<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
(AMENDMENT NO. 2)
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D) (1) OF THE SECURITIES EXCHANGE ACT OF 1934
AND
AMENDMENT NO. 6 TO
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
------------------------
ASARCO INCORPORATED
(Name of Subject Company)
ASMEX CORPORATION
AND
GRUPO MEXICO, S.A. DE C.V.
(Bidders)
------------------------
COMMON STOCK, NO PAR VALUE
(INCLUDING THE ASSOCIATED JUNIOR
PARTICIPATING PREFERRED STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
------------------------
04341310
(CUSIP Number of Class of Securities)
------------------------
Daniel Tellechea Salido
Managing Director for Administration and Finance
Grupo Mexico, S.A. de C.V.
Baja California 200
Colonia Roma Sur
06760 Mexico City, Mexico
Telephone: 011-525-574-2067
(Name, Address and Telephone Number of Person Authorized To
Receive Notices and Communications on Behalf of Bidders)
COPY TO:
Lori Anne Czepiel, Esq.
Brown & Wood LLP
One World Trade Center
New York, New York 10048
Telephone: (212) 839-5300
Facsimile: (212) 839-5599
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<PAGE>
This amendment constitutes Amendment No. 2 to the Tender Offer Statement on
Schedule 14D-1 as the same may have been amended from time to time (as amended
hereby, the "Statement") and the Amendment No. 6 to the Schedule 13D and relates
to the offer by Grupo Mexico, S.A. de C.V., a Mexican corporation ("Parent")
through its wholly owned subsidiary, ASMEX Corporation, a Delaware corporation
("Purchaser"), to purchase all of the outstanding shares of common stock,
without par value (together with the associated junior participating preferred
stock purchase rights, the "Common Stock"), of ASARCO Incorporated, a New Jersey
corporation ("ASARCO") at a purchase price of $29.50 per share of Common Stock,
net to the seller in cash, without interest thereon, upon the terms and subject
to the conditions set forth in the Offer to Purchase dated September 27, 1999
(as amended, the "Offer to Purchase"), a copy of which is attached to this
Statement as Exhibit (a)(1), as amended and supplemented by the Supplement dated
October 8, 1999 (the "Supplement"), a copy of which is attached to this
Statement as Exhibit (a)(10) (the Statement, along with the Offer to Purchase
and the Supplement, as each have been amended or supplemented from time to time,
constitute the "Offer"). Capitalized terms not defined herein have the meanings
ascribed in the Offer to Purchase and the Supplement. The item numbers and
responses thereto below are in accordance with the requirements of
Schedule 14D-1.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
Item 3 is hereby amended by the following:
The discussion set forth in the "INTRODUCTION" and "Section 11--Background
of the Offer; Contacts with ASARCO" of the Offer to Purchase is hereby amended
as follows:
On October 8, 1999, Parent filed Amendment No. 1 to its Schedule 14D-1,
reflecting the fact that Parent had revised the Offer to, among other things,
increase the Offer Price from $26.00 per share of Common Stock to $29.50 per
share of Common Stock. Also on October 8, 1999, ASARCO filed an amendment to the
ASARCO Schedule 14D-9 that contained and discussed the PD Merger Agreement and
stated that ASARCO was considering Parent's revised bid.
Later on October 8, 1999, Phelps Dodge issued a press release stating that
Phelps Dodge would not raise its offer for ASARCO.
ASARCO issued a press release on October 8, 1999, announcing that the ASARCO
Board met to consider Parent's revised Offer. The press release stated that at
the meeting, the ASARCO Board considered, together with advice from its
financial and legal advisors, the terms of Parent's revised Offer, ASARCO's
rights and obligations under the PD Merger Agreement and its fiduciary duties to
shareholders of ASARCO under applicable law. The press release stated that, in
accordance therewith, the ASARCO Board determined in good faith, after
consultation with its legal and financial advisors, that it was necessary in
order to comply with its fiduciary duties under applicable law to recommend to
the ASARCO shareholders that they not tender their shares pursuant to the Phelps
Dodge Offer, and if necessary ASARCO would furnish information to Parent
pursuant to a customary confidentiality agreement and participate in discussions
or negotiations regarding the Offer, as revised.
Later that day, ASARCO filed another amendment to the ASARCO 14D-9
reflecting this change. According to the amendment, the ASARCO Board notified
Phelps Dodge in accordance with the terms of the PD Merger Agreement of its
intention to take these actions.
On the evening of Friday, October 8, 1999, Parent's legal advisors delivered
to ASARCO Parent's proposed revisions to the agreement relating to the Proposed
Merger (the "Proposed Merger Agreement"), which revisions set forth the basis
upon which Parent was prepared to consummate the Proposed Merger.
Over the course of the next few days, Parent's and ASARCO's respective
financial and legal advisors conducted negotiations relating to the Proposed
Merger Agreement.
2
<PAGE>
ASARCO issued a press release on October 11, 1999 stating that on
October 12, 1999, the ASARCO Board would meet to discuss Parent's latest offer.
On October 13, 1999, Phelps Dodge issued a press release reiterating its
previous decision not to raise its offer for ASARCO.
On Thursday, October 14, 1999, Parent notified ASARCO that it would be
willing to increase its tender offer price to $29.75 per share of Common Stock
in cash subject to Parent entering into the Proposed Merger Agreement with
ASARCO prior to 5:00 P.M. New York City time on October 23, 1999. In connection
therewith, Parent submitted a revised bid package to ASARCO detailing its
willingness to increase the Offer Price to $29.75 per share of Common Stock in
the event ASARCO were to agree to increase the termination fee indicated in the
Proposed Merger Agreement to $40 million and to deliver notice to Phelps Dodge
that it is prepared to execute the Proposed Merger Agreement with Parent. The
letter stated that the revised Offer would remain outstanding until 5:00 P.M. on
October 23, 1999. The bid package included Parent's proposed revisions to the
Proposed Merger Agreement, which incorporated comments made during negotiations
that transpired earlier in the week between ASARCO and Parent and the legal and
financial advisors of ASARCO and Parent.
On October 15, 1999, ASARCO issued a press release stating that earlier that
day, the ASARCO Board met to consider Parent's revised proposal. According to
the press release, at the meeting, the ASARCO Board authorized ASARCO's
management to provide notice to Phelps Dodge that ASARCO is prepared to accept
the revised Offer and that ASARCO intended to terminate the PD Merger Agreement
on Saturday, October 23, 1999 at or after 9:00 A.M. Later that day, ASARCO filed
an amendment to the Schedule 14D-9 relating to the Offer reflecting these
occurrences.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 4 is hereby amended by the following:
The discussion set forth in "Section 10--Source and Amount of Funds" of the
Offer to Purchase is hereby amended as follows:
On October 15, 1999, the commitment letter, dated as of September 24, 1999
(the "Commitment Letter") and as amended and revised on October 5, 1999 (the
"First Amended and Restated Commitment Letter") and October 7, 1999 (the "Second
Amended and Restated Commitment Letter"), by and among Parent, The Chase
Manhattan Bank and Chase Securities Inc. (collectively, "Chase") was further
amended and restated (the "Third Amended and Restated Commitment Letter"), a
copy of which is which is filed as Exhibit (b)(4) and incorporated herein by
reference, to modify certain conditions to the obligations of Chase under the
Credit Facilities to, among other things, provide a revised condition with
respect to market disruptions that is more narrow than the prior such condition
until December 18, 1999, or that date that is the same number of days after
November 30, 1999 as the date of execution and delivery of a definitive merger
agreement is after October 5, 1999, whichever is earlier, and that reverts to
its prior form thereafter. Such amendments to the commitment letter were subject
to a satisfactory merger agreement being entered into with ASARCO not later than
5:00 P.M. New York City time on October 23, 1999.
The foregoing description of the Credit Facilities is qualified in its
entirety by reference to the full text of the Third Amended and Restated
Commitment Letter, a copy of which is filed as Exhibit (b)(4) and incorporated
herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
Item 5 is hereby amended by the information set forth in Item 3 above.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
Item 6 is hereby amended by the information set forth in Item 3 above.
3
<PAGE>
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
Item 7 is hereby amended by the information set forth in Item 3 above.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Item 9 is hereby amended by the following:
The information set forth in "Section 9--Certain Information Concerning
Purchaser, Parent and Certain Affiliates" under the heading "Differences Between
Mexican GAAP and U.S. GAAP" is amended by the following:
A. The second paragraph under the subheading "Cash flow information" is
amended and restated as follows:
Statement of Financial Accounting Standard No. 95, "Statement of Cash Flows"
(SFAS No. 95), requires that the effects of inflation on cash flows be shown
separately.
B. The second paragraph under the subheading "Cost of pension plans and
other employee benefits" is amended and restated as follows:
Parent provides health care benefits for the retired and active employees of
Mexicana de Cananea, S.A. de C.V. ("Mexcananea") as well as their family members
through a subsidiary of Mexcananea (Hospital del Ronquillo, S. de R.L. de C.V.).
During 1995 Parent adopted SFAS 106, "Employers' Accounting for Postretirement
Benefits Other than Pensions". Due to the fact that Parent in previous years had
few employees that were eligible for this benefit, the liability based on the
actuarial calculation was considered immaterial and therefore the related effect
was not included in the U.S. GAAP reconciliation. In 1998 Parent terminated 600
union and 400 non-union employees, thus accelerating the related postretirement
benefits for such employees and resulting in a charge of Ps. 34,880 which was
included in the U.S. GAAP reconciliation.
C. The fourth paragraph under the subheading "Property and equipment" is
amended and restated as follows:
In accordance with the fifth amendment to Bulletin B-10, the value of
machinery and equipment of foreign origin may be restated based on the
devaluation and inflation of the country of origin. Parent does not utilize this
option to restate the value of its property and equipment.
