EXHIBIT 2.2
EXECUTION COPY
FIRST SUPPLEMENTAL INDENTURE
This First Supplemental Indenture (this "Supplemental Indenture"),
dated as of May 21, 2002, among TFM, S.A. de C.V., a sociedad anonima de capital
variable, organized under the laws of the United Mexican States, as Issuer (the
"Company"), Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V., a sociedad
anonima de capital variable, organized under the laws of the United Mexican
States, as Guarantor (the "Guarantor"), The Bank of New York, a New York banking
corporation, as trustee under the indenture referred to below (in such capacity,
the "Trustee"), and Deutsche Bank Luxembourg S.A., as the Paying Agent (the
"Paying Agent").
W I T N E S S E T H:
WHEREAS, the Company and the Guarantor have heretofore executed and
delivered to the Trustee an indenture dated as of June 16, 1997 (the
"Indenture"), providing for the issuance by the Company and the guarantee by the
Guarantor of an aggregate principal amount of up to $150,000,000 of 10.25%
Senior Notes due 2007 (the "Notes");
WHEREAS, the Company is contemplating the acquisition (the
"Acquisition") of the equity interest held by the government of Mexico in the
Guarantor (the "Call Option Shares") through Ferrocarriles Nacionales de Mexico
("FNM") and Nacional Financiera, S.N.C., as trustee ("Nafin");
WHEREAS, Section 9.02 of the Indenture provides that, with the written
consent of the Holders of a majority in aggregate principal amount of the
outstanding Notes (the "Requisite Consents"), the Company and the Guarantor,
when authorized by their respective Boards of Directors (as evidenced by a Board
Resolution), and the Trustee may amend the Indenture, and the Holders of a
majority in aggregate principal amount of the outstanding Notes (the "Requisite
Holders") by written notice to the Trustee may waive future compliance by the
Company with certain provisions of the Indenture;
WHEREAS, in order to permit the Company to consummate the Acquisition,
the Company has completed a consent solicitation (the "Consent Solicitation")
whereby the Company has obtained the Requisite Consents to amend, and a waiver
by the Requisite Holders (the "Waiver") of, Section 4.04 of the Indenture,
entitled "Limitation on Restricted Payments" (this amendment, together with the
Waiver and certain additional amendments to Sections 4.03, 4.04 and 4.09 of the
Indenture which are being made hereby, the "Amendments"), which limits the
amounts of restricted payments the Company is permitted to make based on the
Company's cumulative adjusted consolidated net income beginning on July 1, 1997;
WHEREAS, in connection with the Consent Solicitation, Holders that
delivered a valid consent on a timely basis (the "Consenting Holders") are
entitled to receive a cash fee (the "Cash Fee") with respect to the Notes in
respect of which they have consented if the conditions to the Consent
Solicitation are met;
WHEREAS, the Company, the Guarantor, the Trustee and the Paying Agent
are entering into this Supplemental Indenture in order to set forth the
Amendments;
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WHEREAS, this Supplemental Indenture has been duly authorized by all
necessary corporate action on the part of the Company and the Guarantor; and
NOW, THEREFORE, the Company, the Guarantor, the Trustee and the Paying
Agent mutually covenant and agree for the equal and ratable benefit of all the
Holders of the Notes as follows:
ARTICLE I.
