EXHIBIT 4.9
FACTORING AGREEMENT
FOR THE PURCHASE AND SALE OF ACCOUNTS RECEIVABLE
This Factoring Agreement for the Purchase and Sale of Accounts
Receivable ("Agreement") is made as of this 4th day of August, 2000, between:
(1) VITRO ENVASES NORTEAMERICA, S.A. DE C.V., a corporation organized under
the laws of Mexico and having an address at Xxxxxxxxxx 517 Ote. Col;
Xxxxxxx, Monterey, N.L C.P. 64570.
(2) VIDRIERA MONTERREY, S.A. DE C.V., a corporation organized under the laws
of Mexico and having an address at Xxxxxxxxxx 517 Ote. Col. Xxxxxxx,
Monterrey. N.L. C.P. 64570;
(3) VlDRIERA MEXICO, S.A. DE C.V., a corporation organized under the laws of
Mexico and having an address at Lago Zurich 243, Col. Anahuac, Mexico
D.F., C.P. 11320;
(4) VIDRIERA LOS XXXXX, X.X DE C.V., a corporation organized under the laws
of Mexico and having an address at Ave. Presidente Xxxxxx 2039, Los
Xxxxx, Xxxxxxxxxxxx Xxxxxx xx Xxxxxx. X.X. 00000;
(5) VIDRIERA GUADALAJARA, S.A. DE C.V., a corporation organized under the
laws of Mexico and having an address at Libra 225, Fracc. Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxx Xxxxxxx, X.X. 00000;
(6) VIDRIERA QUERETARO, S.A. DE C.V., a corporation organized under the laws
of Mexico and having an address at Coahuila 5 Col. Obrera, Queretaro,
Queretaro, C.P. 76130;
(7) VIDRIERA TOLUCA, S.A. DE C.V., a corporation organized under the laws of
Mexico and having an address at Xxxxxxxxx Xxxxxx - Xxxxxx Xx. 00.0, Xxxxxx
Xxxxxx xx Xxxxxx, C.P. 50200;
(8) VIDRIERA MEXICALI, S.A. DE C.V., a corporation organized under the laws
of Mexico and having an address at Carretera San Xxxx Rio Colorado Km.
11.5 Xx. 0000, Xxxxxxxx Xxxx Xxxxxxxxxx, X.X. 00000; and
(9) COMPANIA MEXICANA DE ENVASES, S.A. DE C. V., Magallanes 517 Ote. Col.
Xxxxxxx. Monterrey, N.L., C.P. 64570.
Each of the above nine VITRO companies are herein referred to
individually as a "Company' and collectively as "the Companies".
TRANSAMERRICA COMMERCIAL FINANCE CORPORATION, a corporation existing
under the laws of Delaware, United States of America, with its principal
offices at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxx, XX. 00000 ("TCFC"); and
RECITALS
(A) The Companies and TCFC desire to enter into a Factoring Agreement;
(B) Simultaneously with the execution of this Agreement, the Companies and
TDF de Mexico S.R.L. de C.V. ("TDFM"), an affiliate of TCFC, are entering
into a Service Agreement ("Servicing Agreement") regarding, among other
things, the servicing and collection of the Reccivables purchased and sold
under this Agreement;
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties agree as follows:
1. Factoring through the sale and purchase of accounts receivable.
1.1 Factoring by TCFC: The Companies shall offer for sale to TCFC and TCFC
shall purchase subject to the terms, conditions and covenants contained
in this Agreement, Companies' accounts receivable ("Receivable(s)")
generated by the sale of the Companies' inventory and products to the
Companies' customers or affiliates of the Companies who are located in
Mexico, and who have been approved by TCFC, ("Customer(s)"). The
aggregate amount of Receivables purchased by TCFC and outstanding at
any point in time (whether or not TCFC has assumed the Credit Risk for
such Receivables purchased by TCFC) shall not exceed (except in TCFC's
sole discretion) US Seventy Five Million Dollars (US $75,000,000.00),
(the "Funding Limit"). Purchases of Receivables by TCFC shall normally
be on a non-notification basis to Customers, however, TCFC reserves the
right to at any time notify Customers of such Receivable purchases. For
purposes hereof the term "Dollars" means dollars currency of the United
States of America.
1.1.1 TCFC shall from time to time pursuant to Section 4 herein
establish TCFC Credit Lines for Customers of the Companies.
Credit Risk assumed by TCFC with respect to Receivables of a
Customer generated under a TCFC Credit Line as in effect from
time to time shall apply to such Receivables in the order that
they arise. Receivables which originate by the Companies render
a TCFC Credit Line for a Customer, as set forth herein, shall be
deemed purchased by TCFC on a nonrecourse basis, additional
Receivables which are in excess of the TCFC Credit Line or which
originate by a Company under a separate Vitro Credit Line
(defined herein) or a Vitro Credit Line which is in addition to
a TCFC Credit Line established for a Customer, as set forth
herein, shall be deemed purchased by TCFC on a full recourse
basis and the parties hereby agree that should the recourse
rights of TCFC against a Company under this Agreement at any time
be analyzed by a court of law applying Mexican law, then such
recourse rights shall be deemed to arise from a "garantia de
cobro" which shall be deemed to have been hereby, agreed to as
permitted by Article 391 of the Commercial Code of the United
Mexican States. However, the parties may otherwise agree to
share Credit Risk with respect to Receivables as they may agree
from time to time. TCFC shall also set a separate funding limit
per Customer which shall be equal to the applicable then current
TCFC Credit Line or and/or the Vitro Credit Line established for
such Customer pursuant to this Agreement subject however to the
overall aggregate funding limit set forth above.
The Companies shall periodically provide a Receivable List to
TCFC for Receivables being offered for sale to TCFC pursuant to
Section 5.1 below. TCFCs selection and approval shall be
evidenced by TCFC signing an acknowledgment of receipt of such
Approval Listing (defined below). The term "Approval Listing"
shall mean that form, as set forth herein as Schedule 1, which
form shall contain, without limitation, an identification of
each Receivable to be purchased and a statement of transfer,
which Schedule shall be signed by TCFC and a Company. Without
affecting the validity or effect of any purchase of
Receivables, TCFC may require that a Company have its signature
on any Approval Listing: ratified before a corredor or notario
publico for the purpose of achieving public faith as to the
date on which the Approval Listing in question was executed by
such Company. The term "Approval Listing Date" shall mean, with
respect to any Approval Listing the date on which TCFC reserves
such Approval Listing. TCFC shall be deemed to purchase all
Receivables contained on any such Approval Listing once TCFC
signs and aknowledges its acceptance of such Approval Listing
unless TCFC specifically rejects a Receivable for purchase as
set forth in this paragraph. The date that TCFC signs and
accepts any such Approval Listing should be the "Purchase Date"
with respect to the Receivables listed on such Approval
Listing. TCFC shall accept or reject (without prejudice to
TCFC's rescission rights hereafter set forth) an Approval
Listing within two (2) Business Days following receipt of such
Approval Listing TCFC may only reject or refuse to purchase any
Receivable listed on any such Approval Listing if it
determines, at such time, that any such Receivable does not
meet TCFC's criteria for purchase as described in Section 1.1.3
below. it shall be understood however, that TCFC shall have the
right to rescind the purchase of any purchased Receivable,
within 10 Business Days following the corresponding Purchase
Date, if and only if TCFC determines that any such purchased
Receivable did not meet at the Purchase Date,
or ceases to meet at any time prior to the expiration of said 10
Business Day period, the above referred criteria for purchase.
Such Receivables Lists, Approval Listings and acknowledgments
of acceptance may be provided or exchanged between the parties in
electronic format or on an electronic basis as they may agree
from time to time.
1.1.2 Together with the sale of a Receivable to TCFC a Company shall
be deemed to assign all of such Company's interest in the goods
represented by such Receivable and in all goods, that may be
returned by Customers and in all of such Company's rights as an
unpaid vendor.
1.1.3 Criteria for Purchase or Recission of Purchase: In accordance
with Section 1.1.1, TCFC may only refuse to purchase Receivables
or rescind the purchase of Receivables that do not comply with
the following requirements, as of the Purchase Date or at any
time during the following 10 Business Days, respectively, as the
case may be:
(a) Are approved by TCFC pursuant to Section 1.1.1; and
(b) Are owned by a Company, free and clear of all Liens,
encumbrances or claims of any kind; and
(c) Derive from TCFC Credit Lines or Vitro Credit lines, and
were originated pursuant to the Procedures; and
(d) Are valid obligations of Customer, are accurate in all
material respects; and
(e) The product with respect to such Receivable has been
shipped by the respective Company and accepted by the
Customer except for the events in which a
"Prestamo-Bodega-Cliente" condition or arrangement was
made with a Customer provided the respective Company
shall have communicated such condition or arrangement in
writing to TCFC on or prior to the Approval Listing Date
and TCFC shall have granted its consent thereto (such
consent not to be unreasonably withheld, in which event
the shipping requirement set forth in this paragraph
shall not apply, and no known Commercial Dispute or right
of setoff exists; and
(f) Are not delinquent more than 30 days past their
respective due date; and
(g) Do not contain payment terms longer than 180 days, unless
TCFC agrees otherwise.
1.l.4 Notwithstanding anything in this Agreement to the contrary, TCFC
shall not be obligated to purchase new Receivables from the
Companies if Vitro Envases Norteamerica. S.A. de C.V. and its
Consolidated Subsidiaries' Total Debt Service Ratio (measured on
a consolidated basis) is less than 0.9 to 1.0, which Total Debt
Service Ratio shall be measured and determined on a fiscal
quarterly basis unless TCFC agrees otherwise. Such Total Debt
Service Ratio shall be calculated at the end of each fiscal
quarter of the Companies. If at the end of any such fiscal
quarter the Companies are determined not to be in Compliance
with the above Total Debt Service Ratio (as determined based
upon the consolidated financial statements of Vitro Envases
Norteamerica, S.A. de C.V. and its Consolidated Subsidiaries)
then TCFC may at its option cease purchasing any new Receivables
from the Companies during the next immediately following fiscal
quarter period, and any subsequent fiscal quarter period, until
such time as the Companies are again in compliance with such
Total Debt Service Ratio as determined at the end of a fiscal
quarter of the Companies (as determined based upon the
consolidated financial statements of Vitro Envases Norteamerica,
S. A. de C. V. and its Consolidated Subsidiaries). Vitro Envases
Norteamerica S.A de C.V. will provide to TCFC a statement of its
compliance with the above Total Debt Service Ratio requirement
on a
quarterly basis.