D. The second paragraph under the subheading "Financial Statement
translation for foreign subsidiaries" is amended and restated as follows:
Under U.S. GAAP, the translation of financial statements of subsidiaries
with operations in hyper inflationary economies should be remeasured into the
reporting currency. The process requires monetary assets and liabilities to be
remeasured at the year-end exchange rate, while non-monetary assets and
liabilities and income and expense accounts are remeasured at the historical
exchange rate. Resulting exchange differences are included in income.
E. The paragraph under the subheading "Available for sale security" is
amended and restated as follows:
Available for sales security. Under Mexican GAAP, the investment in ASARCO
is included in cash and marketable securities in the amounts of Ps. 614,802 and
Ps. 665,672 as of December 31, 1998 and 1997, respectively. Changes in the
market value of the investment were recorded as interest income (loss) in the
statement of income and amounted to 271,650 and (5,565) for the years ended
December 31, 1998 and 1997, respectively. Under U.S. GAAP and in accordance with
Statement of Financial Accounting Standard No. 115, this investment should be
classified as an "available for sale security" and reported at fair value, with
unrealized gains and losses excluded from earnings and reported in other
comprehensive income.
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F. RECONCILIATION OF MEXICAN GAAP TO U.S. GAAP
Net income and stockholders' equity, adjusted to take into account the
significant differences between Mexican GAAP and U.S. GAAP, except for the
comprehensive effects of price-level changes, are as follows:
<TABLE>
<CAPTION>
1998 1997 1996
------------- ------------- --------------
<S> <C> <C> <C>
NET INCOME:
Consolidated net income under Mexican GAAP........ Ps. 806,638 Ps. 2,921,045 Ps. 4,004,570
U.S. GAAP adjustments:
Deferred income tax asset (liability)........... (335,854) (378,325) (1,567,349)
Deferred employee profit sharing liability...... (450,515) (404,732) (219,286)
Amortization of capitalized exchange loss and
gain on monetary position..................... 4,769 4,769 4,769
Capitalized interest............................ 206,170 269,199 --
Amortization of negative goodwill............... 583,029 689,983 598,319
Pension plan cost............................... 2,037 445 772
Gain (loss) in permanent investment............. 271,650 (5,565) --
Postretirement plan costs....................... (34,880) -- --
Adoption of SOP 98-5............................ (222,321) (110,888) --
Gain on extinguishment of debt.................. 82,787 -- --
Effects of inflation accounting on U.S. GAAP
adjustments and monetary gain on labor
liabilities................................... 1,250,231 1,119,208 1,900,509
------------- ------------- --------------
1,357,103 1,184,094 717,734
------------- ------------- --------------
Consolidated net income under U.S. GAAP........... Ps. 2,163,741 Ps. 4,105,139 Ps. 4,722,304
============= ============= ==============
</TABLE>
<TABLE>
<CAPTION>
1998 1997
--------------- ---------------
<S> <C> <C>
STOCKHOLDERS' EQUITY:
Stockholders' equity under Mexican GAAP................... Ps. 29,635,784 Ps. 29,642,490
U.S. GAAP adjustments:
Deferred income taxes..................................... (4,967,527) (5,523,988)
Deferred employee profit sharing.......................... (2,151,540) (2,058,836)
Capitalized exchange loss and gain on monetary position... (185,958) (190,727)
Capitalized interest...................................... 475,369 269,199
Accumulated pension plan cost............................. (1,066) 1,034
Postretirement plan costs................................. (34,880) --
Negative goodwill (previously amortized for Mexican GAAP
purposes)............................................... (3,513,541) (4,096,570)
Adoption of SOP 98-5...................................... (333,209) (110,888)
Gain on extinguishment of debt............................ 82,787 --
Investment in common stock of a parent company............ (1,303,637) (1,947,718)
--------------- ---------------
(11,933,202) (13,658,494)
--------------- ---------------
Stockholders' equity under U.S. GAAP........................ Ps. 17,702,582 Ps. 15,983,996
=============== ===============
</TABLE>
ITEM 10. ADDITIONAL INFORMATION.
Item 10 is hereby amended by the information set forth in Item 3 and by the
following:
CONDITIONS OF THE OFFER. The discussion set forth in the Introduction to
the Offer to Purchase and Section 14 of the Offer to Purchase is amended and
supplemented as follows:
5
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A. The second paragraph on page 13 in the Offer to Purchase under
"Section 1--Terms of the Offer; Expiration Date" is restated as follows:
The Offer is conditioned upon, among other things, satisfaction of the
Minimum Condition, the Rights Condition and the Merger Agreement Condition. If
prior to the Expiration Date any or all of such conditions, or if any or all of
the other events set forth in Section 14 are not satisfied, other than events
relating to regulatory approvals (which must be satisfied prior to acceptance
for payment of shares of Common Stock), Purchaser reserves the right (but shall
not be obligated) to (i) decline to purchase any of the shares of Common Stock
tendered in the Offer and to terminate the Offer and return all tendered shares
of Common Stock to the tendering shareholders, (ii) waive or reduce the Minimum
Condition or waive or amend any or all other conditions to the Offer to the
extent permitted by applicable law, and, subject to complying with applicable
rules and regulations of the SEC, purchase all shares of Common Stock validly
tendered, or (iii) extend the Offer and, subject to the right of shareholders to
withdraw shares of Common Stock until the Expiration Date, retain the shares of
Common Stock that have been tendered during the period or periods for which the
Offer is extended.
B. The first paragraph on page 50 of the Offer to Purchase under
"Section 14--Conditions of the Offer" is restated as follows:
Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) Purchaser's rights to extend and amend the Offer at any
time in its sole discretion, Purchaser shall not be required to accept for
payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-1(c) under the Exchange Act (relating to Purchaser's
obligation to pay for or return tendered shares of Common Stock promptly after
termination or withdrawal of the Offer), pay for, and may delay the acceptance
for payment of or, subject to the restriction referred to above, the payment
for, any tendered shares of Common Stock, and may terminate the Offer as to any
shares of Common Stock not then paid for, if, in the sole judgment of Purchaser
at or prior to (i) the acceptance for payment of shares of Common Stock, any
required regulatory approvals have not been obtained or (ii) the Expiration Date
(x) any one or more of the Minimum Condition, the Rights Condition or the Merger
Agreement Condition shall not have been satisfied or (y) any of the following
events shall occur or shall be deemed by Purchaser to have occurred:
C. The Merger Agreement Condition is amended and restated to read as
follows:
"THE MERGER AGREEMENT CONDITION. CONSUMMATION OF THE OFFER IS CONDITIONED
UPON PURCHASER BEING SATISFIED, IN ITS SOLE DISCRETION, THAT THE PD MERGER
AGREEMENT HAS BEEN TERMINATED AND ASARCO HAVING ENTERED INTO A DEFINITIVE MERGER
AGREEMENT WITH PARENT AND PURCHASER THAT WOULD PROVIDE FOR THE ACQUISITION OF
ASARCO BY PARENT OR PURCHASER (THE "MERGER AGREEMENT CONDITION").
In order for the Merger Agreement Condition to be satisfied, the PD Merger
Agreement must be terminated. Depending on ASARCO's willingness to enter into
negotiations with Parent and Purchaser and the then pending status of any such
negotiations, Purchaser may extend the Offer from time to time until the Merger
Agreement Condition is satisfied.
In the event the Merger Agreement Condition is satisfied prior to 5:00 P.M.
