EXHIBIT 10.8
EXECUTION COPY
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CREDIT AGREEMENT
Dated as of September 17, 2002
among
TFM, S.A. DE C.V.,
as Borrower
STANDARD CHARTERED BANK,
as Issuing Bank
X.X. XXXXXX SECURITIES INC.,
as Joint Lead Arranger and Sole Book Manager
XXXXXXX XXXXX BARNEY INC.,
as Joint Lead Arranger
BANK OF AMERICA, N.A.,
COMERICA BANK
and
LANDESBANK SCHLWESWIG-HOLSTEIN GIROZENTRALE, KIEL
as Arrangers
STANDARD CHARTERED BANK,
as Arranger and Documentation Agent
JPMORGAN CHASE BANK,
as Administrative Agent
and
THE BANKS NAMED HEREIN,
as Banks
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US$122,000,000
Commercial Paper Program
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS ...................................................................................................... 1
SECTION 1.1. Certain Definitions .................................................................................... 1
SECTION 1.2. Other Definitional Provisions .......................................................................... 23
ARTICLE II LETTER OF CREDIT AND COMMERCIAL PAPER OPERATIONS ................................................................ 24
SECTION 2.1. The Letter of Credit.................................................................................... 24
SECTION 2.2. Issuance of CP Notes ................................................................................... 24
SECTION 2.3. Agreement to Reimburse LOC Advances .................................................................... 26
SECTION 2.4. Commercial Paper Account................................................................................ 28
SECTION 2.5. Letter of Credit Account................................................................................ 30
SECTION 2.6. Change in Law Applicable to the Letter of Credit........................................................ 31
SECTION 2.7. Effect on the Letter of Credit ......................................................................... 31
SECTION 2.8. Participation and Funding Commitments................................................................... 31
SECTION 2.9. Market Disruption Events................................................................................ 34
ARTICLE III LOANS .......................................................................................................... 36
SECTION 3.1. Loans .................................................................................................. 36
SECTION 3.2. Notes .................................................................................................. 38
SECTION 3.3. Procedure for Conversion................................................................................ 39
SECTION 3.4. Repayment .............................................................................................. 39
SECTION 3.5. Prepayments............................................................................................. 39
SECTION 3.6. Interest Rates and Payment Dates........................................................................ 40
SECTION 3.7. Computation of Interest................................................................................. 41
SECTION 3.8. Inability to Determine Interest Rate.................................................................... 41
SECTION 3.9. Continuation Option..................................................................................... 41
SECTION 3.10. Maximum Interest Rate................................................................................... 42
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ARTICLE IV TERMS APPLICABLE TO LETTERS OF CREDIT AND LOANS ................................................................. 42
SECTION 4.1. Reduction of Commitments................................................................................ 42
SECTION 4.2. Termination and Extension............................................................................... 43
SECTION 4.3. Commitments Exceeded ................................................................................... 44
SECTION 4.4. Notice to Depositary ................................................................................... 44
SECTION 4.5. Fees ................................................................................................... 44
SECTION 4.6. Maximum Interest or Discount ........................................................................... 45
SECTION 4.7. Pro Rata Treatment and Payments......................................................................... 45
SECTION 4.8. Taxes .................................................................................................. 46
SECTION 4.9. Illegality.............................................................................................. 47
SECTION 4.10. Requirements of Law .................................................................................... 47
SECTION 4.11. Funding Indemnity ...................................................................................... 48
SECTION 4.12. Sharing of Payments, Etc ............................................................................... 49
SECTION 4.13. Change of Lending Office. .............................................................................. 49
SECTION 4.14. Replacement of Banks.................................................................................... 49
ARTICLE V CONDITIONS PRECEDENT ............................................................................................. 50
SECTION 5.1. Conditions to Effective Date ........................................................................... 50
SECTION 5.2. Conditions to each Extension of Credit.................................................................. 52
ARTICLE VI REPRESENTATIONS AND WARRANTIES .................................................................................. 53
SECTION 6.1. Status and Licensing ................................................................................... 54
SECTION 6.2. Corporate Power and Authority; Enforceable Obligations ................................................. 54
SECTION 6.3. Compliance with Law and Other Instruments............................................................... 54
SECTION 6.4. Litigation and Environmental Matters ................................................................... 55
SECTION 6.5. Governmental Approvals ................................................................................. 55
SECTION 6.6. Financial Information................................................................................... 55
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SECTION 6.7. Taxes, Assessments and Fees ........................................................................... 55
SECTION 6.8. Investment Company Act ................................................................................ 56
SECTION 6.9. Accuracy of Information ............................................................................... 56
SECTION 6.10. Absence of Default..................................................................................... 56
SECTION 6.11. Obligations Pari Passu; Recourse; Liens................................................................ 56
SECTION 6.12. Withholding Tax ....................................................................................... 56
SECTION 6.13. Proper Form; No Filing ................................................................................ 56
SECTION 6.14. Choice of Law.......................................................................................... 57
SECTION 6.15. Immunity .............................................................................................. 57
SECTION 6.16. Status of Concession .................................................................................. 57
SECTION 6.17. Properties ............................................................................................ 57
SECTION 6.18. Subsidiaries........................................................................................... 58
SECTION 6.19. Federal Regulations.................................................................................... 58
SECTION 6.20. Labor Matters.......................................................................................... 58
ARTICLE VII AFFIRMATIVE COVENANTS .......................................................................................... 58
SECTION 7.1. Senior Obligations..................................................................................... 58
SECTION 7.2. Financial Statements .................................................................................. 58
SECTION 7.3. Notice of Default; Litigation and Material Adverse Effect.............................................. 59
SECTION 7.4. Additional Information................................................................................. 59
SECTION 7.5. Other Obligations...................................................................................... 60
SECTION 7.6. Use of Proceeds ....................................................................................... 60
SECTION 7.7. Securities Act......................................................................................... 60
SECTION 7.8. Conduct of Business and Maintenance of Existence ...................................................... 60
SECTION 7.9. Maintenance of Government Approvals ................................................................... 60
SECTION 7.10. Compliance with Laws and Other Instruments............................................................. 60
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SECTION 7.11. Maintenance of Properties; Insurance .................................................................. 61
SECTION 7.12. Maintenance of Books and Records and Inspection Rights ................................................ 61
SECTION 7.13. Payment of Obligations ................................................................................ 61
SECTION 7.14. Environmental Laws .................................................................................... 61
ARTICLE VIII NEGATIVE COVENANTS ............................................................................................ 62
SECTION 8.1. CP Memorandum ......................................................................................... 62
SECTION 8.2. Amendment of Principal Documents ...................................................................... 62
SECTION 8.3. Concerning the CP Notes ............................................................................... 62
SECTION 8.4. Financial Covenants ................................................................................... 62
SECTION 8.5. Margin Regulations..................................................................................... 63
SECTION 8.6. Limitation on Restricted Payments. .................................................................... 63
SECTION 8.7. Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries ........................................................................................... 67
SECTION 8.8. Limitation on the Issuance and Sale of Capital Stock of
Subsidiaries ..................................................................................................... 68
SECTION 8.9. Limitation on Issuances of Guarantees by Subsidiaries................................................... 68
SECTION 8.10. Limitation on Transactions with Stockholders and Affiliates. .......................................... 69
SECTION 8.11. Limitation on Liens ................................................................................... 70
SECTION 8.12. Limitation on Sale-Leaseback Transactions.............................................................. 71
SECTION 8.13. Limitation on Asset Sales. ............................................................................ 71
SECTION 8.14. Consolidation, Merger and Sale of Assets............................................................... 72
SECTION 8.15. Lines of Business ..................................................................................... 73
SECTION 8.16. Additional Indebtedness ............................................................................... 73
ARTICLE IX EVENTS OF DEFAULT................................................................................................ 73
SECTION 9.1. Events of Default...................................................................................... 73
SECTION 9.2. Remedies .............................................................................................. 76
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ARTICLE X THE ADMINISTRATIVE AGENT.......................................................................................... 77
SECTION 10.1. Appointment .......................................................................................... 77
SECTION 10.2. Delegation of Duties ................................................................................. 77
SECTION 10.3. Exculpatory Provisions................................................................................ 78
SECTION 10.4. Reliance by the Administrative Agent ................................................................. 78
SECTION 10.5. Notice of Default..................................................................................... 78
SECTION 10.6. Non-Reliance on the Administrative Agent and Other Banks.............................................. 79
SECTION 10.7. Indemnification ...................................................................................... 79
SECTION 10.8. The Administrative Agent in Its Individual Capacity .................................................. 79
SECTION 10.9. Successor Administrative Agent........................................................................ 80
ARTICLE XI THE ISSUING BANK ................................................................................................ 80
SECTION 11.1. Appointment .......................................................................................... 80
SECTION 11.2. Exculpatory Provisions................................................................................ 81
SECTION 11.3. Reliance by Issuing Bank ............................................................................. 81
SECTION 11.4. Indemnification ...................................................................................... 81
SECTION 11.5. Issuing Bank in Its Individual Capacity .............................................................. 82
SECTION 11.6. Non-Reliance on Issuing Bank and Other Banks ......................................................... 82
ARTICLE XII THE JOINT LEAD ARRANGERS, ARRANGERS AND
DOCUMENTATION AGENT.................................................................................................... 83
SECTION 12.1. The Joint Lead Arrangers, etc......................................................................... 83
SECTION 12.2. Exculpatory Provisions................................................................................ 83
SECTION 12.3. Arrangers and Agent .................................................................................. 83
SECTION 12.4. Non-Reliance on the Arrangers, Agent and Other Banks ................................................. 83
ARTICLE XIII MISCELLANEOUS ................................................................................................. 84
SECTION 13.1. Transfers of Funds ................................................................................... 84
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SECTION 13.2. Financial Data ....................................................................................... 84
SECTION 13.3. Payment of Expenses, etc ............................................................................. 84
SECTION 13.4. Amendments and Waivers................................................................................ 85
SECTION 13.5. GOVERNING LAW ........................................................................................ 86
SECTION 13.6. Indemnification ...................................................................................... 86
SECTION 13.7. Notices............................................................................................... 87
SECTION 13.8. Table of Contents; Descriptive Headings; etc ......................................................... 90
SECTION 13.9. Survival of Agreements and Representations............................................................ 90
SECTION 13.10. Benefit of Agreement; Assignment...................................................................... 90
SECTION 13.11. Participation ........................................................................................ 91
SECTION 13.12. Right of Set-off ..................................................................................... 91
SECTION 13.13. SUBMISSION TO JURISDICTION; VENUE; SERVICE;
WAIVER OF JURY TRIAL ............................................................................................. 92
SECTION 13.14. Judgment Currency .................................................................................... 93
SECTION 13.15. Execution in Counterparts ............................................................................ 93
SECTION 13.16. Waiver of Immunities.................................................................................. 93
SECTION 13.17. Severability ......................................................................................... 94
SECTION 13.18. Confidentiality ...................................................................................... 94
SECTION 13.19. No Waiver; Remedies .................................................................................. 94
SECTION 13.20. Prior Agreements Superseded........................................................................... 00
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XXXXXXXXX
Schedule 1.1(a) Commitments; Percentage Shares
Schedule 1.1(b) Lending Offices; Addresses of Notices; Payment Instructions
Schedule 6.18 Subsidiaries
Schedule 8.7(b)(i) Existing Encumbrances or Restrictions
Schedule 8.11(a) Existing Liens
EXHIBITS
Exhibit A-1 Form of Simple Note
Exhibit A-2 Form of Mexican Base Rate Note
Exhibit A-3 Form of Mexican LIBOR Note
Exhibit B Form of Letter of Credit
Exhibit C Form of Depositary Agreement
Exhibit D Notice of Non-Reimbursement
Exhibit E Conversion Certificate
Exhibit F Form of Notice to Depositary
Exhibit G Forms of Opinion of U.S./Mexican Counsel to Borrower
Exhibit H Notice of CP Disruption Event
Exhibit I Form of Assignment and Acceptance
Exhibit J Form of Notice of Default
Exhibit K Form of Notice of Acceleration
Exhibit L Form of Notice of Force Majeure Disruption Event
Exhibit M Form of Notice of Borrowing
Exhibit N Form of Notice of Rescission of Default
US$122,000,000
Commercial Paper Program
Dated as of September 17, 2002
CREDIT AGREEMENT, dated as of September 17, 2002 among TFM, S.A. de
C.V., a limited liability company with variable capital (sociedad anonima de
capital variable) organized under the laws of the United Mexican States
("Mexico"), (the "Borrower"), the several Banks parties hereto, Standard
Chartered Bank, as the Issuing Bank, Bank of America, N.A., Comerica Bank and
Landesbank Schlweswig-Holstein Girozentrale, Kiel, as Arrangers, Standard
Chartered Bank, as Arranger and Documentation Agent and JPMorgan Chase Bank, as
Administrative Agent.
PRELIMINARY STATEMENT:
The Borrower proposes to sell its promissory notes in the United
States of America commercial paper market supported by a letter of credit, and
desires to obtain loans in an aggregate principal amount (together with any
outstanding commercial paper) not in excess of US$122,000,000 at any one time
outstanding to provide liquidity support therefor in the event of certain
market disruptions.
The Borrower has requested the Issuing Bank to issue its Letter of
Credit in the maximum face amount of US$122,000,000 to provide for the
repayment of outstanding promissory notes of the Borrower issued in the United
States of America commercial paper market in accordance with the provisions of
(i) this Agreement and (ii) a Depositary Agreement dated as of the date hereof
upon the terms and subject to the conditions herein and therein set forth.
Subject to the terms and conditions set forth below, the Issuing Bank
is willing to issue the Letter of Credit, the Banks are willing to participate
in the Letter of Credit and make the aforesaid loans, and the Administrative
Agent, the Documentation Agent, the Arrangers, the Banks and Issuing Bank are
willing to enter into this Agreement.
NOW, THEREFORE, the Borrower, the Banks, the Issuing Bank, the
Documentation Agent, the Arrangers and the Administrative Agent hereby agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Definitions. As used in this Agreement, the
following terms shall have the following meanings:
"Additional Amounts" shall have the meaning assigned to that term in
Section 4.8.
"Adjusted Consolidated Net Income" shall mean, for any period, the
Borrower and any of its Subsidiaries' aggregate net income (or loss) for such
period determined in
conformity with IAS; provided that the following items shall be excluded in
computing Adjusted Consolidated Net Income (without duplication): (i) the net
income of any Person (other than net income attributable to a Subsidiary) in
which any Person (other than the Borrower or any of its Subsidiaries) has a
joint interest, except to the extent of the amount of dividends or other
distributions actually paid to the Borrower or its Subsidiaries by such other
Person during such period; (ii) solely for the purposes of calculating the
amount of Restricted Payments that may be made pursuant to clause (iv) (C) of
Section 8.6(a) (and in such case, except to the extent includible pursuant to
clause (i) above), the net income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary or is merged into or consolidated with the
Borrower or any of its Subsidiaries or all or substantially all of the property
and assets of such Person are acquired by the Borrower or any of its
Subsidiaries; (iii) the net income of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
of such net income is not at the time permitted by the operation of the terms
of its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to such Subsidiary; (iv) any gains
or losses (on an after-tax basis) attributable to Asset Sales; (v) except for
purposes of calculating the amount of Restricted Payments that may be made
pursuant to clause (iv) (C) of Section 8.6(a), any amount paid or accrued as
dividends on any Preferred Stock of the Borrower or any of its Subsidiaries
owned by Persons other than the Borrower and any of its Subsidiaries; and (vi)
all extraordinary gains and extraordinary losses.
"Administration Fee Letter" shall have the meaning assigned to that
term in Section 4.5(c).
"Administration Fees" shall have the meaning assigned to that term in
Section 4.5(c).
"Administrative Agent" shall mean the administrative agent for the
Banks appointed pursuant to Section 10.1, initially, JPMCB, and its successors
in such capacity.
"Affected Bank" shall have the meaning assigned to that term in
Section 4.10(a).
"Affiliate" shall mean, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Aggregate Exposure" shall mean, as to any Bank, the sum of (a) the
outstanding principal amount of Loans made by such Bank and (b) the amount of
such Bank's Participation Fraction in unreimbursed LOC Advances.
"Agreement" shall mean this Credit Agreement, as from time to time
amended, supplemented or otherwise modified.
"Arrangement Fee Letter" shall have the meaning assigned to that term
in Section 4.5(d).
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"Arrangement Fees" shall have the meaning assigned to that term in
Section 4.5(d).
"Arrangers" shall mean Bank of America, N.A., Comerica Bank,
Landesbank Schlweswig-Holstein Girozentrale, Kiel and Standard Chartered Bank.
"Asset Sale" shall mean any sale, transfer or other disposition
(including by way of merger, consolidation or sale-leaseback transaction) in
one transaction or a series of related transactions by the Borrower or any of
its Subsidiaries to any Person other than the Borrower or any of its
Subsidiaries of (i) all or any of the Capital Stock of any Subsidiary, (ii) all
or substantially all of the property and assets of an operating unit or
business of the Borrower or any of its Subsidiaries or (iii) any other property
and assets of the Borrower or any of its Subsidiaries, including, without
limitation, receivables outside the ordinary course of business and, in each
case, that is not subject to the provisions of Section 8.14; provided that
"Asset Sale" shall not include sales or other dispositions of current
receivables (but not receivables to be generated in the future) in an aggregate
amount not to exceed $25,000,000 at any time outstanding.
"Assignment and Acceptance" shall have the meaning assigned to that
term in Section 13.10.
"Average Life" shall mean, at any date of determination with respect
to any debt security, the quotient obtained by dividing (i) the sum of the
products of (a) the number of years from such date of determination to the
dates of each successive scheduled principal payment of such debt security and
(b) the amount of such principal payment by (ii) the sum of all such principal
payments.
"Bank" shall mean each bank or other financial institution listed on
the signature pages hereof as a "Bank" and any bank or other financial
institution, which becomes a successor or assignee of any such Bank pursuant to
Section 13.10.
"Bank Affiliate" shall have the meaning assigned to that term in
Section 13.10.
"Base Rate" shall mean, for any day, the higher of (i) the Prime Rate
or (ii) the effective Federal Funds Effective Rate plus one-half of one percent
(1/2 of 1.0%), in each case as in effect for such day.
"Base Rate Loan" shall mean any Loan made or maintained, as the case
may be, at a rate of interest calculated with reference to the Base Rate.
"Base Rate Margin" shall mean 2.00% per annum.
"Borrower" shall have the meaning assigned to that term in the
preliminary statement hereto.
"Borrowing" shall mean the aggregation of Loans hereunder made on a
particular date from the Banks pro rata in accordance with their respective
Participation Fractions.
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"Business Day" shall mean any day other than a Saturday or a Sunday or
a day on which banking institutions in New York, New York are authorized or
required by law to close.
"Canadian Bank" shall mean Export Development Canada, a corporation
created pursuant to a special act of the Parliament of Canada.
"Canadian Business Day" shall mean any day other than a Saturday or a
Sunday or a day on which banking institutions or other financial institutions
in Canada are authorized or required by law to close.
"Capital Expenditures" shall mean, with respect to the Borrower and
its Subsidiaries, all expenditures by the Borrower and its Subsidiaries which
should be capitalized in accordance with IAS, including all such expenditures
with respect to fixed or capital assets (including, without limitation,
expenditures for maintenance and repairs which should be capitalized in
accordance with IAS).
"Capital Stock" shall mean, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) in equity of such Person, whether now outstanding
or issued after the Effective Date, including, without limitation, all Common
Stock and Preferred Stock.
"Capitalized Lease" shall mean, as applied to any Person, any lease of
any property (whether real, personal or mixed) of which the discounted present
value of the rental obligations of such Person as lessee, in conformity with
IAS, is required to be capitalized on the balance sheet of such Person.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under generally accepted accounting principles, are or will
be required to be capitalized on the books of such Person, in each case taken
at the amount thereof accounted for as indebtedness in accordance with such
principles.
"Change of Control" shall mean such time as:
(1) the Existing Holders cease to be the ultimate "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act and including by
reason of any change in the ultimate "beneficial ownership" of the
Capital Stock of Grupo TFM) of Voting Stock representing more than 50.0%
of the total voting power of the total Voting Stock of Grupo TFM on a
fully diluted basis;
(2) individuals who on the Effective Date constitute the Board of
Directors of the Borrower or Grupo TFM (together with any new directors
whose election by the Board of Directors or by the Borrower's
stockholders or Grupo TFM's stockholders, as the case may be, was
approved by a vote of at least two-thirds of the members of such Board of
Directors then in office who either were members of such Board of
Directors on the Effective Date or whose election or nomination for
election was previously so approved or who were appointed by one or more
of the Existing Holders) cease for any reason to constitute a majority of
the members of such Board of Directors then in office;
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(3) Grupo TFM does not own all of the outstanding Voting Stock of
the Borrower other than as a result of (A) one or more primary offerings
of Common Stock of the Borrower having, in the aggregate, voting power
equal to or less than 35% of the total voting power of the Voting Stock
of the Borrower, so long as Grupo TFM shall remain the beneficial owner
of at least 65% of the outstanding Voting Stock of the Borrower or (B) a
merger, consolidation, sale, transfer or lease solely between Grupo TFM
and the Borrower; or
(4) a "change in control" as defined in any Senior Note Indenture
shall occur.
"Commercial Paper Account" shall have the meaning assigned to that
term in Section 2.4(a).
"Commitment" shall mean, in the case of any Bank, such Bank's
obligation to participate in the Letter of Credit Facility in the manner
provided in Section 2.8, and to make Loans hereunder, not to exceed in the
aggregate the amount set forth next to such Bank's name in Schedule 1.1(a) at
any time outstanding, as such amount may be reduced from time to time pursuant
to Sections 2.8(d) or 4.1.
"Commitment Period" shall mean the period from the Effective Date to
the Termination Date.
"Common Stock" shall mean, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or nonvoting) of such Person's equity, other than Disqualified
Stock of such Person, whether now outstanding or issued after the Effective
Date, including all Common Stock or Preferred Stock (other than Disqualified
Stock). For purposes of this definition, "Common Stock" shall include all
shares, interests, participations and equivalents corresponding to common stock
(other than Disqualified Stock) under the laws of the jurisdiction in which
such Person is organized.
"Concession Title" shall mean the Borrower's right for a period of 30
years, to be the exclusive provider (subject to certain trackage rights) of
freight transportation services over the Northeast Rail Lines and for an
additional 20 years to be a non-exclusive provider of such services granted by
the Mexican government pursuant to the Concession Title, subject in all cases
to the terms and conditions of the Concession Title, as in effect on June 23,
1997, the date on which Grupo TFM acquired 80% of the Capital Stock of the
Borrower.
"Consolidated EBIT" shall mean, for any period, the Consolidated Net
Income for such period, increased by interest expense and provision for taxes
based on income and without giving effect to any extraordinary gains or losses
otherwise reflected in Consolidated Net Income.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto the amount of all amortization and depreciation, in
each case that were deducted in arriving at Consolidated EBIT for such period.
"Consolidated Fixed Charge Coverage Ratio" shall mean, for any period,
the ratio of (i) Consolidated EBITDA for such period to (ii) Consolidated Fixed
Charges for such period.
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"Consolidated Fixed Charges" for any period shall mean the sum,
without duplication, of (i) Consolidated Interest Expense for such period, (ii)
the amount of all Capital Expenditures made by the Borrower and its
Consolidated Subsidiaries during such period, (iii) all cash payments in
respect of taxes made during such period (net of any cash refunds actually
received during such period), (iv) the scheduled principal amount of all
amortization payments on all Indebtedness (including without limitation the
principal component of all Capitalized Lease Obligations) of the Borrower and
its Consolidated Subsidiaries for such period (as determined on the first day
of the respective period), but excluding any payments refinanced with the
proceeds of the CP Notes and the Term Loans, (v) all cash payments made by the
Borrower for the benefit of employees pursuant to profit sharing plans in
accordance with applicable Mexican law, (vi) all cash dividend payments and
(vii) the net amount of cash collateral deposited during such period, and the
net amount of payments made during such period, in each case pursuant to Swap
Agreements.
"Consolidated Indebtedness" shall mean, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness
(including in any event the then outstanding principal amount of all
Outstanding Extensions of Credit, Term Loans, Senior Unsecured Notes I and II
and all Capitalized Lease Obligations and the aggregate face amount (without
giving effect to the discount on issuance) of the Senior Discount Debentures)
of the Borrower and its Subsidiaries on a consolidated basis as determined in
accordance with IAS.
"Consolidated Interest Coverage Ratio" shall mean, for any period, the
ratio of (i) Consolidated EBITDA for such period to (ii) Consolidated Interest
Expense for such period.
"Consolidated Interest Expense" shall mean, for any period, the total
consolidated interest expense of the Borrower and its Consolidated Subsidiaries
for such period (calculated without regard to any limitations on the payment
thereof) plus, without duplication, that portion of Capitalized Lease
Obligations of the Borrower and its Consolidated Subsidiaries representing the
interest factor for such period, in any event (i) including (x) the
amortization of any original issue discount in connection with the Senior
Discount Debentures and (y) withholding or similar taxes paid by the Borrower
and its Consolidated Subsidiaries arising from, or in connection with, the
payment of interest, fees and any other amounts (in any event, including all
Additional Amounts and withholdings with respect to the Senior Notes paid
during such period), but (ii) excluding the amortization of any other deferred
financing costs incurred in connection with this Agreement or the issuance of
the Senior Notes and any other permitted Indebtedness.
"Consolidated Leverage Ratio" shall mean, as at the last day of any
period, the ratio of (i) Consolidated Indebtedness on such date to (ii)
Consolidated EBITDA for such period.
"Consolidated Net Income" shall mean, for any period, the consolidated
net after tax income of the Borrower and its Consolidated Subsidiaries
determined in accordance with IAS.
"Consolidated Net Worth" shall mean, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of the Borrower and its Subsidiaries (which
shall be as of a date not more than 90 days prior to the date of such
computation), less any amounts attributable to Disqualified Stock or any equity
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security convertible into or exchangeable for Indebtedness, the cost of
treasury stock and the principal amount of any promissory notes receivable from
the sale of the Capital Stock of the Borrower or any of its Subsidiaries, each
item to be determined in conformity with IAS.
"Consolidated Subsidiaries" shall mean, as to any Person, all
Subsidiaries of such Person which are consolidated with such Person for
financial reporting purposes in accordance with IAS.
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Conversion Certificate" shall have the meaning assigned to that term
in Section 3.3.
"CP Disruption Event" shall have the meaning assigned to that term in
the definition of "Market Disruption Event".
"CP Memorandum" shall mean the Commercial Paper Memorandum prepared in
connection with the sale of the CP Notes.
"CP Notes" shall mean the collective reference to any promissory note
of the Borrower in book entry form or in a form issued in accordance with the
terms of the Depositary Agreement.
"Date of Issuance" shall have the meaning assigned to that term in
Section 2.1.
"Dealer" shall mean Banc of America Securities LLC, Xxxxxx Xxxxxxx &
Co. Incorporated and any other dealer of the CP Notes appointed by the
Borrower and approved by the Issuing Bank (collectively referred to as the
"Dealers").
"Dealer Agreement" shall mean any dealer agreement between the
Borrower and any Dealer with respect to the issue and sale of CP Notes.
"Default" shall mean any of the events specified in Section 9.1,
whether or not any requirement for the giving of notice or lapse of time or
both has been satisfied.
"Depositary" shall mean the depositary appointed pursuant to the
Depositary Agreement, initially JPMCB, and any successor depositary approved by
the Borrower, the Administrative Agent and the Issuing Bank.
"Depositary Agreement" shall mean the Depositary Agreement in
substantially the form of Exhibit C, as from time to time amended, supplemented
or otherwise modified.
"Depositary Fee Letter" shall have the meaning assigned to that term
in Section 4.5(e).
7
"Depositary Fees" shall have the meaning assigned to that term in
Section 4.5(e).
"Deposited Funds" shall have the meaning assigned to that term in
Section 2.4(c).
"Disbursement Date" with respect to any LOC Advance, shall mean the
date on which such LOC Advance is made and, with respect to any Loan under
Section 3.1(f), the date on which such Loan is made.
"Disqualified Stock" shall mean any class or series of Capital Stock
of any Person that by its terms or otherwise is (i) required to be redeemed
prior to the Stated Termination Date; (ii) redeemable at the option of the
holder of such class or series of Capital Stock at any time prior to the Stated
Termination Date; or (iii) convertible into or exchangeable for Capital Stock
referred to in clause (i) or (ii) above or Indebtedness having a scheduled
maturity prior to the Stated Termination Date.
"Documentation Agent" shall mean Standard Chartered Bank.
"Dollars" and "US$" shall mean lawful money of the United States of
America.
"Domestic Lending Office" shall mean, with respect to any Bank,
initially, the office of such Bank designated as such in Schedule 1.1(b);
thereafter, such other office of such Bank registered with Hacienda or
organized and licensed under the laws of Mexico, if any, which shall be making
or maintaining Base Rate Loans in accordance with the provisions of this
Agreement.
"Drawing Deadline" with respect to any CP Note, shall mean the close
of business of the Issuing Bank on the date of maturity of such CP Note, or, if
such day is not a Business Day, then the first Business Day thereafter but in
no event beyond the Stated Termination Date.
"Effective Date" shall mean the date on which all of the conditions
set forth in Section 5.1 hereof have been fulfilled.
"Elected Termination Date" shall have the meaning assigned to that
term in Section 4.2(c).
"Environmental Laws" shall mean any and all federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of
Law regulating, relating to or imposing liability or standards of conduct
concerning protection of human health or the environment, as now or may at any
time hereafter be in effect.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation,
fines, penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract,
8
agreement or other consensual arrangement pursuant to which liability is
assumed or imposed with respect to any of the foregoing.
"Eurocurrency Liabilities" shall mean, with respect to any Bank, the
full reserve requirement percentage imposed in respect of "Eurocurrency
Liabilities", as such term is defined in Regulation D (or any successor
provision) (including any marginal, emergency, supplemental, special or other
reserves) of the Board of Governors of the Federal Reserve System, that such
Bank in its sole discretion determines to be applicable to such Bank for each
day during an Interest Period.
"Eurodollar Business Day" shall mean a Business Day on which
commercial banks are open in New York City and London, England, for the
transaction of international business, including but not limited to dealings in
Dollar deposits in the international interbank markets.
"Eurodollar Lending Office" shall mean, with respect to any Bank,
initially, the office of such Bank designated as such in Schedule 1.1(b);
thereafter, such other office of such Bank registered with Hacienda or
organized and licensed under the laws of Mexico, if any, which shall be making
or maintaining Eurodollar Loans in accordance with the provisions of this
Agreement.