"Total Debt Service" means, for any period (which for purposes
of this Section shall be not less than a fiscal quarter of the
Companies, except at TCFC's sole discretion) with respect to
Vitro Envases Nortearnerica, S.A. de C.V. and its Consolidated
Subsidiaries, the aggregate amount of all payments of principal
and interest falling due during such period on all interest-
bearing obligations of Vitro Envases Norteamerica, S.A. de C.V.
and its Consolidated Subsidiaries, on a consolidated basis.
"Total Debt Service Ratio" means for any period (which for
purposes of this Section shall be not less than a fiscal quarter
of the Companies, except at TCFC's sole discretion) the ratio of
(i) Cash Flow Available for Debt Service of Vitro Envases
Norteamerica, S.A. de C.V. and its Consolidated Subsidiaries
for such period to (ii) Total Debt Service of Vitro Envases
Norteamerica, SA de C.V. and its Consolidated Subsidiaries for
such period.
"Cash Flow Available for Debt Service", means, for any period
(which for purposes of this Section shall be not less than a
fiscal quarter of the Companies, except at TCFC's sole
discretion) for Vitro Envases Norteamerica, S.A. de C. V. and its
Consolidated Subsidiaries. the sum of earnings before interest
and taxes of Vitro Envases Norteamerica, S.A. de C.V. and its
Consolidated Subsidiaries for such period plus depreciation and
amortization, plus or minus, as the case may be (to the extent
deducted or added, as the case may be, in determining such
earnings), other non-cash item far such period.
2. Procedures. The Receivables of the Companies shall be generated and
maintained in accordance with the credit management policies of TCFC
attached hereto as Exhibit A (hereinafter referred to as the
"Procedures"). The Procedures may be amended from time to time by TCFC in
its discretion provided that TCFC shall give the Companies at 1east 15
days prior written notice before any changes in the Procedure are
implemented.
3. Credit Risk and Credit Risk Receivables.
3.1 The term Credit Risk shall mean the risk of nonpayment by a
Customer-obligor under a Receivable:
(a) who is financially usable or unwilling without Commercial
Dispute, to pay at maturity any invoice rendered to it,
or
(b) by or against whom a petition for relief is filed in
bankruptcy or a suspension of payments is requested or
occurs with respect to such Customer; or
(c) who calls a general meeting of creditors to compromise,
compose, or adjust its debts; or
(d) by or against whom a proceeding is instituted for debtor
relief under any insolvency law or
(e) who makes a general assignment for the benefit of
creditors.
4. Credit Approval Process. Purchased Receivables which were originated
under a TCFC Credit Line: (as defined below) shall be called "Credit
Risk Receivables". TCFC shall only accept Credit Risk for Receivables
according to the following:
4.1 TDFM shall perform a credit assessment process on behalf of the
Companies for each Vitro Customer
4.2 In order for TDFM to properly perform the credit assessment
process, the Companies agree that all Customers will be
submitted to TDFM for credit assessment.
4.3 Following the credit assessment process, TDFM will within two (2)
Business Days notify the Companies and TCFC of its
recommendation of the proposed maximum credit line that TDFM
recommends for each Customer. The amount TCFC accepts as its
TCFC Credit Line for each such Customer shall be the ("TCFC
Credit Line"). TCFC will notify the Companies and TDFM of the
TCFC Credit Line that TCFC is willing to take under this
Agreement;
4.4. The Companies may either accept the TCFC Credit Line or propose
a higher credit line. If a Company proposes a higher credit
line, a meeting of a joint credit advisory committee ("Credit
Committee") composed of two TDFM representatives and two of the
Companies' representatives will meet to discuss the proposal. If
after discussion, the Companies continues to prefer a credit
line higher than the TCFC Credit Line then the credit line to
such Customer will be set at the Companies' proposed level (the
"Vitro Credit Line");
4.5 If the Vitro Credit Line, rather than the TCFC Credit Line, is
established for a Customer, TCFC may determine, in its sole
discretion, to reduce, modify or eliminate the TCFC Credit Line
for such Customer and TCFC will so notify the Companies and
TDFM:
4.6 If a Vitro Credit Line has been established, the Vitro Credit
Line will be used to determine whether or not an Order from a
Customer for the purchase of products should be approved subject
to Subsections 4.7 and 4.8. If no Vitro Credit Line has been
established, the TCFC Credit Line will be used to determine
whether or not an order from a Customer for the purchase of
products should be approved subject to Subsections 4.7 and 4.8;
4.7 TDFM will repeat the credit assessment process for all Customers
with previously established credit limits;
(i) At approximately yearly intervals or less frequently as
TDFM in its sole discretion deems appropriate or TCFC
requests; and/or
(ii) At any time a Company requests modification of either the
TCFC Credit Line or Vitro Credit Line; and/or
(iii) At any time TDFM or TCFC at its sole discretion,
determines in accordance with the Procedures that the
credit status of the corresponding Customer has changed
in any way.
4.8 If the repetition of the credit assessment process results in a
new TCFC Credit Line being established by TCFC for any Customer
of the Companies, TCFC will promptly notify Company and TDFM of
such determination and the processes described in Subsections
4.3 and 4.6 above shall reoccur at that time including (if
necessary) the processes described in Subsections 4.2. 4.4 and
4.5 above.
4.9 The Companies agree that:
(i) All orders for the purchase of product from the
Companies' Customers ("Orders") will be submitted to TDFM
by the respective Company and released by TDFM prior to
shipment (based upon the established credit limits set
forth in Sections 4.3 or 4.4; and
(ii) If any Order is not submitted to TDFM for review and
release by TDFM in accordance with the TCFC Credit Line
prior to shipment, then any existing Credit Risk assumed
by TCFC under the terms of this Agreement on the account
of the Customer submitting such Order may cease at TCFC's
sole discretion, and TCFC shall thereafter have full
recourse to the Companies for Receivables on account of
such Customer upon shipment by a Company of the Order and
receipt of written notice from TCFC to that effect.
4.10 Notwithstanding anything herein to the contrary, in the event
that a Customer does not pay a Receivable when such Receivable
is due and payable for whatever reason (as such due date may be
extended by the mutual agreement of the parties hereto),
including Commercial Dispute, or if a Customer has failed to
provide TCFC with financial information requested by TCFC, or a
Customer in any other manner no longer complies with TCFC's
credit standards, then TCFC may in its discretion, notify the
Companies in writing that TCFC will no longer assume any Credit
Risk from such Customer with respect to any future Receivables
purchased by TCFC which are due from such Customer.
5. Transmission of Receivables Inforntation and Purchase Procedure:
5.1 The Companies shall, at agreed intervals, deliver to TCFC a list
(the "Receivables List") of Rcaivables being offered for sale to
TCFC (which may be in the form of a facsimile transmission.
Printed computer listing or an electronic computer file)
identifying in a form acceptable to TCFC:
(a) The amount of each Receivable in Pesos and/or in Dollars
using the Conversion Factor (defined above);
(b) The original selling terms on which the Receivables are
owed including the maturity periods.
(c) The Customer by whom they are payable; and
(d) Other information as may be reasonably required by TCFC.
The Companies shall also deliver to TCFC, upon request, at
agreed intervals, a copy of the respective Company's credit file
and such other relevant information as is reasonably requested,
from time to time, by TCFC.
5.2 TCFC shall have the right to inspect and request copies of the
Companies' records relating to such Receivables and any
associated guarantees, invoices, delivery notes, original credit
files or other documents or information at the Companies'
offices during normal business hours of the Companies upon 2 days
prior written notice from TCFC.
5.3 All records maintained by the Companies relating to the
Receivables shall be clearly identifiable for audit purposes
and may be inspected at any time by TCFC upon 2 days prior
written notice from TCFC at the Companies' offices during normal
business hours of the Companies.
5.4 Confidentiality. During the term of this Agreement, and any
renewal thereof, TCFC and the Companies each agree that all
information communicated to it by the other will be held in strict
confidence and will be used only for purposes of this Agreement,
and that no such information will be disclosed by the recipient
party, its agents, or employees without the prior consent of the
other party except to Affiliates, legal representatives or
auditors of TCFC or the Companies, provided however, that
notwithstanding anything to the contrary herein, neither the
Companies nor TCFC shall have any obligation to preserve the
confidentiality of the other party's information which: (i) was
previously known to such party free of any obligation to keep it
confidential; (ii) is or becomes publicly available, other that
through disclosure known to the receiving party to have been
unauthorized; or (iii) is independently developed by such party,
without violating any of its obligations under this Agreement.
6 Servicing:
6.1 The Companies by themselves, or through TDFM pursuant to the
Service Agreement, shall collect, receive, process, and remit
proceeds from the collection of Receivables to TCFC in
accordance with the Procedures. In the event that TCFC assigns
this Agreement, such assignee may serve due notice on the
Customers of the assignment of the Receivables and thus instruct
the Companies to also act in such assignee's name vis-a-vis such
Customers.
6.2 The Servicing obligations of the Companies to TCFC shall
include:
(a) The Companies shall, in the Companies' name, but on
behalf and for the account of TCFC, collect and, when
necessary for such purpose, legally enforce any of TCFC's
claims against Customers with respect to Receivables of
such Customers sold to TCFC without recourse to the
Companies, except as set forth in this Agreement.
(b) Remit to TCFC (as provided in Section 8.4) an amount
equal to the amount received from the Customers without
deduction.