New York City time on October 23, 1999, Purchaser and Parent, in accordance with
the terms of the Third Amended and Restated Commitment Letter, will be in the
position to substantially limit its conditions to the following:
"Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) Purchaser's rights to extend and amend the Offer at any
time in its sole discretion (subject to the provisions of the Proposed Merger
Agreement), Purchaser shall not be required to accept for payment or, subject to
any applicable rules and regulations of the SEC, including Rule 14e-1(c) under
the Exchange Act (relating to Purchaser's obligation to pay for or return
tendered Common Stock promptly after termination or withdrawal of the Offer),
pay for, and may delay the acceptance for payment of or, subject
6
<PAGE>
to the restriction referred to above, the payment for, any tendered shares of
Common Stock, and may terminate or amend the Offer (but only subject to and in
accordance with the Proposed Merger Agreement) if (i) the HSR Act Condition (as
defined in the Proposed Merger Agreement) has not been satisfied, (ii) the
Minimum Condition has not been satisfied or (iii) at any time on or after
October 23, 1999 and before the Expiration Date for payment pursuant to the
Offer, any of the following events shall occur:
(a) there shall have been any statute, rule, regulation, judgment, order or
injunction promulgated, entered, enforced, enacted, issued or rendered
applicable to the Offer or the Proposed Merger by any domestic or foreign,
federal or state governmental regulatory or administrative agency or authority
or court or legislative body or commission which (i) prohibits, or imposes any
material limitations on, Parent's or Purchaser's ownership or operation of all
or a material portion of ASARCO's businesses or assets, (ii) prohibits, or makes
illegal the acceptance for payment, payment for or purchase of Common Stock or
the consummation of the Offer or the Proposed Merger, (iii) results in a
material delay in or restricts the ability of Purchaser, or renders Purchaser
unable, to accept for payment, pay for or purchase some or all of the tendered
shares of Common Stock, or (iv) imposes material limitations on the ability of
Purchaser or Parent effectively to exercise full rights of ownership of the
Common Stock, including, without limitation, the right to vote the Common Stock
purchased by it on all matters properly presented to ASARCO's shareholders,
PROVIDED that Parent and Purchaser shall have used all reasonable efforts to
cause any such judgment, order or injunction to be vacated or lifted;
(b) the representations and warranties of ASARCO set forth in the Proposed
Merger Agreement shall not be true and correct as of the date of consummation of
the Offer as though made on or as of such date except, in each case, (i) for
changes specifically permitted by the Proposed Merger Agreement and
(ii) (A) those representations and warranties that address matters only as of a
particular date which are true and correct as of such date or (B) where the
failure of such representations and warranties to be true and correct (without
giving effect to any qualifications as to "materiality" or "Material Adverse
Effect" set forth therein) would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on ASARCO, or ASARCO
shall have materially breached or failed in any material respect to perform or
comply with any material obligation, agreement or covenant required by the
Agreement to be performed or complied with by it;
(c) the Proposed Merger Agreement shall have been terminated in accordance
with its terms prior to the Expiration Date;
(d) ASARCO shall have entered into a definitive agreement or agreement in
principle with any person with respect to an ASARCO Takeover Proposal or similar
business combination with ASARCO;
(e) (i) The Chase Manhattan Bank and Chase Securities Inc. shall have
terminated the commitment letter as a result of there having occurred after the
date the Proposed Merger Agreement is executed to that date that is the same
number of days after November 30, 1999 as the date of execution and delivery of
the Proposed Merger Agreement is after October 5 (the "Agreed Date"), a general
banking moratorium established by Federal or state authorities, a generally
recognized capital markets crisis, as evidenced by a cumulative 20% decline in
the Dow Industrial Average over a period of five (5) consecutive trading days,
or a virtual cessation in bank and other private debt financings or the
introduction of additional material government restrictions imposed by lending
institutions which materially affect the type of transactions contemplated by
the Proposed Merger Agreement, and (ii) The Chase Manhattan Bank and Chase
Securities Inc. shall have terminated the commitment letter as a result of there
having occurred after the Agreed Date a material disruption of or material
adverse change in U.S. or developed country financial, banking or capital market
conditions that is reasonably likely to materially impair the syndication of the
Credit Facilities; or
(f) the ASARCO Board of Directors shall have withdrawn, or amended, modified
or changed in a manner adverse to Parent or the Purchaser (including by
amendment of the Schedule 14D-9), its recommendation of the Offer, the Proposed
Merger Agreement or the Proposed Merger, or recommended
7
<PAGE>
another proposal or offer from any person other than Parent or Purchaser, or
shall have resolved to do any of the foregoing; which in the reasonable judgment
of Parent or Purchaser, in any such case, and regardless of the circumstances
giving rise to such condition, makes it inadvisable to proceed with the Offer
and/or with such acceptance for payment or payments;
which in the reasonable judgment of Parent or the Purchaser, in any such case,
and regardless of the circumstances giving rise to such condition, makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment or
payments.
The foregoing conditions will be for the sole benefit of Purchaser and
Parent and may be waived by Parent or Purchaser, in whole or in part at any time
and from time to time in the sole discretion of Parent or Purchaser.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
<TABLE>
<S> <C>
(a)(1) Offer to Purchase dated September 27, 1999.*
(a)(2) Form of Letter of Transmittal.*
(a)(3) Form of Notice of Guaranteed Delivery.*
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.*
(a)(5) Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.*
(a)(6) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.*
(a)(7) Form of Summary Advertisement dated September 27, 1999.*
(a)(8) Press release of Parent dated September 24, 1999.*
(a)(9) Press release of Parent dated September 27, 1999.*
(a)(10) Supplement to the Offer to Purchase dated October 8, 1999.*
(a)(11) Press release of Parent dated October 7, 1999.*
(b)(1) Commitment Letter from The Chase Manhattan Bank and Chase
Securities Inc. dated September 24, 1999.*
(b)(2) First Amended and Restated Commitment Letter from The Chase
Manhattan Bank and Chase Securities Inc. dated October 5,
1999.*
(b)(3) Second Amended and Restated Commitment Letter from The Chase
Manhattan Bank and Chase Securities Inc. dated October 15,
1999.*
(b)(4) Third Amended and Restated Commitment Letter from The Chase
Manhattan Bank and Chase Securities Inc. dated October 15,
1999.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) None.
(g)(1) 1997 Annual Report of Parent.*
(g)(2) 1998 Annual Report of Parent.*
</TABLE>
8
<PAGE>
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: October 18, 1999
<TABLE>
<S> <C> <C>
GRUPO MEXICO, S.A. DE C.V.
By: /s/ DANIEL TELLECHEA SALIDO
----------------------------------------------
Name: Daniel Tellechea Salido
Title: Managing Director for Administration
and Finance
GRUPO MEXICO, S.A. DE C.V.
By: /s/ HECTOR CALVA RUIZ
----------------------------------------------
Name: Hector Calva Ruiz
Title: Managing Director for Exploration
and Projects
ASMEX CORPORATION
By: /s/ DANIEL TELLECHEA SALIDO
----------------------------------------------
Name: Daniel Tellechea Salido
Title: Vice President and Treasurer
</TABLE>
9
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO.
- -----------
<S> <C>
(a)(1) Offer to Purchase dated September 27, 1999.*
(a)(2) Form of Letter of Transmittal.*
(a)(3) Form of Notice of Guaranteed Delivery.*
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.*
(a)(5) Form of Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.*
(a)(6) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.*
(a)(7) Form of Summary Advertisement dated September 27, 1999.*
(a)(8) Press release of Parent dated September 24, 1999.*
(a)(9) Press release of Parent dated September 27, 1999.*
(a)(10) Supplement to the Offer to Purchase dated October 8, 1999.*
(a)(11) Press release of Parent dated October 7, 1999.*
(b)(1) Commitment Letter from The Chase Manhattan Bank and Chase
Securities Inc. dated September 24, 1999.*
(b)(2) First Amended and Restated Commitment Letter from The Chase
Manhattan Bank and Chase Securities Inc. dated October 5,
1999.*
(b)(3) Second Amended and Restated Commitment Letter from The Chase
Manhattan Bank and Chase Securities Inc. dated October 7,
1999.*
(b)(4) Third Amended and Restated Commitment Letter from The Chase
Manhattan Bank and Chase Securities Inc. dated October 15,
1999.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) None.
(g)(1) 1997 Annual Report of Parent.*
(g)(2) 1998 Annual Report of Parent.*
</TABLE>
- ------------------------
* Previously filed.
<PAGE>
[GRAPHIC OMITTED]
THE CHASE MANHATTAN BANK CHASE SECURITIES INC.
270 Park Avenue 270 Park Avenue
New York, New York 10017 New York, New York 10017
October 15, 1999
ASMEX Corporation
Senior Secured Credit Facilities
Third Amended and Restated Commitment Letter
Grupo Mexico, S.A. de C.V.
Baja California 200
Colonia Roma Sur
Mexico, D.F. Mexico
06760
Attention: Daniel Tellechea
Ladies and Gentlemen:
This Third Amended and Restated Commitment Letter hereby, subject to
the terms and conditions set forth herein, amends and restates the Second
Amended and Restated Commitment Letter dated October 7, 1999 (the "SECOND
AMENDED AND RESTATED COMMITMENT"), among Grupo Mexico, Chase and CSI (each as
defined below). You have advised The Chase Manhattan Bank ("CHASE") and Chase
Securities Inc. ("CSI") that ASMEX Corporation, a Delaware corporation (the
"BORROWER"), a wholly-owned subsidiary of Grupo Mexico, S.A. de C.V., a Mexican
corporation ("GRUPO MEXICO"), intends to make a cash tender offer (the "TENDER
OFFER") for common stock of Asarco Incorporated, a New Jersey corporation
("ASARCO"), representing at least 80% of the ordinary voting power of all of the
shares of capital stock of Asarco on a fully diluted basis (including stock of
Asarco owned by Grupo Mexico and
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[GRAPHIC OMITTED] Grupo Mexico, S.A. de C.V.
<PAGE>
2
subsidiaries prior to the Tender Offer), to be followed by the merger of the
Borrower into Asarco, with Asarco thereby becoming a wholly-owned subsidiary of
Grupo Mexico.
We understand that to provide funds for the Tender Offer and to pay
related fees and expenses, Grupo Mexico requires that senior secured financing
be made available to the Borrower in the amount of up to $823 million (the "A
TENDER FACILITY"). We further understand that, following the successful
completion of the Tender Offer, the Borrower is to be merged into Asarco with
Asarco thereby becoming a wholly-owned subsidiary of Grupo Mexico (the "MERGER"
and, together with the Tender Offer, the "TRANSACTIONS"), and that (whether or
not the Merger is immediately effected) Grupo Mexico will require senior
financing for Asarco (the "R/C FACILITIES") in an aggregate amount equal to $250
million in order to refinance certain indebtedness of Asarco and to provide
funds for ongoing general corporate purposes. The A Tender Facility and the R/C
Facilities are herein collectively referred to as the "FACILITIES".
In that connection, you have requested that CSI agree to structure,
arrange and syndicate the Facilities, and that Chase commit to provide the
entire principal amount of the Facilities and to serve as administrative agent
for the Facilities.
CSI is pleased to advise you that it is willing to act as exclusive
advisor, lead arranger and book manager for the Facilities.
Furthermore, Chase is pleased to advise you of its commitment to
provide the entire amount of the Facilities upon the terms and subject to the
conditions set forth or referred to in this third amended and restated
commitment letter (the "THIRD AMENDED AND RESTATED COMMITMENT LETTER"), in the
Third Amended and Restated Summary of Terms and Conditions attached hereto as
Exhibit A (the "TERM SHEET") and in the Amended and Restated Fee Letter dated
October 15, 1999 (the "AMENDED AND RESTATED FEE LETTER"). We intend to syndicate
the Facilities to a group of financial institutions (together with Chase, the
"LENDERS") identified by us in consultation with you. Chase shall be relieved of
its obligation to provide the entire amount of the Facilities to the extent that
the offers of Lenders other than Chase to provide any portion of the Facilities
are accepted.
