally due, the Company will pay such additional
amounts, in the relevant currency, as may be necessary to compensate for the
shortfall. Any obligation of the Company not discharged by such payment will,
to the fullest extent permitted by applicable law, be due as a separate and
independent obligation and, until discharged as provided herein, will continue
in full force and effect.
17. Waiver of Immunity. To the extent that the Company has or
hereafter may acquire any immunity (sovereign or otherwise) from any legal
action, suit or proceeding, from jurisdiction of any court or from set-off or
any legal process (whether service or notice, attachment in aid or otherwise)
with respect to itself or any of its property, the Company hereby irrevocably
waives such immunity to the extent such waiver is legally permissible and agrees
not to plead or claim such immunity in respect of its obligations under this
Agreement.
18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.
19. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
20. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the U.S. Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in The City of New York.
19
"Commission" shall mean the U.S. Securities and Exchange Commission.
"Exchange Act" shall mean the U.S. Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Mexico" shall mean the United Mexican States.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"PORTAL" shall mean the Private Offerings, Resales and Trading through
Automated Linkages system of the NASD.
"Regulation D" shall mean Regulation D under the Act.
"Regulation S" shall mean Regulation S under the Act.
"Xxxxxxx Xxxxx Xxxxxx" shall mean Xxxxxxx Xxxxx Barney Inc.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"U.S." or the "United States" shall mean the United States of America.
20
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement between the
Company and the several Initial Purchasers.
Very truly yours,
TFM, S.A. de C.V.
By: /s/ Xxxx Xxxxx
-------------------
Name: Xxxx Xxxxx
Title: Treasurer
By: /s/ Xxxxxxx Xxxxxx
-------------------
Name:Xxxxxxx Xxxxxx
Title: Acting Chief
Financial Officer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Xxxxxxx Xxxxx Xxxxxx Inc.
X.X. Xxxxxx Securities Inc.
By: Xxxxxxx Xxxxx Barney Inc.
By: /s/ Xxxx X. Xxxxxxxx
--------------------
Name: Xxxx X. Xxxxxxxx
Title: Managing Director
By: X.X. Xxxxxx Securities Inc.
By: /s/ Xxxxxxx Xxxxxx
--------------------
Name: Xxxxxxx Xxxxxx
Title: Managing Director
21
SCHEDULE I
Principal Amount of
Securities
Initial Purchasers to be Purchased
------------------ -------------------
Xxxxxxx Xxxxx Barney Inc. .......................... U.S.$ 144,000,000
X.X. Xxxxxx Securities Inc. ........................ U.S.$ 36,000,000
-----------------
Total ........................................... U.S.$ 180,000,000
22
EXHIBIT A
Non-Distribution Letter for Institutional Accredited Investors
____________, 2002
Xxxxxxx Xxxxx Barney Inc.
X.X. Xxxxxx Securities Inc.
As Initial Purchasers
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
TFM, S.A. de C.V.
Periferico Sur 4829, 4(degree) Piso,
Col. Parques del Pedregal, X.X. 00000
Xxxxxxxxxx Xxxxxxx, Xxxxxx D.F.
Re: Purchase of US$_____ principal amount of 12.50%
Senior Notes Due 2012 (the "Securities") of
TFM, S.A. de C.V. (the "Company")(1)
Ladies and Gentlemen:
In connection with our purchase of the Securities we confirm that:
1. We understand that the Securities are not being and will not be
registered under the Securities Act of 1933, as amended (the "Act"), and are
being sold to us in a transaction that is exempt from the registration
requirements of the Act.
2. We acknowledge that (a) neither the Company, nor the Initial
Purchasers (as defined in the Offering Circular dated June 6, 2002, relating to
the Securities (the "Final Offering Circular")) nor any person acting on behalf
of the Company or the Initial Purchasers has made any representation to us with
respect to the Company or the offer or sale of any Securities; and (b) any
information we desire concerning the Company and the Securities or any other
matter relevant to our decision to purchase the Securities (including a copy of
the Final Offering Circular) is or has been made available to us.
3. We have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an investment in
the Securities, and we are (or any account for which we are purchasing under
paragraph 4 below is) an institutional "accredited
-----------------------------
(1) Each U.S. purchaser, or account for which each U.S. purchaser is acting,
should purchase at least US$250,000 of Securities.