(c) The Companies shall take all such action or undertake all
legal or other proceedings to enforce payment as TCFC may
reasonably require with respect to Receivables for which
TCFC has any Credit Risk.
(d) The Companies shall pay all costs associated with its
servicing activities with respect to Receivables
including, for example, external service providers and
attorneys' fees incurred in the collection process. TCFC
shall reimburse the Companies for legal expenses incurred
with respect to collection of Reaivables for which TCFC
has the Credit Risk.
(e) Advise TCFC of the uncollectibility of any Reccrvable(s)
and to account for such Receivable(s) according to the
Procedures.
(f) Apply any payment received by the Companies from a
Customer whose account is the subject of enforcement of
collection first in satisfaction of the total amount owed
on the oldest outstanding invoice from the Companies to
the Customer which are the subject of Receivables sold to
TCFC, provided however, that notwithstanding the
foregoing provision, proceeds from Receivables that were
purchased by TCFC without recourse to the Companies shall
only be applied to the payment of such non-recourse
Receivables and that proceeds of Receivables that were
purchased by TCFC with recourse to the Companies (or for
which the Companies later become liable on a full
recourse basis) shall only be applied to the payment of
such recourse Receivables except to the extent that the
parties may otherwise agree to apply and account for the
application of the proceeds of Receivables.
(g) Deliver to TCFC monthly, a complete accounting of all
remittances on Receivables (which may be in the form of a
printed computer listing) as set forth in the Procedures.
(h) If so requested by TCFC, the Companies, shall initiate
and conduct on behalf of TCFC as owner of the
Receivables, any and all proceedings which TCFC
reasonably deems appropriate for the collection of
Receivables, and the Companies shall likewise execute
such acknowledgments of assignment, affidavits as to the
existence of Receivables and underlying transactions and
appear as witness for the benefit of TCFC, as may be
deemed appropriate by TCFC in any such proceedings. If
the Companies refuse to join or cooperate in the
proceedings as provided above or act as reasonably
requested by TCFC or, if it were necessary for any reason
that the Companies brought collection action in their own
name and they shall refuse to do so, then TCFC in its
discretion may notify the Companies that TCFC has decided
to cease having any Credit Risk with respect to such
Receivable and upon such notification becoming effective
hereunder, such Receivable shall become full recourse to
the Companies.
(i) Each party agrees that it will notify the other parties
of any counterclaims; cross-claims; or defenses of which
it becomes aware that are filed in any legal proceeding
which involve any issue other than the enforceability of
the credit extended to such Customer. The Companies
shall indemnify TCFC for any claim against TCFC, loss,
costs, expenses, fees, judgments, or other payments
incurred arising directly or indirectly from such
counterclaims, cross-claims, or defenses.
7. Management of Receivables.
7.1 Receivables will be managed in accordance with the Procedures.
7.2 The established, day-to-day operations of the Companies in the
performance of their responsibilities in servicing the
Receivables under this Agreement will be supervised by TCFC and
the Companies shall be exclusively responsible for the
engagement and management of its employees.
8. Payment and Purchase Price
8.1 Title to Receivables: Purchase of Receivables by TCFC shall vest
full, legal, equitable and beneficial title in and to TCFC on
the terms and subject to the covenants, conditions, and
stipulations contained in this Agreement. Upon any such purchase
of Receivables by TCFC, the respective Company shall be deemed
to have automatically transferred, assigned, conveyed and
delivered to TCFC all right, title and interest in and to all
such Receivables purchased by TCFC, together with all credit
enhancements held by the Companies with respect to the
Receivables purchased by TCFC, including but not limited to
guarantees and letters of credit.
8.1.1 The fact that an invoice has not been issued at the
Purchase Date with respect to a purchdsed Receivable
shall not affect the validity and enforceability of such
purchase.
8.1.2 Regardless of whether an invoice has been issued at the
Purchase Date, the Approval Listing (in the form annexed
hereto as Schedule 1 once such Approval Listing is
acknowledged as accepted by TCFC (which may be
accomplished via electronic or computer transfers, or by
facsimile), then such signing or acknowledgment of
acceptance by TCFC constitutes conclusive evidence of the
transfer of ownership of the Receivable to TCFC, subject
to TCFC's ten Business Day right of recession as set
forth in Section 1.1.1.
8.1.3 The Companies covenant and agree that the sale of a
Receivable and the transfer of ownership shall be
reflected properly on the respective Company's books.
8.2 Purchase Price: TCFC shall only be obligated to fund the
Companies for Receivables purchased by TCFC up to the aggregate
amount of TCFC Credit Lines and Vitro Credit Lines established
for Customers pursuant to this Agreement, however, in no event
shall TCFC purchase from the Companies (except in TCFC's sole
discretion) in excess of US $75,000,000 of Receivables. Funding
from TCFC for purchases of Receivables made by TCFC under an
Approval Listing, will be availabie upon demand from the
Companies one (1) Business Day after the corresponding Purchase
Date. The date TCFC disburses fumds to the Companies in payment
for the purchase of a Receivable shall be the "Funding Date"
with respect to each such Receivable.
8.2.1 When purchases of Receivables are funded TCFC shall pay
directly to the respective Company in Dollars for a
Receivable an amount (the "Direct Advance") equal to the
following formula: A (1 - Discount %) x (Invoice Amount
- Adjustment), divided by B. (the Conversion Factor)
8.2.1.1 "Discount %" shall mean that percentage as the
parties may agree, which TCFC shall apply as a
discount to the amount funded by TCFC for a
Receivable purchased by TCFC.
8.2.1.2 "Invoice Amount" shall mean the total amount that
the respective Company invoices the Customer shown
on any Receivable.
8.2.1.3 "Adjustment(s)" shall mean for each Receivable
the aggregate of:
(i) All discounts and allowances to which the
Customer would be entitled if it paid on
the most expeditious basis or in the
shortest term; and
(ii) All returns and credits regarding such
Receivable known at the Purchase Date.
8.2.1.4 The "Purchase Price" for a Receivable shall equal
the amount of the Direct Advance.
8.2.1.5 "Conversion Factor" shall mean, as of the date of
any determination making reference thereto, the
exchange rate of Mexican Pesos (Pesos) to Dollars
entitled "Tipo de Cambio para solventar
obligaciones denominadas en moneda extranjera
pagaderas en la Republica Mexicana," as published
by Banco de Mexico on the Diario Oficial de la
Federacion, on the date on which such
detennination is made.
8.2.2 Factoring Service Charge: Commencing on the Funding Date of each
Receivable and continuing until the date which is the earlier of:
(i) Up to 90 days after such Receivable is due and payable, as per
the invoice date or as otherwise calculated pursuant to Article
9 herein, (which date may be extended by mutual agreement of the
parties); or,
(ii) TCFC has demanded that the respective Company pay TCFC any
recourse obligations of the Companies with respect to the
Receivable pursuant to Article 9 herein: or
(iii) Such Receivable is collacted in full and TCFC has received the
funds from such collection:
The respective Company shall pay the factoring service charge
("Factoring Service Charge") to TCFC on the average daily
balance of the Outstanding Receivables based upon the then
current Factoring Formula Rate (defined below). The term
"Outstanding Receivables" shall mean as of the date of any
calculation making reference thereto, an amount equal to the
sum of the Direct Advances funded by TCFC for all Raceivables
purchased by TCFC, minus the US Dollar equivalent that TCFC was
able to purchase with the Peso amounts received by TCFC from
collections of such Receivables.
8.2.1.1 Payment of the Factoring Service Charge: The Factoring
Service Charge shall be payable monthly, as provided in
Section 8.2.2 hereof, in arrears, on the fifth day of
each calendar month commencing on the first Funding Date
under this Agreement and will be billed to the respective
Company on the first day of each such month. The
Factoring Formula Rate shall be subject to adjustment, if
any, on the first day of each calendar month based upon
changes in the One-Month LIBOR Rate (as defined below).
The Factoring Service Charge shall be calculated based
upon a 360-day year and for the actual number of days
elapsed (including the first day but excluding the last
day).
8.2.2.2 Late Fee: If any Receivable purchased and funded by TCFC
(for which TCFC is not tanking Credit Risk) is not paid.
(i) On or before the date that is up to 90 days (or as
may be otherwise extended by agreement of the
parties pursuant to Section 8.2.2 (i) above) after
the date it is due and payable, or
(ii) Within five (5) days after demand by TCFC to the
respective Company to pay its recourse obligations
with respect to such Receivable, pursuant to
Article 9 herein or
(iii) Within five (5) days after demand by TCFC to make
a payment due under the foreign exchange
settlement method set forth in Section 8.4 herein,
or
(iv) Any Factoring Service Charge under this Agreement
is not paid when due and payable,
Then the amount outstanding of such Receivable which has
not been received by TCFC or the amount of the Factoring
Service Charge or other amount due shall be charged a
Late Fee which shall be payable by the Companies to TCFC
equal to an additional two (2%) percent above the
Factoring Formula Rate front such date until paid in
full.
8.2.2.3 Other Definitions: For the purposes hereof the following terms
have the meanings set forth below:
(a) "One Month LIBOR Rate" means a flucatating rate equal to
that rate identified as such in the "Money Rates column
of the Wall Street Journal on the first business day of
the applicable month (a "business day" for purposes of
this section 8.2.2.3 only, being any day the Federal
Reserve Bank of Chicago is open for the transaction
of business);
(b) "Factoring Formula Rate " means a variable figure equal
to the One-Month LIBOR Rate plus 2.0 %.
8.3 Payments:
8.3.1 The Companies and TCFC agree that the specification of Dollars
and payment in the place specified pursuant to this agreement
(the "specified place of payment") is of the essence, and
Dollars shall be the currency of account in all events. The
Companies shall make all payments of all amounts due to TCFC
under this Agreement in Dollars, in same day funds in time to be
credited in accordance with normal banking procedures on the date
when due and payable in account No. 57010 at the Chicago,
Illinois offices of The Northern Trust Bank presently located at
Chicago, Illinois or on such other Bank or Banks as TCFC from
time to time designates. The payment obligations of the
Companies under this agreement stated to be payable in Dollars
shall not be discharged by an amount paid in another currency
or in another place, whether pursuant to a judgment or
otherwise, to the extent that the amount so paid on conversion
to Dollars and transferred to the specified place of payment
under normal banking procedures does not yield the amount of
Dollars in the specified place of payment due hereunder.
