[LOGO] JPMorgan
JPMorgan Chase Bank
P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP
England
August 20, 2003
Centro Distribuidor de Cemento S.A. de C.V.
Xxxxxxx Xxxxxxxxxxxx
000 Xxxxxxxx
Xxxxxxxxx
Xxxxx Xxxx XX 00000
Xxxxxx
Attention: Xx. Xxxxxxx Xxxxx and Mr. Xxxxxxxxx Xxxxxx Xxxxxxxxx
Fax: 000 00 00 00 00 00 19
Deal Ref: 2332487
Re: Share Transaction
The purpose of this letter agreement (this "Confirmation") is to confirm
the terms and conditions of the Share Transaction entered into between JPMorgan
Chase Bank ("JPMorgan") and Centro Distribuidor de Cemento S.A. de C.V.
("Counterparty" and together with JPMorgan, the "Parties") on the Trade Date
specified below (the 'Transaction"). This Confirmation constitutes a
"Confirmation" as referred to in the Agreement specified below.
The definitions and provisions contained in the 2000 ISDA Definitions (the
"Swap Definitions") and in the 1996 ISDA Equity Derivatives Definitions (the
"Equity Definitions", and together with the Swap Definitions, the
"Definitions"), each as published by the International Swaps and Derivatives
Association, Inc. ("ISDA") are incorporated into this Confirmation. In the event
of any inconsistency between the Swap Definitions and the Equity Definitions,
the Equity Definitions will prevail. In the event of any inconsistency between
the Definitions and this Confirmation, this Confirmation will govern. References
herein to a "Swap Transaction" shall be deemed to be references to a
"Transaction" for the purposes of the Equity Definitions.
1. This Confirmation supplements, forms part of, and is subject to, the
ISDA Master Agreement dated as of June 12, 1998, as amended and supplemented
from time to time (the "Agreement"), between us. All provisions contained in the
Agreement govern this Confirmation except as expressly modified below.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
General Terms:
Trade Date: August 20, 2003
Shares: The American Depository Receipts representing
5 "CPO" shares of CEMEX S.A. de C.V. (the
"Issuer") (Exchange identifier: "CX")
Number of Shares: 1,130,000
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Deal Ref: 270WC02332487 A subsidiary of X.X. Xxxxxx Xxxxx & Co.
Incorporated with Limited Liability as a New York State
chartered commercial bank.
Registered in England branch number BR000746. Authorised by the FSA.
Registered branch address 000 Xxxxxx Xxxx, Xxxxxx, XX0X 0XX.
Head office 000 Xxxx Xxxxxx, Xxx Xxxx, XXX.
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Forward Price: USD 25.8346
Exchange: The New York Stock Exchange
Related Exchange(s): The principal exchange with respect to
options contracts or futures contracts, if
any, on the Shares.
Valuation:
Valuation Date: August 20, 2004. Any reference in Section 4.2
of the Equity Definitions to an Exercise Date
shall be deemed to be a reference to August
20, 2004 for the purpose of this Transaction.
Settlement Terms:
Cash Settlement: Applicable. Subject to the Physical
Settlement provision in Section 7(a) herein.
On the Cash Settlement Payment Date, the Cash
Settlement Amount shall be payable in
immediately available funds by JPMorgan to
the Counterparty if the Strike Price
Differential is a positive number or by the
Counterparty to JPMorgan if the Strike Price
Differential is a negative number as follows:
Cash Settlement Amount: An amount in USD as determined by the
Calculation Agent in accordance with the
following formula provided that if the Strike
Price Differential is a negative number, then
the Cash Settlement Amount shall be equal to
the absolute value of that amount:
Cash Number Strike Price
Settlement = of Shares x Differential
Amount
Strike Price Differential: A number (which may be negative) equal to the
Settlement Price minus the Forward Price.
Settlement Price: The official closing price per each "CPO"
share of the Issuer ("CEMEXCP MM") quoted by
the Mexican Stock Exchange (Bolsa Mexicana de
Valores) on the Valuation Date multiplied by
5, divided by the Spot Exchange Rate.
Valuation Time: At the close of the regular trading session
on the Exchange
Cash Settlement Payment
Date: Three (3) Currency Business Days following
the Valuation Date
Adjustments:
Method of Adjustment: Calculation Agent Adjustment
Extraordinary Events:
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Deal Ref: 270WC02332487 A subsidiary of X.X. Xxxxxx Xxxxx & Co.
Incorporated with Limited Liability as a New York State
chartered commercial bank.
Registered in England branch number BR000746. Authorised by the FSA.
Registered branch address 000 Xxxxxx Xxxx, Xxxxxx, XX0X 0XX.
Head office 000 Xxxx Xxxxxx, Xxx Xxxx, XXX.