"Eurodollar Loan" shall mean any Loan made or maintained, as the case
may be, for the Interest Period applicable thereto at a rate of interest
calculated with reference to LIBOR.
"Eurodollar Margin" shall mean 3.00% per annum.
"Event of Default" shall have the meaning assigned to that term in
Section 9.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Existing CP Facility" shall mean the $293,000,000 commercial paper
program under the Credit Facility, dated September 19, 2000, by and among the
Borrower, Westdeutsche Landesbank Girozentrale, New York Branch, as issuing
bank, X.X. Xxxxxx Securities Inc., as lead arranger, Banc of America Securities
LLC and Westdeutsche Landesbank Girozentrale, New York Branch, as
co-documentation agents, co-syndication agents and arrangers, JPMorgan Chase
Bank, as administrative agent and the banks party thereto.
"Existing Holders" shall mean KCSI and Grupo TMM.
"Extension of Credit" shall mean an extension of credit in any of the
following forms: (a) the issuance of the Letter of Credit, (b) the issuance of
CP Notes by the Borrower supported by the Letter of Credit pursuant to Article
II, and (c) the making of a Loan under Section 3.1.
"External Indebtedness" of any Person shall mean all Indebtedness of
such Person which by its terms is payable (or may be required by the Person to
whom it is owed to be paid) in a currency other than the currency of Mexico to
a Person resident or having its head office or principal place of business
outside Mexico.
9
"Face Amount" shall mean, when used with reference to CP Notes
outstanding, the face amount due at maturity of any such CP Note issued on a
discount basis.
"Facility Expenses" shall have the meaning assigned to that term in
Section 13.3.
"fair market value" means the price that would be paid in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to
buy, as determined in good faith by the Board of Directors, whose determination
shall be conclusive if evidenced by a Board Resolution.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day that is a Business Day, the average (rounded upwards,
if necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Letters" shall mean, collectively, the Administration Fee Letter,
the Arrangement Fee Letter, the Depositary Fee Letter, and the LOC Fee Letter.
"Fees" shall mean the collective reference to the Participation Fee,
the Administration Fees, the Arrangement Fees, the Depositary Fees, the Letter
of Credit Fees and the Up-Front Fees.
"Force Majeure" shall mean any introduction of or change in the
interpretation of any law or regulation that would make it unlawful or unduly
burdensome for the Issuing Bank to issue or maintain the Letter of Credit, any
declaration of war, acts of God having a material effect on the operation of
the United States of America commercial paper market or material effect on the
operations of the Issuing Bank, any material suspension or material limitation
on trading on the New York Stock Exchange or any other national or foreign
securities exchange in the United States of America, Mexico or the United
Kingdom (but only if the event or circumstances giving rise to such suspension
or limitation also has an adverse effect on the operation of the United States
of America commercial paper market), any declaration of a general banking
moratorium by U.S., New York or the United Kingdom banking authorities, or any
establishment of any new restrictions on banks materially affecting the
extension of credit by banks.
"Force Majeure Disruption Event" shall have the meaning assigned to
such term in the definition of "Market Disruption Event".
"Governmental Authority" shall mean any nation or government, any
state or other political or administrative subdivision thereof, any central
bank (or similar monetary or regulatory authority) and any entity exercising
executive, legislative, judicial, regulatory or administrative authority of or
pertaining to government.
10
"Grupo TFM" shall mean Grupo Transportacion Ferroviaria Mexicana, S.A.
de C.V., a limited liability company with variable capital (sociedad anonima de
capital variable) organized under the laws of Mexico.
"Grupo TMM" means Grupo TMM, S.A. de C.V., a limited liability company
with variable capital (sociedad anonima de capital variable) organized under
the laws of Mexico, and its successors.
"Guarantee" shall mean any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing (whether pursuant to a guaranty, a
fianza, an aval or otherwise) any Indebtedness of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of such Person (1) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness of such other
Person (whether arising by virtue of partnership arrangements, or by agreements
to keep-well, to purchase assets, goods, securities or services (unless such
purchase arrangements are on arm's length terms and are entered into in the
ordinary course of business), to take-or-pay, or to maintain financial
statement conditions or otherwise) or (2) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part);
provided that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business or obligations
arising, in the ordinary course of business, from contracting for interline
railroad services. The term "Guarantee" used as a verb has a corresponding
meaning.
"Guaranteed Indebtedness" shall have the meaning assigned to that term
in Section 8.9(a).
"Hacienda" shall mean the Secretaria de Hacienda y Credito Publico
(Ministry of Finance and Public Credit) of Mexico.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"IAS" shall mean the accounting principles issued by the International
Accounting Standards Committee, as in effect from time to time.
"Incur" shall mean, with respect to any Indebtedness, to incur,
create, issue, assume, Guarantee or otherwise become liable for or with respect
to, or become responsible for, the payment of, contingently or otherwise, such
Indebtedness; provided that neither the accrual of interest nor the accretion
of original issue discount shall be considered an Incurrence of Indebtedness.
"Indebtedness" shall mean, with respect to any Person at any date of
determination (without duplication):
(a) all indebtedness of such Person for borrowed money;
11
(b) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
(c) all obligations of such Person in respect of letters of credit
or other similar instruments (including reimbursement obligations with respect
thereto, but excluding obligations with respect to letters of credit (including
trade letters of credit) securing obligations (other than obligations described
in clauses (a) or (b) above or (e), (f) or (g) below) entered into in the
ordinary course of business of such Person to the extent such letters of credit
are not drawn upon or, if drawn upon, to the extent such drawing is reimbursed
no later than the third Business Day following receipt by such Person of a
demand for reimbursement);
(d) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services, which purchase price is due more than
six months after the date of placing such property in service or taking
delivery and title thereto or the completion of such services, except Trade
Payables;
(e) all obligations of such Person as lessee under Capitalized
Leases (but not operating leases);
(f) all Indebtedness of other Persons secured by a Lien on any
asset of such Person, whether or not such Indebtedness is assumed by such
Person; provided that the amount of such Indebtedness shall be the lesser of
(A) the fair market value of such asset at such date of determination and (B)
the amount of such Indebtedness;
(g) all Indebtedness of other Persons Guaranteed by such Person to
the extent such Indebtedness is Guaranteed by such Person; and
(h) to the extent not otherwise included in this definition,
obligations to make payments under Swap Agreements.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and, with respect to contingent obligations, the maximum liability upon
the occurrence of the contingency giving rise to the obligation, provided (A)
that the amount outstanding at any time of any Indebtedness issued with
original issue discount is the face amount of such Indebtedness less the
unamortized portion of the original issue discount of such Indebtedness at the
time of its issuance as determined in conformity with IAS, (B) that money
borrowed and set aside at the time of the Incurrence of any Indebtedness in
order to prefund the payment of interest on such Indebtedness shall be deemed
not to be "Indebtedness" and (C) that Indebtedness shall not include any
liability for federal, state, local or other taxes of any jurisdiction.
"Interest Payment Date" shall mean, with respect to any Base Rate
Loan, the last Business Day of each March, June, September and December and the
Maturity Date for such Loan, and with respect to any Eurodollar Loan, the last
day of each Interest Period therefor and the Maturity Date for such Loan.
"Interest Period" shall mean with respect to any Eurodollar Loan, the
period commencing on the date of conversion into such Eurodollar Loan or, in
the case of a
12
continuation of a Eurodollar Loan, the last day of the immediately preceding
Interest Period, and ending on the numerically corresponding day in the
calendar month one, two or three months thereafter, as selected by the Borrower
in its Notice of Borrowing as provided in Section 3.1(g) or Conversion
Certificate as provided in Section 3.3 or notice of continuation as provided in
Section 3.9; provided that, (i) if any Interest Period would otherwise end on a
day which is not a Eurodollar Business Day, that Interest Period shall be
extended to the immediately succeeding Eurodollar Business Day unless the
result of such extension would be to carry such Interest Period into another
calendar month in which event such Interest Period shall end on the immediately
preceding Eurodollar Business Day, (ii) any Interest Period that begins on the
last Eurodollar 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 end on the last Eurodollar Business Day of a calendar
month and (iii) if any Interest Period for any Eurodollar Loan would otherwise
(but for this clause (iii)) extend beyond the Stated Termination Date or the
Maturity Date for such Loans, then such Interest Period shall end on the Stated
Termination Date or such Maturity Date, as the case may be.
"Investment" in any Person means any direct or indirect advance, loan
or other extension of credit (including, without limitation, by way of
Guarantee or similar arrangement; but excluding advances to customers in the
ordinary course of business that are, in conformity with IAS, recorded as
accounts receivable on the balance sheet of the Borrower or that of its
Subsidiaries) or capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock,
bonds, notes, debentures or other similar instruments issued by, such Person.
"Issuing Bank" shall mean the Issuing Bank appointed pursuant to
Section 11.1 hereof, initially, Standard Chartered Bank, in its capacity as
issuer of the Letter of Credit, and its successors in such capacity.
"Joint Lead Arrangers" shall mean the joint lead arrangers appointed
by the Borrower pursuant to a mandate letter and Section 12.1 hereof,
initially, X.X. Xxxxxx Securities Inc., Xxxxxxx Xxxxx Barney, Inc. and each of
their successors in such capacity.
"JPMCB" shall mean JPMorgan Chase Bank.
"KCSI" means Kansas City Southern Industries, Inc., a Delaware
corporation, and its successors.
"Lending Office" shall mean, with respect to any Bank, a Domestic
Lending Office or a Eurodollar Lending Office or both.
"Letter of Credit" shall mean an irrevocable, direct-pay, transferable
letter of credit issued by the Issuing Bank in substantially the form of
Exhibit B, which Letter of Credit shall provide for the direct payment from
time to time by the Issuing Bank to the Depositary, as agent for the holders of
CP Notes, of the Face Amount of the CP Notes.
"Letter of Credit Account" shall have the meaning assigned to that
term in Section 2.5(a).
13
"Letter of Credit Facility" shall mean the Letter of Credit, any
drafts presented thereunder, any LOC Advances (including any unreimbursed LOC
Advances), any obligations of the Borrower in respect of any of the foregoing
and any payments received by the Issuing Bank in respect of any of the
foregoing.
"Letter of Credit Fees" shall have the meaning assigned to that term
in Section 4.5(b).
"LIBOR" shall mean, with respect to the applicable Interest Period,
the rate for deposits in Dollars for a period equal to such Interest Period
quoted on the second Eurodollar Business Day prior to the first day of such
Interest Period, as such rate appears on Page 3750 of the Dow Xxxxx Market
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to Dollar deposits in the
London interbank market) as of 11:00 a.m. (London time) on such date; in each
case as determined by the Administrative Agent and notified to the Banks and
the Borrower on such second prior Eurodollar Business Day. If LIBOR cannot be
determined based on Page 3750 of the Dow Xxxxx Market Service, LIBOR means the
average of the rates per annum, as supplied to the Administrative Agent, quoted
by the respective London Branches of JPMCB and Citibank, N.A. to prime banks in
the London interbank market for deposits in Dollars at approximately 11:00 a.m.
(London time) two Eurodollar Business Days prior to the first day of such
Interest Period in an amount approximately equal to the principal amount of the
Loans to which such Interest Period is to apply and for a period of time
comparable to such Interest Period.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any other contractual or statutory arrangement or provision having
substantially the same economic, financial or operational effect as any of the
foregoing); including, without limitation, any device, including without
limitation, a foreign, including Mexican, trust or joint venture, for the
purpose of setting aside funds for facilitating payments to any person or group
of persons.
"Loans" shall have the meaning specified in Section 3.1(a) hereof.
"LOC Advance" shall mean any payment or disbursement made by or on
behalf of the Issuing Bank under the Letter of Credit.
"LOC Fee Letter" shall have the meaning assigned to that term in
Section 4.5(b).
"Majority Banks" shall mean at a particular time, Banks the sum of
whose Commitments represents at least 66 2/3% of the aggregate Commitments (or,
after all of the Commitments have terminated, the Banks, the sum of whose
Aggregate Exposure represent at least 66 2/3% of the Aggregate Exposure of all
the Banks).
14
"Management Fees" shall mean the management fees payable to KCSI and
Grupo TMM, and their respective Affiliates, shareholders, partners, directors
or other persons, pursuant to (a) the Management Services agreement, dated May
9, 1997, between KCS Transportation Company and the Borrower and (b) the
Management Services agreement, dated May 9, 1997, between Grupo TMM and the
Borrower; provided that in no event shall such management fees incurred
(whether or not paid) in any fiscal year exceed $2,500,000 (which may be
adjusted upward based on the U.S. Consumer Price Index).
"Market Disruption Date" shall mean the first date to occur on which
both (a) a payment is made by the Issuing Bank under the Letter of Credit and
(b) a Market Disruption Event has occurred and is continuing and the issuance
of CP Notes is suspended under Section 2.9 hereof; provided, that Loans will
not be available with respect to more than one Market Disruption Date prior to
the first anniversary of the Effective Date or more than one Market Disruption
Date thereafter.
"Market Disruption Event" shall mean (a) that for any reason there is
disruption in the United States commercial paper market, the effect of which is
to prevent the Borrower from issuing and selling CP Notes (a "CP Disruption
Event") as notified in writing by the Borrower to the Issuing Bank and the
Administrative Agent in accordance with the terms and provisions of Section
2.9(a); or (b) an event of Force Majeure (a "Force Majeure Disruption Event")
which results in the Issuing Bank notifying the Depositary to cease issuing and
delivering CP Notes; provided, however, that so long as any Default or Event of
Default has occurred and is continuing, no Market Disruption Event shall be
deemed to exist.
"Market Disruption Obligations" shall have the meaning assigned to
that term in Section 3.1(a).
"Market Disruption Period" shall have the meaning assigned to that
term in Section 3.1(a).
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, operations, property, condition (financial or otherwise) or
prospects of the Borrower and its subsidiaries taken as a whole or (b) the
validity or enforceability of this Agreement, any of the Notes or any of the
other Principal Documents or the rights or remedies of the Administrative
Agent, the Issuing Bank, the Dealers, the Depositary or the Banks hereunder or
thereunder.
"Maturity Date" with respect to any Loans shall mean the earlier of
(a) the Termination Date and (b) the date which is 90 days from (i) the date of
each conversion of Market Disruption Obligations into such Loans pursuant to
Section 3.1(a) or (ii) the Disbursement Date of each Loan made pursuant to
Section 3.1(f), as applicable.
"Maximum Commercial Paper Amount" shall mean, at any time of
determination thereof, an amount equal to (a) the aggregate amount of the
Commitments at such time less (b) the sum of (i) the aggregate principal amount
of all then outstanding Loans and (ii) the aggregate amount of all unreimbursed
LOC Advances which have not been converted into Loans at such time; provided,
that, in calculating the Maximum Commercial Paper Amount, there shall not be
15
subtracted from Commitments, (1) unreimbursed LOC Advances on the day of such
computation or (2) Loans outstanding on the day of such computation to the
extent, in each case, that amounts, including from the proceeds of CP Notes to
be issued on such date, are on deposit in the Commercial Paper Account on the
date of the issuance of such CP Notes and are to be used to reimburse the
Issuing Bank for such unreimbursed LOC Advances or to prepay such Loans, as the
case may be.
"Mexican Note" shall have the meaning assigned to such term in Section
3.2(b).
"Mexico" shall mean the Estados Unidos Mexicanos (the United Mexican
States).
"Mexrail" shall mean Mexrail, Inc., a Delaware corporation, and its
successors.
"Moody's" shall mean Xxxxx'x Investors Service, Inc. and its
successors.
"Net Cash Proceeds" shall mean (a) with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations (to the extent
corresponding to the principal, but not interest, component thereof) when
received in the form of cash or cash equivalents (except to the extent such
obligations are financed or sold with recourse to the Borrower or any of its
Subsidiaries) and proceeds from the conversion of other property received when
converted to cash or cash equivalents, net of (i) brokerage commissions and
other fees and expenses (including fees and expenses of counsel and investment
bankers) related to such Asset Sale, (ii) provisions for all taxes (whether or
not such taxes will actually be paid or are payable) as a result of such Asset
Sale without regard to the consolidated results of operations of the Borrower
and its Subsidiaries, taken as a whole, (iii) payments made to repay
Indebtedness or any other obligation outstanding at the time of such Asset Sale
that either (A) is secured by a Lien on the property or assets sold or (B) is
required to be paid as a result of such sale and (iv) appropriate amounts to be
provided by the Borrower or any of its Subsidiaries as a reserve against any
liabilities associated with such Asset Sale, including, without limitation,
pension and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Asset Sale, all as determined in conformity with IAS; and
(b) with respect to any issuance or sale of Capital Stock, the proceeds of such
issuance or sale in the form of cash or cash equivalents, including payments in
respect of deferred payment obligations (to the extent corresponding to the
principal, but not interest, component thereof) when received in the form of
cash or cash equivalents (except to the extent such obligations are financed or
sold with recourse to the Borrower or any of its Subsidiaries) and proceeds
from the conversion of other property received when converted to cash or cash
equivalents, net of attorneys' fees, accountants' fees, underwriters' fees,
discounts or commissions and brokerage, consultant and other fees incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Northeast Rail Lines" shall mean that portion of the Mexican railroad
system that is the subject of the Concession Title.
"Note" shall have the meaning assigned to that term in Section 3.2.
"Notice of Borrowing" shall have the meaning assigned to that term in
Section 3.1(g) and shall be substantially in the form of Exhibit M.
16
"Obligations" shall mean all of the obligations and liabilities of the
Borrower to the Banks, the Issuing Bank, the Joint Lead Arrangers, the
Arrangers, the Documentation Agent and/or the Administrative Agent now or in
the future existing under or in connection with this Agreement, the Notes, the
CP Notes and the Letter of Credit (as any of the foregoing may from time to
time be respectively amended, modified, substituted, extended or renewed),
direct or indirect, absolute or contingent, due or to become due, now or
hereafter existing.
"Outstanding Extensions of Credit" shall mean, at any time, the sum of
(a) the aggregate Face Amount of CP Notes outstanding supported by the Letter
of Credit, (b) the aggregate unpaid principal amount of Loans then outstanding
and (c) the aggregate amount of unreimbursed LOC Advances which have not been
converted into Loans provided, that, in calculating the Outstanding Extensions
of Credit at any time, there shall be subtracted from the aggregate amounts
determined under clauses (b) and (c) above, amounts, including from the
proceeds of CP Notes to be issued on such day, on deposit in the Commercial
Paper Account on the date of the issuance of such CP Notes and which are to be
used to reimburse the Issuing Bank for such unreimbursed LOC Advances or to
prepay such Loans, as the case may be.
"Participant" shall have the meaning assigned to that term in Section
13.11.
"Participation Agreement" shall have the meaning assigned to that term
in Section 13.11.
"Participation Fee" shall have the meaning assigned to that term in
Section 4.5(a).
"Participation Fraction" shall mean, for any Bank, at any time of
determination thereof, a fraction having (a) as its numerator the Commitment of
such Bank as in effect at such time (or, if the Commitment has terminated, the
Commitment as in effect prior to such termination) and (b) as its denominator
the aggregate sum of all the Commitments of all the Banks as in effect at such
time (or, after the Commitments have terminated, the aggregate Commitments as
in effect immediately prior to such termination).
"Permitted Investment" shall mean (i) an Investment in the Borrower or
any of its Subsidiaries or a Person which will, upon the making of such
Investment, become a Subsidiary or be merged or consolidated with or into or
transfer or convey all or substantially all of its assets to the Borrower or
one of its Subsidiaries; provided that (a) such Person's primary business is
related, ancillary or complementary to the businesses of the Borrower and its
Subsidiaries on the date of such Investment and (b) the Borrower is in
compliance on a pro forma basis with the covenants set forth in Section 8.4
after giving effect to such Investment as if such Investment had been made on
the first day of the four fiscal quarter period most recently ended; (ii)
Temporary Cash Investments; (iii) payroll, travel and similar advances to cover
matters that are expected at the time of such advances ultimately to be treated
as expenses in accordance with IAS; and (iv) stock, obligations or securities
received in satisfaction of judgments.
"Permitted Liens" shall mean:
(a) Liens for taxes, assessments, governmental charges or claims
that are being contested in good faith by appropriate legal proceedings
promptly instituted and diligently
17
conducted and for which a reserve or other appropriate provision, if any, as
shall be required in conformity with IAS shall have been made;
(b) statutory and common law Liens of landlords and
carriers, warehousemen, mechanics, suppliers, materialmen, repairmen
or other similar Liens arising in the ordinary course of business and
with respect to amounts not yet delinquent or being contested in good
faith by appropriate legal proceedings promptly instituted and
diligently conducted and for which a reserve or other appropriate
provision, if any, as shall be required in conformity with IAS 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) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory or regulatory obligations, bankers'
acceptances, surety and appeal bonds, government contracts, performance and
return-of-money bonds and other obligations of a similar nature incurred in the
ordinary course of business (exclusive of obligations for the payment of
borrowed money);
(e) easements, rights-of-way, municipal and zoning ordinances and
similar charges, encumbrances, title defects or other irregularities that do
not materially interfere with the ordinary course of the business of the
Borrower or any of its Subsidiaries;
(f) Liens (including extensions and renewals thereof) upon real or
personal property acquired after the Effective Date; provided that (i) such
Liens are created solely for the purpose of securing Indebtedness not in excess
of $10,000,000 in the aggregate at any time outstanding which is Incurred to
finance the cost (including the cost of improvement, lease or construction) of
the item of property or assets subject thereto and such Lien is created prior
to, at the time of or within 180 days after the later of the acquisition, the
completion of construction or the commencement of full operation or the lease
of such property, (ii) the principal amount of the Indebtedness secured by such
Lien does not exceed 100.0% of such cost and (iii) any such Lien shall not
extend to or cover any property or assets other than such item of property or
assets and any improvements on such item;
(g) licenses, leases or subleases granted to others that do not
materially interfere with the ordinary course of the business of the Borrower
and its Subsidiaries, taken as a whole;
(h) Liens encumbering property or assets under construction arising
from progress or partial payments by one of the customers of the Borrower or
its Subsidiaries relating to such property or assets, the amount of such
payments secured by such Liens not to exceed $10,000,000 in the aggregate at
any time outstanding;
(i) any interest or title of a lessor or licensor in the property
subject to any Capitalized Lease, operating lease or license agreement,
provided that the aggregate amount of
18
such Capitalized Leases, operating leases and licensing agreements does not
exceed $10,000,000 in the aggregate at any time outstanding;
(j) Liens arising from filing Uniform Commercial Code or similar
financing statements regarding leases;
(k) Liens on property of, or on shares of stock or Indebtedness of,
any Person existing at the time such Person becomes, or becomes a part of, any
Subsidiary; provided that such Liens do not extend to or cover any property or
assets of the Borrower or any Subsidiary other than the property or assets
acquired;
(l) Liens arising from the rendering of a final judgment or order
against the Borrower or any of its Subsidiaries that does not give rise to an
Event of Default;
(m) Liens securing reimbursement obligations with respect to
letters of credit that encumber documents and other property relating to such
letters of credit and the products and proceeds thereof;
(n) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(o) Liens encumbering customary initial deposits and margin
deposits, and other customary Liens on cash and cash deposits, in each case,
securing Indebtedness under Swap Agreements designed solely to protect the
Borrower or any of its Subsidiaries from fluctuations in interest rates,
currencies or the price of commodities;
(p) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by the
Borrower or any of its Subsidiaries in the ordinary course of business;
(q) Liens on existing accounts receivable in an amount not to
exceed $25,000,000 in the aggregate at any time outstanding (but not
receivables to be generated in the future) of the Borrower or any of its
Subsidiaries; and
(r) Liens on any assets acquired by the Borrower or any of its
Subsidiaries after the Effective Date, which Liens were in existence prior to
the acquisition of such assets (to the extent that such Liens were not created
in contemplation of or in connection with such acquisition), provided that such
Liens are limited to the assets so acquired and the proceeds thereof.
"Person" shall mean any corporation, partnership, joint venture,
trust, limited liability company, individual or other person or entity of any
kind.
"Preferred Stock" shall mean, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting)
19
of such Person's preferred or preference equity, whether now outstanding or
issued after the Effective Date, including, without limitation, all series and
classes of such preferred stock or preference stock.
"Prime Rate" shall mean the rate of interest publicly announced by
JPMCB 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 JPMCB or any Bank in
connection with extensions of credit to debtors of any class, or generally.
"Principal Documents" shall mean the collective reference to this
Agreement, the Letter of Credit, the Depositary Agreement, the CP Notes, the
Notes and the Dealer Agreements.
"Public Equity Offering" shall mean an underwritten primary public
offering of Capital Stock of the Borrower pursuant to an effective registration
statement under the Securities Act of 1933, as amended.
"Rate of Exchange" shall have the meaning assigned to that term in
Section 13.14.
"Rating Agencies" shall mean, collectively, S&P and Moody's.
"Related Parties" shall mean, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Requirement of Law" shall mean, as to any Person, any law, treaty,
rule or regulation or determination of an arbitrator or a court or other
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 a Person shall mean the Chairman, Chief
Executive Officer, President, any Executive Director, Director, Vice President,
Treasurer or Assistant Treasurer of that Person, in each case authorized to the
extent required by a board resolution or shareholder meeting; provided that
such officer is then authorized to bind such Person.
"Restricted Payments" shall have the meaning assigned to that term in
Section 8.6(a).
"S&P" shall mean Standard & Poor's Ratings Group and its successors.
"Senior Discount Debentures" shall mean the Borrower's 11 3/4% Senior
Discount Debentures due 2009 issued pursuant to the Senior Discount Debentures
Indenture and any notes issued by the Borrower in exchange for, and as
contemplated by, the Senior Discount Debentures with substantially identical
terms as the Senior Discount Debentures.
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"Senior Discount Debentures Indenture" shall mean the indenture, dated
as of June 16, 1997, among Grupo TFM, the Borrower and The Bank of New York, as
amended, supplemented or otherwise modified from time to time.
"Senior Notes" shall mean, collectively, the Senior Unsecured Notes I
and II and the Senior Discount Debentures.
"Senior Notes Indentures" shall mean, together, the Senior Discount
Debentures Indenture and the Senior Unsecured Notes Indentures I and II.
"Senior Unsecured Notes I" shall mean the Borrower's 10 1/4% Senior
Notes due 2007 issued pursuant to the Senior Unsecured Notes Indenture I and
any notes issued by the Borrower in exchange for, and as contemplated by, the
Senior Unsecured Notes I with substantially identical terms as the Senior
Unsecured Notes I.
"Senior Unsecured Notes II" shall mean the Borrower's 12 1/2 % Senior
Notes due 2012 issued pursuant to the Senior Unsecured Notes Indenture II and
any notes issued by the Borrower in exchange for, and as contemplated by, the
Senior Unsecured Notes II with substantially identical terms as the Senior
Unsecured Notes II.
"Senior Unsecured Notes Indenture I" shall mean the indenture, dated
as of June 16, 1997, among Grupo TFM, the Borrower and The Bank of New York, as
amended, supplemented or otherwise modified from time to time.
"Senior Unsecured Notes Indenture II" shall mean the indenture, dated
as of June 13, 2002, among Grupo TFM, the Borrower and The Bank of New York, as
amended, supplemented or otherwise modified from time to time.
"Settlement Limit" shall have the meaning assigned to that term in
Section 2.2(d).
"Simple Note" shall have the meaning assigned to such term in Section
3.2(a).
"Stated Amount" shall mean US$122,000,000 as such amount may be
reduced or reinstated from time to time in accordance with the terms of the
Letter of Credit.
"Stated Termination Date" shall mean the date specified in the Letter
of Credit, as the same may be extended pursuant to Section 4.2(d).
"Subsidiary" shall mean, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such
Person or by such Person and one or more other Subsidiaries of such Person.
"Swap Agreement" means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial
or pricing indices or measures of economic, financial or pricing risk or value
or any similar transaction or any combination of these transactions; provided
that no phantom
21
stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of
the Borrower or the Subsidiaries shall be a Swap Agreement.
"Taxes" shall mean any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority.
"Temporary Cash Investment" shall mean any of the following: (i)
direct obligations of the United States of America or any agency thereof or
obligations fully and unconditionally guaranteed by the United States of
America or any agency thereof; (ii) time deposit accounts, certificates of
deposit and money market deposits denominated and payable in U.S. Dollars
maturing within 180 days of the date of acquisition thereof issued by a bank or
trust company which is organized under the laws of the United States of
America, any state thereof or any foreign country recognized by the United
States of America, and which bank or trust company has capital, surplus and
undivided profits aggregating in excess of $200,000,000 (or the foreign
currency equivalent thereof) and has outstanding debt which is rated "A" (or
such similar equivalent rating) or higher by S&P or Moody's or any money-market
fund denominated and payable in U.S. dollars sponsored by a registered broker
dealer or mutual fund distributor; (iii) repurchase obligations with a term of
not more than 30 days for underlying securities of the types described in
clause (i) above entered into with a bank meeting the qualifications described
in clause (ii) above; (iv) commercial paper denominated and payable in U.S.
Dollars, maturing not more than 90 days after the date of acquisition, issued
by a corporation (other than an Affiliate of the Borrower) organized and in
existence under the laws of the United States of America or any state thereof
with a rating at the time as of which any investment therein is made of "P-1"
(or higher) according to Moody's or "A-1" (or higher) according to S&P; (v)
securities with maturities of six months or less from the date of acquisition
issued or fully and unconditionally guaranteed by any state, commonwealth or
territory of the United States of America, or by any political subdivision or
taxing authority thereof, and rated at least "A" by S&P or Moody's; (vi)
Certificados de la Tesoreria de la Federacion (Cetes) or Bonos de Desarrollo
del Gobierno Federal (Bondes) issued by the Mexican government and maturing not
more than 180 days after the acquisition thereof, (vii) Investments in money
market funds substantially all of whose assets are comprised of securities of
the types described in clauses (i) through (vi) above; (viii) demand deposit
accounts with U.S. banks (or Mexican banks specified in clause (ix) of this
definition) maintained in the ordinary course of business; and (ix)
certificates of deposit, bank promissory notes and bankers' acceptances
denominated in Mexican pesos, maturing not more than 180 days after the
acquisition thereof and issued or guaranteed by any one of the five largest
banks (based on assets as of the immediately preceding December 31) organized
under the laws of Mexico and which are not under intervention or controlled by
the Fondo Bancario de Proteccion al Ahorro or any successor thereto.