AMENDMENT AND WAIVER OF THE INDENTURE
SECTION 1.1 Addition to Section 4.04 of the Indenture. The Company, the
Guarantor, the Trustee and the Paying Agent hereby agree to amend Section 4.04
of the Indenture, and Section 4.04 of the Indenture is hereby amended by adding
the following paragraph to the end of such section:
Notwithstanding anything to the contrary in the foregoing provisions of
this Section 4.04, (i) the foregoing provisions shall not apply to and
shall not prohibit the purchase by the Company of Capital Stock of the
Guarantor from the government of Mexico, through FNM and Nafin, or their
successors or assigns, and any subsequent transactions between the Company
and the Guarantor in respect of the cancellation, conversion or exchange of
the Capital Stock of the Guarantor thereby purchased by the Company and
(ii) neither such purchase by the Company of Capital Stock of the Guarantor
or any such subsequent transactions, nor the consideration paid by the
Company in connection with such purchase or such subsequent transactions
(such purchase and any subsequent transactions, the "Acquisition
Transactions"), shall be included in calculating whether the conditions of
clause (C) of the first paragraph of this Section 4.04 have been met with
respect to any subsequent Restricted Payments, provided that the Company
shall not be entitled to consummate any Acquisition Transactions under the
provisions of this paragraph prior to having paid the Cash Fee to
consenting Holders, all no later than July 31, 2002 in accordance with the
terms and conditions of the Consent Solicitation.
SECTION 1.2 Waiver of Compliance with Section 4.04 of the Indenture.
Compliance by the Company with Section 4.04 of the Indenture is hereby waived
with respect to any Acquisition Transactions, subject to satisfaction of the
provisions of Section 1.1 of this Supplemental Indenture.
SECTION 1.3 Amendment of Section 4.03(a) of the Indenture. The Company,
the Guarantor, the Trustee and the Paying Agent hereby agree to amend Section
4.03(a) of the Indenture, and Section 4.03(a) of the Indenture is hereby
amended, by:
(A) replacing the first paragraph of such section in its entirety with
the following paragraph:
(a) The Guarantor will not, and will not permit any of its
Restricted Subsidiaries to, Incur any Indebtedness (other than
the Securities, the Securities Guarantees, the Senior Notes
(and the guarantee thereof) and Indebtedness existing on the
Closing Date and any Indebtedness incurred before the
effectiveness of the First
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Supplemental Indenture hereto (including, without limitation,
under our U.S. Commercial Paper Program) in accordance with
the provisions of this Indenture as of the time of
Incurrence); provided that the Guarantor and the Company may
Incur Indebtedness if, after giving effect to the Incurrence
of such Indebtedness and the receipt and application of the
proceeds therefrom, the Interest Coverage Ratio would be
greater than (i) if the Indebtedness is Incurred during the
period beginning on the Closing Date and ending on the third
anniversary thereof, 2.25:1; (ii) if the Indebtedness is
Incurred during the period beginning after the third
anniversary of the Closing Date and the Cash Fee has not been
paid, 2.5:1; (iii) if the Indebtedness is Incurred during the
period beginning after the third anniversary of the Closing
Date and ending on the date upon which the Cash Fee is paid,
2.5:1; (iv) if the Indebtedness is Incurred during the period
beginning after the date upon which the Cash Fee is paid and
ending on October 31, 2003, 3.0:1; and (v) if the Indebtedness
is Incurred thereafter, 2.5:1.
(B) replacing clause (i) thereof in its entirety with the following
text:
(i) Indebtedness outstanding at any time in an aggregate
principal amount not to exceed $50.0 million that is Incurred
solely for the purpose of financing the cost of improvements
or construction related to the properties of Mexrail, Inc. and
the Texas-Mexican Railway Company, the net proceeds of which
are applied to finance the cost of such improvements or
construction; and
(c) eliminating the cross-reference to clause (i) found in clause (iii)
of Section 4.03(a).