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Consequences of Merger Events:
(a) Share-for-Share: Alternative Obligation
(b) Share-for-Other: Cancellation and Payment
(c) Share-for-Combined: Cancellation and Payment
Nationalization or Insolvency: Cancellation and Payment
3. Credit Support Documents: In accordance with the Credit Support Annex
executed between JPMorgan and the Counterparty.
4. Calculation Agent: JPMorgan
5. Account Details:
(a) Account for payments to JPMorgan:
JPMorgan Chase Bank, New York
ABA 021 000 021
SWIFT XXXXXX00
Favor: JPMorgan Chase Bank, London
A/C#: 0010962009
(b) Account for payments to Counterparty:
Please advise
6. Offices:
(a) The Office of JPMorgan for the Transaction is:
JPMorgan Chase Bank
P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP, England
For Notices with respect to this Transaction:
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Equity Derivatives Group
Documentation contact: Xxxxxxxxx Xxxxx
Equity Derivatives Group
--------------------------------------------------------------------------------
Deal Ref: 270WC02332487 A subsidiary of X.X. Xxxxxx Xxxxx & Co.
Incorporated with Limited Liability as a New York State
chartered commercial bank.
Registered in England branch number BR000746. Authorised by the FSA.
Registered branch address 000 Xxxxxx Xxxx, Xxxxxx, XX0X 0XX.
Head office 000 Xxxx Xxxxxx, Xxx Xxxx, XXX.
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Tel: (000)000-0000
Fax: (000)000-0000
(b) The Office of Counterparty for the Transaction is: Inapplicable,
Counterparty is not a Multibranch Party.
7. Other Provisions:
(a) Physical Settlement. Counterparty shall have the right but not the
obligation to physically settle the Transaction in the manner and procedure
prescribed in Article 6 of the Equity Definitions relating to the Physical
Settlement of Options. If Counterparty elects such right, irrevocable oral
telephonic notice specifying that Physical Settlement applies to the Transaction
must be given to JPMorgan (see Section 6 for contact details) between the hours
of 9:00 a.m. and 4:00 p.m. (local time in New York) on any Exchange Business Day
prior to the Expiration Date ("Notice of Exercise"). Upon Notice of Exercise,
the Counterparty will execute and deliver a written confirmation confirming the
substance of that Notice of Exercise within one Exchange Business Day of that
Notice of Exercise. Failure to provide such written confirmation will not affect
the validity of that oral notice. If Notice of Exercise is given after 4:00 p.m.
(local time in New York) on any Exchange Business Day, then that Notice of
Exercise will be deemed delivered on the next following Exchange Business Day,
if any. Upon Notice of Exercise, the Settlement Terms and Valuation terms and
provisions set forth in Section 2 of this Confirmation shall be superseded and
replaced by the following:
Settlement Terms:
Physical Settlement: Applicable. On the relevant Settlement Date
the Counterparty shall pay to JPMorgan the
Settlement Price and JPMorgan shall deliver
to the Counterparty the Number of Shares to
be Delivered. Such payment and such delivery
will be made on the relevant Settlement Date
through the relevant Clearance System and, if
possible through the relevant Clearance
System, will be made on a delivery versus
payment basis.
Settlement Currency: USD
Number of Shares
to be Delivered: 1,130,000
Failure to Deliver: Applicable
Account for Delivery
of Shares: Please advise
(b) Additional Agreement for Discharge of Delivery Obligations.
JPMorgan (the "Designator") may designate any of its Affiliates (the
"Designee") to deliver or take delivery, as the case may be, and otherwise
perform it's obligations to deliver or take delivery, as the case may be, in
respect of this Transaction and the Designee may assume such obligations. Such
designation shall not relieve the Designator of any of its obligations
hereunder.
If the Designee shall have performed the obligations of the Designator
hereunder, then the Designator shall be discharged of its obligations to the
other party to the extent of such performance.
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Deal Ref: 270WC02332487 A subsidiary of X.X. Xxxxxx Xxxxx & Co.
Incorporated with Limited Liability as a New York State
chartered commercial bank.
Registered in England branch number BR000746. Authorised by the FSA.
Registered branch address 000 Xxxxxx Xxxx. London, EC2Y 5AJ.
Head office 000 Xxxx Xxxxxx, Xxx Xxxx, XXX.
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(c) Dividends: If the Shares shall have gone ex-dividend with respect
to a cash dividend on any date (such date the "Ex-Dividend Date") from, but
excluding, the Trade Date to, and including, the Valuation Date, JPMorgan shall
pay to Counterparty, on the date such dividend is paid or, in the event that
such dividend is paid after the Valuation Date, the Cash Settlement Payment
Date, the net U.S. Dollar amount (after giving effect to any withholding or any
other tax applicable at the time at which such cash dividend is paid or if not
paid to be paid (as of the Ex-Dividend Date)) of such cash dividend paid or to
be paid with respect to one Share where the "Valuation Date" is the Ex-Dividend
Date, multiplied by the Number of Shares, excluding, however, special cash
dividends to the extent that such special cash dividends have an effect on the
price of the Shares on the Exchange, all as calculated and announced by the
Issuer.