CSI intends to commence syndication efforts promptly, and you agree
actively to assist CSI in its efforts to complete a syndication satisfactory to
it prior to the Tender Closing Date referred to in the Term Sheet. Such
assistance shall include (a) your using commercially reasonable efforts to
ensure that the syndication efforts benefit materially from your existing
lending relationships, (b) direct contact between senior management and advisors
of yourselves and the Borrower and the proposed Lenders, (c) assistance in the
preparation of a Confidential Information Memorandum and other marketing
materials to be used in connection with the syndication and (d) the hosting,
with CSI, of one or more meetings of prospective Lenders.
It is agreed that Chase will act as the sole and exclusive
Administrative Agent for the Facilities and as the Collateral Agent in
connection with the Facilities, and that CSI will act as the sole and exclusive
advisor, arranger and book manager for the Facilities, and each will, in such
capacities, perform the duties and exercise the authority customarily performed
and exercised by it in such roles. You agree that no other agents, co-agents,
arrangers or book
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[GRAPHIC OMITTED] Grupo Mexico, S.A. de C.V.
<PAGE>
3
managers will be appointed, no other titles will be awarded and no compensation
(other than that expressly contemplated by the Term Sheet and the Amended and
Restated Fee Letter referred to below) will be paid in connection with the
Facilities unless you and we shall so agree.
CSI will (in consultation with you) manage all aspects of the
syndication, including decisions as to the selection of institutions to be
approached and when they will be approached, when their commitments will be
accepted, which institutions will participate, the allocations of the
commitments among the Lenders and the amount and distribution of fees among the
Lenders. To assist CSI in its syndication efforts, you agree promptly to prepare
and provide to CSI and Chase all information with respect to Grupo Mexico, Grupo
Minero Mexico, S.A. de C.V., a Mexican corporation ("GMM") , the Borrower and
their respective subsidiaries, the Transactions and the other matters
contemplated hereby, including all financial information and projections (the
"PROJECTIONS"), as we may reasonably request in connection with the arrangement
and syndication of the Facilities. You hereby represent and covenant that (a)
all information other than the Projections (the "INFORMATION") that has been or
will be made available to Chase or CSI by you or any of your representatives is
or will be, when furnished, complete and correct in all material respects and
does not or will not, when furnished, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
contained therein not materially misleading in light of the circumstances under
which such statements are made and (b) the Projections that have been or will be
made available to Chase or CSI by you or any of your representatives have been
or will be prepared in good faith based upon reasonable assumptions. You
understand that in arranging and syndicating the Facilities we may use and rely
on the Information and Projections without independent verification thereof.
As consideration for Chase's commitment hereunder and CSI's agreement
to perform the services described herein, you agree to pay and to cause the
Borrower to pay to Chase the non-refundable fees set forth in Annex I to the
Term Sheet and in the Amended and Restated Fee Letter.
Chase's commitment hereunder and CSI's agreement to perform the
services described herein are subject to
(a) (i) there not occurring or becoming known to us any material
adverse condition or material adverse change in or affecting the business,
operations, property or financial condition of Grupo Mexico and its
subsidiaries, GMM and its subsidiaries, or Asarco and its subsidiaries, in
each case taken as a whole, which (in the case of Asarco and its
subsidiaries) is not already disclosed and publicly available or otherwise
known by any of our officers who is working with you on the Transactions;
PROVIDED, HOWEVER, that any adverse effect that copper prices have had or
may have on the business, operations, property or financial condition of
Grupo Mexico and its subsidiaries, GMM and its subsidiaries, or Asarco and
its subsidiaries, in each case taken as a whole, shall not be deemed to be
such a material adverse condition or material adverse change for purposes of
this clause (a)(i); and (ii) our not becoming aware after September 24,
1999, of any information or other matter affecting Grupo Mexico and its
subsidiaries, GMM
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[GRAPHIC OMITTED] Grupo Mexico, S.A. de C.V.
<PAGE>
4
and its subsidiaries, Asarco and its subsidiaries, in each case taken as a
whole, or the transactions contemplated hereby which is inconsistent in a
material and adverse manner with any such information or other matter
disclosed to us prior to September 24, 1999, and which (in the case of
Asarco and its subsidiaries) is not already disclosed and publicly available
or otherwise known by any of our officers who is working with you on the
Transactions,
(b) there shall not have been any statute, rule, regulation, judgment,
order or injunction promulgated, entered, enforced, enacted, issued or
applicable to the Tender Offer or the Merger by any domestic or foreign
federal or state governmental regulatory or administrative agency or
authority or court or legislative body or commission which (i) prohibits, or
imposes any material limitations on, Grupo Mexico's or Asmex' ownership or
operation of all or a material portion of Asarco's businesses or assets,
(ii) prohibits, or makes illegal the acceptance for payment, payment for or
purchase of Asarco common stock or the consummation of the Tender Offer or
the Merger, (iii) results in a material delay in or restricts the ability of
Grupo Mexico, or renders Grupo Mexico unable, to accept for payment, pay for
or purchase some or all of the tendered shares of Asarco common stock, or
(iv) imposes material limitations on the ability of Asmex or Grupo Mexico
effectively to exercise full rights of ownership of the Asarco common stock,
including, without limitation, the right to vote the Asarco common stock
purchased by it on all matters properly presented to Asarco's shareholders,
(c) there not having occurred (i) after the date hereof to the Agreed
Date (as hereafter defined), a general banking moratorium established by
Federal or state authorities, a generally recognized capital markets crisis,
as evidenced by a cumulative 20% decline in the Dow Jones Industrial Average
over a period of five (5) consecutive trading days, or a virtual cessation
in bank and other private debt financings or the introduction of additional
material government restrictions imposed upon lending institutions which
materially affect the type of transactions contemplated thereby, and (ii)
after the Agreed Date, a material disruption of or material adverse change
in U.S. or developed country financial, banking or capital market conditions
that, in our judgment, is reasonably likely to materially impair the
syndication of the Facilities (it being agreed that, for purposes of this
clause (c), the term "Agreed Date" shall mean the date, not later than
December 18, 1999, that is the same number of days after November 30, 1999
as the date of execution and delivery of a definitive Merger agreement is
after October 5, 1999),
(d) our satisfaction that prior to and during the syndication of the
Facilities there shall be no competing offering, placement or arrangement of
any debt securities or bank financing by or on behalf of Grupo Mexico or any
affiliate thereof,
(e) in the case of the A Tender Facility, our satisfaction with the
conditions of the Tender Offer which will include, in any event (unless
otherwise satisfied in connection with the definitive Merger agreement with
Asarco), (i) invalidation, redemption or other inapplicability of the rights
issued under Asarco's Shareholder Rights Agreement dated as of January 28,
1998, as amended, (ii) invalidation or satisfaction of the requirements of
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[GRAPHIC OMITTED] Grupo Mexico, S.A. de C.V.
<PAGE>
5
Article 7 of Asarco's Restated Certificate of Incorporation with respect to
the Transactions such that following consummation of the Tender Offer the
Merger may be consummated without the affirmative vote of the holders of any
Asarco shares other than the Borrower, (iii) invalidity, inapplicability or
satisfaction (if necessary) of Article 10 of Asarco's Restated Certificate
of Incorporation with respect to the Transactions or the Facilities, (iv)
satisfaction or inapplicability of the requirements of Section 14A:10A of
the New Jersey Business Corporation Act with respect to the Merger such that
following consummation of the Tender Offer the Merger may be consummated
without the affirmative vote of the holders of any Asarco shares other than
the Borrower and (v) obtaining all regulatory approvals and consents
(including Hart-Scott-Rodino and other approvals or consents, if any)
necessary to effect the Transactions,
(f) in the case of the R/C Facilities, prior or concurrent disbursement
of the A Tender Facility, successful consummation of the Tender Offer and
our satisfaction with the terms and conditions of the definitive Merger
agreement,
(g) the negotiation, execution and delivery on or prior to the Tender
Closing Date of definitive documentation with respect to the Facilities
satisfactory to all parties, and
(h) the other conditions set forth or referred to in the Term Sheet.
The terms and conditions of Chase's commitments hereunder and of the Facilities
are not limited to those set forth herein and in the Term Sheet and Amended and
Restated Fee Letter. Those matters that are not covered by the provisions hereof
and of the Term Sheet are subject to the approval and agreement of Chase, CSI
and Grupo Mexico. Notwithstanding the foregoing, the Term Sheet and Amended and
Restated Fee Letter are intended to reflect all material closing conditions,
representations and warranties, covenants and events of default, subject
however, in each case, to such additional provisions as shall be appropriate to
take into account developments after September 24, 1999.
You agree (a) to indemnify and hold harmless Chase, CSI, their
affiliates and their respective officers, directors, employees, advisors, and
agents (each, an "INDEMNIFIED PERSON") from and against any and all losses,
claims, damages and liabilities to which any such indemnified person may become
subject arising out of or in connection with this Third Amended and Restated
Commitment Letter, the Facilities, the use of the proceeds thereof, the
Transactions or any related transaction or any claim, litigation, investigation
or proceeding relating to any of the foregoing, regardless of whether any
indemnified person is a party thereto, and to reimburse each indemnified person
upon demand for any legal or other expenses incurred in connection with
investigating or defending any of the foregoing, PROVIDED that the foregoing
indemnity will not, as to any indemnified person, apply to losses, claims,
damages, liabilities or related expenses to the extent they are found by a
final, non-appealable judgment of a court to arise from the willful misconduct
or gross negligence of such indemnified person, and (b) to reimburse Chase, CSI
and their affiliates on demand for all reasonable and documented out-of-pocket
expenses (including due diligence expenses, syndication expenses, consultant's
fees and expenses, travel expenses, and reasonable fees, charges and
disbursements of counsel) incurred in connection with the Facilities and any
related documentation (including this Third Amended and Restated
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[GRAPHIC OMITTED] Grupo Mexico, S.A. de C.V.