"Term Loan Agreement" shall mean the $150,000,000 Credit Agreement,
dated as of September 17, 2002, among TFM, S.A. de C.V., as Borrower, X.X.
Xxxxxx Securities Inc. and Xxxxxxx Xxxxx Barney Inc. as joint lead arrangers,
JPMorgan Chase Bank as the administrative agent and the banks named therein.
"Term Loans" shall mean the loans made pursuant to the Term Loan
Agreement.
22
"Termination Date" shall have the meaning assigned to that term in
Section 4.2(b).
"Texas Mexican Railway Company" means the Texas Mexican Railway
Company, a Texas corporation, and its successors.
"Trade Payables" shall mean, with respect to any Person, any accounts
payable or any other indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person or any of its Subsidiaries
arising in the ordinary course of business in connection with the acquisition
of goods or services.
"Tranche" shall mean all outstanding Eurodollar Loans having the same
Interest Period.
"Transaction Date" shall mean, with respect to any Restricted Payment,
the date such Restricted Payment is to be made.
"Up-Front Fees" shall have the meaning assigned to that term in
Section 4.5(f).
"VAT Refund" shall mean the amount of value added taxes paid or
payable to the Borrower by Mexico as a result of matters pending on June 16,
1997 with respect to such value added taxes.
"Voting Stock" means with respect to any Person, capital stock of any
class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person, excluding, however, Class III Series A shares and Class III Series B
shares of the Borrower owned by Mexico as of June 23, 1997 and any class or
kind of capital stock which has limited or restricted voting rights (i.e.,
having the power to vote for the election of a minority of the directors,
managers or other voting members of the governing body of each class) under the
By-laws of such Person or under Mexican law.
"Wholly Owned" shall mean, with respect to any Subsidiary of any
Person, the ownership of all of the outstanding Capital Stock of such
Subsidiary (other than any director's qualifying shares, Investments by foreign
nationals mandated by applicable law or any minimum statutorily required shares
under Mexican law) by such Person or one or more Wholly Owned Subsidiaries of
such Person.
SECTION 1.2. Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in the Notes or any
certificate or other document made or delivered pursuant hereto.
(b) As used herein and in the Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms not defined herein
shall have the meanings customarily given in accordance with IAS as in effect
on the Effective Date. All ratios and computations shall be computed in
conformity with IAS applied on a consistent basis in U.S. Dollars.
23
(c) The term "including" is not limiting and means "including
without limitation".
(d) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(e) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(f) 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 mean "to but excluding".
Periods of days referred to in this Agreement shall be counted in calendar days
unless Business Days are expressly prescribed.
ARTICLE II
LETTER OF CREDIT AND COMMERCIAL PAPER OPERATIONS
SECTION 2.1. The Letter of Credit. Upon at least five Business
Days' prior notice from the Borrower to the Issuing Bank, the Issuing Bank
agrees, on the terms and conditions hereinafter set forth, to issue the Letter
of Credit to the Depositary on the date prior to September 17, 2002, which must
be a Business Day (the "Date of Issuance"), on which the conditions precedent
specified in Section 5.1 and, if applicable to the Date of Issuance, Section 5.2
are satisfied; in the Stated Amount and expiring on or before the Stated
Termination Date.
SECTION 2.2. Issuance of CP Notes.
(a) The Borrower has, pursuant to the Depositary Agreement,
authorized and directed the Depositary to act as its issuing and paying agent
for the issuance, delivery and payment of CP Notes.
(b)(i) So long as neither the Borrower nor the Depositary is in
receipt of unrevoked instructions from the Administrative Agent (upon
instructions from the Majority Banks) or from the Issuing Bank, given in
accordance with this Section 2.2 and the Depositary Agreement (or from the
Borrower in accordance with Section 2.9(a)), not to issue or deliver CP Notes
because:
(A) the conditions precedent specified in Article V with respect
to Extensions of Credit have not been satisfied;
(B) the Commitments have, or the Issuing Bank's obligation to
issue and maintain the Letter of Credit has, been terminated or
canceled pursuant hereto;
(C) the Outstanding Extensions of Credit exceed or, after giving
effect to the issuance of CP Notes and the application of the proceeds
thereof, would exceed the sum of the Commitments as then in effect;
24
(D) the issuance of CP Notes is for the time being prohibited by
the provisions of Sections 2.6 or 2.9; or
(E) the Commitments have been reduced, effective on the maturity
of CP Notes outstanding, and the Face Amount of CP Notes to be issued
on such maturity date is not in an amount equivalent to or less than
the Commitments as so reduced;
the Borrower shall have the right from time to time to issue and sell
CP Notes pursuant to and in accordance with this Agreement and the
Depositary Agreement. Any instructions from the Issuing Bank or the
Administrative Agent (or the Borrower) to the Borrower or the
Depositary in accordance with this Section 2.2(b) shall only be given
if there has occurred, and shall specify as being the reason(s) to
cease issuing and delivering CP Notes, one or more of the events
described above, and a copy of such instructions shall be sent
simultaneously to the Issuing Bank, the Administrative Agent, the
Banks, the Dealers, the Borrower and the Depositary.
(ii) If the Issuing Bank or the Administrative Agent (or the
Borrower) shall, as permitted by Section 2.2(b)(i) and the Depositary
Agreement, instruct the Borrower or the Depositary not to issue or
deliver CP Notes, then the Borrower and the Depositary shall not
thereafter, until such instructions are revoked by the Issuing Bank
or the Administrative Agent (or the Borrower), as the case may be,
issue or deliver any CP Note; provided, however, that the Depositary
may be required to deliver CP Notes in respect of which a final
agreement for sale was concluded by a Dealer prior to receipt by such
Dealer, as applicable, of notice of such instructions; provided,
further, however, that the issuance and delivery of such CP Notes
shall not cause the Outstanding Extensions of Credit to exceed the
Commitments in effect immediately prior to the delivery of such
notice. The Borrower shall not under any circumstances request a
Dealer to purchase or to solicit offers to purchase any CP Notes from
the Borrower after having received such instructions from the Issuing
Bank or the Administrative Agent (or the Borrower). For purposes of
this Section 2.2(b)(ii), an agreement with respect to the issuance
and delivery of CP Notes shall be deemed concluded when it has become
a final agreement in accordance with the customary practice of
commercial paper dealers in New York, New York.
(iii) The Issuing Bank or the Administrative Agent (with the
consent of the Majority Banks) (or the Borrower) may revise or
revoke any instruction given by it pursuant to this Section 2.2(b) to
the Borrower and the Depositary not to issue or deliver CP Notes by
notifying the Borrower and the Depositary by electronic means (or by
telephone if promptly confirmed by facsimile or other written
transmission), with a copy to the Issuing Bank, the Administrative
Agent and each Dealer, of such revision or revocation, and any such
instruction given by the Issuing Bank or the Administrative Agent (or
the Borrower) shall be revised or revoked by it if the condition or
conditions giving rise to such instruction shall have been remedied
or cured to the reasonable satisfaction of the Issuing Bank, the
Administrative Agent and the Majority Banks; provided, however, that
the Issuing Bank or the Administrative Agent, acting without the
consent of the Majority Banks, may revise or revoke any instructions
given by it not to issue or deliver CP Notes due to clause (b)(i)(C)
or (b)(i)(D) of this Section 2.2 so long as
25
the condition giving rise to such instruction shall have been remedied
or cured to the reasonable satisfaction of the party (either the
Issuing Bank or the Administrative Agent, as the case may be) which
gave the original instruction.
(iv) Notwithstanding anything in this Agreement to the contrary,
no notice pursuant to this Section 2.2(b) shall be required to be sent
to the Borrower if an Event of Default specified in Section 9.1(f)
shall have occurred.
(c) The Borrower agrees that each CP Note shall (i) be in
book-entry form or in a form as otherwise permitted by the Depositary
Agreement, (ii) be dated the date of issuance thereof (which shall be a
Business Day), (iii) have a stated date of maturity (which shall be a Business
Day), which shall not be later than the earlier to occur of (A) the 360th day
next succeeding the date of its issuance and (B) the Stated Termination Date,
(iv) be issued in a denomination greater than or equal to US$100,000, and (v)
be in a Face Amount which, when added to (X) the aggregate Face Amount of all
other CP Notes to be issued on such Business Day and (Y) the aggregate Face
Amount of all CP Notes outstanding on such Business Day (excluding any CP Notes
maturing and paid in full on such Business Day), will not exceed an amount
equal to the Maximum Commercial Paper Amount for such Business Day. Subject to
the provisions of the Depositary Agreement, all CP Notes shall be issued and
delivered against payment therefor in accordance with the terms of this
Agreement and the Depositary Agreement. All CP Notes will be issued on a
discount basis.
(d) The Borrower will structure its sales of CP Notes so that
there will not mature on any one Business Day CP Notes having an aggregate Face
Amount that would exceed the product of (i) 50% and (ii) the Stated Amount (the
"Settlement Limit"); provided, however, in connection with (x) an extension of
the Stated Termination Date or (y) the refunding of the Obligations pursuant to
documentation satisfactory to the Issuing Bank and the Administrative Agent,
100% of the aggregate Face Amount of CP Notes outstanding may mature on any one
Business Day that occurs on or prior to the Stated Termination Date. The
Settlement Limit is for the sole benefit of the Issuing Bank and the Issuing
Bank shall have the right to waive the Settlement Limit with subsequent notice
to the Borrower and the Dealers, but without the consent of any party to the
Principal Documents.
SECTION 2.3. Agreement to Reimburse LOC Advances.
(a) The Borrower hereby agrees to reimburse the Issuing Bank for
the amount of any LOC Advance on the Disbursement Date for such LOC Advance.
The Borrower also agrees to pay the Issuing Bank interest on each unreimbursed
LOC Advance (or portion thereof) at the rate per annum specified in Section
2.3(b); provided, however, that if any LOC Advance shall be reimbursed to the
Issuing Bank on the Disbursement Date of such LOC Advance, then such LOC
Advance shall not bear interest. Nothing in this paragraph (a) shall impair or
otherwise affect the rights of the Issuing Bank to effect reimbursements of LOC
Advances, and interest thereon, pursuant to the provisions of Section 2.4.
Each payment to the Issuing Bank by the Borrower pursuant to this Section
2.3(a) shall be made by wire transfer of Dollars in immediately available funds
to the Issuing Bank to an account as set forth on Schedule 1.1(b) which must be
an account maintained in New York City, New York.
26
(b) If any LOC Advance is not reimbursed in full on the date such
reimbursement is due, or is not converted into Loans as of such date pursuant
to Section 3.1, then the amount thereof which is not so reimbursed or converted
shall bear interest from the date of the making thereof until the date such LOC
Advance is reimbursed in full or converted into Loans pursuant to Section 3.1,
as the case may be, at a rate per annum equal to the Base Rate plus the Base
Rate Margin plus 2.0% (computed on the basis of actual days elapsed and a year
of 365 or 366 days).
(c) Interest on each LOC Advance accrued under Section 2.3(b) shall
be payable by the Borrower (i) if such LOC Advance is not repaid or converted
into Loans pursuant to Section 3.1 within three Business Days, on the third
Business Day following the date on which the LOC Advance is made, (ii) on the
date of repayment of such LOC Advance and (iii) if such LOC Advance is
converted into Loans within three Business Days, on the date of the first
Interest Payment Date with respect to such Loans.
(d) The obligations of the Borrower to the Issuing Bank under this
Section 2.3 shall be absolute, unconditional and irrevocable, and all amounts
due under this Section 2.3 shall be paid strictly in accordance with the terms
hereof under all circumstances whatsoever (except as set forth in the second
parenthetical of the following clause (i) of this subsection (d)), including
the following circumstances:
(i) the existence of any claim, set-off, defense or other rights
which the Borrower may have at any time against the
Depositary, any beneficiary or any transferee of the Letter of Credit
(or any Persons for whom the Depositary, any such beneficiary or any
such transferee may be acting), the Issuing Bank (other than the
defense of payment to the Issuing Bank in accordance with the terms
of this Agreement), the Administrative Agent, any Bank or any other
Person, whether in connection with this Agreement or any unrelated
transaction;
(ii) any statement or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(iii) payment by the Issuing Bank under the Letter of Credit
against presentation of a sight draft or certificate which does not
comply with the terms of the Letter of Credit;
(iv) any amendment to, waiver of, or consent to the departure
from, the terms of, this Agreement or any of the other Principal
Documents;
(v) the lack of validity or enforceability of any CP Note or any
agreement or document related thereto; or
(vi) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing;
provided, however, that the provisions of clauses (i) through (vi)
inclusive above shall not limit any right or claim the Borrower may have
against the Issuing Bank to the extent, but only to the extent, of any direct,
as opposed to consequential or special, damages suffered by
27
the Borrower which the Borrower proves were caused by the Issuing Bank's gross
negligence or willful misconduct, it being understood that the existence of any
such right or claim shall not in any way affect the obligation of the Borrower
to reimburse the Issuing Bank for all LOC Advances.
SECTION 2.4. Commercial Paper Account.
(a) (i) The Depositary, as agent for the Issuing Bank, has
established at its Corporate Trust offices in New York, New York a special
purpose non-interest bearing account (for the benefit of the Issuing Bank)
identified as Standard Chartered Bank (TFM, S.A. de C.V. CP Program)
Commercial Paper Account (the "Commercial Paper Account"), over which the
Issuing Bank has exclusive control and the sole right of withdrawal. The
Borrower hereby acknowledges that except for the Issuing Bank and the
Depositary, as agent for the Issuing Bank and as provided in Section 2.4(c), no
Person (including the Borrower) shall have any legal or beneficial interest in
the Commercial Paper Account.
(ii) All proceeds from the sale of CP Notes will initially be
paid into the Commercial Paper Account. Pursuant to Section 1(b) of
the Depositary Agreement, the Issuing Bank has issued standing
instructions to the Depositary in writing, in the form of Exhibit E
to the Depositary Agreement, that, subject to the conditions that
there shall not have occurred and be continuing any Default or Event
of Default, and that the funds in the Commercial Paper Account are
not subject to any investigation, writ, order, judgment, warrant of
attachment, execution or similar process or to any stay or other
similar legal restraint and that, after giving effect to any transfer
from the Commercial Paper Account in accordance with the terms
hereof, the Outstanding Extensions of Credit would not exceed the
Commitments then in effect, the Issuing Bank shall be deemed to have
authorized and directed the Depositary to transfer to other accounts
or Persons specified to the Depositary in writing (or by telephone or
facsimile transmission, and in the case of telephonic notice,
promptly confirmed in writing) by the Borrower (with a copy of all
written communications to be sent contemporaneously to the Issuing
Bank), funds on deposit in the Commercial Paper Account in excess of
the aggregate amount payable (including interest, to the extent
provided for herein) or that would be payable on the day of such
transfer by the Borrower in respect of any LOC Advances relating to
matured CP Notes and any Loans outstanding which are subject to
mandatory prepayment pursuant to Section 3.5(b); provided that the
Issuing Bank shall not be liable to any Person for any such transfer
of funds made pursuant to the Borrower's written request.
(iii) The Issuing Bank may, and at the direction of the
Administrative Agent shall, in each case, without demand or prior
notice of any kind (but with concurrent notice sent to the Borrower,
although the failure to deliver such notice shall not result in any
liability to the Administrative Agent, the Issuing Bank or the
Depositary), at any time and from time to time, cause the Depositary
to debit the Commercial Paper Account first for the amount of any
unreimbursed LOC Advances incurred by the Borrower and interest
thereon, second any Loans
28
outstanding which are subject to mandatory prepayment pursuant to
Section 3.5(b) and interest thereon and third for any amount in
respect of costs due and unpaid hereunder by the Borrower (if there
be sufficient funds therein) and to wire transfer such debit amount
to the Issuing Bank or the Administrative Agent, as the Issuing Bank
may direct. In addition, upon the occurrence of an Event of Default,
the Issuing Bank may, and at the direction of the Administrative
Agent shall, in each case, without demand or prior notice of any kind
(but with concurrent notice sent to the Borrower, although the
failure to deliver such notice shall not result in any liability to
the Administrative Agent, the Issuing Bank or the Depositary), cause
the Depositary to debit the Commercial Paper Account for any amount
in respect of Fees, expenses or any other Obligations and to wire
transfer such debit amount to the Issuing Bank or the Administrative
Agent, as the Issuing Bank may direct.
(b) Subject to the provisions of Section 9.2, (i) the Issuing Bank
will not accept any payment by the Borrower, through the Depositary, for
reimbursement of the Obligations (whether with the proceeds of Loans or
otherwise) prior to 11:30 a.m., New York City time, on the day any payment is
made in respect of a drawing under the Letter of Credit and (ii) the Issuing
Bank will not request the Depositary to debit the Commercial Paper Account for
any payment in respect of the Obligations prior to 1:30 p.m., New York City
time, on the date of any drawing under the Letter of Credit, and in the case of
each of clauses (i) and (ii) above, in no event prior to the time the Issuing
Bank honors such drawing.
(c) In order to secure and to provide for the repayment of the
Obligations, and until the Obligations shall be paid in full and the
Commitments have been terminated, the Borrower hereby irrevocably sells,
assigns, pledges, grants and conveys to the Issuing Bank, as agent for the
ratable benefit of the Banks and the Issuing Bank, all of its right, title and
interest in and to: (i) the net proceeds from the sale of CP Notes, (ii) the
Commercial Paper Account and (iii) all the funds at any time and from time to
time on deposit in, or otherwise to the credit of, and all proceeds of, the
Commercial Paper Account (all such proceeds, accounts and funds being herein
called the "Deposited Funds") and all claims of the Borrower in and to the
Deposited Funds.
(d) The Borrower, the Issuing Bank, the Banks and the
Administrative Agent acknowledge that, for so long as the Letter of Credit is
in effect or any amounts payable hereunder or to the holders of the CP Notes
remain unpaid, the Depositary, as agent for the Issuing Bank, the
Administrative Agent and the Banks, shall be a pledgee in possession of the
Deposited Funds and the Issuing Bank shall have the sole and exclusive right to
withdraw or order a transfer of Deposited Funds from the Commercial Paper
Account. The Borrower hereby appoints the Issuing Bank the true and lawful
attorney of the Borrower, with full power of substitution, for the purpose of
directing the Depositary to make any such withdrawal or order any such transfer
of Deposited Funds from the Commercial Paper Account pursuant to this Section
2.4 and Section 1(b) of the Depositary Agreement, which appointment is coupled
with an interest and is irrevocable.
(e) Upon the occurrence and during the continuance of any Event of
Default, the Issuing Bank will, at any time and from time to time, appropriate
and apply, or cause the
29
Depositary to apply, the Deposited Funds, whether then held or thereafter
acquired, to the payment or prepayment in full of all outstanding Obligations,
whether or not then due, but subject to Section 2.4(b) and to the requirement
that all payments under the Letter of Credit shall be made by the Issuing Bank
from its own funds other than Deposited Funds. The Issuing Bank shall, in
addition to the rights and powers provided for herein, be entitled to exercise
from time to time any rights and remedies available to it under applicable law
as a secured party in respect of the Deposited Funds. The Issuing Bank shall
not be liable to any Person for any incorrect or improper payment made pursuant
to this Section 2.4 in the absence of gross negligence or willful misconduct.
(f) The Borrower agrees that it will maintain in the Commercial
Paper Account on each maturity date of the CP Notes in immediately available
funds an amount equal to the Face Amount of all CP Notes scheduled to mature on
such day; provided, however, that in determining the amount of funds in the
Commercial Paper Account for purposes of this paragraph (f), there shall be
included funds payable on or before 5:00 p.m. (New York City time) on account
of the purchase price of CP Notes duly issued and delivered on such day in
accordance with the provisions of this Agreement and the Depositary Agreement
and to be deposited in the Commercial Paper Account.
SECTION 2.5. Letter of Credit Account.
(a) The Depositary has established at its Corporate Trust offices
in New York, New York, a special purpose non-interest bearing account
identified as the TFM, S.A. de C.V. Letter of Credit Account (the "Letter of
Credit Account"). The Letter of Credit Account is in the name of the
Depositary, as paying agent for the CP Notes, and under the exclusive control
of the Depositary as such paying agent. Except for the holders of the CP Notes
and the Depositary, as such paying agent, no Person shall have any legal or
beneficial interest in the Letter of Credit Account. The funds in the Letter
of Credit Account shall be subject to withdrawal solely by the Depositary, as
paying agent for the CP Notes, and solely for the purpose of paying matured CP
Notes in respect of which the Depositary has made a drawing under the Letter of
Credit. All payments by the Issuing Bank under the Letter of Credit with
respect to CP Notes shall be made directly to the Letter of Credit Account and
no funds in the Letter of Credit Account shall be commingled with monies from
any other source.
(b) The Depositary Agreement provides that prior to 4:00 p.m., New
York City time, on the Business Day immediately preceding the day on which CP
Notes mature, the Depositary shall make drawings under the Letter of Credit in
an aggregate amount equal to the aggregate Face Amount of such maturing CP
Notes, as the case may be, and prior to 1:00 p.m. New York City time, on the
maturity date of such CP Notes, the Issuing Bank will honor such drawings by
making a wire transfer to, or causing to be deposited in, the Letter of Credit
Account, as applicable, an amount in Dollars in immediately available funds
equal to the amount so drawn. The Depositary will record the date and time of
receipt of each wire transfer sent by the Issuing Bank to the Letter of Credit
Account and keep accurate records of each disbursement therefrom. The Issuing
Bank agrees that all LOC Advances shall be paid out of the general funds of the
Issuing Bank and that no payments under the Letter of Credit shall in any way
be contingent upon or drawn from amounts on deposit in the Commercial Paper
Account or amounts on deposit in any account maintained by the Borrower with
the Issuing Bank or the
30
Administrative Agent. The Issuing Bank further agrees that no CP Notes shall
be paid by the Issuing Bank except in the manner provided in the Depositary
Agreement.
SECTION 2.6. Change in Law Applicable to the Letter of Credit.
In the event that any restrictions are imposed upon the Issuing Bank
or the Borrower by any law or regulation, existing or future, of any
Governmental Authority, including any legal lending limits imposed by law or
regulations of the United States or any State thereof, which in the opinion of
counsel to the Issuing Bank, promptly confirmed in writing with a copy to the
Borrower, would prohibit the Issuing Bank from issuing or maintaining the
Letter of Credit or would prohibit the issuance or the sale by the Borrower of
CP Notes supported by the Letter of Credit, the Issuing Bank shall promptly
give notice thereof in accordance with Section 2.2 to the Borrower, the
Administrative Agent (which in turn will give notice to the Banks), the Dealers
and the Depositary and, upon the giving of such notice, the obligation of the
Issuing Bank to permit any further issuance of CP Notes supported by the Letter
of Credit shall terminate; provided, that such event shall be treated for all
purposes hereunder, subject to all applicable restrictions and limitations, as
a Force Majeure Disruption Event.
SECTION 2.7. Effect on the Letter of Credit. Notwithstanding
anything herein to the contrary, no suspension, termination or reduction of the
Commitments or delivery of notice to cease issuing CP Notes pursuant to the
terms of this Agreement shall affect, terminate or reduce (a) the liability of
the Issuing Bank under the Letter of Credit with respect to any CP Notes
validly issued in accordance with the terms and provisions of the Depositary
Agreement or (b) the liability of the Borrower with respect to any LOC Advance
relating to the Letter of Credit or any Loan hereunder or (c) the obligation of
any Bank to reimburse the Issuing Bank for such Bank's Participation Fraction
of any LOC Advance in accordance with the terms of this Agreement.
SECTION 2.8. Participation and Funding Commitments.
(a) (i) The Issuing Bank hereby sells and transfers to each Bank
and each Bank hereby unconditionally and irrevocably, severally and for itself
only, purchases and acquires an undivided participation interest, to the extent
of such Bank's Participation Fraction in the Commitments, in the LOC Advances,
all interest thereon and all other rights and obligations of the Issuing Bank
under, and in connection with, the Letter of Credit and the Letter of Credit
Facility with respect thereto.
(ii) The several obligations and liabilities of the Banks to
the Issuing Bank hereunder shall be absolute, irrevocable and
unconditional under any and all circumstances whatsoever and shall
not be affected by any circumstance, including (A) any set-off,
counterclaim, recoupment, defense, or other right which such Bank or
any other Person may have against the Administrative Agent, the
Issuing Bank or any other Person for any reason whatsoever; (B) the
occurrence or continuance of a Default or Event of Default or the
termination of the Commitments or the Letter of Credit; (C) any
adverse change in the condition (financial or otherwise) or prospects
of the Borrower; (D) any breach of any of the Principal Documents by
any party thereto; (E) the fact that any condition
31
precedent to the issuance of CP Notes or the making of any
payment under the Letter of Credit was not in fact met; (F) any
violation or asserted violation of law by any Bank or any affiliate
thereof; or (G) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. Each
Bank agrees to pay and discharge when due its Participation Fraction
in the Issuing Bank's liability under the Letter of Credit by paying
to the Issuing Bank in accordance with Section 2.8(b) its
Participation Fraction of each amount paid by the Issuing Bank under
the Letter of Credit; provided, however, that the provisions of
clauses (A) through (G) inclusive above shall not limit any right or
claim any Bank may have against the Issuing Bank to the extent, but
only to the extent, of any direct, as opposed to consequential or
special, damages suffered by such Bank which such Bank proves were
caused by the Issuing Bank's gross negligence or willful misconduct,
it being understood that the existence of any such right or claim
shall not in any way affect the obligation of such Bank to reimburse
the Issuing Bank for all LOC Advances.
(b) (i) As promptly as practicable upon becoming aware that it
has not been or will not be reimbursed for any LOC Advance before 5:00 p.m.,
New York City time, on the Disbursement Date for such LOC Advance or that such
LOC Advance will convert to Base Rate Loans pursuant to Section 3.1, the
Issuing Bank will notify the Administrative Agent of the amount of and
Disbursement Date for such LOC Advance. Such notification may be given
telephonically, but shall in all events be confirmed promptly by facsimile or
other written notice in substantially the form of Exhibit D.
(ii) Not later than 2:00 p.m., New York City time, on the
Business Day on which such notice from the Issuing Bank, pursuant to
Section 2.8(b)(i), is received (if such notice is received at or
prior to 1:00 p.m., New York City time, on such day) or as promptly
as practicable and not later than 10:00 a.m., New York City time on
the next succeeding Business Day (if such notice is received after
such time), the Administrative Agent shall notify each Bank by
facsimile transmission or telephone (any such facsimile transmission
or telephone conversation to be promptly confirmed by an original in
writing) of its pro rata share of such LOC Advance or the amount of
its Loan into which such share is converted, based on its
Participation Fraction, and forthwith upon receipt of such notice,
each Bank shall make available its pro rata share of such LOC Advance
or the amount of its Loan into which such share is converted to the
Administrative Agent as set forth on Schedule 1.1(b) in immediately
available funds, not earlier than 1:30 p.m., New York City time, on
such Disbursement Date and not later than (A) 4:00 p.m., New York
City time, on the day such notice from the Administrative Agent is
received (where the relevant notice is received at or prior to 2:00
p.m., New York City time, on any Business Day), or (B) 12:00 noon,
New York City time, on the next succeeding Business Day (where the
relevant notice is received after 2:00 p.m., New York City time, on
any day).
(iii) Each Bank shall indemnify and hold harmless the Issuing
Bank from and against any and all losses, liabilities (including
liabilities for penalties), actions, suits, judgments, demands, costs
and expenses (including reasonable fees
32
and disbursements of counsel including the allocated cost of internal
counsel) resulting from any failure on the part of such Bank to
provide, or from any delay in providing, the Administrative Agent
with such Bank's pro rata share of the amount of any LOC Advance or
the amount of its Loan in accordance with the provisions of Section
2.8(b)(ii) or Section 3.1(a), as the case may be, but (A) no Bank
shall be so liable for any such failure on the part of any other Bank
and (B) no Canadian Bank shall be liable for any delay in providing
the Administrative Agent with such Canadian Bank's pro rata share of
the amount of any LOC Advance or Loan so long as such Canadian Bank
provides the Administrative Agent with such Canadian Bank's pro rata
share within three Business Days (it being understood that such three
Business Day exception shall only apply to Canadian Banks which
cannot provide their pro rata share earlier due to it not being a
Canadian Business Day); provided further, that in any event each
Canadian Bank shall reimburse the Issuing Bank or the Borrower, as
the case may be, at the Federal Funds Effective Rate for any direct
costs to the Issuing Bank or the Borrower, as applicable, arising
from the Canadian Bank's delay in payment.. If a Bank does not make
available to the Administrative Agent when due such Bank's pro rata
share of any LOC Advance or the amount of any such Loan, such Bank
shall be required to pay interest to the Issuing Bank on its pro rata
share of such LOC Advance or such Loan at the Federal Funds Effective
Rate from the date such Bank's payment is due until the date it is
received by the Issuing Bank. If the Issuing Bank receives a Bank's
pro rata share of any LOC Advance on the Disbursement Date therefor,
or if the Issuing Bank receives interest on any late payment from
such Bank in accordance with the provisions of the preceding
sentence, such Bank shall receive interest on its pro rata share of
such LOC Advance in accordance with paragraph (c) of this Section 2.8
from such Disbursement Date. If the Issuing Bank does not receive a
Bank's pro rata share of any LOC Advance on the Disbursement Date
therefor and does not receive interest on any such late payment from
such Bank in accordance with the provisions of this paragraph, such
Bank shall receive interest on its pro rata share of such LOC Advance
in accordance with paragraph (d) of this Section 2.8 from the date on
which such Bank's payment is received by the Issuing Bank.
(c) (i) Whenever the Issuing Bank shall receive any payment in
the form of reimbursement from the Borrower of any LOC Advance or any payment
of interest on any such unreimbursed LOC Advance, which payment relates to an
amount for which the Issuing Bank has received reimbursement from the Banks
pursuant to this Agreement, the Issuing Bank will promptly pay to each Bank, in
immediately available funds, such Bank's pro rata share, computed in accordance
with its Participation Fraction, of such payment (x) before the close of
business on the day such payment is received, if such payment is received at or
prior to 12:00 noon, New York City time, on such day or (y) before 2:00 p.m.,
New York City time, on the next succeeding Business Day if such payment is
received after 12:00 noon, New York City time, on such day; provided, however,
that such Bank shall only be entitled to share in payments relating to interest
in accordance with the provisions of paragraph (b) of this Section 2.8. Any
amounts received by the Issuing Bank that are due and owing to the Banks and
remain unpaid to the Banks after the date on which the Issuing Bank receives
such amounts shall bear interest, payable by the Issuing Bank, at the Federal
Funds Effective Rate from the day such amounts are
33
received until the day such payment is made. Each Bank shall have a direct
claim against the Borrower for the principal of and interest on each portion of
a LOC Advance advanced by it to the Issuing Bank to the extent that the
Borrower does not reimburse the Issuing Bank for such LOC Advances.