SECTION 1.4 Amendment of Section 4.04(C) of the Indenture. The Company,
the Guarantor, the Trustee and the Paying Agent hereby agree to amend Section
4.04 of the Indenture, and Section 4.04 of the Indenture is hereby amended, with
effect retroactive to April 1, 2002, by replacing clause C thereof in its
entirety with the following text:
(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 Guarantor, whose determination shall be conclusive and evidenced by a Board
Resolution) made on or after April 1, 2002 shall exceed the sum of (1) 50% of
the aggregate amount of the Adjusted Consolidated Net Income (or, if the
Adjusted Consolidated Net Income is a loss, minus 100% of the amount of such
loss) (determined by excluding income resulting from transfers of assets by the
Guarantor or a Restricted Subsidiary to an Unrestricted Subsidiary) 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 reports have been filed or provided to the
Trustee pursuant to Section 4.18 plus (2) the aggregate Net Cash Proceeds
received by the Company or the Guarantor on or after April 1, 2002 from a
capital contribution or the issuance and sale (other than pursuant to the
Capital Contribution Agreement) permitted by this Indenture of Capital Stock of
the Company or the Guarantor (other than Disqualified Stock) to a Person who is
not a Subsidiary of the Company or the Guarantor, including an issuance or sale
permitted by this Indenture of Indebtedness of the Company or the Guarantor for
cash subsequent to the Threshold Conversion Date upon the conversion of such
Indebtedness into Capital Stock (other than Disqualified Stock) of the Company
or the Guarantor, or from the issuance to a Person who is not a Subsidiary of
the Company or the Guarantor of any options,
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warrants or other rights to acquire Capital Stock of the Company or the
Guarantor (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 Maturity of the Securities) 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, repayments of loans or
advances, or other transfers of assets, in each case to the Guarantor or any
Restricted Subsidiary 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), or from
redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries (valued
in each case as provided in the definition of "Investments"), not to exceed, in
each case, the amount of Investments previously made by the Company or any
Restricted Subsidiary in such Person or Unrestricted Subsidiary.
SECTION 1.5 Amendment of Section 1.01 of the Indenture. The Company,
the Guarantor, the Trustee and the Paying Agent hereby agree to amend Section
1.01 of the Indenture by adding the following definitions to Section 1.01 in the
appropriate alphabetical order.
"Acquisition Transactions" has the meaning provided in Section 4.04.
"Cash Fee" means the cash fee offered in connection with the Consent
Solicitation of $30.00 for each $1,000 principal amount of Notes in respect of
which Holders delivered a valid and unrevoked consent.
"U.S. Commercial Paper Program" means the Company's $290.0 million
Letter of Credit Backed U.S. Commercial Paper Program, established pursuant to a
Credit Agreement, dated as of September 19, 2000, among the Company, Chase
Securities Inc. as lead arranger and book manager, Bank of America Securities
LLC and Westdeutsche Landesbank Girozentrale, S.A., New York Branch, as
co-documentation agents, co-syndication agents and arrangers, The Chase
Manhattan Bank as administrative agent and the several banks parties thereto, as
amended by the Amendment and Joinder Agreement dated as of December 5, 2000,
increasing the amount from $290.0 million to $310.0 million, and the Second
Amendment dated as of September 25, 2001, together with all other agreements,
instruments and documents executed or delivered pursuant thereto, in each case
as such agreements may be amended (including any amendment and restatement
thereof), supplemented, replaced or otherwise modified from time to time,
including any agreement extending the maturity of, refinancing, replacing or
otherwise restructuring all or any portion of the Indebtedness under such
agreement or any successor or replacement agreement and whether by the same or
any other agent, lender or group of lenders.
SECTION 1.6 Amendment of Section 4.09 of the Indenture. The Company,
the Guarantor, the Trustee and the Paying Agent hereby agree to amend Section
4.09 of the Indenture, and Section 4.09 of the Indenture is hereby amended by
replacing the text after the last semicolon at the end of such section with the
following text:
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"(vii) Liens securing Indebtedness which is permitted to be incurred under
clause (i) of the second paragraph of Section 4.03; or (viii) Permitted Liens."
ARTICLE II.
MISCELLANEOUS
SECTION 2.1 Effect of Supplemental Indenture. Upon the execution and
delivery of this Supplemental Indenture by the Company, the Guarantor, the
Trustee and the Paying Agent, the Indenture shall be supplemented in accordance
herewith, and this Supplemental Indenture shall form a part of the Indenture for
all purposes, and every Holder of Notes heretofore or hereafter authenticated
and delivered under the Indenture shall be bound thereby.