<PAGE>
6
Commitment Letter, the Term Sheet, the Amended and Restated Fee Letter and the
definitive financing documentation) or (without duplication of fees or costs for
administrative services covered in the Amended and Restated Fee Letter) the
administration, amendment, modification or waiver thereof. No indemnified person
shall be liable for any damages arising from the use by others of Information or
other materials obtained through electronic, telecommunications or other
information transmission systems, or for any special, indirect, consequential or
punitive damages in connection with the Facilities.
You acknowledge that Chase and/or CSI may be providing debt financing,
equity capital or other services (including financial advisory services) to
other companies in respect of which you may have conflicting interests regarding
the transactions described hereby and otherwise. Neither Chase nor CSI will use
confidential information obtained from you by virtue of the transactions
contemplated hereby or other relationships with you in connection with the
performance by Chase or CSI of services for other companies, and neither Chase
nor CSI will furnish any such information to other companies. You also
acknowledge that neither Chase nor CSI has any obligation to use in connection
with the transactions contemplated hereby, or to furnish to you, confidential
information obtained from other companies.
This Third Amended and Restated Commitment Letter shall not be
assignable by you without the prior written consent of Chase and CSI (and any
purported assignment without such consent shall be null and void), is intended
to be solely for the benefit of the parties hereto and is not intended to confer
any benefits upon, or create any rights in favor of, any person other than the
parties hereto. This Third Amended and Restated Commitment Letter may not be
amended or waived except by an instrument in writing signed by you, Chase and
CSI. This Third Amended and Restated Commitment Letter may be executed in any
number of counterparts, each of which shall be an original, and all of which,
when taken together, shall constitute one agreement. Delivery of an executed
signature page of this Third Amended and Restated Commitment Letter by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof. This Third Amended and Restated Commitment Letter and the Amended and
Restated Fee Letter set forth the entire understanding of the parties with
respect thereto. This Third Amended and Restated Commitment Letter shall be
governed by, and construed in accordance with, the laws of the State of New
York.
This Third Amended and Restated Commitment Letter is delivered to you
on the understanding that neither this Third Amended and Restated Commitment
Letter, the Term Sheet or the Amended and Restated Fee Letter nor any of their
terms or substance shall be disclosed, directly or indirectly, to any other
person except (a) to your officers, agents and advisors who are directly
involved in the consideration of this matter or (b) as may be compelled in a
judicial or administrative proceeding or as otherwise required by law (in which
case you agree to inform us promptly thereof), PROVIDED, that the foregoing
restrictions shall cease to apply (except in respect of the Amended and Restated
Fee Letter and its terms and substance) after this Third Amended and Restated
Commitment Letter has been accepted by you.
The compensation, reimbursement, indemnification and confidentiality
provisions contained herein and in the Amended and Restated Fee Letter shall
remain in full force and
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[GRAPHIC OMITTED] Grupo Mexico, S.A. de C.V.
<PAGE>
7
effect regardless of whether definitive financing documentation shall be
executed and delivered and notwithstanding the termination of this Third Amended
and Restated Commitment Letter or Chase's commitments hereunder.
If the foregoing correctly sets forth our agreement, please indicate
your acceptance of the terms hereof and of the Term Sheet by returning to us
executed counterparts hereof not later than 9:00 a.m. New York City time, on
October 18, 1999 (at which time this Third Amended and Restated Commitment
Letter shall expire if not executed and delivered by you). Further, this Third
Amended and Restated Commitment Letter and the amendments of the Second Amended
and Restated Commitment and the Summary of Terms and Conditions attached thereto
as Exhibit A set forth herein and in the Term Sheet shall not become effective
UNLESS Grupo Mexico and Asarco execute and deliver a definitive Merger agreement
satisfactory to Chase and CSI, not later than 5:00 p.m., New York City time, on
October 23, 1999.
Chase and CSI are pleased to have been given the opportunity to assist
you in connection with this important financing.
Very truly yours,
THE CHASE MANHATTAN BANK
By:
------------------------------------
Name:
Title:
CHASE SECURITIES INC.
By:
------------------------------------
Name:
Title:
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[GRAPHIC OMITTED] Grupo Mexico, S.A. de C.V.
<PAGE>
8
Accepted and agreed to as of the
date first written above by:
GRUPO MEXICO, S.A. DE C.V.
By:
-------------------------------
Name:
Title:
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[GRAPHIC OMITTED] Grupo Mexico, S.A. de C.V.
<PAGE>
Exhibit A
SENIOR SECURED CREDIT FACILITIES
Third Amended and Restated Summary of Terms and Conditions
October 15, 1999
AS USED HEREIN, CAPITALIZED TERMS NOT OTHERWISE DEFINED HEREIN SHALL
HAVE THE RESPECTIVE MEANINGS ASCRIBED TO THEM IN THE THIRD AMENDED AND RESTATED
COMMITMENT LETTER TO WHICH THIS THIRD AMENDED AND RESTATED SUMMARY OF TERMS AND
CONDITIONS IS ATTACHED.
This Third Amended and Restated Summary of Terms and Conditions hereby,
subject to the terms and conditions set forth in the Amended and Restated
Commitment Letter, amends and restates the Second Amended and Restated Summary
of Terms and Conditions dated October 7, 1999. The following sets forth the
terms and conditions for the senior secured credit facilities that will be made
available to ASMEX Corporation, a Delaware corporation ("ASMEX"), in connection
with Asmex' proposed cash tender offer (the "TENDER OFFER" and, together with
the Merger defined below, the "TRANSACTIONS") for shares of common stock of
Asarco Incorporated (the "SHARES"), a New Jersey corporation ("ASARCO"),
representing not less than 80% of the ordinary voting power of all of the shares
of capital stock of Asarco on a fully diluted basis, including stock of Asarco
owned by Grupo Mexico, S.A. de C.V., ("GRUPO MEXICO") and subsidiaries prior to
the Tender Offer (determined in a manner satisfactory to the Arranger). The
conditions precedent to the obligation of Asmex to purchase the Shares pursuant
to the Tender Offer will include, unless otherwise satisfied in connection with
the definitive Merger agreement with Asarco, the following: (i) invalidation,
redemption or other inapplicability of the rights issued under Asarco's
Shareholder Rights Agreement dated as of January 28, 1998, as amended, (ii)
invalidation or satisfaction of the requirements of Article 7 of Asarco's
Restated Certificate of Incorporation with respect to the Transactions such
that, following consummation of the Tender Offer, the Merger can be consummated
without the affirmative vote of the holders of any Asarco shares other than
Asmex, (iii) invalidity, inapplicability or satisfaction (if necessary) of
Article 10 of Asarco's Restated Certificate of Incorporation with respect to the
Transactions or the Facilities, (iv) satisfaction or inapplicability of the
requirements of Section 14A:10A of the New Jersey Business Corporation Act with
respect to the Merger such that following consummation of the Tender Offer the
Merger can be consummated without the affirmative vote of the holders of any
Asarco shares other than Asmex and (v) obtaining all regulatory approvals and
consents (including Hart-Scott-Rodino, and other approvals or consents, if any)
necessary to effect the Transactions. The purchase of shares will be funded
through credit facilities (the "A Tender Facility" referred to below) together
with certain cash from Grupo Minero Mexico, S.A. de C.V. ("GMM") and Grupo
Mexico. Following the purchase of the Shares pursuant to the Tender Offer,
Asmex, a direct wholly-owned subsidiary of Grupo Mexico, is to be merged into
Asarco with Asarco thereby becoming a wholly-owned subsidiary of Grupo Mexico
and with Asarco shareholders receiving solely cash consideration (the "MERGER").
The following also sets forth the terms and conditions for the other senior
credit facilities (the "R/C Facilities" referred to
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[GRAPHIC OMITTED] Grupo Mexico, S.A. de C.V.
<PAGE>
2
below) that will be made available to Asarco upon and subsequent to consummation
of the Tender Offer.
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[GRAPHIC OMITTED] Grupo Mexico, S.A. de C.V.
<PAGE>
3
I. PARTIES
Borrowers: Under the A Tender Facility, ASMEX
Corporation ("ASMEX") and, after the
Merger, Asarco; and under the R/C
Facilities, Asarco (each of Asmex and
Asarco being sometimes referred to below
as a "BORROWER").
Guarantor(s): Under the A Tender Facility, Grupo
Mexico; and under the R/C Facilities,
Grupo Mexico and, until consummation of
the Merger, Asmex.
Advisor, Lead Arranger
and Book Manager: Chase Securities Inc. (in such capacity,
the "ARRANGER").
Administrative Agent: The Chase Manhattan Bank ("CHASE" and, in
such capacity, the "ADMINISTRATIVE
AGENT").
Lenders: A syndicate of banks, financial
institutions and other entities,
including Chase, arranged by the Arranger
in consultation with Grupo Mexico
(collectively, the "LENDERS").
II. TYPES AND AMOUNTS OF
CREDIT FACILITIES
1. A TENDER FACILITY
Type and Amount of
Facility: An aggregate principal amount of up to
$823 million will be available to Asmex
under a senior secured credit facility
(the "A TENDER FACILITY").
Availability: The Loans under the A Tender Facility
(the "A TENDER LOANS") shall be made in a
single drawing on the Tender Closing Date
(as defined below).
Amortization: The A Tender Loans shall be repayable in
full on the date eighteen (18) months
after the Tender Closing Date (the date
on which
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[GRAPHIC OMITTED] Grupo Mexico, S.A. de C.V.
<PAGE>
4
the A Tender Loans are repayable, the
"MATURITY DATE").