(ii) If on any date on which LOC Advances are outstanding, the
Issuing Bank receives payment from the Borrower in an amount less
than the aggregate amount of such LOC Advances, together with accrued
and unpaid interest thereon, such payment shall be allocated to the
Banks pro rata in proportion to the aggregate amount of LOC Advances
then outstanding, respectively, to be distributed to the Banks, as
the case may be, as provided in clause (i) of this paragraph (c).
(d) If a Bank fails to make any payments under this Section 2.8,
and if any such payments are not made prior to the expiration of five Business
Days following notice of such nonpayment given by the Issuing Bank to such
Bank, then (i) the Issuing Bank (with the prior consent, such consent not to be
unreasonably withheld, of the Borrower) may cause such Bank to transfer to it
or to a third party or (ii) the Borrower (with the prior consent, such consent
not to be unreasonably withheld, of the Issuing Bank) may cause such bank to
transfer to a third party (which in any case must be a bank or financial
institution organized and licensed under the laws of Mexico or a commercial
bank registered with Hacienda) in exchange for the sum or sums due hereunder
from such Bank, such Bank's participation interest hereunder, and all other
rights of such Bank under this Agreement, without, however, relieving such Bank
from any liability for damages, costs and expenses suffered by the Issuing Bank
as a result of such failure. The purchaser of any such interest (including the
Issuing Bank) shall be deemed to have acquired an interest senior to the
interest of such Bank and, accordingly, (i) such purchaser shall be entitled to
receive all subsequent payments which the Issuing Bank would otherwise have
made hereunder to such Bank, (ii) such purchaser (if not already a party to
this Agreement) shall immediately become a party to this Agreement without the
need for any further amendment hereto, (iii) the Borrower shall promptly
execute and deliver to such purchaser one or more Notes pursuant to Section 3.2
below, and (iv) such Bank shall thereupon cease to be a Bank party to this
Agreement and shall cease to have any further rights in respect hereof or in
respect of such Bank's Notes, which shall be deemed canceled, except that such
Bank shall continue to be entitled to be reimbursed for all amounts previously
advanced by it not theretofore reimbursed and all unpaid Loans theretofore made
by it and not repaid and to be paid any interest thereon to which such Bank is
entitled in accordance with this Agreement; provided, however, that such Bank's
entitlement to be so reimbursed and paid in full shall be subordinate and
junior in all respects to the rights of all other Banks, including the
purchaser, to be paid all amounts due and owing to them hereunder. Following
such reimbursements, such Bank shall forthwith return its Notes to the Borrower
marked "canceled".
SECTION 2.9. Market Disruption Events.
(a) If, based upon information provided by the Dealers, the
Borrower shall determine on any Business Day that a CP Disruption Event shall
have occurred, the Borrower shall immediately cease issuing CP Notes and
written notice of such determination (pursuant to a Notice of CP Disruption
Event in substantially the form of Exhibit H) shall be given to the
34
Issuing Bank, the Joint Lead Arrangers and the Administrative Agent by the
Borrower no later than 11:00 a.m., New York City time, on such Business Day.
If, in accordance with the preceding sentence, the Borrower ceases to issue CP
Notes, the Borrower shall also promptly give notice to the Depositary pursuant
to the Depositary Agreement not to issue and deliver any CP Notes. The
Administrative Agent shall give prompt written notice of such determination to
the Banks.
(b) If the Issuing Bank shall determine on any Business Day that a
Force Majeure Disruption Event shall have occurred, then the Issuing Bank may,
but shall not be obligated to, give notice to the Depositary pursuant to the
Depositary Agreement, in the form provided in Exhibit L hereto, not to issue
and deliver any CP Notes. The Issuing Bank shall give prompt written notice of
such determination to the Borrower, the Joint Lead Arrangers, the
Administrative Agent and the Dealers. The Administrative Agent shall give
prompt written notice of such determination to the Banks. In the case of a
Force Majeure Disruption Event, the Borrower may elect to substitute the
Issuing Bank, with the consent of the Majority Banks (which consent shall not
be unreasonably withheld); provided, (i) no CP Notes are outstanding, (ii) the
Issuing Bank shall have received for its own account payment in full for all
amounts owing to it under the Principal Documents (whether due and payable at
such time or otherwise), including, without limitation, all fees and
reimbursement obligations, (iii) each of Xxxxx'x and S&P shall have consented
to the substitution of the Issuing Bank and shall have confirmed the rating of
the Letter of Credit with the substitution of the Issuing Bank, (iv) if the
Force Majeure Disruption Event was precipitated by a downgrade in the rating of
the Issuing Bank by Xxxxx'x or S&P, then the new issuing bank shall have a
higher rating by Xxxxx'x and/or S&P, as applicable, than the Issuing Bank, (v)
the Borrower shall deliver any other document reasonably requested by the
Administrative Agent or either Rating Agency, including customary opinions of
counsel. Once each of the conditions described in the immediately preceding
sentence have been met, the Issuing Bank promptly shall assign all of its
rights and interest under this Agreement and all other documents executed in
connection herewith to the new issuing bank.
(c) In the event the issuance of CP Notes by the Borrower is
suspended as a result of this Section 2.9, the Borrower may incur Loans in
accordance with the terms and provisions of Section 3.1.
(d) If, based upon information provided by the Dealers, the
Borrower shall determine on any Business Day that a CP Disruption Event shall
have ceased to exist, then written notice of such determination (pursuant to a
Notice of CP Disruption Event, in substantially the form of Exhibit H) shall be
given to the Issuing Bank, the Joint Lead Arrangers, the Administrative Agent
and the Depositary by the Borrower as soon as possible after any such
information has been given by the Dealers to the Borrower, whereupon the
Borrower may revoke forthwith any instructions to the Depositary not to issue
and deliver CP Notes and the Borrower may, subject to concurrent or prior
prepayment of all Loans in accordance with Section 3.5(b), recommence issuing
CP Notes. The Administrative Agent shall give prompt written notice to the
Banks upon receipt of any such determination.
(e) If the Issuing Bank shall determine that a Force Majeure
Disruption Event shall have ceased to exist, then the Issuing Bank shall as
promptly as is possible under the circumstances give written notice of such
determination to the Depositary, the Joint Lead
35
Arrangers, the Administrative Agent, the Dealers and the Borrower, whereupon
the Issuing Bank shall revoke forthwith any instructions to the Depositary not
to issue and deliver CP Notes and the Borrower may, subject to concurrent or
prior prepayment of all Loans in accordance with Section 3.5(b), recommence
issuing CP Notes. The Administrative Agent shall give prompt written notice to
the Banks upon receipt of notice of any such determination.
ARTICLE III
LOANS
SECTION 3.1. Loans.
(a) Notwithstanding anything to the contrary contained in Article
II, if at any time during the Commitment Period there shall occur a Market
Disruption Event, then, subject to the terms and conditions set forth in this
Agreement and the satisfaction of the conditions precedent to Extensions of
Credit set forth in Section 5.2, all unreimbursed LOC Advances made while such
Market Disruption Event is in existence (the "Market Disruption Obligations")
in respect of CP Notes duly issued and outstanding on the Market Disruption
Date shall be either paid in full by the Borrower on the maturity date of the
CP Notes to the Commercial Paper Account or shall automatically be converted to
loans on such date, upon the terms and conditions of this Agreement (such
loans, together with any loans made pursuant to Section 3.1(f), collectively,
"Loans"); provided, however, that no Loans may be made, based on such Market
Disruption Event, after the end of the period beginning on the Market
Disruption Date and ending on the date which is the earlier of (i) the Stated
Termination Date and (ii) 90 days after the relevant Disbursement Date (a
"Market Disruption Period"); provided, further, that (x) Loans may only be made
in connection with one Market Disruption Date prior to the first anniversary of
the Effective Date and only one Market Disruption Date thereafter, and (y) no
conversion of LOC Advances to Loans shall occur during the pendency of any
Default or Event of Default. Each Bank severally agrees, on the terms and
conditions of this Agreement, to make Loans to the Borrower from time to time
in an aggregate principal amount not in excess of the aggregate amount of such
Market Disruption Obligations arising from its Participation Fraction of all
unreimbursed LOC Advances. All Loans made pursuant to this paragraph (a) shall
initially be Base Rate Loans, which may, at the Borrower's option, be converted
into Eurodollar Loans in accordance with the terms and provisions of Section
3.3.
(b) At the time the conversion into Base Rate Loans becomes
effective pursuant to the preceding paragraph (a), the obligations of the
Borrower to the Issuing Bank under Section 2.3(a) (other than with respect to
accrued and unpaid interest) shall be discharged in an amount equal to the
aggregate principal amount of Loans paid by the Banks to the Administrative
Agent for the account of the Issuing Bank pursuant to Section 2.8(b).
(c) The Administrative Agent shall give the Banks prompt notice of
the existence of a Market Disruption Event as soon as it obtains notice thereof
and of the conversion of any unreimbursed LOC Advances into Loans.
36
(d) The Loans shall be made without any payments being made by the
Banks to the Borrower, but subject to the obligations of the Banks to the
Issuing Bank under Section 2.8(b).
(e) Each Borrowing shall be made from the several Banks ratably in
accordance with their Participation Fractions.
(f) During any Market Disruption Period on the terms and subject to
the conditions set forth in this Agreement, including the conditions precedent
specified in Section 5.2, the Borrower may borrow Loans other than under
Section 3.1(a) above under the Available Commitments (as defined below) in a
minimum amount of US$5,000,000 or in multiples of US$1,000,000 in excess
thereof on any Business Day; provided that the Borrower shall give the
Administrative Agent and the Issuing Bank notice as provided in Section 3.1(g).
As used in this paragraph (f), "Available Commitments" shall mean, as of any
date, the total amount of the Commitments minus the sum of (A) the aggregate
principal amount of CP Notes outstanding, (B) the aggregate principal amount of
unreimbursed LOC Advances that have not been converted into Loans pursuant to
Section 3.1(a), (C) the aggregate principal amount of any Loans made under this
Section 3.1 (whether or not still outstanding) and (D) any fees or other
amounts which the Borrower owes to any other party under the Principal
Documents. Each Loan made pursuant to this Section 3.1(f) shall be in Dollars
and shall be made to an account of the Borrower in the United States.
(g) The Borrower may (but shall not be obligated to) request Loans
under Section 3.1(f) by giving notice to the Administrative Agent (with a copy
to the Issuing Bank) by 11:00 a.m. at least three Business Days prior to the
date of Borrowing. Such notice (a "Notice of Borrowing") may be by telephone,
if promptly confirmed in writing in substantially the form of Exhibit M, and
may be made by facsimile transmission. The Notice of Borrowing shall specify
(i) the aggregate amount of such Borrowing, which shall be in a minimum amount
equal to US$5,000,000 or in multiples of US$1,000,000 in excess thereof, (ii)
whether the Loans comprising such Borrowing shall bear interest based on the
Base Rate or LIBOR and (iii) if the Loans are to be Eurodollar Loans the
duration of the initial Interest Period applicable to such Loans. The Notice
of Borrowing shall further certify that, as of the date of such Borrowing, (i)
each condition in Section 5.2 shall have been satisfied and (ii) a Market
Disruption Event has occurred and is continuing. The Notice of Borrowing shall
not be revocable by the Borrower after the Administrative Agent has notified
any Bank thereof.
(h) (i) Not later than 10:00 a.m., New York City time, on the
Business Day following the date on which a Notice of Borrowing is received, the
Administrative Agent shall notify each Bank by facsimile transmission or
telephone (any such facsimile transmission or telephone conversation to be
promptly confirmed by an original in writing) of the amount of its Loan to be
made under Section 3.1(f), based on its Participation Fraction. On the
Disbursement Date for such Loan, each Bank shall make available the amount
thereof to the Administrative Agent at its address set forth on Schedule 1.1(b)
in immediately available funds, not later than 12:00 Noon, New York City time.
(ii) Unless the Administrative Agent shall have been notified
in writing by any Bank prior to a borrowing that such Bank will not
make the
37
amount that would constitute its share of such borrowing available
to the Administrative Agent, the Administrative Agent may assume
that such Bank is making such amount available to the Administrative
Agent, and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower a corresponding amount.
If such amount is not made available to the Administrative Agent by
the required time on the Disbursement Date therefor, such Bank shall
pay to the Administrative Agent, on demand, such amount with interest
thereon, at a rate equal to the greater of (i) the Federal Funds
Effective Rate and (ii) a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation,
for the period until such Bank makes such amount immediately
available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Bank with respect to any
amounts owing under this paragraph shall be conclusive in the absence
of manifest error. If such Bank's share of such borrowing is not
made available to the Administrative Agent by such Bank within three
Business Days after such Disbursement Date, the Administrative Agent
shall also be entitled to recover, without prejudice to any rights
the Borrower may have against such Bank, such amount with interest
thereon at the rate per annum applicable to Base Rate Loans under
this Agreement, on demand, from the Borrower.
(i) The Commitment of each Bank hereunder to make Loans is not
revolving in nature and any amounts borrowed hereunder and subsequently repaid
may not be reborrowed, except that the Commitments may be reinstated, as
provided in this Section 3.1 to permit the making of Loans in connection with a
Market Disruption Date occurring after the first anniversary of the Effective
Date to the extent that Loans made in connection with any Market Disruption
Date occurring prior to such anniversary have been repaid.
SECTION 3.2. Notes.
(a) The Loans made by each Bank shall, subject to the provisions of
Section 3.2(b) below, be evidenced by a promissory note of the Borrower in
substantially the form of Exhibit A-1 appropriately completed (each, a "Simple
Note"; and, collectively and together with any Mexican Notes issued pursuant to
Section 3.2(b) below, the "Notes"), in the principal amount of such Bank's
Commitment representing the obligation of the Borrower to pay to such Bank the
unpaid principal amount of all such Loans made by such Bank pursuant to Section
3.1, plus interest thereon as provided in Sections 3.6 and 3.7. The date and
principal amount of each Loan made by such Bank, and the date and amount of
each payment or prepayment of the principal amount of each such Loan, shall be
recorded by such Bank on the Schedules annexed to its Simple Note and such
Schedules shall constitute prima facie evidence of the accuracy of the
information so recorded, provided, however, that the failure of any Bank to
make such recordation (or any error in such recordation) shall not affect the
obligations of the Borrower hereunder or under the Simple Notes.
(b) The Borrower agrees that whenever a Loan is made hereunder, or
at any time while a Loan made hereunder is outstanding, upon the request of any
Bank holding a Simple Note in respect of any portion of such Loan, the Borrower
shall issue to such Bank, against delivery to the Borrower, for cancellation,
of such Simple Note, one or more new promissory
38
notes in the form of Exhibit A-2 or Exhibit A-3 hereto appropriately completed
(each, a "Mexican Note" and collectively, the "Mexican Notes"), in the
respective principal amounts of each portion of the outstanding Loans that are
evidenced by the Simple Note. Each Bank acknowledges and agrees that if it
requests a Mexican Note in respect of its portion of any Loan hereunder, then
it shall be obligated to accept Mexican Notes in respect of its portion of all
Loans hereunder, and that the Borrower shall have no further obligation to
issue to it any Simple Notes. The Borrower further agrees that if at any time,
any Loan outstanding hereunder shall convert from a Base Rate Loan to a
Eurodollar Loan or from a Eurodollar Loan to a Base Rate Loan, whether at the
election of the Borrower or otherwise, the Borrower shall issue to each Bank
holding a Mexican Note in respect of such Loan, a new Mexican Note that
accurately reflects the appropriate interest rate determinant, against delivery
to the Borrower, for cancellation, of the Mexican Note that reflected the
pre-conversion interest rate determinant.
SECTION 3.3. Procedure for Conversion. Loans shall be made in
accordance with Section 3.1 and, subject to Section 3.8 and so long as no
Default or Event of Default then exists, the Borrower may convert Base Rate
Loans to Eurodollar Loans on any Eurodollar Business Day; provided that the
Borrower shall give the Administrative Agent irrevocable written or facsimile
notice in the form of a conversion certificate in substantially the form of
Exhibit E (the "Conversion Certificate"), which Conversion Certificate must be
received by the Administrative Agent prior to 11:00 a.m., New York City time,
three Eurodollar Business Days prior to the proposed conversion date. Upon the
receipt of a Conversion Certificate relating to such Eurodollar Loans, the
Administrative Agent shall immediately, and in any event by 6:00 p.m., New York
City time, on the same Business Day as the date of receipt, notify each Bank
thereof (which notice shall in all events be confirmed promptly in writing or
by facsimile).
SECTION 3.4. Repayment. The Borrower shall pay to the
Administrative Agent, at such account as set forth on Schedule 1.1(b), for the
account of each Bank the unpaid principal amount of each of such Bank's Loans on
the Maturity Date therefor.
SECTION 3.5. Prepayments.
(a) Optional Prepayments.
(i) The Borrower may (A) upon notice to the Administrative
Agent received not later than one Business Day prior to the date for
such repayment, prepay Base Rate Loans in whole or in part, without
premium or penalty, and (B) subject to the indemnity provisions of
Section 4.11, prepay Eurodollar Loans upon at least five Eurodollar
Business Days irrevocable notice to the Administrative Agent,
specifying the date and amount of prepayment. Each such optional
prepayment shall be applied to prepay the Loans specified by the
Borrower in its notice of prepayment ratably among the several Banks.
(ii) Upon receipt of a notice of prepayment, the
Administrative Agent shall promptly notify each Bank thereof. If such
notice is given, the Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on
the date specified therein, together with accrued interest to, and any
other amounts then due on, each such date on the amount
39
prepaid. Prepayments of Loans shall be in a minimum amount
equal to US$5,000,000 and in multiples of US$1,000,000 in excess
thereof, or, if less, the aggregate principal amount of Loans then
outstanding. Amounts prepaid may not be reborrowed.
(b) Mandatory Prepayments.
(i) If at any time the Outstanding Extensions of Credit shall
exceed the sum of the Commitments as then in effect, the Borrower
shall immediately prepay the outstanding Loans and repay LOC
Advances, if any, to the extent of such excess.
(ii) Upon the determination that a Market Disruption Event has
ceased to exist (as determined in accordance with the terms and
provisions of Section 2.9(d) or 2.9(e)), the Borrower shall, within
five Business Days after notice thereof to the Administrative Agent,
prepay all Loans outstanding.
(iii) Amounts applied to the prepayment of Loans pursuant to
this Section 3.5(b) shall be applied to prepay ratably the Loans
among the several Banks.
(iv) The application of any prepayment pursuant to this
Section 3.5(b) shall be made, first, to Base Rate Loans and, second, to
Eurodollar Loans. Each prepayment of the Loans under this Section
3.5(b) shall be accompanied by accrued interest to the date of such
prepayment on the amount prepaid. Any prepayment of Eurodollar Loans
pursuant to this Section shall be subject to the provisions of
Section 4.11. Amounts prepaid may not be reborrowed.
SECTION 3.6. Interest Rates and Payment Dates.
(a) The Eurodollar Loans comprising each Tranche shall bear
interest for each day during the Interest Period for such Tranche on the unpaid
principal amount thereof at a rate per annum equal to LIBOR determined for such
Interest Period plus the Eurodollar Margin.
(b) The Base Rate Loans shall bear interest for the period from and
including the date of such Loans on the unpaid principal amount thereof at a
rate per annum equal to the Base Rate plus the Base Rate Margin.
(c) If all or a portion of the principal amount of any of the Loans
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), each Eurodollar Loan shall bear interest at LIBOR plus the
Eurodollar Margin plus 2.0% and any overdue principal amount of Base Rate Loans
shall bear interest at a rate per annum equal to the Base Rate plus the Base
Rate Margin plus 2.0%, in each case from the date of such non-payment until
paid in full (both after and before judgment) and shall be payable on demand.
If all or any portion of (A) any interest payable on the principal amount of
any Loan or (B) any fee or other amount payable hereunder shall not be paid
when due, such overdue amount shall (to the fullest extent permitted by
applicable law) bear interest at a rate per annum equal to the Base Rate plus
the Base Rate
40
Margin plus 2.0% from the date of such non-payment until such amount is paid in
full (after as well as before judgment) and shall be payable on demand and on
the date of payment in full.
(d) Except as otherwise provided in paragraph (c), interest shall
be payable in arrears on each Interest Payment Date and on the Maturity Date.
SECTION 3.7. Computation of Interest.
(a) Interest in respect of Eurodollar Loans and Base Rate Loans
shall be calculated on the basis of a 360 day year for the actual days elapsed
except that, with respect to Base Rate Loans the rate of interest on which is
calculated on the basis of the Prime Rate, the interest thereon shall be
calculated on the basis of a 365- (or 366-, as the case may be) day year for
the actual days elapsed. The Administrative Agent shall, as soon as
practicable, notify the Borrower and the Banks of each determination of LIBOR;
provided, however, that any failure to do so shall not relieve the Borrower of
any liability hereunder. Any change in the interest rate on a Loan resulting
from a change in the Base Rate shall become effective as of the opening of
business on the day on which such change in the Base Rate is announced. The
Administrative Agent shall as soon as practicable notify the Borrower and the
Banks of the effective date and the amount of each such change; provided,
however, that any failure to do so shall not relieve the Borrower of any
liability hereunder.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Banks in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower or any Bank, deliver
to the Borrower or such Bank, as the case may be, a statement showing the
quotations used by the Administrative Agent in determining any interest rate
pursuant to Section 3.6(a).
SECTION 3.8. Inability to Determine Interest Rate. In the event
that the Administrative Agent shall have reasonably determined (which
determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances affecting the interbank eurodollar market, adequate means do
not exist for ascertaining LIBOR applicable pursuant to Section 3.6(a) for any
requested Interest Period with respect to a proposed Loan that the Borrower has
requested be converted into or continued as a Eurodollar Loan, the
Administrative Agent shall forthwith give notice by facsimile of such
determination to the Borrower and each Bank at least one day prior to the
proposed conversion date or continuation date for such Eurodollar Loan. Until
such notice has been withdrawn, no conversion of Base Rate Loans to Eurodollar
Loans under Section 3.3 or otherwise may be made and all Eurodollar Loans shall
be converted to Base Rate Loans on the last day of the then current Interest
Period for each Tranche (unless such last day shall also be the Maturity Date
for such Tranche).
SECTION 3.9. Continuation Option. Any Eurodollar Loans may be
continued as such upon the expiration of the then current Interest Period with
respect thereto by the Borrower giving written notice to the Administrative
Agent not later than 11:00 a.m. New York City time, three Eurodollar Business
Days prior to the last day of such Interest Period in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1,
of the length of the next Interest Period to be applicable to such Loans;
provided, however, that
41
no Eurodollar Loan may be continued as such (a) when any Event of Default has
occurred and is continuing and the Administrative Agent, with the consent of
the Majority Banks, has determined that such a continuation is not appropriate
and (b) after the date that is one month prior to the Maturity Date with
respect to such Eurodollar Loan and provided, further, that if the Borrower
shall fail to give any required notice as described above in this Section 3.9
or if such continuation is not permitted pursuant to the preceding proviso such
Loans shall be automatically converted to Base Rate Loans on the last day of
such then expiring Interest Period. Upon receipt of such notice, the
Administrative Agent shall promptly give the Banks notice of the same.
SECTION 3.10. Maximum Interest Rate. Anything in this Agreement or
any other Principal Document to the contrary notwithstanding, the interest rate
on any Loan or any LOC Advance shall in no event be in excess of the maximum
permitted by applicable law.
ARTICLE IV
TERMS APPLICABLE TO LETTERS OF CREDIT AND LOANS
SECTION 4.1. Reduction of Commitments. The Borrower shall have the
right, upon not less than 30 days' notice to the Administrative Agent and the
Issuing Bank and without premium or penalty (other than as may arise pursuant
to Section 4.11), from time to time to permanently reduce on a pro rata basis
the Commitments and the Stated Amount of the Letter of Credit in part by an
aggregate minimum amount of US$10,000,000 or any integral multiple of
US$5,000,000 in excess thereof; provided, however, that no reduction of the
Commitments shall be permitted if, after giving effect thereto, the Commitments
would be less than $50,000,000; provided, further, however, that no reduction
of the Commitments shall be permitted if, after giving effect thereto and to
any repayment or prepayment of Loans to be made on the effective date thereof
with funds other than the proceeds of CP Notes to be issued on such date, the
aggregate Outstanding Extensions of Credit would exceed the Commitments as so
reduced and determined on such date. Notwithstanding the foregoing sentence to
the contrary, the $50,000,000 limitation and the 30 days' notice requirement,
which are contained in the foregoing sentence, shall not apply to any reduction
of Commitments being made in connection with an extension of the Stated
Termination Date or the refunding of the Obligations pursuant to documentation
satisfactory to the Issuing Bank and the Administrative Agent. Any reduction
of the Commitments shall be irrevocable. Promptly upon the receipt by the
Administrative Agent of such notice, the Administrative Agent shall notify the
Banks of such reduction. Promptly upon receipt by the Issuing Bank, the
Issuing Bank shall notify the Depositary (with a copy to the Administrative
Agent, the Rating Agencies and the Dealers) by notice substantially in the form
of Annex C to the Letter of Credit. If the Commitments shall be reduced, all
Fees, accrued but unpaid in respect of that portion of the Commitments by which
the Commitments have been reduced, shall be immediately due and payable. Any
reduction of the Commitments pursuant to this Section 4.1 shall be effective on
the later to occur of: (a) the date on which the Outstanding Extensions of
Credit do not exceed the aggregate Commitments (as so reduced) and (b) the
expiration of such 30 day notice period. Outstanding CP Notes may not be
redeemed prior to maturity with the proceeds of any drawing under the Letter of
Credit. In the event that the Commitments are reduced pursuant hereto, the
Borrower shall have no right to a refund of any fees previously paid in
connection with the Principal Documents, including, but not limited to, any
refund of Letter of Credit Fees or Up-Front Fees. Any reduction of the
Commitments
42
pursuant to this Section 4.1 shall cause the Stated Amount of the Letter of
Credit to be reduced by the same amount.
SECTION 4.2. Termination and Extension.
(a) The Commitments shall terminate on the Termination Date, and
any Loans outstanding on the Termination Date shall thereupon be due and
payable, together with all interest and Fees accrued thereon or in respect
thereof and any amounts payable pursuant to Section 4.11.
(b) As used in this Agreement, "Termination Date" shall mean the
earlier of (a) the Stated Termination Date and (b) such earlier date as the
Commitments may terminate as herein provided.
(c) The Borrower shall have the right on any Business Day prior to
the Stated Termination Date but no sooner than the later of (1) the Drawing
Deadline for all CP Notes validly issued and outstanding pursuant to the terms
of this Agreement and the Depositary Agreement and (2) (unless any payments by
the Borrower hereunder or under the CP Notes shall have become subject to
Mexican withholding taxes) the six-month anniversary of the Effective Date (the
"Elected Termination Date"), upon not less than 30 days' notice to the
Administrative Agent and the Issuing Bank, to terminate the Commitments;
provided, however, that if a Force Majeure Disruption Event or a CP Disruption
Event precipitated by a downgrade in the credit rating of the Issuing Bank has
occurred and is continuing, the Borrower shall have the right to terminate the
Commitments upon not less than 10 days' notice; provided, further that on or
prior to the Elected Termination Date, (i) the Letter of Credit shall have been
terminated and the Issuing Bank shall have delivered notice to the Depositary
of such termination pursuant to the Depositary Agreement, (ii) the unpaid
principal amount of the Notes, together with accrued interest thereon and any
Fees and all other Obligations accrued hereunder, shall have been paid, (iii)
the Borrower shall have paid to the Issuing Bank the amount agreed to by the
Issuing Bank and the Borrower in the LOC Fee Letter, and (iv) the Issuing Bank
or the Borrower shall have instructed the Depositary to cease issuing CP Notes
as provided in the Depositary Agreement. Nothing in this Section 4.2 shall
impair the obligation of Issuing Bank to make payments in accordance with the
Letter of Credit with respect to maturing CP Notes which have been validly
issued and are outstanding pursuant to the terms of this Agreement and the
Depositary Agreement. Notwithstanding the foregoing to the contrary, the 30
days' notice requirement shall not apply to any termination of Commitments
being made in connection with an extension of the Stated Termination Date or
the refunding of the Obligations pursuant to documentation satisfactory to the
Issuing Bank and the Administrative Agent.
(d) The term of this Agreement may be extended by agreement of the
Borrower, all the Banks, the Joint Lead Arrangers, the Arrangers, the Issuing
Bank, the Documentation Agent and the Administrative Agent; not earlier than 90
days prior to the Stated Termination Date on such terms and conditions as such
parties may agree in writing provided, however, that none of the aforementioned
parties are obliged to agree to such an extension (any such agreement to be in
the sole discretion of such party).
43
SECTION 4.3. Commitments Exceeded. If at any time the aggregate
Outstanding Extensions of Credit shall exceed the amount of the Commitments,
the Borrower shall deliver to the Issuing Bank, in immediately available funds,
an amount equal to such excess; provided, however, that the provisions of this
Section 4.3 shall not apply to the extent (but only to the extent) such excess
is reduced as a result of prepayment of Loans pursuant to Section 3.5, and
provided, further, that such funds shall be transferred by the Issuing Bank to
the Commercial Paper Account at the Depositary, and no such funds may be
applied to reimburse the Issuing Bank for any LOC Advance in connection
therewith, except after 1:30 p.m., New York City time, on the day such LOC
Advance is made.
SECTION 4.4. Notice to Depositary. To enable the Depositary to
determine the Maximum Commercial Paper Amount from time to time, the
Administrative Agent shall send to the Depositary, with a copy to the Borrower,
a notice by facsimile or, failing that, by hand, in substantially the form of
Exhibit F at the close of business each day on which (a) any LOC Advance has
not been reimbursed by the Borrower at or prior to 5:00 p.m., New York City
time, on the day such LOC Advance was made, (b) Loans have been made hereunder,
(c) the Administrative Agent or the Issuing Bank have received monies in
payment or prepayment of outstanding Loans or unreimbursed LOC Advances or (d)
the aggregate amount of Commitments change. The Issuing Bank shall furnish to
the Administrative Agent such information as the Administrative Agent may
require in connection with the preparation of such notices.