A-1
investor" (within the meaning of Rule 501(a) (1), (2), (3) or (7) of Regulation
D under the Act) able to bear the economic risk of investment in the Securities.
4. We are acquiring the Securities for our own account (or for
accounts as to which we exercise sole investment discretion and have authority
to make, and do make, the statements contained in this letter) and not with a
view to any distribution of the Securities, subject, nevertheless, to the
understanding that the disposition of our property will at all times be and
remain within our control.
5. We understand that (a) the Securities will be in registered form
only and that any certificates delivered to us in respect of the Securities will
bear a legend substantially to the following effect:
"These Securities have not been registered under the Securities Act of
1933. Further offers or sales of these Securities are subject to
certain restrictions, as set forth in the Offering Circular dated June
6, 2002 relating to these Securities."
and (b) the Company has agreed to reissue such certificates without the
foregoing legend only in the event of a disposition of the Securities in
accordance with the provisions of paragraph 6 (provided, in the case of a
disposition of the Securities in accordance with paragraph 6(f) below, that the
legal opinion referred to in such paragraph so permits), or at our request at
such time as we would be permitted to dispose of them in accordance with
paragraph 6(a) below.
6. We agree that in the event that at some future time we wish to
dispose of any of the Securities, we will not do so unless such disposition is
made in accordance with any applicable securities laws of any state of the
United States and:
(a) the Securities are sold in compliance with Rule 144(k) under the
Act; or
(b) the Securities are sold in compliance with Rule 144A under the
Act; or
(c) the Securities are sold in compliance with Rule 904 of Regulation
S under the Act; or
(d) the Securities are sold pursuant to an effective registration
statement under the Act; or
(e) the Securities are sold to the Company; or
(f) the Securities are disposed of in any other transaction that does
not require registration under the Act, and we theretofore have furnished to the
Company or its designee an opinion of counsel experienced in securities law
matters to such effect or such other documentation as the Company or its
designee may reasonably request.
Very truly yours,
By ________________________
(Authorized Officer)
A-2
EXHIBIT B
Selling Restrictions for Offers and
Sales Outside the United States
(1) (a) Each Initial Purchaser, severally and not jointly, represents
and warrants to and agrees with the Company that:
(i) neither it, nor any of its Affiliates nor any person acting
on its or their behalf has engaged or will engage in any directed selling
efforts with respect to the Securities; and
(ii) it has not entered and will not enter into any contractual
arrangement with any distributor (as that term is defined by Regulation S)
with respect to the distribution of the Securities, except with its
affiliates or with the prior written consent of the Company;
(iii) it and they have complied and will comply with the offering
restrictions requirement of Regulation S; and
(iv) at or prior to the confirmation of sale of Securities
(other than a sale of Securities pursuant to Section 4(a)(i)(B) of the
Agreement to which this is an exhibit), it shall have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Securities from it during the distribution
compliance period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Act") and may not be offered or sold
within the United States, except in accordance with Regulation S or
Rule 144A under the Act. Additional restrictions on the offer and sale
of the Securities are described in the offering memorandum for the
securities. Terms used in this paragraph have the meanings given to
them by Regulation S."
(b) Terms used in this Section 1 have the meanings given to them by
Regulation S.
(2) Each Initial Purchaser represents and agrees that:
(i) it has not offered or sold and, prior to the date six
months after the date of issuance of the Securities, will not offer or sell
any Securities to persons in the United Kingdom except to persons whose
ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or as agent) for the purposes of
their businesses or otherwise in circumstances which have not resulted and
will not
B-1
result in an offer to the public in the United Kingdom within the meaning
of the Public Offers of Securities Regulations 1995;
(ii) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in relation to
the Securities in, from or otherwise involving the United Kingdom; and
(iii) it has only communicated or caused to be communicated and
will only communicate or cause to be communicated any invitation or
inducement to engage in investment activity (within the meaning of section
21 of the FSMA) received by it in connection with the issue or sale of any
Securities, in circumstances in which section 21(1) of the FSMA does not
apply to the Company.
(3) Each Initial Purchaser represents and agrees that neither it nor any
person acting on its behalf has made or will make offers or sales of the
Securities to the public in Mexico.
B-2