Purpose: The proceeds of the A Tender Loans shall
be used to purchase Shares.
2. R/C FACILITIES
Type and Amount of
Facility: An aggregate principal amount of up to
$250 million will be available to Asarco
subsequent to consummation of the Tender
Offer under a senior secured revolving
credit facility (the "R/C FACILITIES").
Such aggregate principal amount may,
based on the actual amount of eligible
accounts receivable of Asarco available
to secure the R/C Facilities and in the
sole discretion of the Arranger, be
increased provided that the A Tender
Loans are prepaid in an amount equal to
the amount of such increase. Such
aggregate principal amount may, based on
the aggregate principal amount of
Existing R/C Facilities (as defined
below) available to Asarco and remaining
in place subsequent to the consummation
of the Tender Offer, be reduced in an
amount equal to the amount of such
Existing R/C Facilities.
Availability: The Loans under the R/C Facilities (the
"R/C LOANS" and together with the A
Tender Loans, the "LOANS") shall be
available for borrowing, repayment and
reborrowing during the period from the
Tender Closing Date to the date
thirty-three (33) months thereafter.
Termination: The R/C Facilities shall terminate, and
all outstanding R/C Loans shall be
repayable in full, on the date three (3)
years after the Tender Closing Date.
Purpose: The proceeds of the R/C Loans shall be
used (i) to refinance outstanding
indebtedness of Asarco under the Existing
R/C Facilities (as defined below) and in
the event of an increase in the amount of
the R/C Facilities
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[GRAPHIC OMITTED] Grupo Mexico, S.A. de C.V.
<PAGE>
5
above $250 million to repay a portion of
outstanding A Tender Loans and (ii) for
working capital purposes of Asarco. The
"EXISTING R/C FACILITIES" means the
credit facilities identified as such by
Grupo Mexico and the Administrative Agent
and which are on terms reasonably
acceptable to the Arranger and Grupo
Mexico. The aggregate principal amount of
the Existing R/C Facilities is believed
to total $800 million and to be for
working capital purposes (based on
publicly available information).
III. CERTAIN PAYMENT PROVISIONS
Fees and Interest Rates: As set forth on Annex I.
Optional Prepayments
and Commitment Reductions: All or a portion of the Loans may be
prepaid at any time and the unutilized
portion of the Facilities may be
terminated in whole or in part (in
minimum amounts to be agreed upon) at the
respective Borrower's option (except, in
the case of the R/C Facilities prior to
the Tender Closing Date, at the option of
Grupo Mexico). A Tender Loans once
prepaid may not be reborrowed.
Mandatory Prepayments and
Commitment Reductions: The A Tender Loans will be prepaid,
undrawn commitments for A Tender Loans
will be reduced and replaced, and R/C
Loans will be prepaid, in that order, to
the extent of the net cash proceeds
received from the following (in each case
subject to customary exclusions to be
agreed):
-- any asset sales by Asarco and
designated subsidiaries
-- any debt issuances by Asarco (other
than R/C Loans, except for R/C Loans
required to reduce the A Tender
Facility)
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<PAGE>
6
-- any equity issuances by Asmex or
Asarco (to any party other than Asmex
or Grupo Mexico)
-- any sale of Asarco stock
-- any proceeds received by Asarco as a
result of the exercise (by holders) of
warrants relating to shares of Grupo
Mexico held in a trust for the benefit
of Asarco
IV. GUARANTEES AND COLLATERAL
Guarantees: (a) All obligations of Asmex (and, after
the Merger, of Asarco) in respect of the
A Tender Facility will be unconditionally
guaranteed by Grupo Mexico.
(b) All obligations of Asarco in respect
of the R/C Facilities will be
unconditionally guaranteed by Grupo
Mexico until the A Tender Loans are
repaid in full (except as otherwise noted
below in the case of Alternative R/C
Facilities, and provided the conditions
for release of the collateral for such
guarantee obligations have been met), and
by Asmex until consummation of the
Merger.
The Borrowers and guarantors are
collectively referred to herein as
"CREDIT PARTIES."
Collateral: (a) The obligations of Asmex in respect
of the Facilities will be secured by a
perfected first priority security
interest in the Shares at any time owned
by it.
(b) The obligations of Grupo Mexico under
its guarantees of the A Tender Facility
and the R/C Facilities will be secured by
a perfected first priority security
interest in (1) shares of GMM
representing 100% of the outstanding
shares of GMM (other than shares not
exceeding 1.50% held by others)
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[GRAPHIC OMITTED] Grupo Mexico, S.A. de C.V.
<PAGE>
7
and (2) all shares of Asarco held by
Grupo Mexico, both immediately prior to
the making of the A Tender Loans
(presently representing approximately
9.8% of the outstanding shares of Asarco)
and after the Merger. In addition, Grupo
Mexico will covenant to maintain at all
times, in support of its guarantees (so
long as they remain in effect), an amount
of unencumbered cash and short-term
authorized money market investments (to
be agreed with the Arranger, including
deposits with approved banks, which in
Mexico shall include only Banamex and
Bancomer) equal to the lower of (A) 6
months of interest on the outstanding A
Tender Loans and (B) $100 million.
(c) The obligations of Asarco in respect
of the R/C Facilities will be secured by
accounts receivable of Asarco (except as
otherwise provided below in the case of
"Alternative R/C Facilities").
The security documentation will provide
that in the event of default and
enforcement or foreclosure at a time when
both Asarco shares and GMM shares are
held as collateral for the defaulted
obligation, the collateral agent will be
instructed to exercise reasonable efforts
(for a period of up to 45 days) to sell
collateral consisting of Asarco shares
before selling collateral consisting of
GMM shares. Further, so long as any
amounts under the A Tender Facility and
the R/C Facilities remain outstanding,
the proceeds of any sale of collateral
consisting of shares shall be applied:
first, to the payment of interest and
principal on the A Tender Loans and the
Alternative R/C Loans (if any), and
second, to the payment of interest and
principal on the R/C Loans.
Certain Releases of Collateral: So long as no Default has occurred and
is continuing:
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<PAGE>
8
(a) The pledge of Asarco Shares securing
guarantees of the R/C Loans will
terminate when the A Tender Loans are
repaid in full, PROVIDED that at such
time (i) the R/C Loans and R/C Facilities
are not Alternative R/C Loans and
Alternative R/C Facilities, and (ii)
Asarco is in compliance with its
financial covenant relating to minimum
EBITDA;
(b) The pledge of Asarco Shares securing
guarantees of the Alternative R/C Loans
will terminate when (i) the A Tender
Loans are repaid in full, and (ii)
Asarco's senior unsecured long-term
indebtedness is rated at or above BBB- by
S&P and Baa3 by Moody's;
(c) The pledge of GMM shares securing
Grupo Mexico guarantees of the Facilities
will be reduced pro rata (on a percentage
basis) with reductions (by repayment) of
the outstanding principal of the A Tender
Loans, PROVIDED that (except as described
in clause (d) below) the percentage of
outstanding GMM shares remaining in
pledge as security for guarantees of the
Facilities may not thereby be reduced
below 51% (or such higher percentage, if
any, as is required for approval of
corporate actions of GMM that are subject
to shareholder consent and for election
of a majority of the Board of Directors
of GMM);
(d) At such time as the outstanding
principal of the A Tender Loans has been
reduced (by repayment) to an amount equal
to or less than 25% of the original
principal amount of the A Tender Loans,
all GMM shares remaining in pledge as
security for guarantees of the Facilities
will be released, PROVIDED that Asarco's
senior unsecured long-term indebtedness
is rated at or above BBB- by S&P and Baa3
by Moody's.
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<PAGE>
9
V. CERTAIN CONDITIONS The availability of the Facilities shall
be conditioned upon satisfaction of,
among other things, the following
conditions precedent (the date upon which
all such conditions precedent shall be
satisfied and the A Tender Facility is
first utilized being herein called the
"TENDER CLOSING DATE") and the occurrence
of the first utilization of the A Tender
Facility on or before the date nine (9)
months after September 24, 1999, and
other conditions precedent customary for
facilities and transactions of this type,
including evidence of authority and
receipt of necessary consents and
approvals:
(a) Each Credit Party shall have executed
and delivered satisfactory definitive
financing documentation with respect to
the Facilities (the "CREDIT
DOCUMENTATION").
(b) On or prior to the Tender Closing
Date, cash in an amount not less than
$270 million shall be contributed to the
equity capital of Asmex through Grupo
Mexico (i) from existing cash resources
of GMM in an aggregate amount not less
than $250 million, and (ii) from existing
cash resources of Grupo Mexico, in an
amount not less than $20 million;
PROVIDED that in the event that Asmex
requires cash in excess of such cash
contributions and the A Tender Facility
to consummate the Tender Offer, such
additional cash shall be provided to
Asmex through Grupo Mexico from other
sources acceptable to the Arranger.
(c) Satisfaction of the Arranger with all
material terms and conditions of the
Tender Offer and the definitive Merger
agreement. In addition, the Tender Offer
and the Merger shall have been, or shall
be concurrently, consummated in a manner
satisfactory to the Administrative Agent
(including satisfaction of the
Administrative Agent with all
determinations as to the satisfaction of
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<PAGE>
10
material conditions thereunder) and no
such condition of the Tender Offer or the
definitive Merger agreement shall have
been waived, amended, supplemented or
otherwise modified without the prior
written consent of the Administrative
Agent; and Asmex shall have acquired
shares of common stock of Asarco
representing not less than 80% of the
ordinary voting power of all of the
shares of capital stock of Asarco on a
fully diluted basis, including stock of
Asarco owned by Grupo Mexico and
subsidiaries prior to the Tender Offer
(determined in a manner satisfactory to
the Arranger).