8.3.2 TCFC shall make all payments of amounts due to the Companies
under this Agreement to Dollars to the Companies' respective
bank accounts (or to such other bank accounts as such Companies
may from time to time notify TCFC in writing) as set forth on
Exhibit C hereto.
8.4 Currency Fluctuation Obligations:
8.4.1 The Companies shall have the obligation to hold TCFC harmless
from foreign exchange currency fluctuation risk according to the
provisions of this Section 8.4. In addition, to the extent that
the payment obligations of the Companies under this Agreement
are not satisfied or discharged upon payment by or on behalf of
the Companies to TCFC of amounts converted from another currency
to Dollars, then TCFC shall have the right to demand immediate
payment from the Companies of the amount in Dollars still needed
to satisfy the payment obligations of the Companies due to TCFC.
8.4.2 Without prejudice to the obligation of the Companies under
Section 8.4.1. the parties shall do the following:
8.4.2.1 TCFC shall calculate the Cross-Currency Balance (as
defined in Section 8.4.2.4) on Wednesday of each week,
or on the next Business Day if such Wednesday is not a
Business Day, provided however that during any such
time as the fluctuation in the Cross-Currency Balance
is more than 20% between any Wednesday and the next
succeeding Wednesday (or next following Business Day
if the latter Wednesday is not a Business Day), then
TCFC shall calculate the Cross-Currency Balance on
every Business Day until such time as the foreign
exchange fluctuation between any Wednesday and the
next succeeding Wednesday (or next following Business
Day if the latter Wednesday is not a Business Day) is
less than 20%. If the Cross-Currency Balance whenever
calculated by TCFC in accordance herewith is a
positive number, the Companies shall pay such
Cross-Currency Balance to TCFC, in Dollars within one
(1) Business Day in the manner set forth in 8.3.1. If
the Cross-Currency Balance whenever calculated by TCFC
in accordance herewith is a negative number TCFC may,
if so requested by the Companies at such time, or
within one (1) Business Day thereafter , pay the
absolute value of such Cross-Currency Balance to the
Companies, in Dollars, within one (1) Business Day.
(The sum of dollar amounts paid by the Companies to
TCFC as provided in this paragraph minus the sum of
dollar amounts paid by TCFC to the Companies as
provided in this paragraph shall be credited towards
satisfaction of the obligation of the Companies under
Section 8.4.1 upon its being finally determined.
8.4.2.2 Notwithstanding the provision of Section 8.4.2.1. as
from the occurrence of an Event of Default or the
giving of notice by TCFC that it will cease
purchasing Rrceivables hereunder, TCFC shall calculate
the Cross-Currency Balance on every Business Day. If
the Cross-Currency Balance on any such day is a
positive number, the Companies shall pay such
Cross-Currency Balance to TCFC, in Dollars within the
next one (1) Business Day in the manner set forth in
8.3.1. During the continuance of any Event of Default
incurred by the Companies or after the giving of any
notice of termination of this Agreement, TCFC shall
not be obligated to make any payments to the Companies
by virtue of negative Cross-Currency Balances;
however, both (i) the positive Cross-Currency Balance
payments made to TCFC by the Companies and (ii) the
absolute value of negative Cross-Currency Balances on
any of such days, shall be credited towards
satisfaction of the obligation of the Companies under
Section 8.4.1.
8.4.2.3 Once all Receivables purchased by TCFC are either
collected in full (with respect to their original
invoice amount in Pesos) from collections from
Customers or from recourse payments by the Companies
or any remaining balances are written off as losses,
then if upon final reconciliation of all Cross-Currency
Balance calculations it is determined that the
remaining obligation of the Companies under section
8.4.1 is an amount lower than the sum of Cross-Currency
Balance amounts due from and as yet unpaid by TCFC
pursuant to Sections 8.4.2.1 and 8.4.2.2, then, within
5 (five) Business Days following written demand
therefor by the Companies to TCFC and provided no
Event of Default shall be continuing, TCFC shall pay
to the Companies in Dollars. an amount equal to the
difference between such two amounts. If upon such
final reconciliation of the Cross-Currency Balance
calculation it is determined that the obligations of
the Companies under Section 8.4.1 have not been fully
satisfied then the Companies shall pay to TCFC any
remaining amounts necessary to fully satisfy such
obligation within five (5) Business Days following
written demand therefor by TCFC.
8.4.2.4 For purposes hereof, the term "Cross-Currency Balance"
shall mean. as of the date for which calculated, the
difference obtained by subtracting (i) the nominal US
Dollar equivalent calculated at the Conversion Factor
applicable on such date, of the outstanding balance
(which balances shall be deemed reduced not only by
collections from Customers but also by recourse
payments made by the Companies to TCFC and the amounts
of losses written off by TCFC with respect to
Receivables) of Receivables denominated in Pesos
purchased by TCFC, from (ii) the nominal US Dollar
amount of the Direct Advance made by TCFC with respect
to each of such Receivables minus (a) the Dollars
purchased by TCFC with the Peso amounts received by
TCFC from collections of such Receivables, (b) the
Dollars received by TCFC from the Companies pursuant
to recourse payments on account of such Receivables,
and (c) the Dollar equivalent of any losses written
off by TCFC with respect to such Receivables
calculated at the Conversion Factor applicable on the
date on which such losses are written off, or on the
following Business Day if such day is not a Business
Day. For purposes of this calculation, should TCFC
write off a loss with respect to any of such
Receivables and thereafter receives a recourse
payment from the Companies intended to cover or apply
to the loss written off or TCFC recovers from the
relevant Customer an amount previously written off by
TCFC as a loss or previously covered by a recourse
payment from the Companies for a loss, such additional
amounts received by TCFC shall not be deducted from
the sum to be determined under item (ii) of this
Section 8.4.2.4.
8.4.2.5 Nothing herein shall release the Companies from their
obligation under Section 8.4.1.
8.4.2.6 Furthermore, TCFC shall also have the right to
immediately setoff and deduct such amounts still due
to TCFC by the Companies from any payments which may
otherwise be due from TCFC to the Companies. If for
purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in Dollars
into another currency (in this Section called the
"second currency"), the rate of exchange which shall
be applied shall be that specified in Section 8.2.1.5.
The obligation of the Companies in respect of any such
sum due to TCFC bmeunder shall, notwithstanding the
rate of exchange actually applied in rendering such
judgment, be discharged only to the extent that on the
Business Day following receipt by TCFC of the sum
adjudged to be due hereunder or under the account
receivables acquired by TCFC in the second currency.
TCFC may, in accordance with normal banking
procedures, purchase and transfer to the specified place
of payment Dollars with the amount of the second
currency so adjudged to be due. The Companies agree to
indemnify TCFC against any loss incurred by it as a
result of any judgment or order being given or made
for the payment of any amount due hereunder which is
expressed and paid in secondary currency, other than
Dollars, and as a result of any variation between (i)
the rate of exchange at which Dollars amount is
converted into secondary currency for the purposes of
such judgment or order, and (ii) the rate of exchange
at which TCFC is able to purchase Dollars with the
amount of judgment currency actually received by TCFC.
The foregoing indemnity shall constitute a separate
and independent obligation of the Companies and shall
continue in full force and effect notwithstanding any
such judgment or order as aforesaid. The term "rate of
exchange" shall include any premiums and costs of
exchange payable in connection with the purchase of,
or conversions into Dollars.
8.4.3 Payments on business days: Whenever any payment to be made by
the Companies or TCFC hereunder shall become due on a day
other than a Business Day, either for Mexico or the
United States of America, the due date thereof shall be
extended the next succeeding Business Day. The term "Business
Day, shall mean a day other than a Saturday or Sunday when (i)
TCFC is open for normal business operations in the United
States of America, and (ii) the Companies are open for normal
business operations in Mexico.
8.5 Taxation:
(a) All payments to be made by the Companies hereunder
shall be made without setoff (except for any setoff
arising from amounts due by TCFC hereunder), defense
or countcrcimin. including, without limitation, any
defense or counterclaim based an any law, rule or
policy which is now or hereafter promulgated by any
governmental authority or regulatory body in Mexico
and which may adversely affect the obligation to
make, or the right of TCFC two receive, such payments
free and clear of and without deduction for or on
account of any present or future taxes of any nature
now or hereafter imposed by or within Mexico or by any
political subdivision or taxing authorities thereof or
therein unless the Companies are compelled by law to
make payment subject to such taxes. In the event that
the Companies are prohibited by law from making any
such payments free of deductions or withholdings, then
the Companies shall pay such additional amount to WPC
within five (5) Business Days of TCFC's demand
therefor, as may be necessary so that the actual
amount received by TCFC after the Companies have paid
any such deduction or withholding taxes (and after
payment of any additional taxes or other charges due
as a consequence of the payment of such deduction or
withholding) is the same as though deduction or
withholding taxes were not required. Notwithstanding
the above provisions, the parties hereby agree that
with respect to any amounts required to be withheld by
the Companies from payments to TCFC up to the rate of
4.9%, and (ii) amounts of withholding taxes which are
assessed on such payments to TCFC at a rate in excess
of 15%.