SECTION 4.5. Fees.
(a) Participation Fee. The Borrower will pay to the Administrative
Agent, for the account of each Bank (including the Issuing Bank), a quarterly
participation fee (the "Participation Fee") on its Participation Fraction of
the aggregate Commitments less the average daily amount of any Loans
outstanding from time to time and unreimbursed LOC Advances on which interest
is accruing under Section 2.3(b), for the period from and including the Date of
Issuance to and including the Termination Date. The Participation Fee shall be
payable in arrears on the last day of March, June, September and December of
each year and on the Termination Date (provided that if any such day is not a
Business Day, the Participation Fee shall be payable on the next preceding
Business Day), and shall be calculated at the rate per annum set forth below
based on the Consolidated Leverage Ratio as of the last day of the period of
the four fiscal quarters most recently ended prior to such payment date:
----------------------------------------------------
Consolidated Leverage Participation Fee
Ratio
----------------------------------------------------
----------------------------------------------------
- 4.0x 2.00%
----------------------------------------------------
- 3.5x to < 4.0x 1.75%
----------------------------------------------------
- 3.0x to < 3.5x 1.50%
----------------------------------------------------
< 3.0x 1.25%
----------------------------------------------------
(b) Letter of Credit Fees. The Borrower will pay to the Issuing
Bank, for the sole account of the Issuing Bank, Letter of Credit administration
fees (the "Letter of Credit Fees") in the amounts and at the times agreed to by
the Issuing Bank and the Borrower in a separate fee letter (the "LOC Fee
Letter").
44
(c) Administration Fee. The Borrower will pay to the
Administrative Agent, for the sole account of the Administrative Agent, an
administration fee (the "Administration Fees") in the amount and at the times
agreed to by the Administrative Agent and the Borrower in a separate fee letter
(the "Administration Fee Letter").
(d) Arrangement Fees. The Borrower will pay to the Joint Lead
Arrangers, for the account of the Joint Lead Arrangers, the arrangement fees
(the "Arrangement Fees") in the amounts and at the times agreed to by the Joint
Lead Arrangers and the Borrower in a separate fee letter (the "Arrangement Fee
Letter").
(e) Depositary Fees. The Borrower will pay to the Depositary, for
the sole account of the Depositary, a depositary fee (the "Depositary Fee") in
the amounts and in the manner agreed to by the Depositary and the Borrower in a
separate fee letter (the "Depositary Fee Letter").
(f) Up-Front Fees. The Borrower will pay to the Administrative
Agent, for the account of the Banks, an up-front fee (collectively, the
"Up-Front Fees") payable in accordance with the terms outlined on page 36 of
the TFM Lenders Meeting Presentation dated July 31, 2002.
(g) Computation and Payment of Fees. Fees payable pursuant to
paragraph (a) of this Section 4.5 shall be computed on the basis of a 360 day
year for the actual days elapsed.
SECTION 4.6. Maximum Interest or Discount. Anything in this
Agreement or the Depositary Agreement to the contrary notwithstanding, the
Borrower shall not issue any CP Notes if the interest thereon or the discount
from the sale price would be in excess of any maximum permitted by applicable
law.
SECTION 4.7. Pro Rata Treatment and Payments.
(a) Each Borrowing by the Borrower from the Banks (except as
otherwise provided in Section 4.9) shall be made pro rata according to the
respective Participation Fractions of the Banks.
(b) Any reduction of the Commitments shall be made pro rata
according to the respective Participation Fractions of the Banks.
(c) Except as otherwise provided in Sections 4.8, 4.9, 4.10 and/or
4.11, each payment (including each prepayment) by the Borrower on account of
principal of and interest on the Loans or unreimbursed LOC Advances shall be
made pro rata according to the respective outstanding principal amounts of the
Loans or unreimbursed LOC Advances held by each Bank. All payments (including
prepayments) to be made by the Borrower on account of principal, interest, Fees
and other amounts due and payable hereunder shall be made without set-off or
counterclaim and (except as otherwise provided in Sections 4.8, 4.9, 4.10 and
4.11) shall be made to the Administrative Agent, for the account of the Banks,
at the Administrative Agent's office set forth in Section 13.7, which shall be
maintained in New York, New York, in Dollars and in immediately available
funds. The Administrative Agent shall distribute such payments to the Banks
promptly upon receipt in like funds as received. The Borrower shall have no
liability
45
to any Bank with respect to any amount for which the Borrower has made payment
to the Administrative Agent, for the account of such Bank.
SECTION 4.8. Taxes.
(a) All payments made by the Borrower under this Agreement and any
other Principal Document shall be made free and clear of, and without deduction
for or on account of, any present or future income, stamp, sales or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
imposed, levied, collected, withheld or assessed by any Governmental Authority
of Mexico or any other jurisdiction from which payment is made or is deemed to
be made (excluding the following "Excluded Taxes": net income taxes or
franchise taxes imposed on any recipient of such payment (each a "Payee") as a
result of a present or former connection between the jurisdiction of the
Governmental Authority imposing such tax and the Payee (other than any such
connection arising solely from the Payee having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement) and withholding taxes to the extent imposed by reason of any Payee
or its assignees or participants, if any, failing to make reasonable commercial
efforts to maintain its registration with Hacienda). If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") are required to be withheld from any amounts payable to
any Payee hereunder, (subject to the right of the Borrower to contest any such
requirement in good faith, so long as proper reserves are maintained and each
Payee hereunder is paid the full amounts payable hereunder including any
gross-up payable) the Borrower shall pay such Non-Excluded Taxes to the
appropriate taxing authority, and the amounts payable to each such Payee shall
be increased by such additional amounts (the "Additional Amounts") necessary to
yield to such Payee (after payment of all Non-Excluded Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified
in this Agreement. Whenever any Non-Excluded Tax is payable by the Borrower,
as promptly as possible thereafter, the Borrower shall send to the
Administrative Agent, for the account of such Payee, a certified copy by a
Responsible Officer of the Borrower of a stamped filed receipt showing payment
thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the affected Payees for any incremental taxes, interest or penalties
that may become payable by any such Payee as a result of any such failure.
This indemnity and agreement shall survive termination of the Agreement and
payment of the Loans and CP Notes.
(b) Each Payee shall, from time to time at the request of the
Borrower, the Issuing Bank or the Administrative Agent, furnish to the
Borrower, the Issuing Bank or the Administrative Agent, as the case may be,
such documentation as may be required to establish any available exemption
from, or reduction in the amount of, otherwise applicable Non-Excluded Taxes.
The Borrower, the Issuing Bank and the Administrative Agent shall be entitled
to rely upon the accuracy of any such documentation furnished to it by any
Payee and shall have no obligation to indemnify such Payee for any incremental
taxes, interest or penalties that may become payable by such Payee solely as a
result of any inaccuracy contained therein or the Payee's failure to furnish
such documentation.
46
SECTION 4.9. Illegality. Notwithstanding any other provisions
herein, if any Requirement of Law or any change therein or in the
interpretation or application thereof shall make it unlawful for any Bank to
make or maintain Eurodollar Loans as contemplated by this Agreement, then such
Bank may give notice thereof to each of the Borrower, the Issuing Bank, the
Administrative Agent, and the Depositary, and upon the giving of such notice
(a) the Commitment of such Bank hereunder to make Eurodollar Loans shall
forthwith be canceled and (b) such Bank's Loans then outstanding as Eurodollar
Loans, if any, shall be converted to Base Rate Loans on the last day of the
Interest Period therefor or within such earlier period as required by law. If
any such conversion of a Eurodollar Loan is made on a day which is not the last
day of the Interest Period therefor, the Borrower shall pay to such Bank such
amounts, if any, as may be required pursuant to Section 4.11.
SECTION 4.10. Requirements of Law.
(a) If, after the Effective Date, and as a result of the adoption
of any law, regulation, treaty or official directive or request (whether or not
having the force of law) or any change therein or any introduction thereof
(which such change or introduction is publicly announced through official
governmental, regulatory or other customary means after the Effective Date) or
compliance therewith by the Borrower, the Administrative Agent, the Issuing
Bank or any Bank (or any corporation controlling such Bank) including those
relating to taxation, reserves, special deposit, cash ratio, liquidity, capital
adequacy or Eurocurrency Liabilities or other requirement or any other form of
banking or monetary requirements or controls, any of the following shall occur:
(i) the cost to any Bank or the Issuing Bank of maintaining
its Commitment or maintaining the Letter of Credit or making or
maintaining its Loans or its participation in the Letter of Credit
Facility is increased by an amount determined by such Bank or Issuing
Bank to be material; or
(ii) any amount receivable by any Bank or the Issuing Bank is
reduced by an amount determined by such Bank or Issuing Bank to be
material as a result of maintaining its Commitment or maintaining the
Letter of Credit or maintaining its Loans or its participation in the
Letter of Credit Facility; or
(iii) the rate of return on such Bank's (or its controlling
corporation's) capital is reduced as a consequence of its obligations
hereunder or under or in respect of the Letter of Credit to a level
below that which such Bank could have achieved but for such adoption,
change or introduction (taking into consideration such Bank's or such
corporation's policies with respect to capital adequacy) by an amount
deemed by such Bank or the Issuing Bank to be material;
in the case of each of clauses (i), (ii) and (iii) other than any increase in
or incurrence of cost, reduction in yield or other return or additional payment
resulting from Excluded Taxes, then and in each such case:
(A) such Bank or the Issuing Bank or the Administrative Agent
on its own behalf (each of the foregoing, an "Affected Bank") shall
notify the Borrower through the
47
Administrative Agent in writing of such event promptly upon its becoming
aware of the event entitling it to make a claim; and
(B) upon demand from time to time by such Affected Bank through
the Administrative Agent, the Borrower shall pay to the Administrative
Agent for the account of such Affected Bank such amount as shall
compensate such Affected Bank for such increased cost, reduced amount
receivable or reduction in rate of return. The certificate of such
Affected Bank specifying the amount of such compensation shall be
conclusive save in the case of manifest error.
(b) If an Affected Bank shall request compensation under this
Section 4.10, such Bank shall furnish to the Borrower a statement setting forth
the basis for requesting such compensation.
(c) The covenants and agreements set forth in this Section 4.10
shall survive the termination of this Agreement and the payment of the
outstanding Loans and CP Notes. Failure or delay on the part of any Bank or
the Issuing Bank to demand compensation pursuant to this Section 4.10 shall not
constitute a waiver of such Bank's or the Issuing Bank's right to demand
compensation; provided that the Borrower shall not be required to compensate a
Bank or the Issuing Bank, as applicable, pursuant to this Section 4.10 for any
increased costs or reductions incurred more than 180 days prior to the date
that such Bank or the Issuing Bank, as the case may be, notifies the Borrower
of the event giving rise to such increased costs or reductions and of such
Bank's or such Issuing Bank's intention to claim compensation therefor; and
provided further that, if the event giving rise to such increased costs or
reduction is retroactive, then the 180 day period referred to above shall be
extended to include the period of retroactive effect thereof.
SECTION 4.11. Funding Indemnity. The Borrower agrees to indemnify
each Bank and to hold such Bank harmless from any actual loss or expense
(excluding loss of profit) which such Bank may sustain or incur as a
consequence of (a) default by the Borrower in payment when due (by acceleration
or otherwise) of the principal amount of or interest on any Eurodollar Loans or
any Base Rate Loans of such Bank, (b) default by the Borrower in converting
Base Rate Loans into Eurodollar Loans after the Borrower has given a Conversion
Certificate in accordance with Section 3.3, (c) default by the Borrower in
making any prepayment after the Borrower has given a notice in accordance with
Section 3.5(a), (d) default by the Borrower in converting Eurodollar Loans into
Base Rate Loans pursuant to Section 4.9 , and (e) the making by the Borrower of
a prepayment of a Eurodollar Loan, on a day which is not the last day of the
Interest Period with respect thereto (whether or not the Administrative Agent
or such Bank has previously consented to such prepayment), including any such
loss or expense arising from interest or fees payable by such Bank to lenders
of funds obtained by it in order to maintain its Eurodollar Loans hereunder as
set forth in a certificate of such Bank delivered to the Borrower through the
Administrative Agent. This covenant shall survive termination of this
Agreement and payment of the Loans and CP Notes.
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SECTION 4.12. Sharing of Payments, Etc.
(a) If, other than as expressly provided elsewhere herein, any Bank
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 Participation Fraction of payments on account of
the Obligations obtained by all the Banks, such Bank shall forthwith (i) notify
the Administrative Agent of such fact, and (ii) purchase from the other Banks
such participations in such Obligations made by them as shall be necessary to
cause such purchasing Bank 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 Bank, such purchase shall to that
extent be rescinded and each other Bank shall repay to the purchasing Bank the
purchase price paid therefor, together with an amount equal to such paying
Bank's Participation Fraction (according to the proportion of (A) the amount of
such paying Bank's required repayment to (B) the total amount so recovered from
the purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The
Administrative Agent will keep records (which shall be conclusive and binding
in the absence of manifest error) of participations purchased pursuant to this
Section 4.12 and will in each case notify the Banks and the Borrower following
any such purchases.
(b) The Borrower agrees that any Bank so purchasing a participation
from another Bank pursuant to this Section 4.12 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off, but subject to Section 13.12) with respect to such participation as
fully as if such Bank were the direct creditor of the Borrower in the amount of
such participation.
SECTION 4.13. Change of Lending Office.
Each Bank agrees that, upon the occurrence of any event giving rise to
the operation of Section 4.8, 4.9 or 4.10(a) as to it, it will use its
reasonable best efforts to avoid or minimize the consequences of such event;
provided, however, that such action shall not, in the judgment of such Bank, as
the case may be, be illegal or economically or otherwise disadvantageous to it.
If such Bank is entitled to compensation for the events specified under Section
4.8 or 4.10(a), or is prevented from making Eurodollar Loans as a result of the
operation of Section 4.9, it shall endeavor for a period of 30 days to designate
a different office for any Obligation or Letter of Credit affected by such event
if such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Bank, result in any
economic, legal or regulatory or other disadvantage to such Bank or any of its
affiliates.
SECTION 4.14. Replacement of Banks. The Borrower shall be permitted
to replace any Bank that (a) requests reimbursement for amounts owing pursuant
to Section 4.8 or 4.10(a), (b) is prevented from making Eurodollar Loans as a
result of the operation of Section 4.9 or (c) defaults in its obligation to
make Loans hereunder, with a replacement financial institution; provided that
(i) such replacement does not conflict with any Requirement of Law, (ii) no
Event of Default shall have occurred and be continuing at the time of such
replacement, (iii) prior to any such replacement, such Bank shall have taken no
action under Section 4.13 so as to eliminate the continued need for payment of
amounts owing pursuant to Section 4.8 or 4.10(a) or the operation of Section
4.9, (iv) the replacement financial institution shall purchase, at par, all
49
Loans, unreimbursed LOC Advances and other amounts owing to such replaced Bank
on or prior to the date of replacement, (v) the Borrower shall be liable to
such replaced Bank under Section 4.11 if any Eurodollar Loan owing to such
replaced Bank shall be purchased other than on the last day of the Interest
Period relating thereto, (vi) the replacement financial institution, if not
already a Bank, shall be reasonably satisfactory to the Administrative Agent
and the Issuing Bank, (vii) the replaced Bank shall be obligated to make such
replacement in accordance with the provisions of Section 13.10 (provided that
the Borrower shall be obligated to pay the registration and processing fee
referred to therein), (viii) until such time as such replacement shall be
consummated, the Borrower shall pay all additional amounts (if any) required
pursuant to Section 4.8 or 4.10(a), as the case may be, and (ix) any such
replacement shall not be deemed to be a waiver of any rights that the Borrower,
the Administrative Agent, the Issuing Bank or any other Bank shall have against
the replaced Bank.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1. Conditions to Effective Date. This Agreement shall
become effective on the date that the following conditions, and the conditions
precedent to the issuance of the Letter of Credit set forth in Section 5.2,
have been fulfilled:
(a) Agreement. The Administrative Agent shall have received
counterparts of this Agreement, duly executed by each party hereto.
(b) Notes. All the Notes shall have been duly executed and
delivered by the Borrower to the Administrative Agent.
(c) Depositary Agreement and Dealer Agreements. The Administrative
Agent shall have received: (i) counterparts of the Depositary Agreement duly
executed by each party thereto, which shall be in full force and effect,
together with evidence that the Commercial Paper Account and the Letter of
Credit Account have been established at the office of the Depositary and copies
of all documents to be delivered pursuant to the Depositary Agreement and (ii)
counterparts of each Dealer Agreement duly executed by the parties thereto.
(d) Opinions of Borrower's Counsel. The Administrative Agent and
the Issuing Bank shall have received, each dated the Date of Issuance: (i) the
opinions of Xxxxxx and Xxxxx LLP and Xxxxxx and Xxxxx, S.C., special New York
counsel and special Mexican counsel, respectively, to the Borrower, in
substantially the form of Exhibit G and as to the exemption of the CP Notes
from registration under the Securities Act of 1933, as amended, and as to such
bankruptcy matters as Xxxxx'x or S&P may request. The opinions of Borrower's
counsel shall also address such matters as any Rating Agency may additionally
request and shall be addressed to the Issuing Bank, the Administrative Agent,
the Documentation Agent, the Joint Lead Arrangers, the Arrangers, the Banks and
the Rating Agencies.
(e) Opinions of Counsel to the Issuing Bank and the Administrative
Agent. The Administrative Agent shall have received (i) the opinion of
Xxxxxxxxx and May, English counsel for the Issuing Bank, as to the
enforceability of the Letter of Credit, (ii) the opinion of U.S. counsel to
the Issuing Bank, as to the due authorization and delivery of the Letter of
Credit and
50
the Agreement and the validity and enforceability thereof against the Issuing
Bank and (iii) the opinion of Mexican counsel to the Administrative Agent, each
dated the Date of Issuance and in form and substance satisfactory to the
Administrative Agent.
(f) Governmental Approvals. All necessary orders, consents,
approvals (including authorizations from any central bank), licenses,
permissions, registrations and validations of, or notices to or filings with,
and exemptions by, any Mexican Governmental Authority required for the
execution, delivery, performance or carrying out by the Borrower of the
provisions of this Agreement and the other Principal Documents and for the
validity or enforceability of the obligations incurred hereunder or thereunder
shall have been obtained and shall be in full force and effect and copies
thereof certified by appropriate officers of the Borrower to such effect shall
have been delivered to the Administrative Agent, including the approval of the
Mexican National Banking and Securities Commission for the registration of the
CP Notes with the Special Section of the National Registry of Securities.
(g) Organizational Documents. There shall have been delivered to
the Administrative Agent the following organizational documents: (i) a duly
certified copy by Mexican Public Notary, in Spanish, of the estatutos of the
Borrower as adopted as of the Effective Date; (ii) an incumbency certificate
designating the officers of the Borrower (together with their specimen
signatures) authorized to execute any document in connection with the
transactions contemplated by this Agreement; and (iii) copies authorized by
Mexican Public Notary of resolutions of the Board of Directors of the Borrower
certified by the Secretary of the Board of Directors of the Borrower or a
Responsible Officer of the Borrower and dated as of the Effective Date,
authorizing the execution, delivery and performance of this Agreement, the
Depositary Agreement, each Dealer Agreement, each Fee Letter, the designation
of CT Corporation as the Borrower's agent for service of process, the CP Notes
and the Notes. Such certificates shall state that the resolutions set forth
therein have not been amended, modified, revoked or rescinded as of the date of
such certificates.
(h) Change of Conditions. No introduction of or any change in the
interpretation of any law or regulation and no event of Force Majeure that
would make it unlawful or impracticable for the Banks, the Issuing Bank or the
Administrative Agent to undertake the transactions contemplated by this
Agreement shall have occurred and be continuing.
(i) Payment of Fees and Expenses. The Borrower shall have paid:
(A) to the Administrative Agent, the Administration Fees due on the Date of
Issuance; (B) to the Joint Lead Arrangers, the Arrangement Fees due on the Date
of Issuance; (C) to the Depositary, the Depositary Fees due on the Date of
Issuance; (D) to the Issuing Bank, the Letter of Credit Fees, as detailed in
the LOC Fee Letter; (E) to the Administrative Agent for the account of the
Banks, the Up-Front Fees; and (F) to the Administrative Agent, the Joint Lead
Arrangers and the Arrangers, the Facility Expenses then due and owing.
(j) Agent for Service of Process. The Administrative Agent shall
have received a certified copy of the applicable notarial deed by which the
Borrower has appointed and granted a power of attorney to the agent for service
of process in New York, New York pursuant to Section 13.13, and that the agent
has accepted such appointment.
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(k) Ratings. The CP Notes shall be rated at least A-1 by S&P and
P-1 by Xxxxx'x.
(l) Governmental Concessions. The Administrative Agent shall have
received copies of the Concession Title together with a certificate of the
Secretary of the Board of Directors of the Borrower or any Responsible Officer
of the Borrower stating that such Concession Title is in full force and effect
and further that the Borrower is in material compliance with all terms and
conditions applicable thereunder or pursuant to applicable law.
(m) Financial Statements. The Administrative Agent shall have
received (i) audited consolidated financial statements of the Borrower for the
1999, 2000 and 2001 fiscal years and (ii) unaudited interim consolidated
financial statements of the Borrower for each fiscal quarter ended after the
date of the latest applicable financial statements delivered pursuant to clause
(i) of this paragraph through June 30, 2002 and such financial statements shall
be in form and substance satisfactory to the Administrative Agent.
(n) Projections. The Administrative Agent shall have received
financial projections of the Borrower through fiscal year 2006, in form and
substance satisfactory to the Administrative Agent.
(o) Termination of Existing CP Facility. The Administrative Agent
shall have received a termination letter, in form and substance satisfactory to
the Administrative Agent, dated the Date of Issuance, confirming that all
obligations of the Borrower under the Existing CP Facility shall have been
satisfied in full or will be satisfied in full concurrently with the
effectiveness of this Agreement and that the Existing CP Facility shall have
been terminated or will be terminated concurrently with the effectiveness of
this Agreement.
(p) Term Loans. The conditions set forth in Article III of the
Term Loan Agreement shall have been satisfied.
In connection with this Section 5.1, the Borrower shall deliver to the
Administrative Agent sufficient copies (executed originals and certified
English translations where applicable) of all documents for each of the Banks.
SECTION 5.2. Conditions to each Extension of Credit. The Borrower
shall not be entitled to have the Letter of Credit issued for its account or
cause to be issued any CP Notes or to borrow any Loans hereunder unless:
(a) Effective Date. The Effective Date shall have occurred.
(b) Representations and Warranties. The representations and
warranties of the Borrower contained herein (other than any such representation
or warranty which, by its term, speaks as of a particular date) are true and
correct in all material respects on and as of the date of such Extension of
Credit with the same effect as if made on and as of such date.
(c) Payment of Fees and Expenses. The Borrower shall have paid all
fees and other amounts then due and payable by the Borrower hereunder and
pursuant to any Fee Letter.
52
(d) No Event of Default. No Default or Event of Default shall have
occurred and be continuing on the Date of Issuance of the Letter of Credit or
the date of such Extension of Credit or shall come into existence as a result
thereof or the use of the proceeds thereof.
(e) Depositary Instructions. The Borrower shall have not (i)
revoked or in any way modified the instructions to establish the accounts as
set forth in Section 1(a) or 1(c) of the Depositary Agreement or (ii) received
the notice referred to in Section 1(b) of the Depositary Agreement.
(f) No Attachments. No de facto investigation, writ, order,
judgment, warrant of attachment, execution or similar process or stay or legal
restraint has been imposed and remains in effect upon the Commercial Paper
Account or the Letter of Credit Account.
(g) Ratings. The CP Notes shall be rated at least A-1 by S&P and
P-1 by Xxxxx'x.
(h) CP Memorandum. In the case of any issuance of CP Notes, the
Administrative Agent and the Issuing Bank shall have received a copy acceptable
to them of each CP Memorandum to be used by the Dealers in connection with the
offer and sale of CP Notes.
(i) Commitments. After giving effect on any day to (i) each
Extension of Credit and (ii) the prepayment or repayment of any LOC Advances or
Loans or CP Notes on such day, the aggregate Outstanding Extensions of Credit
shall not exceed the sum of the Commitments in effect on such day.
(j) No Notice of Default or Acceleration. No Notice of Default
pursuant to Section 9.2(a) shall have been delivered by the Issuing Bank to the
Borrower and (ii) no Notice of Acceleration pursuant to Section 9.2(b) and no
notice pursuant to Section 9.2(e) shall have been delivered by the
Administrative Agent to the Borrower.
(k) Other Conditions. In the case of any issuance of CP Notes, no
Market Disruption Event shall have occurred and be continuing as a result of
which the Borrower is required to cease issuing CP Notes.
Each Extension of Credit hereunder shall constitute a representation by
the Borrower that the foregoing conditions have been satisfied on and as of the
date of such Extension of Credit.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Banks, the Issuing Bank, the Joint Lead
Arrangers, the Arrangers, the Documentation Agent and the Administrative Agent
to enter into this Agreement and to induce the Banks and the Issuing Bank to
make the Extensions of Credit provided for herein, the Borrower makes the
following representations and warranties to the Banks, the
53
Issuing Bank, the Joint Lead Arrangers, the Arrangers, the Documentation Agent
and the Administrative Agent, all of which shall survive the execution and
delivery of this Agreement:
SECTION 6.1. Status and Licensing. The Borrower is a limited
liability variable capital corporation (sociedad anonima de capital variable)
duly organized and validly existing under the laws of Mexico. The Borrower has
the power and authority to own its property and to transact the business in
which it is engaged or presently proposes to engage and is duly qualified or
licensed as a foreign corporation in each jurisdiction in which such
qualification is required, unless failure so to qualify could not reasonably be
expected to have a Material Adverse Effect.
SECTION 6.2. Corporate Power and Authority; Enforceable
Obligations. (a) The Borrower has the corporate power to execute, deliver
and perform the terms and provisions of the Principal Documents and the
Fee Letters and to have the Letter of Credit issued for the account of the
Borrower, and has taken all necessary corporate action required by the
estatutos of the Borrower to authorize the execution, delivery and
performance of the Principal Documents and the Fee Letters and to have the
Letter of Credit issued for the account of the Borrower.
(b) Each of this Agreement, the other Principal Documents to which
the Borrower is a party and the Fee Letters have been duly authorized, executed
and delivered by the Borrower.
(c) Each of this Agreement and the other Principal Documents (other
than the Notes and the CP Notes) and the Fee Letters constitutes, and each Note
and each CP Note when executed by the Borrower and delivered for value received
will constitute, legal, valid and binding obligations of the Borrower
enforceable in accordance with their respective terms except to the extent that
the enforceability thereof may be limited by applicable bankruptcy, concurso
mercantil, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors' rights and by equitable principles (regardless
of whether enforcement is sought in equity or at law).
SECTION 6.3. Compliance with Law and Other Instruments. Neither
the execution, delivery or performance of this Agreement or any of the other
Principal Documents in accordance with their respective terms, nor the
consummation of the transactions herein or therein contemplated, nor compliance
with the terms and provisions hereof or thereof, will contravene the charter or
by-laws (estatutos) (or other equivalent organizational documents) of the
Borrower or contravene any Requirement of Law to which the Borrower is subject
or any judgment, decree, order or permit applicable to the Borrower, or will
conflict with or will result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien upon
any of the property or assets of the Borrower pursuant to the terms of any
indenture, mortgage, deed of trust, agreement or other instrument (other than
those permitted or required by this Agreement and the other Principal Documents,
including, without limitation, Permitted Liens) to which the Borrower is a party
or bound or to which it may be subject or violate any provision of the estatutos
of the Borrower, except in each case where such conflict, breach, default or
violation would not have a Material Adverse Effect.
54
SECTION 6.4. Litigation and Environmental Matters. There are no
actions, suits or proceedings pending or, to the best of the Borrower's
knowledge, threatened against or affecting the Borrower before any court,
tribunal or other Governmental Authority: (a) with respect to this Agreement,
any other Principal Document or the transactions contemplated hereby or thereby
or (b) which individually or in the aggregate could be reasonably expected to
have a Material Adverse Effect. Except with respect to any matters that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, the Borrower (i) has not failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has not become
subject to any Environmental Liability, (iii) has not received notice of any
claim with respect to any Environmental Liability or (iv) knows of no basis for
any Environmental Liability. The Borrower is not in default with respect to
any applicable statute, rule, writ, injunction, decree, order or regulation of
any Governmental Authority having jurisdiction over the Borrower which could
reasonably be expected to have a Material Adverse Effect.
SECTION 6.5. Governmental Approvals. Assuming that the Letter of
Credit will be duly issued by the Issuing Bank and will constitute a valid
obligation of the Issuing Bank, no order, permission, consent, approval,
license, authorization, registration or validation of, or notice to or filing
with, or exemption by, any Governmental Authority is required by the Borrower
to authorize, or is required in connection with, the execution, delivery and
performance by the Borrower of this Agreement and the other Principal Documents
or the taking of any action by the Borrower hereby or thereby contemplated, or,
if any of the foregoing are required, they have been obtained and are in full
force and effect.
SECTION 6.6. Financial Information.
(a) The audited financial statements of the Borrower dated December
31, 1999, 2000 and 2001, and unaudited financial statements as of June 30, 2002
(the "Financial Statements"), including in each case the related schedules and
notes, fairly present the financial condition of the Borrower as of the dates
of such statements and the results of their operations for the periods therein
stated and have been prepared in accordance IAS, consistently applied
throughout the periods involved (unless and to the extent otherwise stated
therein).
(b) Except as fully disclosed in the Financial Statements, there
are no liabilities or obligations with respect to the Borrower and its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) and the Borrower knows of no basis for the
assertion against it or its Subsidiaries of any liability or obligation of any
nature that is not fully disclosed in the Financial Statements which, in either
case, either individually or in the aggregate, would be reasonably expected to
have a Material Adverse Effect.
(c) Since December 31, 2001, there has been no development or event
which has had or could reasonably be expected to have a Material Adverse Effect.
SECTION 6.7. Taxes, Assessments and Fees. The Borrower has paid
all taxes due except such taxes as are being contested in good faith for which
adequate (in the good faith judgment of the Borrower) reserves have been made
(in accordance with IAS) or such taxes the failure of which to pay could not
reasonably be expected to have a Material Adverse Effect.
55
SECTION 6.8. Investment Company Act. The Borrower is not an
"investment company" required to be registered under the Investment Company Act
of 1940, as amended.