(d) Grupo Mexico and Asarco shall have
entered into a definitive Merger
agreement in form and substance
satisfactory to the Administrative Agent,
or Grupo Mexico shall have made
satisfactory arrangements for the
initiation of a statutory short-form
merger, in each case pursuant to which
Asarco will become a wholly-owned
subsidiary of Grupo Mexico with Grupo
Mexico able to exercise full control over
the business and affairs of Asarco.
(e) Invalidation or satisfaction of the
requirements of Article 7 of Asarco's
Restated Certificate of Incorporation
with respect to the Transactions such
that, following consummation of the
Tender Offer, the Merger can be
consummated without the affirmative vote
of the holders of any Asarco shares other
than Asmex; and invalidity,
inapplicability or satisfaction (if
necessary) of Article 10 of Asarco's
Restated Certificate of Incorporation
with respect to the Transactions or the
Facilities.
(f) Satisfaction or inapplicability of
the requirements of Section 14A:10A of
the New Jersey Business Corporation Act
with respect to the Merger such that
following consummation of the Tender
Offer the Merger can be
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<PAGE>
11
consummated without the affirmative vote
of the holders of any Asarco shares other
than Asmex.
(g) Invalidation, redemption or other
inapplicability of the rights issued
under Asarco's Shareholder Rights
Agreement dated as of January 28, 1998,
as amended.
(h) There not being any statute, rule,
regulation, judgment, order or injunction
promulgated, entered, enforced, enacted,
issued or applicable to the Tender Offer
or the Merger by any domestic or foreign
federal or state governmental regulatory
or administrative agency or authority or
court or legislative body or commission
which (i) prohibits, or imposes any
material limitations on, Grupo Mexico's
or Asmex' ownership or operation of all
or a material portion of Asarco's
businesses or assets, (ii) prohibits, or
makes illegal the acceptance for payment,
payment for or purchase of Asarco common
stock or the consummation of the Tender
Offer or the Merger, (iii) results in a
material delay in or restricts the
ability of the Grupo Mexico, or renders
Grupo Mexico unable, to accept for
payment, pay for or purchase some or all
of the tendered shares of Asarco common
stock, or (iv) imposes material
limitations on the ability of Asmex or
Grupo Mexico effectively to exercise full
rights of ownership of the Asarco common
stock, including, without limitation, the
right to vote the Asarco common stock
purchased by it on all matters properly
presented to Asarco's shareholders.
(i) The Lenders, the Administrative Agent
and the Arranger shall have received all
fees required to be paid, and all
expenses for which invoices have been
presented, on or before the Tender
Closing Date.
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<PAGE>
12
(j) The documents and materials filed
publicly by Grupo Mexico (and its
affiliates) and Asmex in connection with
the Tender Offer shall have been
furnished to the Administrative Agent and
such documents and materials shall be
reasonably satisfactory in form and
substance to the Administrative Agent.
(k) All regulatory and third party
approvals and consents (including
Hart-Scott-Rodino and other approvals and
consents, if any) necessary in connection
with the Transactions and the financing
contemplated by the Third Amended and
Restated Commitment Letter shall have
been obtained and be in full force and
effect and all applicable waiting periods
shall have expired without any action
being taken or threatened by any
competent authority which could restrain,
prevent or otherwise impose materially
adverse conditions on the Transactions or
the financing thereof, in each case on
terms satisfactory to the Administrative
Agent.
(l) The Lenders shall have received (i)
audited consolidated financial statements
of Grupo Mexico, GMM and Grupo
Ferroviario Mexicano, S.A. de C.V. ("RR")
for the two most recent fiscal years (in
the case of RR, one year) ended prior to
the Tender Closing Date and (ii)
unaudited interim consolidated financial
statements of Grupo Mexico and of GMM for
each quarterly period ended subsequent to
the date of the latest financial
statements delivered pursuant to clause
(i) of this paragraph (l) as to which
such financial statements are available.
(m) The requisite Lenders shall be
satisfied that upon making the initial A
Tender Loans the requirements of
Regulation U of the
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<PAGE>
13
Board of Governors of the Federal Reserve
System shall have been complied with.
(n) The Lenders shall have received such
legal opinions (including opinions (i)
from counsel to Grupo Mexico and its
subsidiaries and (ii) from such special
and local counsel as may be required by
the Administrative Agent), documents and
other instruments as are customary for
transactions of this type or as they may
reasonably request.
(o) The negotiation, execution and
delivery of definitive Credit
Documentation with respect to the R/C
Facilities satisfactory to all parties.
Such Credit Documentation will contain a
borrowing base condition to each
utilization of the R/C Facilities,
requiring that borrowings thereunder not
exceed 85% of the amount of eligible
receivables of Asarco securing the R/C
Loans; provided that if such requirement
renders the R/C Facilities initially
unutilizable by Asarco in an amount
sufficient to satisfy the financing needs
of Asarco on the Tender Closing Date,
such Credit Documentation will provide
(until such time as such borrowing base
and security requirement can be
satisfied) for an alternative mechanism
(referred to herein as the "ALTERNATIVE
R/C FACILITIES") for utilization by
Asarco of the R/C Facilities, with the
following principal features (borrowings
under such alternative mechanism being
herein referred to as the "ALTERNATIVE
R/C LOANS"):
-- Alternative R/C Loans will not be
secured by Asarco assets
-- Alternative R/C Loans will be (i)
guaranteed by Asmex (until the
Merger), with such guarantee secured
by the Shares, and (ii) guaranteed by
Grupo Mexico,
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<PAGE>
14
with such guarantee secured by pledges
of any Shares held by Grupo Mexico and
of the shares of GMM; and such
guarantee and pledges will not
terminate or be fully released
(notwithstanding contrary provisions
elsewhere in this Term Sheet) until
(in addition to other conditions noted
above) Asarco's senior unsecured
long-term indebtedness is rated at or
above BBB- by S&P and Baa3 by Moody's.
In the event that the working capital
requirements of Asarco may be satisfied
with Existing R/C Facilities subsequent
to the consummation of the Tender Offer,
the aggregate principal amount of the R/C
Facilities may be reduced by the amount
of such Existing R/C Facilities.
(p) Hedging arrangements satisfactory to
the Administrative Agent shall have been
entered into (with counterparties
acceptable to the Administrative Agent)
for a "costless" collar covering
production of GMM (with a minimum copper
price of $0.75/lb with respect to 70,000
tons per annum) and, upon the
consummation of the Tender Offer,
covering production of Asarco (with a
minimum copper price of $0.75/lb with
respect to 100,000 tons per annum), in
each case for a period of at least one
year from the Tender Closing Date.
On-Going Conditions: The making of each extension of credit
shall be conditioned on (a) the accuracy
of all representations and warranties in
the Credit Documentation (including,
without limitation, the material adverse
change and litigation representations)
and (b) there being no default or event
of default in existence at the time of,
or after giving effect to the making of,
such extension of credit.
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<PAGE>
15
As used herein and in the Credit
Documentation a "MATERIAL ADVERSE CHANGE"
shall mean (i) prior to the consummation
of the Merger, any event, development or
circumstance that has had or could
reasonably be expected to have a material
adverse effect on (a) the Transactions,
(b) the business, assets, property or
condition (financial or otherwise) of
Grupo Mexico and its subsidiaries, GMM
and its subsidiaries, or Asarco and its
subsidiaries, in each case taken as a
whole (including any material change,
prior to consummation of the Tender
Offer, in capital structure or
indebtedness of Asarco and any material
acquisition or divestiture of assets of
Asarco or any of its subsidiaries taken
as a whole, that in any such case has had
or could reasonably be expected to have
such a material adverse effect);
PROVIDED, HOWEVER, that any adverse
effect that copper prices have had or may
have on the business, operations,
property or financial condition of Grupo
Mexico and its subsidiaries, GMM and its
subsidiaries, or Asarco and its
subsidiaries, in each case taken as a
whole, shall not be deemed to have such a
material adverse effect for purposes of
this clause (i)(b), or (c) the validity
or enforceability of any of the Credit
Documentation or the rights and remedies
of the Administrative Agent and the
Lenders thereunder; and (ii) after the
consummation of the Merger, any event,
development or circumstance that has had
or could reasonably be expected to have a
material adverse effect on (a) the
Transactions, (b) the business, assets,
property, condition (financial or
otherwise) or prospects of Grupo Mexico
and its subsidiaries, GMM and its
subsidiaries, or Asarco and its
subsidiaries, in each case taken as a
whole, or (c) the validity or
enforceability of any of the Credit
Documentation or the rights and remedies
of
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<PAGE>
16
the Administrative Agent and the Lenders
thereunder.
VI. CERTAIN DOCUMENTATION MATTERS The Credit Documentation for the A Tender
Facility and the R/C Facilities shall
contain representations, warranties,
covenants and events of default customary
for financings of these types and other
terms deemed appropriate by the Lenders,
including, without limitation (but
subject in appropriate cases to customary
and other exceptions to be agreed), those
specified below.
Representations and
Warranties: Financial statements (including pro forma
financial statements); absence of
undisclosed liabilities; no material
adverse change; corporate existence;
compliance with law; corporate power and
authority; enforceability of Credit
Documentation; no conflict with law or
contractual obligations; no material
litigation; no default; ownership of
property; liens; intellectual property;
no burdensome restrictions; taxes; margin
stock regulations; Federal Reserve
regulations; ERISA; Investment Company
Act; subsidiaries; environmental matters;
solvency; labor matters; accuracy of
disclosure; and creation and perfection
of security interests.