(b) The Companies shall pay directly to the appropriate
taxing authority any and all present and future taxes,
levies imposts, deductions, stamp and other duties,
filing and other fees or charges (includiqg without
limitation any capital transaction tax or foreign
exchange tax or charge) and all liabilities with
respect thereto imposed by the law of Mexico or by any
taxing authority thereof or within with regard to any
aspect of the transactions contemplated by this
Agreement or the execution and delivery of this
Agreement or other documentation hereunder, provided,
however, the Companies may contest, at the Companies'
sole cost and expense, by appropriate legal
proceedings conducted in good faith and with due
diligence, the amount, validity or imposition, in
whole or in part, of any tax, provided that (a) the
Companies shall have set aside on its books adequate
reserves with respect thereto: (b) that no assets of
the Companies would be in any immediate danger of
being forfeited or taken or a lien being unpaid
thereon, (c) that the Companies would not be incurring
any criminal liability for failure to pay such tax
during the pendency of the contest; (d) if such
contest be finally resolved against the Companies, the
Companies shall promptly pay the amount required to be
paid, together with all interest and penalties accrued
thereon; and (e) no Event of Default exists. The
Companies shall hold IWCPFC harmless from any
liability with respect to the delay or failure by the
Companies to pay any such taxes or charges and shall
reimburse TCFC, upon demand, for any such taxes paid
by any of them in connection herewith whether or not
such taxes shall be correctly or legally asserted or
otherwise contested or contestable together with any
interest, penalties and expenses in connection
therewith.
(c) Notwithstanding the foregoing, if the Companies shall
pay any tax or charge as provided herein or shall make
any deductions or withholdings from amounts paid
hereunder, the Companies shall within five (5)
Business Days of such timely payment to the Mexican
tax authorities, forward to TCFC official reccipts or
evidence acceptable to TCFC establishing payment of
such amounts.
8.6 Statement: TCFC shall send a monthly statement of account to
the Companies which shall constitute an account stated and
be binding upon the Companies with respect to the matters
reflected therein and in any matters previously reported to
the Company which we incorporated therein, except to the
extent that written exceptions thereto are served upon TCFC
within thirty (30) days of such statement.
8.7 Material Change: The Companies hereby agree that the
obligations of TCFC hereunder are subject to the condition
that there be no material change in governmental regulations
or monetary policies of the United States of America or of
Mexico, including any such change relating to TCFC which would
have the effect of reducing the rate of return on the capital
of TCFC below the level contemplated hereby. In the event that
any law, regulation, treaty or official directive or the
interpretation or application thereof by any court or
governmental authority of the United States of America or of
Mexico or the compliance with any guidelines or request of
either or any subdivision thereof (whether or not having the
force of law): (i) subjects TCFC to any tax with respect to
any amounts payable hereunder by the Companies or otherwise
with respect to the transactions contemplated hereunder
(except for taxes on the overall net income of TCFC imposed by
the United States of America or any political subdivision
thereof), or (ii) imposes upon TCFC any other condition with
respect to the purchases made hereunder, and the result of any
of the foregoing is to increase the cost to TCFC, reduce the
income received or receivable by or return on equity of TCFC
or impose any expense upon TCFC with respect to any purchases
hereunder, TCFC shall so notify the Companies. In such event
TCFC shall have the option to. require the Companies to pay
TCFC the amount of such increase in cost, reduction in income,
reduced return on equity or additional expense. The Companies
agree to pay TCFC the amount of such increase in cost,
reduction in income, reduced return on equity or additional
expense as and when such cost, reduction in income, reduced
return on equity or additional expense is incurred or
determined, upon presentation by TCFC of a statement in the
amount and setting forth TCFC's calculation thereof (in
determining such amount, TCFC may use any reasonable averaging
and attribution methods), which statement shall be deemed true
and correct absent manifest error. In the event TCFC requires
the Companies to make payments to TCFC pursuant to this
Section 8.7, the Companies shall have the right, provided no
Event of Default shall have occurred and be continuing, to
send a notice to TCFC of the Companies' intent to terminate
this Agreement, which termination shall become effective after
the lapse (counted as from the date in which such notice
becomes effective hereunder) of the number of months (not to
be in any event less than three) so specified by the Companies
in such notice, provided however, that the Companies will
continue to be obligated to reimburse TCFC for all such
payments for such amounts that accrue or are incurred by TCFC
prior to and during such period.
9. Risk of Loss.
9.1 The purchase by TCFC of Receivables will be on a full recourse
or non-recourse basis as determined the extent that TCFC has
assumed Credit Risk therefor pursuant to the terms of this
Agreement and the parties hereby agree that should the
recourse rights of TCFC against a Company at any time be
analyzed by a court of law applying Mexican law, then such
recourse rights shall be deemed to arise from a "garantia de
cobro" which shall be deemed to have been hereby agreed to as
permitted Article 391 of the Commercial Code of the United
Mexican States.
9.1.1 If the Direct Advances funded with respect to any
Receivable were an amount higher than the amount
actually due and payable by the corresponding Customer
under that Receivable for any reason other than by
reason of an exchange rate fluctuation (including.
without limitation, by reason of a credit issued by a
Company or a debit not raised by a Customer in respect
of a discount taken or other claim), then, the
Companies will pay such difference to TCFC within
five (5) Business Days from the date of TCFC making
demand for payment therefor. In addition, TCFC may at
its sole option, deduct such payment from any payment
due the Companies from TCFC.
9.1.2 If the original invoice for any purchased Receivable
shall not have been received by TCFC within five
Business Days following written request therefor by
TCFC to the Companies, then such Receivable shall
become full recourse to the Companies.
9.2 If a purchased Receivable becomes an Uncollectible Receivable
(as defined in Section 9.3) then, the Company shall, upon
demand by TCFC, pay to TCFC, within five (5) Business Days from
the date of such demand without deduction, an amount in Dollars
which at the Conversion Factor on the date of delivery to TCFC
shall be equal to the allocable percentage share of Credit Risk
assumed by the Companies, or such portion of the Credit Risk as
the parties may have otherwise previously agreed to be assumed
by the Companies, with respect to the Uncollectibility Loss for
such Receivable (as defined in Section 9.3). This obligation
shall apply regardless of any reason expressed by the Customer
for nonpayment, including, without limitation, any breach of
contract by the Company, the costence of any setoff or
counterclaim, the right to a deduction, any matter which would
constitute a breach of the Company's warranties and covenants to
the Customer, the Company's acceptance of the return of any goods
which are the subject of a Receivable, or the Company's
liability to credit the Customer. In the event that the Company
pays TCFC the Dollar equivalent of the allocable percentage
share of Credit Risk assumed by the Companies, or such portion
of the Credit Risk as the parties may have otherwise
previously agreed to be assumed by the Companies, with respect
to the Uncollectibility Loss as herein provided and provided no
Company shall have incurred an Event of Default, then any
further. payments received by TCFC on such Receivable shall be
remitted to the Company within five (5) Business Days. In the
event that any Company shall have incurred an Event of Default
then TCFC shall not remit any such payments as would otherwise
be due the Companies pursuant to the above provisions until
such time as the Companies have cured such Event of Default or
all obligations of the Companies to TCFC pursuant to this
Agreement have been fully satisfied. Each such Dollar amount
delivered by the Companies to TCFC shall be deemed a collection
on account of such Receivable for all other purposes hereof. The
Dollar equivalent of the unpaid portion of any Uncollectible
Receivable, after giving effect to the recourse payment by the
Companies, if any, shall be written off from the aggregate
outstanding balance of purchased Receivables.
9.3 Uncollectible Receivables and Uncollectibility Loss:
9.3.1 Uncollectible Receivables: Without limitation, a
Receivable shall be deemed to be uncollectible
("Uncollecttble Receivable") upon the earlier of any of
the following events:
9.3.1.1 Insolvency: The Customer-obligor under the Receivable
becomes insolvent, makes a general assignment for the
benefit of creditors, or becomes subject to or applies
for concurso mercantil or any bankruptcy proceedings,
or is submitted to or makes or there is made an
application for the process of control administration
or of preliminary concordat or is put into forced or
voluntary liquidation, or such Customer shall
otherwise enter into any settlement or commence any
proceedings under any law, regulation or decree of
Mexico relating to reorganization arrangement,
readjustments of debts, dissolution or liquidation by
reason of insolvency, whether now or hereafter in
effect; or
9.3.1.2 Nonpayment: The Customer under the Receivables shall
fail to pay the amount due on the Receivable when due
and payable and such default has continued for a
90-day term from the time the Receivables was
originally due for any reason. including, without
limitation, a dispute regarding the goods or
otherwise, strike, currency restriction or failure of
consideration in the underlying transaction.
9.3.1.3 Uncollectible: TCFC notifies the Companies that TCFC
deems a Receivable uncollectible or that TCFC
believes, with reasonable good grounds and in good
faith, that it is unlikely that payment by the
Customer of the Receivable will be made on the date
the Receivable will be due and payable (as determined
by TCFC in its reasonable discretion.
9.3.2 Uncollectibility Lcss. The term " Uncollectibility
Loss" of a Receivable means the result of subtracting,
from the Original Invoice Amount of such Receivable,
the amount of Pesos actually collected by TCFC on
account of such Receivable prior to the date on which
such Receivable became an Uncollectible Receivable.
For purposes hereof, the term "Original Invoice
Amount" of a Receivable means the Peso amount stated
as due (including any debits or credits so stated) by
a Customer on account of such Receivable (i) in the
Approval Listing where such Receivable shall have been
offered for purchase to TCFC hereunder or, in the
absence of an individual statement in that regard in
an Approval Listing with regard to such Receivable,
then (ii) in the face of the document or documents
evidencing such Receivable.
9.4 Commercial Disputes. If a Receivable becomes subject to a
Commercial Dispute (defined below) whether or not TCFC is
taking Credit Risk with respect to such Receivable, then TCFC
shall allow the respective Company thirty (30) days to resolve
any asserted or alleged Commercial Dispute. Any amounts that a
Company may allow as a settlement amount with respect to the
Customer relating to the Receivable in dispute shall not be
subject to Credit Risk on the part of TCFC, and if TCFC has
funded a Company for the purchase of such Receivable from the
Companies then the Companies shall within 5 Business Days pay
TCFC the amount allowed by the Companies in settlement as a
reduction of the amount due by such Customer under such
Receivable. If at the end of such 30-day period such
Commercial Dispute has not been resolved then TCFC shall no
longer have any Credit Risk for the portion of the Receivable
that remains in dispute, and if TCFC has funded a Company for
the purchase of such Receivable from the Companies, then the
Companies shall within 5 Business Days pay TCFC the amount of
such Receivable remaining in dispute. "Commercial Dispute"
shall mean any dispute or claim in any respect (including,
without limitation, any alleged dispute as to price, terms,
quantity, quality, or late delivery, and claims of release from
liability, counterclaim, or any alleged claim of deduction,
offset, counterclaim or otherwise, arising out of an invoice
or any other transaction.