Notwithstanding the foregoing, the Amendments set forth herein will
have no effect, and this First Supplemental Indenture shall be null and void, if
the Cash Fee is not paid to consenting Holders on or before July 31, 2002 in
accordance with the terms and conditions of the Consent Solicitation.
SECTION 2.2 Indenture Remains in Full Force and Effect. Except as
expressly provided herein, all provisions in the Indenture shall remain in full
force and effect. The amendments and waiver provided for herein are limited to
the specific sections of the Indenture specified herein and shall not constitute
an amendment of any other provisions of the Indenture.
SECTION 2.3 Indenture and Supplemental Indenture Construed Together.
This Supplemental Indenture is an indenture supplemental to and in
implementation of the Indenture, and the Indenture and Supplemental Indenture
shall henceforth be read and construed together.
SECTION 2.4 Conflict with Trust Indenture Act. If any provision of this
Supplemental Indenture limits, qualifies or conflicts with any provision of the
Trust Indenture Act that is required under such Act to be part of and govern any
provision of this Supplemental Indenture, the provision of such Act shall
control. If any provision of this Supplemental Indenture modifies or excludes a
provision of the Trust Indenture Act that may be so modified or excluded, the
provision of such Act shall be deemed to apply to the Indenture as so modified
or to be excluded by this Supplemental Indenture, as the case may be.
SECTION 2.5 Severability Clause. In case any provision of this
Supplemental Indenture shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 2.6 Terms Defined in the Indenture. All capitalized terms not
otherwise defined herein shall have the meanings ascribed to them in the
Indenture.
SECTION 2.7 Benefits of Supplemental Indenture. Nothing in this
Supplemental Indenture, the Indenture or the Notes, express or implied, shall
give to any Person, other than the parties hereto and thereto and their
successors hereunder or thereunder and the Holders of Notes, any benefit of any
legal or equitable right, remedy or claim under the Indenture, this Supplemental
Indenture or the Notes.
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SECTION 2.8 Successors and Assigns. All covenants and agreements in
this Supplemental lndenture by the Company and the Guarantor shall bind their
successors and assigns, whether so expressed or not.
SECTION 2.9 Governing Law. This Supplemental Indenture shall be
governed by and construed in accordance with the laws of the State of New York,
without giving effect to the conflicts of law principles thereof.
SECTION 2.10 Effect of Headings. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
SECTION 2.11 Counterparts. This Supplemental Indenture may be executed
in counterparts, each of which, when so executed, shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 2.12 Trustee Not Responsible for Recitals. The Trustee shall
not be responsible in any manner whatsoever for or in respect of the validity or
sufficiency of this Supplemental Indenture or for or in respect of the recitals
of fact contained herein, all of which recitals are made solely by the Company.
***
[SIGNATURE PAGE TO IMMEDIATELY FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed as of the date first stated above.
TFM, S.A. DE C.V.
By: /s/ Xxxx Xxxxx / Xxxxxxx Xxxxxx
Name: Xxxx Xxxxx / Xxxxxxx Xxxxxx
Title: Finance Director / Acting CFO
GRUPO TRANSPORTACION
FERROVIARIA MEXICANA, S.A. DE C.V.
By: /s/ Xxxx Xxxxx / Xxxxxxx Xxxxxx
Name: Xxxx Xxxxx / Xxxxxxx Xxxxxx
Title: Finance Director / Acting CFO
THE BANK OF NEW YORK, AS TRUSTEE
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Assistant Vice President
DEUTSCHE BANK LUXEMBOURG S.A.,
AS PAYING AGENT
By: /s/ C.A. Xxxxxx / X. Xxxxxxxxx
Name: C.A. Xxxxxx / X. Xxxxxxxxx
Title: Attorney / Attorney
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