SECTION 6.9. Accuracy of Information. All written information
supplied by the Borrower to the Administrative Agent, the Documentation Agent,
the Issuing Bank, the Joint Lead Arrangers, the Arrangers and the Banks
relating to the Borrower, viewed in the aggregate, was true and accurate in all
material respects as of the date supplied, and did not as of such date, and
does not, in each case viewed in the aggregate, omit to state any material
information necessary to make the information therein contained, in light of
the circumstances under which such information was supplied, not misleading.
SECTION 6.10. Absence of Default. No Default or Event of Default
has occurred and is continuing.
SECTION 6.11. Obligations Pari Passu; Recourse; Liens. The
Obligations of the Borrower under the Principal Documents rank at least pari
passu in right of payment with all its other senior unsecured Indebtedness,
except for obligations accorded preference by mandatory provisions of law.
There is no Lien upon or with respect to any of the present or future
properties or Indebtedness of the Borrower or its Subsidiaries other than liens
permitted or required by this Agreement or the other Principal Documents,
including, without limitation, Permitted Liens.
SECTION 6.12. Withholding Tax. As of the Effective Date, there is
no tax, levy, impost, deduction, charge or withholding imposed, levied 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 Principal Documents or the Fee Letters or (ii) on
any payment to be made by the Borrower pursuant to this Agreement or any of the
other Principal Documents or any of the Fee Letters to any Person, except that
payments of interest under this Agreement (including payments made in excess of
the original issue price of the CP Notes) and fees payable hereunder and under
any Fee Letter will be subject to a Mexican withholding tax at a rate of 4.9% so
long as the payee is a commercial bank or other financial institution registered
with Hacienda and, if applicable, the Borrower complies with general rules
issued by Hacienda. As of the Effective Date, the Borrower is permitted under
applicable law, to make all payments pursuant to this Agreement or any of the
other Principal Documents, or the Fee Letters free and clear of all taxes,
levies, imposts, deductions, charges or withholdings imposed, levied or made by
or in Mexico or any political subdivision or taxing authority thereof, as
provided in this Agreement or in any other of the Principal Documents, without
any liability to be borne by the payee in connection with such Mexican
withholding tax to the extent that the Borrower has complied with its
obligations in Section 4.8 of this Agreement and the corresponding provisions of
the other Principal Documents to pay to the appropriate Mexican authorities
applicable withholding taxes required to be paid by the Borrower.
SECTION 6.13. Proper Form; No Filing. Each Principal Document is
(or, in the case of any Note or any CP Note, will be, upon the issuance thereof
in accordance herewith) in proper legal form for the enforcement thereof in
Mexico against the Borrower; provided, however, that if any legal proceedings
are brought in a court of Mexico for the enforcement against the Borrower, of
this Agreement and the other Principal Documents, a Spanish
56
translation of such documents prepared by a translator approved by the Mexican
court would have to be approved by such court after the Borrower has been given
the opportunity to be heard with respect to the accuracy of the translation,
and proceedings would thereafter be based on the translated documents. To
ensure the legality, validity, enforceability or admissibility in evidence of
this Agreement and the other Principal Documents in Mexico it is not necessary
that this Agreement or any other document be filed or recorded with any
Governmental Authority in Mexico or be notarized, or that any stamp or similar
tax be paid on or in respect of this Agreement or any of the other Principal
Documents.
SECTION 6.14. Choice of Law. In any action or proceeding involving
the Borrower arising out of or relating to this Agreement in any court of
Mexico, a Bank, the Issuing Bank, the Joint Lead Arrangers, the Arrangers, the
Documentation Agent and the Administrative Agent would be entitled to the
recognition and effectiveness of the choice of law provisions of Section 13.5.
SECTION 6.15. Immunity. The Borrower is subject to suit in Mexico
and neither it nor its property has any right of immunity, on the grounds of
sovereignty or otherwise, from any legal action, suit or proceeding, set-off or
counterclaim, the jurisdiction of any competent court and service of process,
attachment or execution in Mexico with respect to its obligations, liabilities,
or any other matter under or arising out of or in connection with this
Agreement or any other Principal Document, and to the extent that the Borrower
or its property may have or may hereafter become entitled to any such right of
immunity it has effectively waived such right under Section 13.16; provided,
that the Concession Title may not be transferred to any Person without the
prior consent of Mexico. The waiver by the Borrower described in the
immediately preceding sentence is a legal, valid and binding obligation
thereof. The foregoing waiver is intended to be effective to the fullest
extent now or hereafter permitted by the applicable law of any jurisdiction in
which any suit, action or proceeding with respect to this Agreement may be
commenced. The performance of this Agreement and the other Principal Documents
by the Borrower constitutes private and commercial acts rather than
governmental or public acts.
SECTION 6.16. Status of Concession. The Concession Title is in full
force and effect and no investigation or proceeding seeking the termination or
revocation of the Concession Title has been initiated or attempted.
SECTION 6.17. Properties. (a) The Borrower has good title to,
or valid leasehold interests in, all its real and personal property
material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted
or to utilize such properties for their intended purposes.
(b) The Borrower owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its
business, and the use thereof by the Borrower does not infringe upon the rights
of any other Person, except for any such infringements that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
57
SECTION 6.18. Subsidiaries. The Subsidiaries listed on
Schedule 6.18 hereto constitute the only Subsidiaries of the Borrower as at the
date hereof.
SECTION 6.19. Federal Regulations. No part of the proceeds of any
Loans will be used for "buying" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect or for any purpose that violates the
provisions of the Regulations of the Board. If requested by any Bank or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Bank a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in
Regulation U.
SECTION 6.20. Labor Matters. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes or other labor disputes against the Borrower pending or, to the
knowledge of the Borrower, threatened; (b) hours worked by and payment made to
employees of the Borrower have not been in violation of any applicable
Requirement of Law dealing with such matters; and (c) all payments due from the
Borrower on account of employee health and welfare insurance have been paid or
accrued as a liability on the financial statements of the Borrower.
ARTICLE VII
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that for so long as this Agreement
is in effect and until all of the Obligations are paid in full, the Borrower
will:
SECTION 7.1. Senior Obligations. Ensure that its obligations under
the Principal Documents shall at all times rank at least pari passu with all
its other present and future direct, indirect, unsecured and unsubordinated
Indebtedness, except for obligations accorded preference by mandatory
provisions of law.
SECTION 7.2. Financial Statements.
(a) Deliver to the Administrative Agent as soon as available, and
in any case within 120 days of the end of each fiscal year of the Borrower,
originals and English translations of the consolidated annual financial
statements of the Borrower and its Subsidiaries audited and reported on in
accordance with IAS, consistently applied (except as otherwise discussed in the
notes to such financial statements) by independent auditors of recognized
standing, which financial statements shall present fairly in accordance with
IAS the financial condition of the Borrower as at the end of the relevant
fiscal year and the results of the operations of the Borrower for such fiscal
year;
(b) Deliver to the Administrative Agent as soon as available, and
in any case within 45 days of the end of each fiscal quarter, originals and
English translations of the unaudited consolidated financial statements of the
Borrower and its Subsidiaries in respect of such fiscal quarter prepared in
accordance with IAS, consistently applied (except as otherwise discussed in the
notes to such financial statements), which financial statements shall present
fairly in accordance with IAS, the financial condition of the Borrower as at
the end of the
58
relevant fiscal quarter of each fiscal year and the results of the operations
of the Borrower for such fiscal quarter;
(c) Concurrently, with the delivery of the financial statements
pursuant to paragraphs (a) and (b) above, deliver to the Administrative Agent a
certificate of a Responsible Officer of the Borrower stating that (i) to the
best of such Responsible Officer's knowledge, the Borrower during such period
has observed or performed all of its covenants and other agreements, and
satisfied every condition contained in this Agreement, the Depositary Agreement
and other related agreements and that such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in such
certificate and (ii) a compliance certificate by the Borrower containing all
information and calculations necessary for determining compliance by the
Borrower with the covenants contained in Section 8.4;
(d) Deliver to the Administrative Agent sufficient copies of the
statements referred to in paragraphs (a) and (b) for all the Banks and other
parties to this Agreement; and
(e) Furnish to the Administrative Agent copies of such other
financial reports filed by the Borrower with any Governmental Authority or with
any Mexican or other securities exchange and which are publicly available which
the Administrative Agent (or the Issuing Bank or any Bank through the
Administrative Agent) may from time to time reasonably request; provided that
the information will be furnished in Spanish unless information is provided
publicly in English.
SECTION 7.3. Notice of Default; Litigation and Material Adverse
Effect. Furnish to the Administrative Agent, not later than five Business Days
after a Responsible Officer of the Borrower obtains knowledge thereof (and the
Administrative Agent will notify the Issuing Bank, each Bank, the Depositary
and each Dealer thereof):
(a) written notice of any Default or Event of Default, signed by a
Responsible Officer of the Borrower, describing such Default or Event of
Default and the steps that the Borrower proposes to take in connection
therewith;
(b) written notice of any litigation, action or proceeding pending
or threatened in writing against the Borrower before any Governmental
Authority, which, individually or in the aggregate, could be reasonably
expected to have a Material Adverse Effect; and
(c) a certificate of a Responsible Officer of the Borrower setting
forth details of any event that may have a Material Adverse Effect on the
Borrower and the actions the Borrower proposes to take with respect thereto.
SECTION 7.4. Additional Information. Provide each Dealer with such
updated information as may be necessary to ensure (assuming the accuracy in all
material respects of information supplied by the Issuing Bank and the
Administrative Agent), in light of the circumstances under which such updated
information is provided, that the information about the Borrower that is
contained in any CP Memorandum used in connection with the offer and sale of CP
Notes (when taken together with such updated information) is true and accurate
in all material respects and not misleading.
59
SECTION 7.5. Other Obligations. Comply with all of its obligations
under the Depositary Agreement (taking all applicable grace periods into
account) and use commercially reasonable efforts to ensure that there is at all
times an issuing agent and a paying agent for the CP Notes in New York, New
York.
SECTION 7.6. Use of Proceeds. Use the proceeds of CP Notes and
Loans solely for general working capital purposes which shall include, without
limitation, the repayment of obligations of the Borrower under the Existing CP
Facility upon the initial issuance of CP Notes, and to provide liquidity for the
reimbursement of unreimbursed LOC Advances during the existence of a Market
Disruption Event.
SECTION 7.7. Securities Act. Sell and offer to sell CP Notes only
in compliance with the registration provisions of the Securities Act of 1933, as
amended, or pursuant to an exemption under Section 3 or Section 4 thereof, and
in compliance with the registration or qualification provisions of the
securities laws of any state or foreign country having jurisdiction.
SECTION 7.8. Conduct of Business and Maintenance of Existence.
(a) Continue to engage in business of the same general type as now
conducted by it or authorized by its estatutos or by the Concession Title and
preserve, renew and keep in full force and effect its corporate existence,
subject to any merger or consolidation permitted under Section 8.14 and (b)
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business (including,
without limitation, the Concession Title) and comply with all contractual
obligations (including the terms of such Concession Title) binding on it or its
property except for failure to maintain any rights, privileges or franchises or
to comply with contractual obligations which, in the aggregate, would not have
a Material Adverse Effect.
SECTION 7.9. Maintenance of Government Approvals. Maintain in full
force and effect all material governmental approvals (including any exchange
control approvals), consents, licenses and authorizations which may be
necessary or appropriate under any applicable law or regulation for the conduct
of its business, for the execution, delivery and performance of the Principal
Documents by the Borrower and for the validity or enforceability against it
hereof and thereof and take all necessary governmental and administrative
action in Mexico to make all payments to be made by it hereunder and
thereunder. The Borrower will file all applications necessary for, and shall
use its best efforts to obtain, any additional authorization as soon as
possible after determination that such authorization or approval is required
for the Borrower to perform its obligations hereunder or under the other
Principal Documents, including, but not limited to, any filings necessary to
obtain payment in US Dollars in respect of this Agreement, the CP Notes or the
Loans.
SECTION 7.10. Compliance with Laws and Other Instruments. Comply in
all material respects with (a) all applicable Requirements of Law (including,
without limitation, all applicable Mexican railroad regulations (including the
filing of documents, the fulfillment of investment requirements and the
performance of services as required in the Concession Title and the applicable
laws and regulations)), and (b) any of the terms, covenants, conditions or
60
provisions of any indenture, mortgage, deed of trust, agreement or other
instrument to which the Borrower is a party or bound or to which it may be
subject, except in each case where the necessity of compliance therewith is
contested in good faith by appropriate proceedings or where failure to comply
could not reasonably be expected to have a Material Adverse Effect.
SECTION 7.11. Maintenance of Properties; Insurance. The Borrower
will, and will cause each of its Subsidiaries to, (a) keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain insurance with
financially sound, responsible and reputable insurance companies in such
amounts and covering such risks as is usually carried by companies engaged in
similar businesses and owning and/or operating properties similar to those
owned and/or operated by the Borrower or such Subsidiary, as the case may be,
in the same general areas in which the Borrower or such Subsidiary owns and/or
operates its properties.
SECTION 7.12. Maintenance of Books and Records and Inspection
Rights. The Borrower will, and will cause each of its Subsidiaries to, maintain
books, accounts and records in accordance with IAS. The Borrower will, and will
cause each of its Subsidiaries to, permit any representatives designated by the
Administrative Agent or any Bank, upon reasonable prior written notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all during business hours of the Borrower or such
Subsidiary and as often as reasonably requested.
SECTION 7.13. Payment of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, could result in a Material Adverse Effect
before the same shall become delinquent or in default, except where (a) the
validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) the Borrower or such Subsidiary has set aside on its books
adequate reserves with respect thereto in accordance with IAS and (c) the
failure to make payment pending such contest could not reasonably be expected
to result in a Material Adverse Effect.
SECTION 7.14. Environmental Laws. (a) Comply in all material
respects with, and ensure compliance in all material respects by all tenants
and subtenants, if any, with, all applicable Environmental Laws, and obtain and
comply in all material respects with and maintain, and ensure that all tenants
and subtenants obtain and comply in all material respects with and maintain,
any and all licenses, approvals, notifications, registrations or permits
required by applicable Environmental Laws, and (b) conduct and complete all
investigations, studies, sampling and testing, and all remedial, removal and
other actions required under Environmental Laws and promptly comply in all
material respects with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws, except in each case where the
necessity of compliance therewith is contested in good faith by appropriate
proceedings or where failure to comply could not reasonably be expected to have
a Material Adverse Effect.
61
ARTICLE VIII
NEGATIVE COVENANTS
The Borrower covenants and agrees that for so long as this Agreement
is in effect and until all of the Obligations are paid in full, the Borrower
shall not, and shall not permit any of its Subsidiaries to:
SECTION 8.1. CP Memorandum. Include any information relating to
the Administrative Agent, the Issuing Bank, the Documentation Agent, the Joint
Lead Arrangers, either Arranger, any Bank or the facilities offered hereby in
any CP Memorandum used in the offering or sale of CP Notes unless such
information is approved in writing by the Administrative Agent, the Issuing
Bank, such Documentation Agent, the Joint Lead Arrangers, such Arranger, or such
Bank, as the case may be, prior to its inclusion in such CP Memorandum, provided
such approval is not unreasonably withheld or delayed; provided, further, that
the approval of any of such parties shall not be required solely as a result of
the reference to such party as a party to any Principal Document to which it is
a party or the inclusion in any CP Memorandum of a description of such Principal
Documents.
SECTION 8.2. Amendment of Principal Documents. Consent to, agree
to, or otherwise acquiesce in, the amendment or modification of CP Notes, any
Dealer Agreement or the Depositary Agreement without the written consent of the
Issuing Bank and the Administrative Agent acting on behalf of the Majority
Banks, which consents shall not be unreasonably withheld.
SECTION 8.3. Concerning the CP Notes. Permit (a) any CP Note to
have a stated date of maturity beyond the earlier of (i) 360 days after its date
of issuance or (ii) the Stated Termination Date or (b) CP Notes having an
aggregate Face Amount in excess of the Settlement Limit to mature on any one
Business Day; provided, however, that, in connection with an extension of the
Stated Termination Date or a refinancing of the Obligations pursuant to
documentation satisfactory to the Issuing Bank and the Administrative Agent,
100% of the aggregate Face Amount of CP Notes outstanding may mature on any one
Business Day that occurs on or prior to the Stated Termination Date.
SECTION 8.4. Financial Covenants.
(a) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio as of the last day of any fiscal quarter, to be less
than the ratio set forth below corresponding to such fiscal quarter, for the
period of four consecutive fiscal quarters ending on such date:
--------------------------------------------
Period Ratio
--------------------------------------------
07/01/02 - 12/31/02 2.00x
--------------------------------------------
01/01/03 - 09/30/03 2.25x
--------------------------------------------
10/01/03 - 09/30/04 2.50x
--------------------------------------------
62
(b) Consolidated Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio as of the last day of any fiscal
quarter, to be less than the ratio set forth below corresponding to such fiscal
quarter, for the period of four consecutive fiscal quarters ending on such date:
--------------------------------------------
Period Ratio
--------------------------------------------
07/01/02 - 09/30/03 0.85x
--------------------------------------------
10/01/03 - 09/30/04 1.00x
--------------------------------------------
(c) Consolidated Leverage Ratio. Permit the Consolidated Leverage
Ratio as of the last day of any fiscal quarter, to be greater than the ratio
set forth below corresponding to such fiscal quarter, for the period of four
consecutive fiscal quarters ending on such date:
--------------------------------------------
Period Ratio
--------------------------------------------
07/01/02 - 12/31/02 4.50x
--------------------------------------------
01/01/03 - 09/30/03 4.00x
--------------------------------------------
10/01/03 - 09/30/04 3.50x
--------------------------------------------
SECTION 8.5. Margin Regulations. Use any part of the proceeds from
the CP Notes and the Loans for any purpose which would result in any violation
of Regulations T, U or X of the Board of Governors of the Federal Reserve
System or to extend credit to others for any such purpose. The Borrower will
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.
SECTION 8.6. Limitation on Restricted Payments.
(a) (i) Declare or pay any dividend or make any distribution on
or with respect to the Capital Stock of the Borrower or any of its Subsidiaries
(other than (x) dividends or distributions payable solely in shares of the
Borrower's or such Subsidiary's Capital Stock (other than Disqualified Stock)
or in options, warrants or other rights to acquire shares of such Capital Stock
and (y) pro rata dividends or distributions on Common Stock of Subsidiaries
held by minority stockholders, provided that such dividends do not in the
aggregate exceed the minority stockholders' pro rata share of such
Subsidiaries' net income from the first day of the fiscal quarter beginning
immediately following the Effective Date) held by Persons other than the
Borrower or any of its Subsidiaries;
(ii) purchase, redeem, retire or otherwise acquire for value
any shares of Capital Stock of (x) the Borrower (including options,
warrants or other rights to acquire such shares of Capital Stock) held
by any Person or (y) a Subsidiary of the Borrower (including options,
warrants or other rights to acquire such shares of Capital Stock) held
by any Affiliate of the Borrower (other than a Wholly Owned
63
Subsidiary) or any holder (or any Affiliate of such holder) of 5.0% or
more of the Borrower's Capital Stock;
(iii) make any voluntary or optional principal payment,
or voluntary or optional redemption, repurchase, defeasance, or other
acquisition or retirement for value, of Indebtedness of the Borrower
that is subordinated in right of payment to any of the Obligations; or
(iv) make any Investment, other than a Permitted Investment,
in any Person (such payments or any other actions described in clauses
(a)(i) through (iv) above being collectively "Restricted Payments") if,
at the time of, and after giving effect to, the proposed Restricted
Payment:
(A) a Default or Event of Default shall have occurred and be
continuing;
(B) the Borrower could not Incur at least $1.00 of Indebtedness
without violating the financial ratios then in effect under Section 8.4; or
(C) the aggregate amount of all Restricted Payments (the
amount, if other than in cash, to be determined in good faith by the Board of
Directors of the Borrower, whose determination shall be conclusive and evidenced
by a resolution) made on or after April 1, 2002 shall exceed the sum of
(1) 50.0% of the aggregate amount of the Adjusted
Consolidated Net Income (or, if the Adjusted Consolidated Net
Income is a loss, minus 100.0% of the amount of such loss)
accrued on a cumulative basis during the period (taken as one
accounting period) beginning on April 1, 2002 and ending on the
last day of the last fiscal quarter preceding the Transaction
Date for which financial statements have been delivered to the
Administrative Agent pursuant to Section 7.2, plus
(2) the aggregate Net Cash Proceeds received by the
Borrower on or after April 1, 2002 from a capital contribution
or the issuance and sale permitted by this Agreement of Capital
Stock (other than Disqualified Stock) of the Borrower to a
Person who is not a Subsidiary of the Borrower, including an
issuance or sale permitted by this Agreement of Indebtedness
for cash subsequent to the Effective Date upon the conversion
of such Indebtedness into Capital Stock of the Borrower (other
than Disqualified Stock), or from the issuance to a Person who
is not a Subsidiary of the Borrower of any options, warrants or
other rights to acquire Capital Stock of the Borrower (in each
case, exclusive of any Disqualified Stock or any options,
warrants or other rights that are redeemable at the option of
the holder, or are required to be redeemed, prior to the Stated
Termination Date), plus
(3) an amount equal to the net reduction in
Investments (other than reductions in Permitted Investments) in
any Person on or after April 1, 2002 resulting from payments of
interest on Indebtedness, dividends,
64
repayments of loans or advances, or other transfers of assets,
in each case to the Borrower or any of its Subsidiaries or from
the Net Cash Proceeds from the sale of any such Investment
(except, in each case, to the extent any such payment or
proceeds are included in the calculation of Adjusted
Consolidated Net Income), not to exceed, in each case, the
amount of Investments previously made by the Borrower or any of
its Subsidiaries in such Person.
(b) The provisions of paragraph (a) of this Section 8.6 shall not
be violated by reason of:
(i) the payment of any dividend within 60 days after the
date of declaration thereof if, at said date of declaration, such
payment would comply with the foregoing paragraph;
(ii) the redemption, repurchase, retirement, defeasance
or other acquisition for value of Indebtedness of the Borrower that is
subordinated in right of payment to the Obligations, including premium,
if any, and accrued and unpaid interest, with the proceeds of, or in
exchange for, Indebtedness that (x) is expressly subordinate in right
of payment to the Obligations at least to the extent that the
Indebtedness being refinanced is subordinated thereto, (y) does not
mature prior to the Stated Termination Date and (z) has an Average Life
at least equal to that of the Indebtedness being refinanced;
(iii) the repurchase, redemption or other acquisition of
Capital Stock of the Borrower (or options, warrants or other rights to
acquire such Capital Stock) in exchange for, or out of the proceeds of
a substantially concurrent offering of, shares of Capital Stock of the
Borrower (other than Disqualified Stock) (or options, warrants or other
rights to acquire such Capital Stock);
(iv) the making of any principal payment or the repurchase,
redemption, retirement, defeasance or other acquisition for value of
Indebtedness of the Borrower which is subordinated in right of payment
to the Obligations, in exchange for, or out of the proceeds of, a
substantially concurrent offering of, shares of Capital Stock of the
Borrower (other than Disqualified Stock) (or options, warrants or other
rights to acquire such Capital Stock);
(v) payments or distributions to dissenting stockholders
pursuant to applicable law or pursuant to or in connection with a
consolidation, merger or transfer of assets that complies with the
provisions of Section 8.14;
(vi) Investments acquired as a capital contribution or
in exchange for Capital Stock of the Borrower (other than Disqualified
Stock);
(vii) (x) the payment by the Borrower (made on behalf of
Grupo TFM) for the repurchase from Mexico of Capital Stock of the
Borrower, provided that (1) after giving effect to such repurchase and
any Indebtedness Incurred to fund such repurchase, the Consolidated
Interest Coverage Ratio would be greater than
65
4.0:1.0 or (2)(A) no Indebtedness or any other obligation of the
Borrower or any Subsidiary is Incurred or otherwise created in
connection with such repurchase and (B) the consideration paid to
Mexico for such repurchase shall not exceed the VAT Refund refunded,
paid or otherwise credited to the Borrower; provided that, in the case
of this clause (2)(B), if such consideration is paid in cash by the
Borrower, payment of the VAT Refund shall be made in cash by Mexico
prior to or simultaneously with such repurchase; and
(y) the declaration and payment of dividends in order
to effect this clause (vii);
(viii) the declaration or payment of dividends on Capital
Stock of the Borrower following a Public Equity Offering of such Capital
Stock, of up to 6.0% per annum of the Net Cash Proceeds received by the
Borrower in such Public Equity Offering; provided that any such amount
of Net Cash Proceeds to be so paid as dividends shall be placed into an
escrow account to be opened and maintained with the Administrative Agent
promptly upon receipt of such Net Cash Proceeds until distribution or
payment of such dividends is made; or
(ix) the declaration and payment of dividends to Grupo TFM
by the Borrower in an amount not to exceed Grupo TFM's operating
expenses, corporate overhead costs and expenses and taxes; provided
that the amount so dividended is actually used for such purpose; and
the declaration and payment of pro rata dividends or distributions on
Common Stock of the Borrower held by minority stockholders paid in
connection with dividends to Grupo TFM permitted by this clause (ix),
provided that such dividends do not in the aggregate exceed the
minority stockholders' pro rata share of the Borrower's net income from
July 1, 1997, and provided further that (A) such dividends made
pursuant to this clause (ix) with respect to operating and corporate
overhead costs and expenses do not in the aggregate exceed $1,000,000
for any fiscal year of the Borrower and (B) such dividends made
pursuant to this clause (ix) with respect to taxes do not in the
aggregate exceed $5,000,000 for any fiscal year of the Borrower;
provided that, except in the case of clauses (i) and (iii) above, no Default or
Event of Default shall have occurred and be continuing or shall occur as a
consequence of the actions or payments set forth herein.
(c) Each Restricted Payment permitted pursuant to the preceding
paragraph (other than the Restricted Payment referred to in clause (ii)
thereof, an exchange of Capital Stock for Capital Stock or Indebtedness
referred to in clause (iii) or (iv) thereof, an Investment referred to in
clause (vi) thereof, a repurchase of Capital Stock referred to in clause (vii)
(y) thereof and the dividends referred to in clauses (vii) thereof), and the
Net Cash Proceeds from any issuance of Capital Stock referred to in clauses
(ii) and (iii), shall be included in calculating whether the conditions of
clause (a)(iv)(C) of this Section 8.6 have been met with respect to any
subsequent Restricted Payments. In the event the proceeds of an issuance of
Capital Stock of the Borrower are used for the redemption, repurchase or other
acquisition of the Obligations or Indebtedness that is pari passu with the
Obligations, then the Net Cash Proceeds of such issuance shall be
66
included in clause (a)(iv)(C) of this Section 8.6 only to the extent such
proceeds are not used for such redemption, repurchase or other acquisition of
Indebtedness.
(d) Notwithstanding anything to the contrary in the foregoing
provisions or herein, under no circumstances shall the Borrower assume the
obligation of Grupo TFM, KCSI or Grupo TMM under the agreement dated as of June
9, 1997 celebrated by The Federal Government of the United States of Mexico,
Grupo TFM, Grupo TMM, and KCSI to repurchase the Capital Stock of the Borrower;
provided that the Borrower shall be permitted to pay the repurchase price
thereof on behalf of Grupo TFM or Grupo TMM in accordance with the terms of
Section 8.6(b)(vii).
SECTION 8.7. Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries
(a) Create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Subsidiary to (i) pay dividends or make any other distributions
permitted by applicable law on any Capital Stock of such Subsidiary owned by
the Borrower or any other Subsidiary; (ii) pay any Indebtedness owed to the
Borrower or any other Subsidiary; (iii) make loans or advances to the Borrower
or any other Subsidiary; or (iv) transfer any of its property or assets to the
Borrower or any other Subsidiary.
(b) The foregoing provisions shall not restrict any encumbrances or
restrictions:
(i) existing on the Effective Date and set forth on
Schedule 8.7 (b)(i);
(ii) existing in the Senior Note Indentures and the
Senior Discount Debenture Indentures, and any extensions, refinancings,
renewals or replacements thereof; provided that the encumbrances and
restrictions in any such extensions, refinancings, renewals or replacements
are no less favorable in any material respect to the Banks than those
encumbrances or restrictions that are then in effect and that are being
extended, refinanced, renewed or replaced;
(iii) existing under or by reason of applicable law;
(iv) existing with respect to any Person or the property or
assets of such Person acquired by the Borrower or any of its Subsidiaries,
existing at the time of such acquisition and not incurred in contemplation
thereof, which encumbrances or restrictions are not applicable to any
Person or the property or assets of any Person other than such Person or
the property or assets of such Person so acquired;
(v) in the case of transfers of any property or assets of a
Subsidiary to the Borrower or any other Subsidiary
(x) that restrict in a customary manner the
subletting, assignment or transfer of any property or asset that
is a lease, license, conveyance or contract or similar property or
asset,
67
(y) existing by virtue of any transfer of, agreement
to transfer, option or right with respect to, or Lien on, any of
the property or assets of the Borrower or any of its Subsidiaries
not otherwise prohibited by this Agreement, or
(z) arising or agreed to in the ordinary course of
business, not relating to any Indebtedness, and that do not,
individually or in the aggregate, detract from the value of the
property or assets of the Borrower or any of its Subsidiaries in
any manner material to the Borrower or to any of its Subsidiaries,
(vi) with respect to a Subsidiary and imposed pursuant to an
agreement that has been entered into for the sale or disposition of all or
substantially all of the Capital Stock of, or property and assets of, such
Subsidiary; or
(vii) for the benefit of any holder of a Lien permitted under
Section 8.11.
Nothing contained in this Section 8.7 shall prevent the Borrower or any of its
Subsidiaries from (1) creating, incurring, assuming or suffering to exist any
Liens otherwise permitted by Section 8.11 or (2) restricting the sale or other
disposition of property or assets of the Borrower or any of its Subsidiaries
that secure their respective Indebtedness.
SECTION 8.8. Limitation on the Issuance and Sale of Capital Stock
of Subsidiaries. Issue or sell, any shares of Capital Stock of a Subsidiary
(including options, warrants or other rights to purchase shares of such Capital
Stock) except:
(a) to the Borrower or a Wholly Owned Subsidiary;
(b) issuances of director's qualifying shares or sales to foreign
nationals of shares of Capital Stock of foreign Subsidiaries, to the extent
required by applicable law;
(c) if, immediately after giving effect to such issuance or sale,
such Subsidiary would no longer constitute a Subsidiary and any Investment in
such Person remaining after giving effect to such issuance or sale would have
been permitted to be made under Section 8.6 if made on the date of such
issuance or sale; or
(d) issuances of Common Stock that has no preference with respect
to dividends or upon liquidation, the Net Cash Proceeds of which are promptly
applied towards the prepayment of Term Loans as provided in the Term Loan
Agreement.