9.5 Assignment of Receivables. With respect to all Receivables
which am purchased by TCFC. the Companies shall thereafter be
deemed to have assigned all of the respective Company's title
and interest in such Receivables to TCFC along with all of
such Company's interest in the goods represented by such
Receivable and in all goods that may be returned by Customers
with respect to such Receivable and in all of the respective
Company's rights as an unpaid vendor with respccl to such
Receivable. The Companies agree to execute any documents or
related items that may be necessary to evidence such
assignment.
10. The Companies' Warranties and Covenants:
10.1 Warranty. Each Company warrants, as of the date hereof and as
of the date of each purchase made hereunder, to TCFC as
follows:
10.1.1 That for every Receivable which is purchased by TCFC:
(a) The respective Company will be the legal and
beneficial owner of such Receivable and entitled to
sell and assign the same to TCFC free from any
mortgage, charge or other encumbrance and such
Receivable will be legally enforceable by the
Companies and, that other than as may be provided by
law, or any Adjustments, as disclosed in such
Receivable or otherwise disclosed in writing to TCFC,
no justification for the non-payment of the full
amount of such Receivable to the Companies by the
Customer exists; and that the particulars of such
Receivable in the Receivables List will be true and
accurate;
(b) The Companies will not have sold or assigned or
allowed anyone else to assume Credit Risk or offered
to have sold or assigned or have Credit Risk assumed
with respect to such Receivable to any person other
than TCFC.
(c) For each Receivable sold to TCFC the Companies shall
have shipped the product invoiced, except for the
events in which a "Prestamo-Bodega-Cliente" condition
or arrangement was made with a Customer provided the
respective Company shall have communicated such
condition or arrangement in writing to TCFC on or
prior to the Approval Listing Date and TCFC shall have
granted its consent thereto (such consent not to be
unreasonably withheld), as well as any other cases
where the parties agrees otherwise.
(d) That the joint and several liability obligation of
each of the Companies' obligations contained in this
Agreement constitute the legal, valid and binding
obligations of each Company enforceable in accordance
with their terms, except that the joint obligation of
each Company (other than Vitro Envases Norteamerica, S.A
de C.V.) with respect to the obligations of each other
Company hereunder shall be unenforceable for as long
as the resolutions of the general extraordinary
shareholders' meetings referred to in Section 11.1.7
are not adopted, notarized and registered as indicated
therein.
10.1.2 That the Companies have no other factoring arrangements as of
the date of this Agreement and during the term of this
Agreement the Companies shall have no other factoring
arrangements.
10.1.3 That there are no registrations and approvals of Mexico, of any
legislative body or government agency thereof necessary for
the due execution and delivery of this Agreement.
10.1.4 That this Agreement constitutes the legal, valid and binding
obligations of the Companies enforceable in accordance with
their terms.
10.1.5 That there are no pending or threatened legal actions,
arbitration or other proceedings which may materially and
adversely affect the financial condition of the Companies
taken as a whole or the validity or crAccabilits+ of this
Agreement.
10.1.6 That the Companies have taken all necessary corporate and
other action to authorim the execution and delivery of this
Agreement and the performance and observance of the terms and
conditions hereof and there is no provision of any of the
Companies' articles of iporation and bylaws, or of any treaty
provision, law, ordinance, decree or regulation and no
contractual our other obligation binding on the Companies that
are or will be contravened by the execution and delivery of
this Agreement or by the performance or observance of any of
the terms hereof.
10.1.7 That the Companies shall each provide TCFC with quarterly
financial statements within 45 days after the end of each
fiscal quarter, and they shall each provide TCFC with copies
of their respective annual audited financial statements,
accompanied by a certificate of an independent accountant
within 120 days after the ad of each of Companies' respective
fiscal years. The Companies' financial statements are
currently prepared on a consolidated basis with the financial
statements of Vitro Envases Norteamerica, S.A. de C. V. and
shall be furnished to TCFC on such consolidated basis. Such
consolidated financial statements shall be prepared in
accordance with Mexican generally accepted accounting
principles. In addition, the Companies agree to provide TCFC
with such additional financial information as TCFC may from to
time reasonably request.
10.2 Covenants: Each Company covenants and agrees:
10.2.1 That for every Receivable, the Companies will not, without
the prior written consent of TCFC (a) permit any setoff,
counterclaim or right to a deduction to arise at any time,
beyond what would customarily be done in the normal course
of business, and the Companies agree that they shall
nevertheless be liable to TCFC for the repayment of any such
setoffs, volume discounts, early payment discounts,
oounterclaims or deductions to the extent such items reduce
the amount payable under a Receivable; (b) assign, modify or
deal with such Receivable except as expressly provided for
in this Agreement, nor (c) grant any extension of time for
payment (beyond that set forth in the credit procedures
agreed to by TCFC and the Companies) or any waiver or other
indulgence.
10.2.2 That all facts, figures, and statements of any kind and all
signatures appearing on every contract and other document
supplied to TCFC as evidence of or relating to a Receivable
will be true and genuine.
10.2.3 That it will indemnify and keep indemnified TCFC against any
claim or counterclaim of whatsoever nature by a Customer in
respect of a purchased Receivable and all costs and expenses
suffered or incurred by TCFC im connection with any such
claim and the Companies shall pay to TCFC upon demand,
within any deduction whatsoever, the amount of any resulting
losses, damages, casts, charges, and expenses so suffered or
incurred by TCFC, provided that such indemnity shall be
limited to actual out of pocket costs, expenses or liabilities
incurred by TCFC with respect to such events.
10.2.4 That for my Receivable for which TCFC has arty Credit Risk
that is more than 90 days past due for whatever reason, or
with respect to which TCFC reasonably believes in good faith
that the financial situation of the Customer has materially
deteriorated, then TCFC may request the Companies to stop
shipping product to the Companies' Customer that is the
account debtor with respect to such delinquent Receivable.
Upon receipt of such request from TCFC the Companies shall
immediately stop shipping product to such Companies'
Customer. If the Compames shall breach this covenant with
respect to any Companies' Customer, then without limiting
TCFC's rights hereunder, all Credit Risk with respect to all
existing Receivables of such Companies' Customer shall cease
immediately and automatically upon shipment by the Companies
of product to such Companies' Customer and the Companies
shall become liable on a full recourse basis with respect to
all such Receivables with respect to such Customer.
10.2.5 Taxes.
10.2.5.1 General withholding and other taxes: TCFC shall not
be resident or domiciled or be deemed to have
established a place of business or to be carrying
on any, business in Mexico by reason of the
execution, delivery, performance or enforcement of
this Agreement or any document provided hereunder.
10.2.5.2 TCFC Indemnity. In the event Mexico or any
government agency has establishes or hereafter
establishes or rules that withholding tax or other
charges are applicable to any payments hereunder or
if so established, any increases thereto, in Mexico
during the term of this Agreement, the Companies
agree to indemnify and pay to TCFC the amount that
any such increased taxes or charges are determined
to be due and payable by TCFC or its assigns in
connection with the establishment of any taxes (or
increases thereto) applicable to any payments made
hereunder. Notwithstanding the above provisions,
the parties hereby agree that with respect to any
amounts required to be withheld by the Companies
from payments to TCFC as a result of Mexican
withholding taxes, the Company shall only be
obligated to indemnify TCFC for (i) Mexican
withholding taxes assessed on such payments to TCFC
up to the rate of 4.9%, and (ii) amounts of
withholding taxes which are
assessed on such payments to TCFC at a rate in excess
of 15%. Further, all such indemnity payments from
the Companies to TCFC shall be free of withholdings
of any nature whatsoever (and the Companies shall
pay an additional amount such that the net amount
actually received by TCFC will after such
withholding equal the full amount of the payment
then due) and shall be free of expense to TCFC for
collection or other charges.
10.2.5.3 That the Companies shall promptly give notice to
TCFC of (i) the occurrence of any Event of Default
(as defined below) or any event that, with the
giving of notice or the passage of time, or both,
would constitute an Event of Default hereunder, or
(ii) any circumstances which could materially affect
the fulfillment by the Companies of their
obligations hereunder.