Affirmative Covenants: Delivery of financial statements,
reports, accountants' letters, annual
projections, officers' certificates and
other information requested by the
Lenders; payment of certain other
obligations; all payments under the
Facilities to be made free and clear of
and without reduction by reason of
present or future taxes (customary
gross-up, indemnity and evidence of
payment provisions); continuation of
business and maintenance of existence and
material rights and privileges;
compliance with laws and material
contractual obligations; maintenance of
property and insurance; maintenance of
books and records; right of
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<PAGE>
17
the Lenders to inspect property and books
and records; notices of defaults,
litigation and other material events;
maintenance of required hedging
arrangements; compliance with
environmental laws; further assurances
(including, without limitation, with
respect to security interests in
after-acquired property); ownership of
GMM, of RR, of Asmex and, after the
Merger, of Asarco; in the event of
Asarco's utilization of the Alternative
R/C Facility, Grupo Mexico to use its
best efforts to cause Asarco to replace
such utilization with R/C Loans that are
not Alternative R/C Loans; and Grupo
Mexico to use its best efforts to
consummate the Merger as soon as
practicable; and GMM to take reasonable
steps to maintain investment grade
ratings from S&P, Moody's and Duff &
Phelps.
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<PAGE>
18
Financial Covenants: Financial covenants relating to
(a) Grupo Mexico (consolidated with all
subsidiaries, and consolidated with all
subsidiaries other than Southern Peru
Copper Corporation)
(i) Maximum Debt to EBITDA ratio
(ii) Minimum ratio of EBITDA to
interest expense
(iii) Maximum Debt to Capital ratio
(b) GMM and subsidiaries (for so long as
any Grupo Mexico guarantee is in effect)
(i) Debt to Capital ratio not
exceeding 45%
(ii) Minimum Tangible Net Worth
(iii) Minimum Collections to Debt
Service ratio
(iv) Minimum annual level of export
receivables
(v) Minimum ratio of export
receivables to SEN debt service
(vi) Minimum ratio of EBITDA to
interest expense
(c) Asarco
Minimum EBITDA levels
Negative Covenants: Limitations on: indebtedness (including
preferred stock of subsidiaries);
voluntary prepayments of indebtedness
other than under the Facilities; liens
(including negative pledge on stock of
GMM, Asarco and RR); guarantee
obligations; mergers, consolidations,
liquidations and dissolutions; sales of
assets; leases; capital expenditures;
investments, loans and advances;
dividends
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<PAGE>
19
and other payments in respect of capital
stock; transactions with affiliates; sale
and leasebacks; changes in fiscal year;
and changes in lines of business.
Special Covenant of Asmex: Asmex shall covenant that it will not
engage in any activity other than the
Transactions, the A Tender Facility and
activities necessary to effect the same.
Events of Default: (a) A Borrower shall fail to make any
payment of principal of any Loan when
due.
(b) A Borrower shall fail to make any
payment of interest or fees on any Loan,
or any other payments required under the
Credit Documentation, within 3 business
days of due date.
(c) Any representation or warranty by a
Credit Party contained in the Credit
Documentation or any certificate required
to be delivered thereunder shall prove to
have been incorrect in a material respect
when made or deemed made.
(d) A Credit Party (or any of its
subsidiaries) shall fail to perform or
observe any of its financial or other
covenants under the Credit Documentation
(subject to grace periods to be agreed).
(e) Customary bankruptcy events of
default, including (i) Grupo Mexico, GMM,
Asarco or any of their subsidiaries
(except for non-material subsidiaries (to
be defined)) shall consent to the
appointment of a receiver for itself or a
substantial part of its property, (ii)
Grupo Mexico, GMM, Asarco or any of their
subsidiaries (except for non-material
subsidiaries) shall seek relief under any
applicable bankruptcy law or (iii) an
involuntary bankruptcy or like proceeding
shall have been commenced against Grupo
Mexico, GMM, Asarco or any of their
subsidiaries (except for non-material
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<PAGE>
20
subsidiaries) and such proceeding shall
not have been stayed or vacated for a
period of 60 days after the date it was
commenced.
(f) The security interest in any
collateral furnished by a Credit Party
listed above under "Guarantees and
Collateral" shall cease to be a first
priority perfected security interest as
required hereunder.
(g) Failure by a Credit Party to pay when
due (after taking into account applicable
grace periods) any unsecured or secured
indebtedness (including capitalized lease
obligations) or any default that permits
the acceleration of the maturity of any
such indebtedness and obligations or
termination of any capital lease,
aggregating in the case of all such
indebtedness and obligations an amount
equal to or exceeding threshold amounts
to be agreed.
(h) A final judgment or judgments for the
payment of money shall be entered against
Grupo Mexico, GMM, Asarco or any of their
subsidiaries (except for non-material
subsidiaries, and except, in the case of
Asarco and its subsidiaries prior to
consummation of the Tender Offer,
judgments the existence of which was
already disclosed and publicly available
(or otherwise known by officers of the
Arranger or Chase working on the
Transactions) prior to September 24,
1999) in an aggregate amount for all such
persons equal to or exceeding threshold
amounts to be agreed and which have not
been bonded, stayed or satisfied for a
period of 30 days or more.
(i) There shall occur one or more ERISA
Events which individually or in the
aggregate results in or could reasonably
be expected to result in a material
adverse change; or there shall exist an
amount of unfunded benefit liabilities
(as defined in the
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<PAGE>
21
Statement of Financial Accounting
Standards No. 87), individually or in the
aggregate for all Plans (excluding for
purposes of such computation any Plans
with respect to which assets exceed
benefit liabilities), which could
reasonably be expected to result in a
material adverse change.
(j) There shall occur a change in control
of GMM, Asmex or (after the consummation
of the Tender Offer) Asarco; or Persons
(to be identified) controlling Grupo
Mexico (I.E., having the power to elect a
majority of the members of the Board of
Directors of Grupo Mexico) on September
24, 1999, shall cease to maintain such
control.
(k) Default in the performance or
observation of any term or condition in
any material contract of Grupo Mexico,
GMM or Asarco, or any of their
subsidiaries, in each case taken as a
whole, that could reasonably be expected
to result in a material adverse change.
(l) So long as any obligations under the
A Tender Facility remain outstanding, any
Default or acceleration under the A
Tender Facility, or the R/C Facilities
(including Alternative R/C Facilities) or
the secured export note or other
long-term debt obligations of GMM (with a
threshold amount, in the case of GMM, of
$30 million).
Voting: Amendments and waivers with respect to
the Credit Documentation shall require
the approval of Lenders holding not less
than a majority of the aggregate amount
of the Loans thereunder and commitments
under the related Facilities, except that
(a) the consent of each Lender directly
affected thereby shall be required with
respect to (i) changes in the maturity of
any Loan,
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<PAGE>
22
(ii) reductions in the rate of interest
or any fee or extensions of any due date
thereof, (iii) increases in the amount or
extensions of the expiry date of any
Lender's commitment and (iv)
modifications to the pro rata provisions
of the Credit Documentation and (b) the
consent of 100% of the Lenders shall be
required with respect to (i)
modifications to any of the voting
percentages and (ii) releases of any
guarantee other than of a non-material
subsidiary (to be defined) or all or any
substantial part of the collateral.
Assignments and
Participations: The Lenders shall be permitted to assign
and sell participations in their Loans
and commitments, subject, in the case of
assignments (other than to another Lender
or to an affiliate of a Lender), to the
consent of the Administrative Agent and
Grupo Mexico (which consent in each case
shall not be unreasonably withheld,
provided that if a default shall have
occurred and be continuing Grupo Mexico's
consent shall not be necessary). In the
case of partial assignments (other than
to another Lender or to an affiliate of a
Lender of any interest in the A Tender
Facility), the minimum assignment amount
shall be $5,000,000 unless otherwise
agreed by Grupo Mexico and the
Administrative Agent. Each assignment
shall be subject to payment to the
Administrative Agent of a processing fee
of $3,500. Participants shall have the
same benefits as the Lenders from which
they acquired their participations with
respect to yield protection and increased
cost provisions. Voting rights of
participants shall be limited to those
matters with respect to which the
affirmative vote of the Lender from which
it purchased its participation would be
required as described in items (a) and
(b) of the paragraph on "Voting" above.
Pledges of Loans in accordance with
applicable law shall be permitted without
restriction.
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<PAGE>
23
Yield Protection: The Credit Documentation shall contain
customary provisions (a) protecting the
Lenders against increased costs or loss
of yield resulting from changes in
reserve, tax, capital adequacy and other
requirements of law and from the
imposition of or changes in withholding
or other taxes and (b) indemnifying the
Lenders for "breakage costs" incurred in
connection with, among other things, any
prepayment of a Eurodollar Loan (as
defined in Annex I) on a day other than
the last day of an interest period with
respect thereto.
Expenses and
Indemnification: The Borrowers shall pay (a) all
reasonable out-of-pocket expenses of the
Administrative Agent and the Arranger
associated with the syndication of the
Credit Facilities and the preparation,
execution, delivery and administration of
the Credit Documentation and any
amendment or waiver with respect thereto
(including the reasonable fees,
disbursements and other charges of
counsel) and (b) all out-of-pocket
expenses of the Administrative Agent and
(after an Event of Default) of the
Lenders (including the fees,
disbursements and other charges of
counsel) in connection with the
enforcement of the Credit Documentation.
The Administrative Agent, the Arranger
and the Lenders (and their affiliates and
their respective officers, directors,
employees, advisors and agents) will have
no liability for, and will be indemnified
and held harmless against, any loss,
liability, cost or expense incurred in
respect of the financing contemplated
hereby or the use or the proposed use of
proceeds thereof (except to the extent
resulting from the gross negligence or
willful misconduct of the indemnified
party).
Governing Law and Forum: State of New York.
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<PAGE>
24
Counsel to the Administrative
Agent and the Arranger: Milbank, Tweed, Hadley & McCloy LLP, and
Ritch, Heather y Mueller S.C.
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