SECTION 8.9. Limitation on Issuances of Guarantees by Subsidiaries
(a) With respect to any Subsidiary, Guarantee any Indebtedness of
the Borrower which is pari passu with or subordinate in right of payment to the
Obligations ("Guaranteed Indebtedness"), unless:
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(i) such Subsidiary simultaneously executes and delivers
a guarantee (a "Subsidiary Guarantee") of payment of the Obligations;
and
(ii) such Subsidiary waives and will not in any manner
whatsoever claim or take the benefit or advantage of, any rights of
reimbursement, indemnity or subrogation or any other rights against the
Borrower or any other Subsidiary as a result of any payment by such
Subsidiary under its Subsidiary Guarantee until the Extensions of
Credit have been paid in full, in U.S. dollars;
provided that this paragraph shall not be applicable to any Guarantee of any
Subsidiary that existed at the time such Person became a Subsidiary and was not
Incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary.
(b) If the Guaranteed Indebtedness is (i) pari passu with the
Extensions of Credit, then the Guarantee of such Guaranteed Indebtedness shall
be pari passu with, or subordinated to, the Subsidiary Guarantee or (ii)
subordinated to the Extensions of Credit, then the Guarantee of such Guaranteed
Indebtedness shall be subordinated to the Subsidiary Guarantee at least to the
extent that the Guaranteed Indebtedness is subordinated to the Extensions of
Credit.
(c) Notwithstanding the foregoing, any Subsidiary Guarantee by a
Subsidiary shall provide by its terms that it shall be automatically and
unconditionally released and discharged upon:
(i) any sale, exchange or transfer, to any Person not an
Affiliate of the Borrower, of all of the Borrower's or any Subsidiary's
Capital Stock in, or all or substantially all the assets of, such
Subsidiary (which sale, exchange or transfer is not prohibited by this
Agreement); or
(ii) the release or discharge of the Guarantee which
resulted in the creation of such Subsidiary Guarantee, except a
discharge or release by or as a result of payment under such Guarantee.
SECTION 8.10. Limitation on Transactions with Stockholders and
Affiliates.
(a) Enter into, renew or extend any transaction (including, without
limitation, the purchase, sale, lease or exchange of property or assets, or the
rendering of any service) with any holder (or any Affiliate of such holder) of
5.0% or more of any class of Capital Stock of Grupo TFM or the Borrower or with
any Affiliate of Grupo TFM or the Borrower or any Subsidiary, except upon fair
and reasonable terms no less favorable to the Borrower or such Subsidiary than
could be obtained, at the time of such transaction or, if such transaction is
pursuant to a written agreement, at the time of the execution of the agreement
providing therefor, in a comparable arm's-length transaction with a Person that
is not such a holder or an Affiliate.
(b) The limitation of paragraph (a) of this Section 8.10 does not
limit, and shall not apply to:
(i) transactions for which the Borrower or a Subsidiary
delivers to the Administrative Agent a written opinion of a United
States nationally recognized
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investment banking firm (or their Mexican affiliate) stating that the
transaction is fair to the Borrower or such Subsidiary from a financial
point of view;
(ii) payment of reasonable and customary regular fees and
compensation to directors and officers of the Borrower and Grupo TFM
consistent with past practices;
(iii) payments or other transactions pursuant to any
tax-sharing agreement between the Borrower and any Subsidiary of the
Borrower with which the Borrower files a consolidated tax return or
with which the Borrower is part of a consolidated group for tax
purposes;
(iv) payment of the Management Fees;
(v) sales of equipment to a Wholly Owned Subsidiary
pursuant to an arrangement under which such equipment will be leased
back to the Borrower on terms that are no less favorable to the
Borrower than the terms that would have been offered by an unrelated
party; and
(vi) other transactions in the aggregate in any calendar
year involving consideration of no more than $2,000,000.
SECTION 8.11. Limitation on Liens. Create, incur, assume or suffer
to exist any Lien on any of the Borrower's or any Subsidiary's assets or
properties of any character, or on any shares of Capital Stock or Indebtedness
of any Subsidiary, except:
(a) Liens existing on the Effective Date and set forth on Schedule
8.11(a);
(b) Liens granted after the Effective Date on any of the assets or
Capital Stock of the Borrower or its Subsidiaries created in favor of the Banks
and the Issuing Bank to secure the Obligations;
(c) Liens with respect to the assets of a Subsidiary granted by
such Subsidiary to the Borrower or a Wholly Owned Subsidiary to secure
Indebtedness owing to the Borrower or such other Subsidiary;
(d) Liens securing Indebtedness which is Incurred to refinance
secured Indebtedness; provided that such Liens do not extend to or cover any
property or assets of the Borrower or any Subsidiary other than the property or
assets securing the Indebtedness being refinanced;
(e) Liens securing Indebtedness outstanding at any time in an
aggregate principal amount not to exceed $50,000,000 that is Incurred solely
for the purpose of financing the cost of improvements or construction related
to the properties of Mexrail and the Texas Mexican Railway Company, the net
proceeds of which are applied to finance the cost of improvements or
construction; or
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(f) Permitted Liens and other Liens permitted or required by the
Principal Documents.
SECTION 8.12. Limitation on Sale-Leaseback Transactions
(a) Enter into any sale-leaseback transaction involving any of the
Borrower's or any of its Subsidiary's assets or properties whether now owned or
hereafter acquired, whereby the Borrower or a Subsidiary sells or transfers such
assets or properties and then or thereafter leases such assets or properties or
any part thereof or any other assets or properties which the Borrower or such
Subsidiary, as the case may be, intends to use for substantially the same
purpose or purposes as the assets or properties sold or transferred.
(b) The foregoing restriction does not apply to any sale-leaseback
transaction if:
(i) the lease is for a period, including renewal rights,
of not in excess of three years;
(ii) the lease secures or relates to industrial revenue or
pollution control bonds;
(iii) the transaction is solely between the Borrower and any
Wholly Owned Subsidiary or solely between Wholly Owned Subsidiaries, or
(iv) the Borrower or such Subsidiary, within twelve months
after the sale or transfer of any assets or properties is completed,
applies an amount not less than the Net Cash Proceeds received from
such sale to prepay the Term Loans in accordance with Section 3.5(b).
SECTION 8.13. Limitation on Asset Sales.
Consummate any Asset Sale, unless:
(a) the consideration received by the Borrower or such Subsidiary
is at least equal to the fair market value of the assets sold or disposed of;
(b) at least 80.0% of the consideration received (excluding any
amount of Released Indebtedness) consists of cash or Temporary Cash Investments;
and
(c) the Net Cash Proceeds of such Asset Sales are promptly applied
towards the prepayment of Term Loans as provided in the Term Loan Agreement;
provided, however, that in no event shall the Borrower or any of its
Subsidiaries enter into any Asset Sale with respect to future accounts
receivables to be generated by it.
For the purposes of this Section 8.13, "Released Indebtedness" shall mean, with
respect to any Asset Sale, Indebtedness (i) which is owed to the Borrower by any
of its Subsidiaries (the "Obligors") prior to such Asset Sale, (ii) which is
assumed by the purchaser or any affiliate thereof in connection with such Asset
Sale and (iii) with respect to which Obligors receive
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written unconditional releases from each creditor no later than the closing date
of such Asset Sale.
SECTION 8.14. Consolidation, Merger and Sale of Assets.
Consolidate with, merge with or into, or sell, convey, transfer, lease
or otherwise dispose of all or substantially all of the property and assets of
the Borrower or any of its Subsidiaries (as an entirety or substantially an
entirety in one transaction or a series of related transactions) to, any Person
or permit any Person to merge with or into the Borrower or any Subsidiary
except that:
(a) any Subsidiary of the Borrower may be merged or consolidated
with or into the Borrower (provided that the Borrower shall be the continuing
or surviving corporation) or with or into any Wholly Owned Subsidiary (provided
that the Wholly Owned Subsidiary shall be the continuing or surviving
corporation);
(b) any Subsidiary or the Borrower may dispose of any or all of its
assets (i) to the Borrower or any Wholly Owned Subsidiary (upon voluntary
liquidation or otherwise) or (ii) pursuant to a disposition permitted by
Section 8.13; and
(c) any Investment expressly permitted by Section 8.6 may be
structured as a merger, consolidation or amalgamation; and
(d) the Borrower or such Subsidiary may merge or consolidate with
or into a Person (other than the Borrower or one of its Subsidiaries), or sell,
convey, transfer, lease or otherwise dispose of all or substantially all of the
property and assets of the Borrower or Subsidiaries to a Person (other than the
Borrower or one of its Subsidiaries) provided that:
(i) the Borrower or such Subsidiary shall be the continuing
Person, or the Person (if other than the Borrower) formed by such
consolidation or into which the Borrower is merged or that acquired
or leased such property and assets shall be a corporation organized and
validly existing under the laws of Mexico, the United States of America
or any jurisdiction of either such country and shall expressly assume
in an agreement in form and substance satisfactory to the
Administrative Agent and the Issuing Bank, all of the obligations of
the Borrower or such Subsidiary hereunder and under the other Principal
Documents;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction on
a pro forma basis, the Borrower or such Subsidiary, or any Person
becoming the successor obligor hereunder and under the other Principal
Documents shall have a Consolidated Net Worth equal to or greater than
the Borrower's or such Subsidiary's (as applicable) Consolidated Net
Worth, immediately prior to such transaction;
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(iv) immediately after giving effect to such transaction on
a pro forma basis the Borrower or such Subsidiary, or any Person
becoming the successor obligor hereunder and under the other Principal
Documents could Incur at least $1.00 of Indebtedness without violating
the covenants in Section 8.4 after giving pro forma effect to the
proposed transaction; and
(v) the Borrower delivers to the Administrative Agent a
certificate of a Responsible Officer (attaching the arithmetic
computations to demonstrate compliance with clauses (d)(iii) and
(d)(iv)) stating that such consolidation, merger or transfer complies
with this provision and that all conditions precedent provided for
herein relating to such tansaction have been complied with;
provided, however, with respect to this subsection (d), that only clause (i)
hereof shall apply for a merger or consolidation of the Borrower and Grupo TFM.
SECTION 8.15. Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which the
Borrower and its Subsidiaries are engaged on the date of this Agreement or that
are reasonably related thereto.
SECTION 8.16. Additional Indebtedness. Create, incur, assume or
suffer to exist Indebtedness which provides for the amortization of principal
prior to the Stated Termination Date other than (a) Indebtedness existing on
the Effective Date plus other Indebtedness subsequently created, incurred or
assumed which, in the aggregate, provides for the amortization of principal of
less than $10,000,000 in the aggregate prior to the Stated Termination Date,
(b) short-term revolving Indebtedness secured by current receivables permitted
by paragraph (q) of the definition of "Permitted Liens," (c) Indebtedness under
Swap Agreements (excluding equity based Swap Agreements) entered into in the
ordinary course of business; provided that such Swap Agreements (i) are
designed solely to protect the Borrower or its Subsidiaries against
fluctuations in foreign currency exchange rates, interest rates or rates in
respect of fuel purchases or other acquisitions of fuel in the ordinary course
of business and (ii) do not increase the Indebtedness of the obligor
outstanding at any time other than as a result of fluctuations in foreign
currency exchange rates or interest rates or by reason of fees, indemnities and
compensation payable thereunder and (d) Indebtedness owed to the Borrower by a
Wholly Owned Subsidiary.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1. Events of Default. The following specified events
shall be "Events of Default" for the purposes of this Agreement:
(a) The Borrower shall fail to pay any principal of, or any
interest on, any Note, any Loan or any LOC Advance when due in accordance with
the terms thereof or hereof; or the Borrower shall fail to pay any other amount
under this Agreement within ten calendar days after any other amount becomes
due in accordance with the terms hereof; or
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(b) Any representation or warranty made or deemed made by the
Borrower herein or in any other Principal Document or which is contained in any
certificate, document or financial or other statement furnished at any time
pursuant to or in connection with this Agreement shall prove to have been
incorrect in any material respect on or as of the date made or deemed made, or
(c) The Borrower shall default in the observance or performance of
any covenant contained in Sections 7.1, 7.3(a), 7.6, 7.8(a), 7.13 or Article
VIII of this Agreement; or
(d) The Borrower shall default in the observance or performance of
any other covenant or agreement contained in this Agreement or any other
Principal Document (other than as provided in Sections 9.1(a), 9.1(b) and
9.1(c), and such default shall continue unremedied for a period of 30 days
after written notice to the Borrower from the Administrative Agent; or
(e) The Borrower or any of its Subsidiaries shall (i) default in
any payment of principal of or interest on any Indebtedness (other than the
Notes and the CP Notes), including in the payment of any Guarantee, beyond the
period of grace, if any, provided in the instrument or agreement under which
such Indebtedness was created (except for any such defaults in respect of
Indebtedness and Guarantees in respect thereof in an aggregate then outstanding
amount for all such Indebtedness of less than US$10,000,000 or an amount in
another currency equivalent thereto); or (ii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or Guarantee or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, in each case beyond any applicable grace period or cure
period, the effect of which default or other event or condition is to cause, or
to permit the holder or holders of such Indebtedness, including the beneficiary
or beneficiaries of any Guarantee (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause, with the giving of
notice if required, such Indebtedness to become due prior to its stated
maturity, including any Guarantee to become payable (except for any such
default or other event or condition in respect of Indebtedness in an aggregate
then outstanding amount for all such Indebtedness of less than US$10,000,000 or
an amount in another currency equivalent thereto); or
(f) (i) The Borrower or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, concurso mercantil,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) in any jurisdiction seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or the Borrower or any of its Subsidiaries
shall make a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against the Borrower or any of its Subsidiaries in any
jurisdiction any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) to the extent applicable, remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii) there
shall be commenced against the Borrower or any of its Subsidiaries in any
jurisdiction any case, proceeding or other action seeking issuance of a warrant
of attachment, execution, distraint or
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similar process against all or any substantial part of its assets which results
in the entry of an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the entry
thereof; or (iv) the Borrower or any of its Subsidiaries shall take any action
in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii) or (iii) above; or (v) the
Borrower or any of its Subsidiaries shall admit in writing its inability to pay
its debts as they become due; or
(g) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries in any jurisdiction involving in the
aggregate a liability (not paid or fully covered by insurance) of US$10,000,000
(or an amount in another currency equivalent thereto) or more, and all such
judgments or decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within 90 days from the entry thereof; or
(h) The Commercial Paper Account or the Letter of Credit Account or
funds on deposit in, or otherwise to the credit of, the Commercial Paper
Account or the Letter of Credit Account shall be subject to any writ, order,
judgment, warrant of attachment, execution or similar process or stay or other
similar legal restraint other than as a direct or indirect result of actions or
proceedings which do not involve the Borrower; or
(i) Any Governmental Authority shall (i) condemn, nationalize,
seize or otherwise expropriate any substantial portion of the assets or the
capital stock of the Borrower and such action is not reversed within a period
of 60 days or (ii) take any action that would prevent the Borrower from
carrying on, or would materially interfere with, any material part of its
business or operations including, without limitation, any action that would
result in the Concession Title ceasing to grant the Borrower the rights
originally provided therein or the Concession Title being terminated or the
rights originally provided therein as exclusive to the Borrower becoming
non-exclusive; or
(j) A Change of Control shall occur; or
(k) The validity of any Principal Document shall be contested by
the Borrower or any Governmental Authority or the Borrower shall deny liability
hereunder or under any Note or under the Depositary Agreement or any CP Note or
this Agreement or such other Principal Document (other than the Dealer
Agreements) shall for any reason be terminated or become invalid, ineffective
or unenforceable; provided, in the case of any contest by a Governmental
Authority such contest is not dismissed within a period of 60 days; or
(l) Any governmental or other consent, license, approval (including
any foreign exchange approval) or authorization which is now or may in the
future be necessary or appropriate under any applicable law or regulation for
the execution, delivery or performance by the Borrower of any material
obligation under any Principal Document to which it is a party or to make any
Principal Document legal, valid, enforceable and admissible in evidence shall
not be obtained or shall be withdrawn or shall cease to be in full force and
effect or shall be modified in a manner which has a reasonable likelihood of
having a Material Adverse Effect; or
(m) Any restriction or requirement not in effect on the date
hereof is imposed, whether by legislative enactment, decree, regulation, order
or otherwise, which limits the
75
availability or the transfer of foreign exchange by the Borrower and interferes
with the Borrower's performance of any material obligation under the Principal
Documents to which it is a party; or
(n) There shall occur any circumstance and/or event of a financial,
political or economic nature in Mexico which, in the reasonable judgment of the
Majority Banks, is likely to have a material adverse effect on the ability of
the Borrower to perform its obligations under any of the Principal Documents.
SECTION 9.2. Remedies. If any Event of Default under
Section 9.1(f) has occurred and is continuing, the Administrative Agent shall,
or if any other Event of Default has occurred and is continuing, the
Administrative Agent shall, at the request of, or may with the consent of, the
Majority Banks, do any or all of the following:
(a) direct the Issuing Bank (i) if and only if no CP Notes are
outstanding, to terminate the Letter of Credit and deliver a Notice of
Termination, in the form of Annex B to the Letter of Credit, to the Borrower
and the Depositary (with a copy to the Administrative Agent, and each Dealer)
whereupon the Letter of Credit and the Commitments shall terminate or (ii) if
any CP Notes are outstanding, to deliver a Notice of Default, in substantially
the form of Exhibit J, to the Borrower and the Depositary (with a copy to the
Administrative Agent and each Dealer) whereupon (A) the Stated Amount shall be
reduced such that the Stated Amount equals the aggregate Face Amount of CP
Notes then outstanding and (B) no amounts shall be reinstated to the Stated
Amount pursuant to the Letter of Credit until receipt by the Depositary of a
written Notice of Rescission of Default, in substantially the form of Exhibit
N, from the Administrative Agent (who shall send a copy of such notice to the
Borrower and the Issuing Bank) of such Event of Default by reason of waiver or
cure in accordance with the terms hereof;
(b) deliver a Notice of Acceleration, in substantially the form of
Exhibit K, to the Depositary with a copy to the Borrower, the Issuing Bank and
each Dealer causing the Depositary to make a drawing under the Letter of Credit
in an aggregate amount required to pay in full the Face Amount of all
outstanding CP Notes entitled to the benefit of the Letter of Credit upon
maturity, the proceeds of such drawing to be deposited in the Letter of Credit
Account, and require from the Borrower immediate reimbursement for payments
pursuant to such drawing; the Letter of Credit shall automatically terminate
fifteen days following the date of delivery of the Notice of Acceleration;
(c) if no Notice of Acceleration has been delivered pursuant to
paragraph (b) above, direct the Borrower immediately to pay into an account
specified by the Administrative Agent an amount in immediately available funds
(to which neither the Issuing Bank nor the Banks shall have any right in
respect of any drawing until the Issuing Bank shall have honored the same)
equal to the Stated Amount or, if less, the aggregate Face Amount of all CP
Notes outstanding whereupon such amount shall become immediately due and
payable by the Borrower without presentment, demand, protest or other notice,
all of which are hereby expressly waived;
(d) declare the principal amount of the 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
76
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 paragraph (f) of Section 9.1, without notice or any other
act by the Banks, 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; and/or
(e) notify the Borrower, the Depositary and each Dealer and each
(which notice may be by telephone to be confirmed in writing within two
Business Days) that an Event of Default has occurred and is continuing and in
such notice direct the Borrower and the Depositary not to issue any CP Notes
from and after the actual receipt by the Depositary of such notice until
receipt by the Depositary of a written Notice of Rescission of Default, in
substantially the form of Exhibit N, from the Administrative Agent (who shall
send a copy of such notice to the Borrower and the Issuing Bank) of such Event
of Default by reason of waiver or cure in accordance with the terms hereof;
provided, however, that nothing in this Section 9.2 shall (x) impair the
obligation of the Issuing Bank to make payments in accordance with the Letter of
Credit with respect to maturing CP Notes which have been validly issued and are
outstanding pursuant to the terms of this Agreement and the Depositary Agreement
or (y) impair the obligation of the Borrower to reimburse the Issuing Bank for,
or the obligation of any Bank to fund its participation in, any drawing made
subsequent to the time any remedy provided in this paragraph shall have been
exercised and, provided, further, that nothing in this Section 9.2 shall give
the Issuing Bank the right to request the Depositary to debit the Commercial
Paper Account on any Business Day until after such time as the Issuing Bank
shall have honored any demand for payment under the Letter of Credit required to
be paid on such Business Day.
ARTICLE X
THE ADMINISTRATIVE AGENT
SECTION 10.1. Appointment. Each Bank hereby irrevocably designates
and appoints JPMCB, as the Administrative Agent of such Bank under this
Agreement, and each such Bank hereby irrevocably authorizes JPMCB, as the
Administrative Agent for such Bank, to take such action on its behalf under the
provisions of this Agreement and to exercise such powers and perform such duties
as are expressly delegated to the Administrative Agent by the terms of this
Agreement, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against the
Administrative Agent.
SECTION 10.2. Delegation of Duties. The Administrative Agent may
execute any of its duties under this Agreement by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.
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SECTION 10.3. Exculpatory Provisions. Neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates shall be (a) liable for any action lawfully taken or omitted to
be taken by it or any such Person under or in connection with this Agreement
(except for its or such Person's own gross negligence or willful misconduct),
or (b) responsible in any manner to any of the Banks for any recitals,
statements, representations or warranties made by the Borrower or any officer
thereof contained in this Agreement 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 for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any of the Principal Documents or for any failure of the
Borrower to perform its obligations hereunder or thereunder. Except in respect
of Section 5.1 or except as otherwise expressly stated herein, the
Administrative Agent shall not be under any obligation to any Bank to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement, or to inspect the properties,
books or records of the Borrower.
SECTION 10.4. Reliance by the Administrative Agent. The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any agreement (including this Agreement), note (including any
Note), writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram or teletype message, statement, order or other document or
facsimile transmission or telephone conversation reasonably believed by it 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 (including
counsel to the Borrower), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent may deem and treat the
payee of any Note as the owner thereof for all purposes unless a written notice
of assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first receive such advice or concurrence of the Majority Banks as it deems
appropriate or it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of 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 and the Notes in accordance with a request of the Majority
Banks, and such request and any action taken or failure to act pursuant thereto
shall be binding upon all the Banks and all future holders of the Notes.
SECTION 10.5. 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 hereunder unless the Administrative Agent has received notice
from a Bank, the Issuing Bank or the Borrower referring to this Agreement,
describing such Default or Event of Default. In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Banks. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
directed by the Majority Banks; provided that, unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, in accordance with
the terms hereof, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Banks.
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SECTION 10.6. Non-Reliance on the Administrative Agent and Other
Banks. Each Bank expressly acknowledges that neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of the Borrower, shall be deemed to constitute any representation or warranty
by the Administrative Agent to any Bank. Each Bank represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to
make its loans hereunder and enter into this Agreement. Each Bank also
represents that it will, independently and without reliance upon the
Administrative Agent or any other Bank, 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 to make such investigations as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished by the Borrower to the
Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Bank with any information concerning the
business, operations, property, financial and other condition or
creditworthiness of the Borrower which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
SECTION 10.7. Indemnification. The Banks agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Participation Fractions in effect on the
date on which indemnification is sought under this Section 10.7 (or, if
indemnification is sought after the date upon which all of the Commitments
shall have terminated and the Obligations shall have been paid in full, ratably
in accordance with their respective Participation Fractions immediately prior
to such termination), from and against any and all 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 in any way
relating to or arising out of this Agreement, 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 such indemnity shall not, as to the
Administrative Agent, be available to the extent that such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements are determined by a court of competent jurisdiction
by final and non-appealable judgment to have resulted from the Administrative
Agent's gross negligence or willful misconduct. The Agreements in this Section
10.7 shall survive the payment of the Obligations and the Termination Date.
SECTION 10.8. The Administrative Agent in Its Individual Capacity.
JPMCB and its Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the Borrower as though JPMCB were not the
Administrative Agent hereunder. With respect to Loans made by it and any Note
issued to it, JPMCB shall have the same rights
79
and powers under this Agreement as any Bank and may exercise the same as though
it were not the Administrative Agent, and the terms "Bank" and "Banks" shall
include JPMCB and such Affiliates in their individual capacities.
SECTION 10.9. Successor Administrative Agent. The Administrative
Agent may be removed at any time upon the written request of all of the Banks
(not including the Administrative Agent or its Affiliates) and the written
consent of the Borrower and the Issuing Bank, such consent not to be
unreasonably withheld, delivered to the Administrative Agent, Issuing Bank, the
Borrower the Dealers and Depositary. The Administrative Agent may resign as
Administrative Agent upon 10 days' notice to the Banks and the Borrower. If
the Administrative Agent shall resign or be removed as Administrative Agent
under this Agreement, then the Majority Banks shall appoint from among the
Banks a successor agent for the Banks which successor agent shall be subject to
approval by the Borrower, whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon its
appointment, and the former Administrative Agent's rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Notes. After any retiring Administrative
Agent's resignation or removal hereunder as Administrative Agent, the
provisions of this Article X 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. In the event the Administrative Agent resigns or is removed
pursuant to this Section 10.9, all fees paid to the resigning Administrative
Agent but not yet accrued shall be transferred to the successor Administrative
Agent.
ARTICLE XI
THE ISSUING BANK
SECTION 11.1. Appointment. Each Bank hereby irrevocably designates
and appoints Standard Chartered Bank, as the Issuing Bank under this Agreement,
and each such Bank hereby irrevocably authorizes Standard Chartered Bank, as
the Issuing Bank to issue the Letter of Credit under and in accordance with
this Agreement, to pay the amount of any draft presented under the Letter of
Credit upon presentation of documents which, upon their face, conform to the
terms of the Letter of Credit, to receive from the Borrower reimbursement for
LOC Advances and to take such action on its behalf under the provisions of this
Agreement and the Depositary Agreement and to exercise such powers and to
perform such duties, hereunder as are specifically delegated to or required of
the Issuing Bank by the terms hereof and thereof, together with such powers as
are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, the Issuing Bank shall not have any
duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Issuing Bank; provided, however, that
nothing contained in this Article XI shall be deemed to limit or impair the
rights and obligations of the Issuing Bank hereunder or under the Letter of
Credit.
80
SECTION 11.2. Exculpatory Provisions. Neither the Issuing Bank nor
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement (except
for such Person's own gross negligence or willful misconduct), or (b)
responsible in any manner to any of the Banks for any recitals, statements,
representations or warranties made by the Borrower or any officer thereof
contained in this Agreement or in any certificate, report, statement or other
document referred to or provided for in, or received by the Issuing Bank under
or in connection with, this Agreement or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any of the Principal Documents or for any failure of the Borrower to perform
its obligations hereunder or thereunder. Except as otherwise expressly stated
herein, the Issuing Bank shall not be under any obligation to any Bank to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrower.
SECTION 11.3. Reliance by Issuing Bank. The Issuing Bank shall be
entitled to rely, and shall be fully protected in relying, upon any agreement
(including this Agreement), note (including any Note), writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram or
teletype message, statement, order or other document or facsimile transmission
or telephone conversation reasonably believed by it 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 (including counsel to the Borrower),
independent accountants and other experts selected by the Issuing Bank. Except
for the issuance of the Letter of Credit in accordance with the terms of this
Agreement and the payment of drawings thereunder, the Issuing Bank shall be
fully justified in failing or refusing to take any action under this Agreement
unless it shall first receive such advice or concurrence of the Majority Banks
as the Issuing Bank deems appropriate or it shall first be indemnified to its
satisfaction by the Banks 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 Issuing Bank shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the Notes in
accordance with a request of the Majority Banks, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Banks and all future holders of the Notes.
SECTION 11.4. Indemnification. The Banks agree to indemnify the
Issuing Bank in its capacity as such (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 Participation Fractions in effect
on the day indemnification is sought under this Section 11.4 (or, if the
indemnification is sought after the date upon which the Commitments shall have
terminated and the Obligations shall have been paid in full, ratably in
accordance with their respective Participation Fractions immediately prior to
such termination), from and against any and all 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 Issuing Bank in any way
relating to or arising out of this Agreement, or any documents contemplated by
or referred to herein or the transactions contemplated hereby or any action
taken or omitted by the Issuing Bank under or in connection with any of the
foregoing; provided, however, that such indemnity shall not, as to the Issuing
Bank, be available to the
81
extent that such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and non-appealable judgment to have resulted
from (i) the Issuing Bank's gross negligence or willful misconduct, or (ii) any
untrue statement of a material fact in the material furnished in writing by the
Issuing Bank to the Borrower for inclusion in any CP Memorandum used in the
offer or sale of CP Notes or any omission in such material to state a material
fact required to be stated therein in light of the circumstances under which
they were made. Notwithstanding the foregoing, no Bank shall be required to
fund any other Bank's portion of an LOC Advance which such other Bank fails to
fund hereunder. The agreements in this Section 11.4 shall survive the payment
of the Obligations and the Termination Date.
SECTION 11.5. Issuing Bank in Its Individual Capacity. Standard
Chartered Bank and its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower as though Standard
Chartered Bank were not the Issuing Bank hereunder. With respect to Loans made
or renewed by Standard Chartered Bank and any Note issued to Standard Chartered
Bank, the Issuing Bank and its Affiliates shall have the same rights and powers
under this Agreement as any Bank and may exercise the same as though it were
not the Issuing Bank, and the terms "Bank" and "Banks" shall include Standard
Chartered Bank and such Affiliates in their individual capacities.
SECTION 11.6. Non-Reliance on Issuing Bank and Other Banks. Each
Bank expressly acknowledges that neither the Issuing Bank nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has
made any representations or warranties to it and that no act by the Issuing
Bank hereinafter taken, including any review of the affairs of the Borrower,
shall be deemed to constitute any representation or warranty by the Issuing
Bank to any Bank. Each Bank represents to the Issuing Bank that it has,
independently and without reliance upon the Issuing Bank or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and made its
own decision to make its loans hereunder and enter into this Agreement. Each
Bank also represents that it will, independently and without reliance upon the
Issuing Bank or any other Bank, 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 to make such investigations as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished by the Borrower to the Issuing
Bank hereunder, the Issuing Bank shall not have any duty or responsibility to
provide any Bank with any information concerning the business, operations,
property, financial and other condition or creditworthiness of the Borrower
which may come into the possession of the Issuing Bank or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.