10.2.6. That the Companies shall comply at all times with the
following financial covenants as determined by and based
upon the financial statements of Vitro Envases Norteamerica,
S.A de C.V. and its Consolidated Subsidiaries on a
consolidated basis:
(i) Minimum Tangible Net Worth: Vitro Envases
Norteamerica, S.A. de C.V. and its Consolidated
Subsidiaries shall keep at all times a Minimum
Consolidated Tangible Net Worth of at least (a) US
$80 million Dollars US from the date of this
Agreement through December 30, 2000, and (b) such
required mmumm amount shall increase on December
31, 2000, and on December 31 of each following
year, in an amount equal to at least 50% of the
than current calendar years' consolidated net income
for Vitro Envases Norteamerica, S.A. do C.V. and
its Consolidated Subsidiaries (without taking into
account any losses incurred in any fiscal year);
and
(ii) Limitation On Indebtedness: Vitro Envases
Norteamerica, S.A. de C. V. and its Consolidated
Subsidiaries shall not incur any Indebtedness unless,
after giving effect to the incurrence of such
Indebtedness and the receipt and application of the
proceeds therefrom, the ratio of Vitro Envases
Norteamerica, S.A. de C.V.'s and its Consolidated
Subsidiaries' Consolidated Indebtedness to Vitro
Envases Norteamerica, SA de C.V.'s and its
Consolidated Subsidiaries' Consolidated EBITDA would
be greater than zero and less than or equal to 4.25
to 1.0 on the date of such incurrence, except:
(a) Consolidated Indebtedness to the extent
Vitro Envases Norteamerica S.A., De C.V.
and its Consolidated Subsidiaries
refinance Consolidated Indebtedness
otherwise permitted hereunder, other than
Consolidated Indebtedness incurred under
clause (b) below;
(b) Consolidated Indebtedness of Vitro Envases
Norteamerica, S.A. de C.V. and its
Consolidated Subsidiaries incurred for
working capital needs in the ordinary
course of business or to refinance
interest expense, in an aggregate
principal amount at any time not to exceed
US $90,000,000;
10.2.6.1 The following definitions shall apply to this
Section 10.2.6:
Consolidated Tangible Net Worth means, at any date,
for Vitro Envases Norteamerica, S.A. de C.V. and its
Consolidated Subsidiaries, the total of
consolidated unimpaired paid-up capital, retained
earnings and reserves not allocated to specific
liabilities of Vitro Envases Norteamerica S.A. de
C.V. and its Consolidated Subsidiaries less their
consolidated Intangible Assets, all determined as
of such date. For purposes of this definition
"Intangible Amounts" means the amount (to the
extent reflected in determining such consolidated
capital) of (i) all write-ups (other that write-ups
resulting from foreign currency translations and
write-ups of assets of a concern business made
within twelve months after the acquisition of such
business subsequent to December 31, 1998 in the
book value of any assets owned by Vitro Envases
Norteamerica, S.A. de C. V. or a Consolidated
Subsidiary other than evaluations of assets in
accordance with generally accepted Mexican
accounting principles, (ii) all investments in
unconsolidated subsidiaries and all equity
investments in third parties which are not
subsidiaries and (iii) all unamortized debt
discount and expense, unamortized deferred charges,
patents, trademarks, service marks, trade names,
anticipated future benefit of tax loss
carry-forwards, copyrights, organization or
developmental expenses and other intangible assets
as defined by TCFC.
Consolidated Subsidiary means, at any date, as to
Vitro Envases Norteamerica. S.A de C.V., any
subsidiary or other entity of Vitro Envases
Norteamerica, S.A de C.V., the accounts of which
would be consolidated under generally accepted
accounting principles with those of Vitro Envases
Norteammica, S.A de CV. in its consolidated
financial statements if such statements were
prepared as of such date and were consistent with
financial statements as required pursuant to
Section 10.1.7 herein.
Consolidated EBITDA means, at any date, for the
fiscal period in question. the consolidated
operating income, plus depreciation, plus
amortization, plus cash derived from interest
income, plus non-cash charges in aggregate amount
(for all fiscal periods) not greater than US
$10.000,000 US. in each case. of Vitro Envases
Norteamerica, S.A. de C.V. and its Consolidated
Subsidiaries, as set forth in the most recent
financial statements of Vitro Envases Norteamerica,
S.A. de C.V. and its Consolidated Subsidiaries
delivered to TCFC pursuant to Section 10.1.7
hereof.
Indebtedness means at any time with respect to any
Person (without duplication), (i) all of such
Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes
or other similar instruments, (iii) all obligations
of such Person in respect of banker's acceptances,
letters of credit or other similar instruments
(including reimbursement obligations with respect
thereto), (iv) all obligations of such Person to
pay the deferred purchase price of property or
services, except trade'aooounts payable arising in
the ordinary course of business, (v) all
obligations of such Person as lessee which are
capitalized in accordance with generally accepted
accounting principles, (vi) all indebtedncs.
secured by a lien on any asset of a Person, whether
or not such indebtedness is an obligation of such
Person, (vii) all Indebtedness of and any
liquidation preference and any mandatory redemption
payment obligations in respect of preference stock
issued by other Persons guaranteed by such Person
to the extent such Indebtedness is guaranteed by
such person, (viii) to the extent not otherwise
included under this definition, obligations of such
Person in respect of any interest rate swap, cap or
collar agreement interest rate future or option
contracts, currency swap agreements, currency future
or option contracts and other similar agreements,
net of all benefits under such agreements to the
extemt able to be set off against such
obligations, (ix) all obligations of such Person
to purchase securities (or other property) which
arise out of or in connection with the sale of the
same or substantially similar securities or
property, (x) all indebtedness of others in respect
of which such Person has guarantee obligations, and
(xi) all obligations of such Person in respect of
such Person's guarantee obligations.
Consolidated Indebtedness shall mean at any time
the Indebtedness of Vitro Envases Norteamerica,
S.A. de C.V. and its Consolidated Subsidiaries on a
consolidated basis.
Person shall mean as individual, corporation,
limited liability company, partnership,
association, trust of other entity or organization,
including a government or political subdivision
thereof.
10.2.6.2 Vitro Envases Norteamerica, SA de C.V. will provide
to TCFC a statement of its compliance with the
above covenants on a quarterly basis.
10.3 Negative pledge: The Companies shall not permit any of their
respective Indebtedness exceeding the amount of USUS $10
million to be secured by any lien, charge, encumbrance or
other security interest, in favor of any creditor or class of
creditors covering any present or future assets, revenues or
rights to the receipt of income of a Company unless the
benefit of such security or other preferential arrangement
is at the same time extended equally and ratably to secure
all amounts hereunder provided, however, that the foregoing
shall not apply to liens, charges, encumbrances or other
security interests upon a Company's property (i) established
or assumed at the time of purchase to secure payment of the
purchase price of such property acquired in the ordinary
course of business: (ii) established or assumed in the
ordinary course of business; or (iii) arising as a matter of
law or (iv) liens or encumbrances granted to secure
Indebtedness prior to the date of this Agreement.
11. Events of Default: Remedies
11.1 If any of the following events occurs (each of the foregoing
shall be called an "Event of Default"):
11.1.1 Non-payment: Any Company shall fail to pay (i) any
amount demanded to be paid by TCFC with respect to
recourse obligations of the Companies with respect
to any Receivable under the terms and conditions of
this Agreement, or (ii) the Factoring Service
Charge due hereunder when such amount is due and
payable, or (iii) any other material amount the
Company is obligated to pay TCFC when such amount
is due and payable, or
11.1.2 Breach of other obligations: Any Company shall
default in the due performance and observance of
any other material provision hereof; which default
is incapable of remedy or, if capable of remmdy, is
not remedied within thirty (30) days after written
notice of such default shall have been given to a
Company by TCFC; or
11.1.3 Cross-Acceleration: The acceleration or maturation
prior to scheduled maturity of (i) any present or
future Indebtedness of a Company, or (ii) any
present or future guaranty for or indemnity in
respect of, Indebtedness, provided, however, that
the aggregate amount of the relevant Indebtedness,
guaranties or indemnities being accelerated equal
or exceed US$10 million or its equivalent in any
other currency or currencies; or
11.1.4 Termination of Servicing Agreement: Termination
occurs under the Servicing Agreement: or
11.1.5 Insolvency: Any Company becomes insolvent, makes a
general assignment for the benefit of creditors, is
generally unable to pay its debts as they fall due,
or becomes subject to or applies for concurso
mercantil or any bankruptcy proceedings, or is
submitted to or makes or there is made an
application for any protection from its creditors
or is put into forced or voluntary liquidation, or
any Company shall otherwise enter into any
settlement or commence any proceedings under any
law, regulation or decree of any applicable
jurisdiction relating to reorganization,
arrangement, readjustments of debts, dissolution or
liquidation by reason of insolvency, whether now or
hereafter in effect, provided however that in the
event of as involuntary petition the Companies
shall have 30 days to get the proceedings dismissed
before it shall be an Event of Default; or
11.1.6 Authorizations and consents: Any action or
condition or thing (including the obtaining or
effecting of any any consent, approval,
authorization, exemption, filing, license, order,
recording or registration) at any time required to
be taken, fulfilled or done in order (i) to enable
each Company lawfully to enter into, exercise its
rights and perform and comply with
its obligations hereunder, and (ii) to ensure that
those obligations are legally binding and
enforceable by each Company, is not taken,
fulfilled or done; or
11.1.7 Illegality: It is or will become unlawful or
unenforceable for any Company to perform or comply
with any one or more of its obligations hereunder,
on the understanding that in the case of the joint
obligation of each Company with respect to the
obligations of each other Company hereunder, an
Event of Default shall occur unless, within the
next following 120 calendar days, (a) resolutions
are adopted by the general extraordinary
shareholders' meeting of each Company (other than
Vitro Envases Norteamerica, S.A. de C.V.) (i)
respectively amending such Company's charter and
by-laws to expressly allow such Company to
guarantee at least the obligations of the other
Companies hereunder and their successors and (iii)
respectively ratifying the joint obligation of such
Company haeunder as from the date of this Agreement
pursuant to its terms, and (b) such resolutions are
properly notarized in accordance with applicable
law, and (c) the notarial instruments containing
the resolutions amending the charters and by-laws
abovementioned are properly registered at the
appropriate public registries of commerce in
accordance with applicable law;
11.1.8 Financial Covenants: In the event that the Companies
breach any of the financial covenants: or
11.1.9 Misrepresentatian: If any representation, warranty
or other statement made herein or in any
certificate or document delivered from any Company
to TCFC is incorrect or misleading in any material
respect as of the date at which it is made or
deemed to be made.
11.1.10 Material Adverse Effect: If any signifilcant change
that: (a) may negatively impact on or affect the
management, financial position, stockholders equity,
results of operations the business, operations,
property, condition (financial or otherwise) or
prospects of any Company; or (b) may have a
significant negative effect on the validity or
enforceability of this Agreement, or on the rights
or remedies of TCFC under this Agreement, or on the
Receivables, shall occur.
11.1.11. Chance of Control. TCFC may terminate this
Agreement, at its sole option, in the event that
there is any material change (of more than 50%) of
the current equity ownership interest in a Company,
except for, and to the extent that, any such change
derives from any corporate merger, consolidation,
spin-off and/or any other change in the equity
ownership interest of any of the Companies and as a
result of the same, any "affiliated entities" of any
of the Companies result to be the new equity owners
thereof. For purposes of this paragraph the term
"affiliated entities" shall mean any legal entities
which are, at such time, controlling or controlled
by Vitro Envases Norteamerica, SA de C.V.