(d) The Counterparty represents and warrants that it nor any of its
affiliates is in possession of any material non-public information with respect
to the Shares at the time of entering into this Transaction.
(e) Counterparty agrees that if Physical Settlement is elected, as
specified in Section 7(a) herein, all conversion costs will be borne by the
Counterparty.
(f) No Reliance. Each party represents that (i) it is entering into
the Transaction evidenced hereby as principal (and not as agent or in any other
capacity); (ii) the other party is not acting as a fiduciary for it; (iii) it is
not relying upon any representations except those expressly set forth in the
Agreement or this Confirmation; (iv) it has consulted with its own legal,
regulatory, tax, business, investment, financial, and accounting advisers to the
extent it has deemed necessary, and it has made its own investment, hedging, and
trading decisions based upon its own judgment and upon any advice from such
advisers as it has deemed necessary and not upon any view expressed by the other
party; and (v) it is entering into this Transaction with a full understanding of
the terms, conditions and risks thereof and it is capable of and willing to
assume those risks.
(g) Each party agrees and acknowledges that (i) X.X. Xxxxxx Securities
Inc., an affiliate of JPMorgan ("JPMSI"), has acted solely as agent and not as
principal with respect to this Transaction and (ii) JPMSI has no obligation or
liability, by way of guaranty, endorsement or otherwise, in any manner in
respect of this Transaction (including, if applicable, in respect of the
settlement thereof). Each party agrees it will look solely to the other party
(or any guarantor in respect thereof) for performance of such other party's
obligations under this Transaction.
(h) Share De-listing Event: If at any time during the period from and
including the Trade Date, to and including the Valuation Date, the Shares cease
to be listed on the Exchange for any reason (other than a Merger Event) and are
not immediately re-listed as of the date of such de-listing on another exchange
in the same jurisdiction as the Exchange (the "Successor Exchange"), then
Cancellation and Payment shall apply, and the date of the de-listing shall be
deemed the date of termination for purposes of calculating any payment due from
one party to the other in connection with the cancellation of this Transaction.
If the Shares are immediately re-listed on a Successor Exchange upon their
de-listing from the Exchange, this Transaction shall continue in full force and
effect, provided that the Successor Exchange shall be deemed to be the Exchange
for all purposes hereunder. In addition, the Calculation Agent shall make any
adjustments it deems necessary to the terms of the Transaction in accordance
with Calculation Agent Adjustment method as defined under Section 9.1(c) of the
1996 ISDA Equity Definitions.
Role of Agent: Each party agrees and acknowledges that (i) X.X. Xxxxxx
Securities Inc., an affiliate of JPMorgan ("JPMSI"), has acted solely as agent
and not as principal with respect to this Transaction and (ii) JPMSI has no
obligation or liability, by way of guaranty, endorsement or otherwise, in any
manner in respect of this Transaction (including, if applicable, in respect of
the settlement thereof). Each party agrees it will look solely to the other
party (or any guarantor in respect thereof) for performance of such other
party's obligations under this Transaction.
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this revised Confirmation and returning it to EDG
Confirmation Group, X.X. Xxxxxx Securities Inc., 000 Xxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, XX 00000-0000, or by fax on 000 000 0000.
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Deal Ref: 270WC02332487 A subsidiary of X.X. Xxxxxx Xxxxx & Co.
Incorporated with Limited Liability as a New York State
chartered commercial bank.
Registered in England branch number BR000746. Authorised by the FSA.
Registered branch address 000 Xxxxxx Xxxx. London, EC2Y 5AJ.
Head office 000 Xxxx Xxxxxx, Xxx Xxxx, XXX.
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For questions regarding this Confirmation, please call 000 000 0000.
Very truly yours,
X.X. Xxxxxx Securities Inc., as agent for
JPMorgan Chase Bank
By: /s/ Xxxxxxxx Xxxxx Xxxx
-------------------------------------
Name: Xxxxxxxx Xxxxx Xxxx
Title: Vice President
Accepted and confirmed as of
the date first above written
CENTRO DISTRIBUIDOR DE CEMENTO SA DE CV
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Financial Operations Administrator
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Deal Ref: 270WC02332487 A subsidiary of X.X. Xxxxxx Xxxxx & Co.
Incorporated with Limited Liability as a New York State
chartered commercial bank.
Registered in England branch number BR000746. Authorised by the FSA.
Registered branch address 000 Xxxxxx Xxxx. London, EC2Y 5AJ.
Head office 000 Xxxx Xxxxxx, Xxx Xxxx, XXX.
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