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ARTICLE XII
THE JOINT LEAD ARRANGERS, ARRANGERS AND
DOCUMENTATION AGENT
SECTION 12.1. The Joint Lead Arrangers, etc. The Borrower hereby
confirms the appointment of and designates X.X. Xxxxxx Securities Inc. and
Xxxxxxx Xxxxx Barney Inc., as Joint Lead Arrangers, Bank of America, N.A.,
Comerica Bank, Landesbank Schlweswig-Holstein Girozentrale, Kiel and Standard
Chartered Bank, as Arrangers (the Joint Lead Arrangers and the Arrangers for
purposes of this Article XII, individually, an "Arranger" and collectively, the
"Arrangers") and Standard Chartered Bank, as Documentation Agent (the
Documentation Agent for purposes of this Article XII, the "Agent") under this
Agreement. The Arrangers and the Agent assume no responsibility or obligation
hereunder for servicing, enforcement or collection of the Obligations, or any
duties as agent for the Banks. The title "Joint Lead Arranger", "Arranger" or
"Documentation Agent" implies no fiduciary responsibility on the part of such
Arranger or Agent to the Issuing Bank or the Banks or any other party to this
Agreement and the use of such title does not impose on any Arranger or Agent
any duties or obligations under this Agreement except as may be expressly set
forth herein.
SECTION 12.2. Exculpatory Provisions. No Arranger or Agent nor any
of its 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 under or in connection with this Agreement (except for its or for
such Person's own gross negligence or willful misconduct), or (b) responsible
in any manner to any of the Banks for any recitals, statements, representations
or warranties made by the Borrower or any officer thereof contained in this
Agreement or in any certificate, report, statement or other document referred
to or provided for in, or received by any Arranger or Agent under or in
connection with, this Agreement or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any of the
Principal Documents or for any failure of the Borrower to perform its
obligations hereunder or thereunder. Except as otherwise expressly stated
herein, no Arranger or Agent shall be under any obligation to any Bank to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrower.
SECTION 12.3. Arrangers and Agent. Bank of America, N.A., Comerica
Bank, Landesbank Schlweswig-Holstein Girozentrale, Kiel and Standard Chartered
Bank and their respective affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though Bank
of America, N.A., Comerica Bank, Landesbank Schlweswig-Holstein Girozentrale,
Kiel and Standard Chartered Bank were not an Arranger or Agent hereunder.
SECTION 12.4. Non-Reliance on the Arrangers, Agent and Other Banks.
Each Bank expressly acknowledges that no Arranger or Agent nor any of its
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to it and that no act by
any Arranger or Agent hereinafter taken, including any review of the affairs of
the Borrower, shall be deemed to constitute any representation or warranty by
such Arranger or Agent to any Bank. Each Bank represents to the Arrangers and
the Agent that
83
it has, independently and without reliance upon any Arranger or Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and made its own decision to make its loans hereunder and enter into
this Agreement. Each Bank also represents that it will, independently and
without reliance upon any Arranger or Agent or any other Bank, 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 to make such investigations as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower. No
Arranger or Agent shall have any duty or responsibility to provide any Bank
with any information concerning the business, operations, property, financial
and other condition or creditworthiness of the Borrower which may come into the
possession of such Arranger or Agent or any of its respective officers,
directors, employees, agents, attorneys-in-fact or affiliates.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. Transfers of Funds. All payments and other transfers
of funds under this Agreement shall be made in immediately available funds,
exclusively in U.S. Dollars, to accounts or payment offices maintained in New
York, New York, unless, in the case of payments by or on behalf of a party
other than the Borrower, otherwise specified herein or the recipient thereof
shall otherwise agree.
SECTION 13.2. Financial Data. Except as otherwise provided herein,
financial data required hereby shall be prepared both as to classification of
items and as to amount in accordance with IAS.
SECTION 13.3. Payment of Expenses, etc.
(a) The Borrower agrees, whether or not the transactions hereby
contemplated shall be consummated, upon demand to reimburse and hold the
Administrative Agent, the Joint Lead Arrangers, the Arrangers, and the Issuing
Bank harmless from liability for the payment of all reasonable and documented
out-of-pocket costs and expenses (the "Facility Expenses") arising in
connection with the preparation, execution and delivery of this Agreement and
any other documents relating to the transactions contemplated hereby, including
(i) the reasonable fees, travel expenses, courier charges, communication
expenses, expenses associated with the execution of this Agreement and all
other out-of-pocket expenses and (ii) all reasonable fees and disbursements of
counsel for the Administrative Agent, the Joint Lead Arrangers, the Arrangers
and the Issuing Bank.
(b) The Borrower further agrees, upon demand communicated through
the Administrative Agent, to reimburse and hold the Banks, the Issuing Bank,
the Administrative Agent, the Joint Lead Arrangers and the Arrangers harmless
from liability for the payment of all of their out-of-pocket costs and expenses
reasonably incurred by any of them and arising in connection with any Default
or Event of Default or the enforcement of, or the amendment,
84
modification, waiver and/or preservation of any rights under, this Agreement,
the Notes or otherwise in connection with the transactions contemplated hereby,
including all reasonable fees and disbursements of counsel of each Bank, the
Issuing Bank, the Administrative Agent, the Joint Lead Arrangers and the
Arrangers, and all stamp taxes (including interest and penalties, if any),
recording taxes and fees and filing taxes and fees which may be payable in
respect thereof.
SECTION 13.4. Amendments and Waivers. No waiver, amendment,
supplement or modification hereto shall be effective unless in writing and
signed by the Borrower and such other parties as are required under this
Section 13.4. With the written consent of the Majority Banks (except if the
rights and duties of the Issuing Bank are affected thereby, including, without
limitation, any amendment, modification or waiver of any provision of Article
II, IV or XI hereof, in which case the written consent of the Issuing Bank
shall also be obtained), the Administrative Agent (on behalf of the Banks) and
the Borrower may, from time to time, enter into written amendments, supplements
or modifications hereto for the purpose of adding any provisions to this
Agreement or the Notes or changing in any manner the rights of the Banks, the
Issuing Bank, the Administrative Agent or of the Borrower hereunder or
thereunder, and with the consent of the Majority Banks, the Administrative
Agent (on behalf of the Banks) may execute and deliver to the Borrower a
written instrument waiving, on such terms and conditions as the Administrative
Agent may specify in such instrument, any of the requirements of this Agreement
or the Notes or any Default or Event of Default and its consequences; provided,
however, no such waiver and no such amendment, supplement or modification
shall:
(a) (i) extend the maturity of any of the Obligations, extend the
time of payment of interest thereon, or extend the Stated Termination Date;
(ii) reduce the principal amount of the Obligations, reduce
the rate of interest thereon, or reduce the amount or change the method
of calculation of any Fees (other than the Letter of Credit Fees);
(iii) amend, modify or waive any provision of this
Section 13.4;
(iv) reduce the percentage specified in the definition of
Majority Banks;
(v) amend, modify or waive any provision of Section 5.1; or
(vi) consent to the assignment or transfer by the Borrower of
any of its rights and obligations under this Agreement or the Notes;
in each case without the written consent of all the Banks;
(b) amend, modify or waive any provision of Article X without the
written consent of the Administrative Agent;
(c) amend, modify or waive any provision of the Depositary
Agreement or permit the substitution of the Depositary without the consent of
the Majority Banks and the Issuing Bank, which consent shall not be
unreasonably withheld as to the substitution of the Depositary;
85
(d) adversely affect the rights and obligations of the Depositary
under the Depositary Agreement without the written consent of the Depositary;
(e) increase the amount of any Bank's Commitment without the
written consent of such Bank;
(f) amend, modify or waive any provision of Article XII without the
written consent of the Joint Lead Arrangers and the Arrangers and the
Documentation Agent; or
(g) amend, modify or waive any provision of the Letter of Credit or
any Principal Documents (other than any Dealer Agreement) without written
notice from the Rating Agencies that the rating on the CP Notes will not be
withdrawn or reduced below A-1 by S&P and P-1 by Xxxxx'x by such amendment,
modification or waiver.
The Issuing Bank may waive the Settlement Limit without the consent of any
other party to the Principal Documents.
Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Banks and shall be binding upon the
Borrower, the Banks, the Issuing Bank, the Administrative Agent, the Joint Lead
Arrangers, the Arrangers, the Documentation Agent and all future holders of the
Notes. In the case of any waiver, the Borrower, the Banks, the Issuing Bank,
the Joint Lead Arrangers, the Arrangers, the Documentation Agent and the
Administrative Agent shall be restored to their former positions and rights
hereunder and under the outstanding Notes, and any Default or Event of Default
waived shall be deemed to be cured and not continuing; but no such waiver shall
extend to any subsequent or other Default or Event of Default, or impair any
right consequent thereon.
SECTION 13.5. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
SECTION 13.6. Indemnification.
(a) The Borrower agrees to indemnify the Issuing Bank, the
Administrative Agent, the Joint Lead Arrangers, the Arrangers, the Banks and
each Related Party of any of the foregoing Persons (each such Person being
called an "Indemnitee") from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever, including, without limitation, all
reasonable fees, documented as to the scope of services provided, and
disbursements of counsel (including the allocated cost of internal counsel)
which may at any time (including at any time following the payment of the
Obligations or the Termination Date) be imposed on or incurred by any such
Indemnitee in connection with the investigation of, preparation for,
participation in or outcome of any pending or threatened claim or cause of
action relating to or arising out of this Agreement or any documents
contemplated by or referred to herein or the transactions contemplated hereby
or thereby or any action taken or omitted by such Indemnitee under or in
connection with any of the foregoing and which would not have been incurred by
or asserted or awarded against such indemnified party but for such Indemnitee
being involved with the Agreement or any documents
86
contemplated by or referred to herein or the transactions contemplated hereby
or any action taken or omitted by such Indemnitee in connection with any of the
foregoing; provided, however, that such indemnity shall not, as to any
Indemnitee, be available to the extent that such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements are determined by a court of competent jurisdiction by final and
non-appealable judgment to have resulted from (i) any untrue statement of a
material fact relating to such Indemnitee in any CP Memorandum used in the sale
of the CP Notes or any omission to state a material fact relating to such
Indemnitee therein necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading if such
information was approved in writing by such Indemnitee prior to its inclusion
in such CP Memorandum, or (ii) the gross negligence or willful misconduct of
such Indemnitee.
(b) This Section 13.6 shall survive the termination of this
Agreement and the payment of the Obligations.
SECTION 13.7. Notices.
(a) Except as otherwise expressly provided herein, all notices,
requests, demands or other communications to or upon the respective parties
hereunder shall be in writing, sent by courier or express mail service or by
facsimile transmission and, unless otherwise expressly provided herein, shall
be effective upon receipt by the party to whom such communications were sent,
or, in the case of notice by facsimile, upon confirmation by the sender of
receipt, addressed to such party, at its address shown in Schedule 1.1(b) (in
the case of the Banks) or below (in all other cases) or at such other address
as such party may hereafter notify to the other. Any communication with respect
to a change of address shall be deemed to be given or made when received by the
party to whom such communication was sent.
(b) Notices and other communications to the Banks hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent and the Issuing Bank; provided that the
foregoing shall not apply to notices pursuant to Articles II, III and IV unless
otherwise agreed by the Administrative Agent, the Issuing Bank and the
applicable Bank. The Administrative Agent, the Issuing Bank or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it;
provided that approval of such procedures may be limited to particular notices
or communications.
If to the Borrower: TFM, S.A. de C.V.
Xx. Xxxxxxxxxx Xxx Xx. 0000
0(xxxxxx) Xxxx
Xxxxxxx del Pedregal, X.X. 00000
Xxxxxxxxxx Xxxxxxx, Xxxxxx, D.F. Mexico
Attention: Chief Financial Officer
Telephone: (000-00-000) 000-0000
Facsimile: (000-00-000) 000-0000
If to the Issuing Bank: Standard Chartered Bank
87
One Madison Avenue, 3rd Floor
New York, New York 10010
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to the Administrative Agent.
If to the Administrative Agent: JPMorgan Xxxxx Xxxx
0 Xxxxx Xxxxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to the Issuing Bank at the
address set forth above.
If to the Joint Lead Arrangers: X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx, 00000
Attention: Xxxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Arrangers and
Documentation Agent: Bank of America, N.A.
Reforma 265 PH
Mexico, F.F. 06500
Attention: Xxxxx Xxxxxxxxx Xxxxxx
Telephone: 00-00-0000-0000
Facsimile: 00-00-0000-0000
88
with a copy to:
Bank of America, N.A.
Reforma 265 XX
Xxxxxx, X.X. 00000
Xxxxxxxxx: Xxxxxxxx Llereas
Telephone: 00-00-0000-0000
Facsimile: 00-00-0000-0000
Comerica Xxxx
Xxxxxx Xxxxx #00 Xxxx 00
Xxxxxx X.X. c.p. 11560
Attention: Xxxxxxx Xxxxx
Telephone: 00-00-0000-0000
Facsimile: 00-00-0000-0000
Landesbank Schleswig-Holstein Girozentrale, Xxxx
Xxxxxxxxxxx 0
X-00000 Xxxx, Xxxxxxx
Attention: Xxxxxxx Xxxxxxx
Telephone: 00-00-000-0000
Facsimile: 00-00-000-0000
Standard Chartered Bank
Xxxxx xx xxx Xxxxxx
000-000
Xxxxx xx Xxxxxxxxxxx
Xxxxxx, D.F. 11000
Attention: Xxxx Xxxxxx Xxxxxxx
Telephone: 00-00-0000-0000
Telecopy: 00-00-0000-0000
with a copy to:
Standard Chartered Bank
0 Xxxxxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
If to the Dealers: Banc of America Securities LLC
000 Xxxxxxxxxx Xxxxxx
Mail Code: CA5-801-12-47
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Money Market Origination
Telephone: (000)000-0000
Facsimile: (000)000-0000
89
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Manager - Continuously Offered
Products
Telephone: (000)000-0000
Facsimile: (000)000-0000
With a copy to:
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Investment Banking Information
Center
Telephone: (000)000-0000
Facsimile: (000)000-0000
SECTION 13.8. Table of Contents; Descriptive Headings; etc. The
table of contents and descriptive headings of the several sections of this
Agreement are inserted for convenience only and shall not be deemed to affect
the meaning or construction of any of the provisions hereof.
SECTION 13.9. Survival of Agreements and Representations. All
covenants, agreements, representations and warranties made herein, in the
Notes, or in any certificate delivered pursuant hereto or thereto shall survive
the execution and delivery hereof, the issuance of the Letter of Credit and the
Loans made hereunder.
SECTION 13.10. Benefit of Agreement; Assignment. This Agreement
shall be binding upon the Borrower, its successors and assigns, and shall inure
to the benefit of the Issuing Bank, the Joint Lead Arrangers, the Arrangers,
the Documentation Agent, the Administrative Agent and the Banks and their
respective successors and assigns except that (a) the Borrower may not transfer
or assign any or all of its rights or obligations hereunder except with the
unanimous consent of all the Banks; (b) an assignment by a Bank of its
Commitment, its Note and its Loans can only be made to a bank or financial
institution organized and licensed under the laws of Mexico or a financial
institution registered with the Hacienda; and (c) no Bank may assign its
Commitment, its Note and the Loans made by such Bank and no Bank may make or
cause to be made its Loans hereunder through any other Person, except pursuant
to an instrument of assignment in substantially the form of Exhibit I (an
"Assignment and Acceptance") and with the consent of the Administrative Agent,
the Issuing Bank and the Borrower (which consent (x) in each case shall not be
unreasonably withheld, (y) in the case of the Borrower, shall not be required
in the case of an assignment to a Person party to this Agreement or a branch,
agency or Subsidiary thereof (a "Bank Affiliate") or after the occurrence and
during the continuance of an Event of Default and (z) in the case of the
Administrative Agent and the Issuing Bank shall not be required in the case of
an assignment to a Bank Affiliate); provided, however, that (i) the Borrower
shall not be required to pay any further amounts pursuant to Sections 4.8, 4.10
and 4.11 than would have been required to be paid but for
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the transfer of such Bank's interest to a Bank Affiliate or the making of Loans
through another office or Subsidiary of such Bank, except as provided in
Section 4.10, (ii) the Letter of Credit shall at all times be issued by the
Issuing Bank, (iii) any such assignment shall be in a minimum amount of
US$1,000,000 and (iv) the Assignee shall pay a fee of US$3,500 to the
Administrative Agent prior to the consummation of such assignment (other than
an assignment to a Bank Affiliate). Nothing herein shall prohibit any Bank
from pledging or assigning any Note to any Federal Reserve Bank in accordance
with applicable law and without compliance with the foregoing provisions of
this Section 13.10; provided, however, that such pledge or assignment shall not
release such Bank from its obligations hereunder.
SECTION 13.11. Participation. Notwithstanding the provisions of
Section 13.10, each Bank shall have the right from time to time to create and
sell one or more participations in its rights under this Agreement, its Note
and the Loans made by it to a bank or financial institution organized and
licensed under the laws of Mexico or a financial institution registered with
the Hacienda. Each Bank agrees to notify the Borrower as promptly as
practicable of the consummation of the sale of a participation in its rights
under this Agreement, its Note and the Loans made by it. No agreement or other
arrangement governing any such creation and sale (a "Participation Agreement")
shall confer upon the purchaser of such interest (a "Participant") any right to
contact, negotiate with or seek information from the Borrower under this
Agreement or such Bank's Note or to enforce this Agreement or such Bank's Note
against the Borrower directly, except as provided below. Any Participation
Agreement shall (a) prohibit the assignment or sale by the Participant of any
subparticipation interest and (b) permit the Bank to consent to waivers,
amendments, modifications or supplements of this Agreement without the consent
of the Participant, except in the case of waivers, amendments or modifications
extending the maturity of any Loan or Note in respect of which such
Participation was granted, or reducing the rate or extending the time for
payment of any installment of interest thereon or reducing the principal
thereof, or reducing the amount or basis of calculation of any Fees to accrue
in respect thereof. Notwithstanding the foregoing, any Participant shall be
entitled to the benefits of Sections 4.8, 4.10 and 4.11 pursuant to its
Participation Agreement as if such Participant were a Bank named herein,
provided, however, that the Borrower shall not be required to pay any further
amounts pursuant to such Sections than would have been required to be paid but
for the sale to such Participant of such Participant's participation interest.
SECTION 13.12. Right of Set-off. Upon the occurrence and during
the continuance of any Event of Default, the Administrative Agent, the Issuing
Bank and the Banks are hereby authorized at any time and from time to time,
without notice to the Borrower (any such notice being expressly waived by the
Borrower) and to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final, in
any currency) at any time held and other indebtedness at any time owing by the
Administrative Agent, the Issuing Bank or the Banks to or for the credit or the
account of the Borrower against any and all of the obligations of the Borrower
now or hereafter existing under this Agreement or the Notes, irrespective of
whether or not the Administrative Agent, the Issuing Bank or the Banks shall
have made any demand hereunder and although such obligations may be unmatured.
Each of the Banks and the Administrative Agent agrees promptly to notify the
Borrower no later than five Business Days after any such setoff and
application; provided, however, that the failure to give such notice shall not
affect the validity of such setoff and application; provided, further, that on
the maturity date of any CP Note, no set-off may occur
91
until such time as the drawing under the Letter of Credit to pay such CP Note
has been honored by the Issuing Bank.
SECTION 13.13. SUBMISSION TO JURISDICTION; VENUE; SERVICE; WAIVER
OF JURY TRIAL. EACH OF THE PARTIES HERETO (AND ITS SUCCESSORS AND ASSIGNS) (i)
AGREE THAT ANY CLAIM, SUIT, ACTION OR PROCEEDING BROUGHT BY ANY PARTY OR
SUCCESSOR THERETO ARISING OUT OF THIS AGREEMENT OR ANY OTHER PRINCIPAL DOCUMENT
SHALL BE SUBJECT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK OR
THE UNITED STATES DISTRICT COURT IN EACH CASE 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 TO APPELLATE COURTS THEREFROM AND EACH OF
THE PARTIES HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS, FOR ITSELF AND ITS
PROPERTY, TO SUCH JURISDICTION FOR SUCH PURPOSE AND (ii) TO THE FULLEST EXTENT
PERMITTED BY LAW, (A) IRREVOCABLY WAIVES ANY OBJECTION IT MAY HAVE AT ANY TIME
TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER PRINCIPAL DOCUMENT BROUGHT IN ANY SUCH
COURT, (B) IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM;
AND (C) 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. EACH OF THE PARTIES HERETO HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES ALL RIGHTS OF JURISDICTION IN ANY SUCH ACTION OR PROCEEDING,
WHICH IT MAY NOW OR HEREAFTER BE AFFORDED BY LAW, IN ANY OTHER FORUM. EACH OF
THE PARTIES HERETO FURTHER AGREES THAT A FINAL JUDGMENT IN ANY SUCH SUIT,
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY MANNER PROVIDED BY LAW. TO THE
FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO (AND THEIR
RESPECTIVE SUCCESSORS AND ASSIGNS) WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. FOR THE PURPOSE OF PROCEEDINGS IN THE COURTS
OF THE STATE OF NEW YORK AND THE UNITED STATES COURTS FOR THE SOUTHERN DISTRICT
OF NEW YORK, IN EACH CASE SITTING IN THE BOROUGH OF MANHATTAN, THE BORROWER
HEREBY IRREVOCABLY DESIGNATES AS OF THE EFFECTIVE DATE CT CORPORATION SYSTEM
WITH OFFICES CURRENTLY LOCATED AT 000 XXXXXX XXXXXX, XXX XXXX, XXX XXXX 00000
AS ITS AGENT FOR SERVICE OF PROCESS. IN THE EVENT THAT SUCH AGENT OR ANY
SUCCESSOR SHALL CEASE TO BE LOCATED IN THE BOROUGH OF MANHATTAN, THE BORROWER
SHALL PROMPTLY AND IRREVOCABLY BEFORE THE RELOCATION OF SUCH AGENT FOR SERVICE
OF PROCESS, IF PRACTICABLE, OR PROMPTLY THEREAFTER DESIGNATE A SUCCESSOR AGENT,
WHICH SUCCESSOR AGENT
92
SHALL BE LOCATED IN THE BOROUGH OF MANHATTAN, AND NOTIFY THE ADMINISTRATIVE
AGENT THEREOF, TO ACCEPT ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS OR OTHER
DOCUMENTS WHICH MAY BE SERVED IN ANY ACTION OR PROCEEDING IN ANY OF SUCH COURTS
AND FURTHER AGREES THAT SERVICE UPON SUCH AGENT SHALL CONSTITUTE VALID AND
EFFECTIVE SERVICE UPON THE BORROWER AND THAT FAILURE OF ANY SUCH AGENT TO GIVE
ANY NOTICE OF SUCH SERVICE TO THE BORROWER SHALL NOT AFFECT THE VALIDITY OF
SUCH SERVICE OR ANY JUDGMENT RENDERED IN ANY ACTION OR PROCEEDING BASED
THEREON. EXCEPTING THE BORROWER, EACH OF THE PARTIES HERETO AGREES THAT
SERVICE OF ANY AND ALL SUCH PROCESS OR OTHER DOCUMENTS ON SUCH PERSON MAY ALSO
BE EFFECTED BY REGISTERED MAIL TO ITS ADDRESS AS SET FORTH IN SECTION 13.7 OR
SCHEDULE 1.1(b). WITH RESPECT TO THE BORROWER, SERVICE, OF ANY AND ALL SUCH
PROCESS OR OTHER DOCUMENTS TO CT CORPORATION OR SUCH OTHER AGENT FOR SERVICE OF
PROCESS DESIGNATED BY THE BORROWER IN ACCORDANCE WITH THIS AGREEMENT, SERVICE
OF PROCESS SHALL CONSTITUTE VALID AND EFFECTIVE SERVICE ONLY IF MADE IN PERSON.
SECTION 13.14. Judgment Currency. All payments made under this
Agreement and the Principal Documents shall be made in New York, New York to
such account as may be directed by the payee from time to time in United States
Dollars, and, if for any reason any payment made hereunder is made in a
currency (the "Other Currency") other than United States Dollars, then to the
extent that the payment actually received by the Banks, the Issuing Bank, the
Joint Lead Arrangers, the Arrangers, the Documentation Agent or the
Administrative Agent, when converted into United States Dollars at the Rate of
Exchange (as defined below) on the date of payment (or, if conversion on such
date is not practicable, as soon thereafter as it is practicable for the Banks,
the Issuing Bank, the Joint Lead Arrangers, the Arrangers, the Documentation
Agent or the Administrative Agent to purchase United States Dollars) falls
short of the amount due under the terms of this Agreement or any Principal
Document, the Borrower, shall, as a separate and independent obligation of the
Borrower, indemnify the Banks, the Issuing Bank, the Joint Lead Arrangers, the
Arrangers, the Documentation Agent and the Administrative Agent and hold the
Banks, the Issuing Bank, the Joint Lead Arrangers, the Arrangers, the
Documentation Agent and the Administrative Agent harmless against the amount of
such shortfall. As used in this Section 13.14, the term "Rate of Exchange"
means the rate at which the Banks, the Issuing Bank, the Joint Lead Arrangers,
the Arrangers, the Documentation Agent or the Administrative Agent are able on
the relevant date to purchase United States Dollars with the Other Currency and
shall include any premiums and costs of exchange payable in connection with the
purchase of or conversion into, United States Dollars.
SECTION 13.15. Execution in 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 and delivered shall be
deemed to be an original and all of which taken together shall constitute one
and the same instrument.
SECTION 13.16. Waiver of Immunities. To the extent that the
Borrower has or hereafter may acquire any immunity from jurisdiction of any
court or from any legal process
93
(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 Agreement and the other Principal Documents. The
foregoing waiver is intended to be effective to the fullest extent now or
hereafter permitted by applicable law.
SECTION 13.17. Severability. To the fullest extent permitted by
law, 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.
SECTION 13.18. Confidentiality. Each of the Issuing Bank, the Joint
Lead Arrangers, the Arrangers, the Documentation Agent, the Administrative
Agent and each of the Banks agrees that it will not disclose without the prior
consent of the Borrower (other than to its affiliates, employees, auditors or
counsel or to another Bank) any information with respect to the Borrower which
is furnished pursuant to this Agreement or any other Principal Document except
that any such Person may disclose any such information (a) as has become
generally available to the public other than by a breach by such Person of this
Section 13.18, (b) as may be requested or required by any Governmental
Authority having or claiming to have jurisdiction over such Person (provided
that such Person does not object to such body's claim of jurisdiction over it)
or to the Federal Reserve Board or the Federal Deposit Insurance Corporation or
similar organizations (whether in the United States or elsewhere) or their
successors, (c) as may be required in response to any summons or subpoena or
any law, order, governmental direction, regulation or ruling applicable to such
Person, or (d) to any prospective participant or assignee in connection with
any contemplated transfer pursuant to Section 13.10 or Section 13.11, provided
that such prospective transferee shall have been made aware of this Section
13.18 and shall have agreed to be bound by its provisions as if it were a party
to this Agreement. Notwithstanding the foregoing, the Administrative Agent may
make any such information available to the Depositary.
SECTION 13.19. No Waiver; Remedies. No failure on the part of the
Administrative Agent, the Issuing Bank, the Joint Lead Arrangers, any Arranger,
the Documentation Agent or any of the Banks to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
SECTION 13.20. Prior Agreements Superseded. As of the Effective
Date, this Agreement shall completely and fully supersede all prior
undertakings or agreements, both written and oral, between or among the
Borrower, the Joint Lead Arrangers, the Arrangers, the Documentation Agent, the
Administrative Agent, the Issuing Bank, and/or the Banks, relating to the
issuance of the Letter of Credit by the Issuing Bank and the acquisition by the
Banks of their Commitments, including, but not limited to, those contained in
any mandate letter between the Borrower and the Joint Lead Arrangers executed
in anticipation of the issuance of the Letter of Credit by the Issuing Bank and
the acquisition by the Banks of their Commitments but excluding the Fee Letters
referred to herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives as of the date first
above written.
TFM, S.A. DE C.V.,
as Borrower
By: /s/ Xxxx Xxxxx
-----------------------------
Name: Xxxx Xxxxx
Title: Treasurer
By: /s/ Jacinto Xxxxxx Xxxxxx
------------------------------
Name: Jacinto Xxxxxx Xxxxxx
Title:
96
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STANDARD CHARTERED BANK,
as Issuing Bank, Arranger, Documentation Agent
and as a Bank
By: /s/ Xxxxxx Xxxxxx
------------------------------------------
Name: Xxxxxx Xxxxxx A2385
Title: Assistant Vice President
By: /s/ Xxxxxxxx Xxxxxxx
------------------------------------------
Name: Xxxxxxxx Xxxxxxx X000
Title: Vice President
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JPMORGAN CHASE BANK,
as Administrative Agent and as a Bank
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
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Arrangers:
BANK OF AMERICA, N.A.
By: /s/ Xxxx-Xxxxx Goinohard
--------------------------------
Name: Xxxx-Xxxxx Goinohard
Title: Managing Director
100
COMERICA BANK
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
101
LANDESBANK SCHLESWIG-HOLSTEIN
GIROZENTRALE, KIEL
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Senior Vice President
By: /s/ Xxxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Senior Vice President
102
Banks:
BANKBOSTON N.A.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Attorney in Fact
103
CITIBANK, N.A.
By: /s/ Xxxx Xxxxx Xxxxxxx
---------------------------------
Name: Xxxx Xxxxx Xxxxxxx
Title: Vice President
104
EXPORT DEVELOPMENT CANADA
By: /s/ Xxxxx Xxxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxxx
Title: Financial Services Manager
By: /s/ Xxxxxx Xxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxx
Title: Financial Services Manager
105
MIZUHO CORPORATE BANK, LTD.
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President and
Senior Team Leader
106
RZB FINANCE LLC
By: /s/ Xxxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Vice President
By: /s/ Xxxx X. Xxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxx
Title: Group Vice President
000
XXXXXX XX, XXX XXXX BRANCH
By: /s/ Xxxxxx Frame
--------------------------------
Name: Xxxxxx Frame
Title: AD
By: /s/ Xxxxxxxxx Xxxxxxxxxx
--------------------------------
Name: Xxxxxxxxx Xxxxxxxxxx
Title: Managing Director
Credit Department