11.2 Remedies: Upon the occurrence of any Event of
Default TCFC may, in its sole and absolute di-
scretion, without limitation, do any or all of the
following at any time thereafter.
(i) By written notice to a Company, declare
any amount outstanding under this
Agreement immediately due and payable,
whereupon the same shall become
immediately due and payable;
(ii) Cease making further purchases hereunder
or otherwise terminate this Agreement;
(iii) Notify Customers of TCFCs purchase of the
Receivable;
(iv) Proceed directly to collect or enforce any
and all rights and remedies with respect
to the Receivables,
(v) Require the Companies to provide all
endorsements to any instruments and to
the Receivables as TCFC may require;
(vi) Require the Companies to segregate in a
separate, traceable account, all proceeds
from any of the Receivables purchased by
TCFC; or
(vii) Take any other action deemed reasonably
necessary by TCFC in furtherance of any of
the foregoing and the exercise of any of
its remedies.
12. Term and termination.
12.1 The term of this Agreement will commence on the date of
execution by the parties hereto ("Effective Date") and will
continue for five (5) years from the date thereof, unless
earlier terminated in accordance with the provisions of this
Agreement. Either party may terminate this Agreement with or
without cause upon a 9-month prior written notice to the
other party. The parties may agree to extend the term of
this Agreement at any time. Upon termination of this
Agreement all obligations of the Companies and TCFC under
this Agreement which were incurred prior to the effective
date of termination shall remain in full force and effect
until fully satisfied by such respective parties.
12.2 Notwithstanding anything herein to the contrary, it shall be
understood that the Companies may, at their sole option,
terminate this Agreement upon prior written notice in the
event that there is any material change (of more than 5O%)
of the current equity ownership interest in TCFC or its
ultimate controlling shareholder, except for, and to the
extent that any such change derives from any corporate
restructure, merger, consolidation, spin-off and/or any
other change in the equity ownership interest in TCFC or its
ultimate controlling shareholder and as a result of the
same, any "affiliated entities" of TCFC or of its ultimate
controlling shareholder result to be the new equity owners
thereof. For purposes of this paragraph the term "affiliated
entities" shall mean any legal entities which are, at such
time, controlling, controlled by or under common control
with TCFC or its ultimate controlling shareholder.
13. Exclusivity.
13.1 During the term of this Agreement or any extension hereof,
the Companies agree that they will not enter into a
factoring agreement or financing program with any bank,
finance company, person or other entity involving the
factoring, sale, assumption of credit risk, assignment or
financing of Receivables.
14. Miscellaneous.
14.1 Further cooperation. Each Company will execute whenever
requested by TCFC all reasonable documents and do such
things as TCFC may reasonably require to vest full legal
title to the Receivables in TCFC. Each Company irrevocably and
by way of security appoints TCFC its attorney in its name
and on its behalf following termination of this Agreement to
execute any such documents and also to collect, enforce,
realize, and give receipts and discharges for any
Receivables.
14.2 Governing Law; Language. All construction and interpretatipn
of the terms, covenants and conditions hereof and all notices
given hereunder shall be in the English language. All
provisions of this Agreement relating to the transfer and
perfection of the ownership of Receivables shall be governed
under and construed in accordance with the laws of Mexico.
All other terms and provisions of this Agreement shall be
governed by and construed in accordance with the laws of the
State of Illinois, United States.
14.3 Submission to jurisdiction. Each Company and TCFC hereby
irrevocably consents that any legal action or proceeding
against it or any of its property with respect to any of the
obligations arising hereunder or relating to this Agreement
may be brought in any of the following locations: (1) any
court located in the state, country, territory or province
where the party against whom an action is brought is
domiciled, or (ii) any court in federal or state court of the
United States of America located in the City of New York,
New York as the party bringing such action may elect, and by
execution and delivery of
this Agreement each Company and TCFC hereby submits to and
accepts with regard to any such action or proceeding, for
itself and in respect of its property. generally and
unconditionally. the non-exclusive jurisdiction of the
aforesaid courts. The Companies or TCFC may serve process in
any manner permitted by law to bring any legal action or
proceeding or to obtain execution of judgment in any other
jurisdiction in the United States of America or of Mexico.
Each Company hereby irrevocably waives any objection which
it may now or hereafter have to the laying of the venue of
any suit, action or proceeding arising out of or relating to
this Agreement, in any of the above mentioned jurisdictions,
and hereby further irrevocably waives any claim that such
jurisdictions are not convenient forum for any suit, action
or proceeding.
14.4 Waiver, remedies cumulative. No failure to exercise and no
delay in exercising on the part of the Companies or of TCFC,
of any right, power or privilege hereunder, shall operate as
a waiver thereof, nor shall any single or partial execise of
any right, power or privilege preclude any other or further
exercise thereof, or the execise of any other rights, power
or privilege. The rights and remedies herein provided are
cumulative and not exclusive of any rights or remedies
provided by law. No waiver in any particular instance shall
constitute a waiver in any other instance.
14.5 Notices. Except as otherwise specified herein, all notices
to or upon the parties hereto under this Agreement shall be in
writing (including teletransmissions including by facsimile),
shall be given or made to the party to which such notice is
required or permitted to be given or made under this
Agreement at the address or telex or telecopier number set
forth below, or at such other address or telex or te1ecopier
number as any party hereto may hereafter specify to the
others by notice in writing, and (unless otherwise specified
herein) shall be deemed delivered: (a) on receipt or on
rejection of a tender of delivery, if teletransmitted or
delivered by hand (which includes a tender of delivery by
any commercially recognized overnight delivery service such
as Federal Express or UPS) and a teletransmission shall be
followed by sending an executed original by overnight
courier delivery addressed to the party: (a) TCFC at 0000
Xxxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxx. IL. 60192. USA
facsimile number 000-000-0000; (b) the Companies at
Xxxxxxxxxx 517 Ote. Col. Xxxxxxx, Monterrey, N.L., Mexico,
C.P. 64550, telecopy 011-52-8-329-14-44; or at such other
address as the relevant party. may hereafter specify for such
purpose to the other by notice in writing. Any notice given
by TCFC under this to a Company may be given to any
Company and such notice shall be deemed to have been given
to such Company individually and as agent for all Companies
hereunder without the need to specify that any such notice is
being given to all Companies or to one Company, as agent for
all Companies.
14.6 Assignments. This Agreement shall be binding upon and inure
to the benefit of the Companies and TCFC and their
respective successors or assigns, except that neither the
Companies nor TCFC may assign or transfer all or any part of
its rights or obligations hereunder without
the prior written consent of the other, except that TCFC may
assign this Agreement and the Companies hereby consent in
advance, to the agreement, to any entity affiliated with
or a subsidiary of or parent of TCFC.
14.7 Titles. Titles under this Agreement are for ease of
reference only and shall not affect the construction or
interpretation thereof.
14.8 Joint and Several Liability. Each Company hereby
acknowledges and agrees that it is jointly and severally
liable with each other Company for the obligations of each
Company hereunder, no matter howsoever arising, existing or
evidenced. TCFC, in enforcing its rights or collecting
amounts due to it hereunder may proceed against one or more
of the Companies, at TCFCs sole discretion.
14.9 Fees and Expenses. The Companies shall pay on demand, any
and all of TCFCs out of pocket fees and expenses, including,
without limitation, legal fees, that may be incurred by TCFC
in the collection of any amounts due to TCFC hereunder
whether now existing or hereafter arising, however such fees
and expenses due from the Companies shall not exceed the
actual out of pocket fees and expenses incurred by TCFC.
This covenant shall survive repayment of all of the
Rooeivables and termination of this Agreement.
14.10 The liability of the Companies and TCFC shall in no way be
limited or impaired by any amendment or modification of this
Agreement; of the Servicing Agreement, unless specifically
addressed in such amendment or modification, any extensions
of time for performance in any of the foregoing, the
accuracy or inaccuracy of any of the representations of a
Company, the release of the Companies from performance or
observance of any of the agreements creating obligations of
the Companies to TCFC by operation of law, TCFCs or the
Companies' voluntary act or otherwise, or TCFCs failure to
require the Companies to pay any recourse obligations with
respect to any Receivable or to otherwise act with regard to
any Receivable.
14.11 No delay on the Companies' or TCFCs part in exercising any
right, power or privilege heturder or under the Servicing
Agreement shall operate as a waiver of any privilege, power
or right of the Companies or TCFC hereunder. No waiver by
the Companies or TCFC in any instance shall constitute a
waiver in any other instance.
14.12 This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
TRANSAMERICA COMMERCIAL
FINANCIAL CORPORATION
By:
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Name:
Title:
VITRO ENVASES NORTEAMERICA, S.A. DE C.V.
By:
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Name:
Title:
By:
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Name:
Title:
VIDRIERA MONTERREY, S.A. DE C.V.
By:
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Name:
Title:
By:
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Name:
Title:
VIDRIERA MEXICO, S.A. DE C.V.
By:
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Name:
Title:
By:
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Name:
Title:
VIDRIERA LOS XXXXX, X.X. DE C.V.
By:
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Name:
Title:
By:
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Name:
Title:
VIDRIERA GUADALAJARA S.A. DE C.V.
By:
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Name:
Title:
By:
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Name:
Title:
VIDRIERA QUERETARO, S.A. DE C.V.
By:
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Name:
Title:
By:
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Name:
Title:
VIDRIERA TOLUCA, S.A. DE C.V.
By:
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Name:
Title:
By:
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Name:
Title:
VIDRIERA MEXICALI, S.A. DE C.V.
By:
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Name:
Title:
By:
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Name:
Title:
COMPANIA MEXICANA DE ENVASES,
S.A. DE C.V.
By:
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Name:
Title:
By:
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Name:
Title:
