SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
-------------
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
November 17, 1999
Date of Report (Date of Earliest Event Reported)
ASARCO INCORPORATED
(Exact name of Registrant as specified in its Charter)
New Jersey
(State of Incorporation)
1-164 13-4924440
(Commission File Number) (IRS Employer Id. Number)
180 Maiden Lane 10038
New York, New York (Zip Code)
(Address of principal executive offices)
(212) 510-2000
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if changed since last report)
<PAGE>
Item 1. Changes in Control of Registrant.
In connection with a tender offer by Grupo Mexico, S.A. de C.V.
("Grupo Mexico") and its wholly owned subsidiary ASMEX Corporation ("ASMEX")
for all of the outstanding shares of common stock, without par value per share,
of ASARCO Incorporated (the "Company"), on November 17, 1999, Grupo Mexico
caused a merger of ASMEX with and into the Company. Upon consummation of the
merger, the Company became a subsidiary of Grupo Mexico, and the shareholders of
the Company who did not tender their shares became entitled to receive $29.75
per share in cash. The Tender Offer was financed in part with borrowings under
the credit facilities described below. The total purchase price for the Company
was approximately $1,157 million for the tendered shares and all remaining
outstanding shares, including certain additional amounts to be paid in respect
of outstanding stock options, warrants and other expenses. Grupo Mexico
currently beneficially owns 100% of the Company's voting securities and Banco
Internacional, S.A., Institucion de Banca Multiple, Grupo Financiero Bital, S.A.
de C.V. - Fideicomiso 80985 has record ownership of approximately 11% of the
Company's voting securities.
Item 5. Other Events.
On November 12, 1999, Grupo Mexico, ASMEX, The Chase Manhattan Bank
and Chase Securities, Inc. executed a credit agreement (the "Credit Agreement")
in connection with the Tender Offer and the Company assumed the obligations of
ASMEX under the Credit Agreement upon consummation of the merger. On November
15, 1999, the Company entered into a revolving credit agreement (the "Revolving
Credit Agreement") with Grupo Mexico, The Chase Manhattan Bank and Chase
Securities, Inc. to refinance certain existing indebtedness of the Company and
to provide working capital. Copies of the Credit Agreement and the Revolving
Credit Agreement are attached hereto as exhibits and incorporated herein by
reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
Exhibit No. Description
10.1 Credit Agreement, dated as of November 10, 1999, among ASMEX,
Grupo Mexico, the Lenders Party thereto and The Chase Manhattan
Bank.
10.2 Revolving Credit Agreement, dated as of November 10, 1999,
among the Company, Grupo Mexico, the Lenders Party thereto and
The Chase Manhattan Bank.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ASARCO INCORPORATED
By: /s/ Daniel Tellechea Salido
---------------------------------
Name: Daniel Tellechea Salido
Title: Vice President and
Chief Financial Officer
Date: December 1, 1999
<PAGE>
Exhibit 10.1
================================================================================
CREDIT AGREEMENT
dated as of
November 10, 1999
among
ASMEX CORPORATION,
as Borrower
GRUPO MEXICO, S.A. DE C.V.,
as Guarantor
The LENDERS Party Hereto
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
-------------------
$817,000,000
-------------------
CHASE SECURITIES INC.,
as Sole Book Manager and Lead Arranger
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.........................................................1
SECTION 1.01. Defined Terms..........................................1
SECTION 1.02. Terms Generally.......................................25
SECTION 1.03. Accounting Terms; GAAP................................25
ARTICLE II THE CREDITS.......................................................25
SECTION 2.01. The Commitments.......................................25
SECTION 2.02. Loans and Borrowings..................................26
SECTION 2.03. Requests for Borrowings...............................26
SECTION 2.04. Funding of Borrowings.................................27
SECTION 2.05. Interest Elections....................................28
SECTION 2.06. Termination and Reduction of the Commitments..........29
SECTION 2.07. Repayment of Loans; Evidence of Debt..................29
SECTION 2.08. Prepayment of Loans...................................30
SECTION 2.09. Fees .................................................32
SECTION 2.10. Interest..............................................33
SECTION 2.11. Alternate Rate of Interest............................33
SECTION 2.12. Increased Costs.......................................34
SECTION 2.13. Break Funding Payments................................35
SECTION 2.14. Taxes. 35
SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing
of Set-offs ........................................36
SECTION 2.16. Mitigation Obligations; Replacement of Lenders........38
ARTICLE III GUARANTEE........................................................39
SECTION 3.01. The Guarantee.........................................39
SECTION 3.02. Obligations Unconditional.............................39
SECTION 3.03. Reinstatement.........................................40
SECTION 3.04. Subrogation...........................................41
SECTION 3.05. Remedies..............................................41
SECTION 3.06. Instrument for the Payment of Money...................41
SECTION 3.07. Continuing Guarantee..................................41
ARTICLE IV REPRESENTATIONS AND WARRANTIES....................................41
SECTION 4.01. Organization; Powers..................................41
SECTION 4.02. Authorization; Enforceability.........................42
SECTION 4.03. Governmental Approvals; No Conflicts..................42
SECTION 4.04. Financial Condition; No Material Adverse Change.......42
SECTION 4.05. Properties............................................43
SECTION 4.06. No Prohibition........................................43
SECTION 4.07. Environmental Matters.................................44
SECTION 4.08. Compliance with Laws and Agreements...................44
SECTION 4.09. Investment and Holding Company Status.................44
SECTION 4.10. Taxes 44
SECTION 4.11. ERISA 45
SECTION 4.12. Disclosure............................................45
SECTION 4.13. Material Agreements and Liens.........................45
SECTION 4.14. Ownership.............................................45
SECTION 4.15. Subsidiaries and Investments..........................46
SECTION 4.16. Solvency..............................................47
SECTION 4.17. Validity of Security Interests........................47
SECTION 4.18. Use of Proceeds, Etc..................................47
SECTION 4.19. Labor Relations.......................................47
ARTICLE V CONDITIONS.........................................................48
SECTION 5.01. Effective Date........................................48
SECTION 5.02. Other Conditions......................................51
ARTICLE VI AFFIRMATIVE COVENANTS.............................................52
SECTION 6.01. Financial Statements and Other Information............52
SECTION 6.02. Notices of Material Events............................54
SECTION 6.03. Existence; Conduct of Business........................54
SECTION 6.04. Payment of Obligations................................54
SECTION 6.05. Maintenance of Properties.............................55
SECTION 6.06. Insurance.............................................55
SECTION 6.07. Books and Records; Inspection Rights..................55
SECTION 6.08. Compliance with Laws..................................55
SECTION 6.09. Use of Proceeds.......................................55
SECTION 6.10. Hedging Agreements....................................55
SECTION 6.11. Utilization of Revolving Loans........................56
SECTION 6.12. Merger Covenants......................................56
SECTION 6.13. Ownership of Subsidiaries.............................56
SECTION 6.14. GMM Ratings...........................................56
SECTION 6.15. Grupo Mexico Liquidity................................56
ARTICLE VII NEGATIVE COVENANTS...............................................57
SECTION 7.01. Indebtedness..........................................57
SECTION 7.02. Liens. 58
SECTION 7.03. Fundamental Changes...................................61
SECTION 7.04. Investments...........................................63
SECTION 7.05. Restricted Payments...................................63
SECTION 7.06. Transactions with Affiliates..........................63
SECTION 7.07. Restrictive Agreements................................64
SECTION 7.08. Incorporation by Reference............................64
SECTION 7.09. Certain Financial Covenants...........................64
SECTION 7.10. Activities of Asmex...................................66
SECTION 7.11. Sale and Leaseback....................................67
SECTION 7.12. Accounting Changes....................................67
SECTION 7.13. Optional Prepayments..................................67
ARTICLE VIII EVENTS OF DEFAULT...............................................67
ARTICLE IX THE ADMINISTRATIVE AGENT..........................................71
ARTICLE X MISCELLANEOUS......................................................73
SECTION 10.01. Notices..............................................73
SECTION 10.02. Waivers; Amendments..................................74
SECTION 10.03. Expenses; Indemnity; Damage Waiver...................75
SECTION 10.04. Successors and Assigns...............................76
SECTION 10.05. Survival.............................................78
SECTION 10.06. Counterparts; Integration; Effectiveness.............78
SECTION 10.07. Severability.........................................79
SECTION 10.08. Right of Setoff......................................79
SECTION 10.09. Governing Law; Jurisdiction; Etc.....................79
SECTION 10.10. WAIVER OF JURY TRIAL.................................80
SECTION 10.11. Headings.............................................81
SECTION 10.12. Treatment of Certain Information; Confidentiality....81
SECTION 10.13. Judgment Currency....................................82
SCHEDULE I - Commitments
SCHEDULE II - Material Agreements and Liens
SCHEDULE III - Restrictive Agreements
SCHEDULE IV - Subsidiaries and Investments
SCHEDULE V - Asarco Indebtedness
SCHEDULE VI - Asarco Liens
EXHIBIT A - Form of Assignment and Acceptance
EXHIBIT B - Form of Asarco Share Pledge Agreement
EXHIBIT C - Form of GMM Share Pledge Agreement
EXHIBIT D-1 - Form of Opinion of Special New York Counsel to the Obligors
EXHIBIT D-2 - Form of Opinion of Special Mexican Counsel to the Obligors
EXHIBIT E-1 - Form of Opinion of Special New York Counsel to Chase
EXHIBIT E-2 - Form of Opinion of Special Mexican Counsel to Chase
EXHIBIT F - Form of Revolving Credit Agreement
ANNEX 1 - Form of Asarco Security Agreement
EXHIBIT G - Form of Unclaimed Funds Security Agreement
EXHIBIT H - Form of SPC Holdings Share Pledge Agreement
EXHIBIT I - Form of Inter-Creditor Agreement
EXHIBIT J - Form of Assumption Agreement
EXHIBIT K-1 - Form of Opinion of New York Counsel to the Borrower
EXHIBIT K-2 - Form of Opinion of New Jersey Counsel to the Borrower
EXHIBIT L - Form of Bital Share Pledge Agreement
<PAGE>
CREDIT AGREEMENT dated as of November 10, 1999, among: ASMEX
CORPORATION, a Delaware corporation ("Asmex" and, together with its permitted
successors and assigns (including, upon consummation of the Merger, Asarco (as
defined below)), the "Borrower"); GRUPO MEXICO, S.A. DE C.V., a SOCIEDAD ANONIMA
DE CAPITAL VARIABLE (corporation) organized and existing under the laws of
Mexico ("Grupo Mexico"); each of the LENDERS identified under the caption
"Lenders" on the signature pages hereof or which, pursuant to Section 2.16(b) or
Section 10.04, shall become a Lender hereunder (each a "Lender"); and THE CHASE
MANHATTAN BANK, as administrative agent for the Lenders (in such capacity,
together with its successors in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, Grupo Mexico and the Borrower have made an offer (the Tender
Offer referred to below) to purchase 100% of the outstanding capital stock of
ASARCO Incorporated, a New Jersey Corporation ("Asarco"), not already owned by
Grupo Mexico, and have requested that the Lenders make loans to the Borrower in
an aggregate principal amount not exceeding $817,000,000 for the purpose of
financing in part such purchase;
WHEREAS, in connection with such purchase by the Borrower of the
capital stock of Asarco, Grupo Mexico and certain Affiliates of Grupo Mexico are
to contribute approximately $430,000,000 to the equity capital of the Borrower;
and
WHEREAS, subsequent to such purchase, the Borrower is to be merged into
Asarco pursuant to the Merger Agreement referred to below, with Asarco becoming
an 89%-owned subsidiary of Grupo Mexico;
NOW, THEREFORE, the Lenders are prepared to make Loans to the Borrower
upon the terms and conditions hereof, and, accordingly, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
-----------
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans constituting such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, for the Interest Period for any Eurodollar
Borrowing, an interest rate per annum (rounded upwards, if necessary, to the
next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied
by (b) the Statutory Reserve Rate for such Interest Period.
"Administrative Agent" has the meaning assigned to such term in the
first introductory paragraph hereto.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Affiliated Party" means each of the Borrower, Grupo Mexico, Asarco and
GMM.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate for
such day plus 1% and (c) the Federal Funds Effective Rate for such day plus 1/2
of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate,
the Base CD Rate or the Federal Funds Effective Rate shall be effective from and
including the effective date of such change in the Prime Rate, the Base CD Rate
or the Federal Funds Effective Rate, as the case may be.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments or Loans hereunder represented by the
aggregate amount of such Lender's Commitments or Loans hereunder.
"Applicable Spread" means,
(a) from the date hereof to the Merger Closing Date, (i) with respect
to any ABR Loan, 3.50% per annum and (ii) with respect to any Eurodollar
Loan, 4.50% per annum, and
(b) from and after the Merger Closing Date,
with respect to any ABR Loan or Eurodollar Loan, as the case may be, the
Applicable Spread per annum set forth below under the caption "ABR Spread" or
"Eurodollar Spread", respectively, based upon the bank loan ratings by Moody's
and S&P, respectively, applicable on such date to the Index Debt:
================================================================================
INDEX DEBT ABR EURODOLLAR
CATEGORIES RATINGS SPREAD SPREAD
- --------------------------------------------------------------------------------
Category 1 Ba3 or higher/BB- or
higher 2.50% 3.50%
- --------------------------------------------------------------------------------
Category 2 B1 or lower/ B+ or
lower 2.75% 3.75%
================================================================================
For purposes of the foregoing clause (b), (i) if either Moody's or S&P
shall not have in effect a rating for the Index Debt (other than by reason of
the circumstances referred to in the last sentence of this definition), then
such rating agency shall be deemed to have established a rating in Category 2;
(ii) if the ratings established or deemed to have been established by Moody's
and S&P for the Index Debt shall fall within different Categories, the
Applicable Spread shall be based on the lower; and (iii) if the ratings
established or deemed to have been established by Moody's and S&P for the Index
Debt shall be changed (other than as a result of a change in the rating system
of Moody's or S&P), such change shall be effective as of the date on which it is
first announced by the applicable rating agency. Each change in the Applicable
Spread shall apply during the period commencing on the effective date of such
change and ending on the date immediately preceding the effective date of the
next such change. If the rating system of Moody's or S&P shall change, or if
either such rating agency shall cease to be in the business of rating corporate
debt obligations, the Borrower and the Lenders shall negotiate in good faith to
amend this definition to reflect such changed rating system or the
unavailability of ratings from such rating agency and, pending the effectiveness
of any such amendment, the Applicable Spread shall be determined by reference to
the rating most recently in effect prior to such change or cessation.
"Approved Fund" means respect to any Lender that is a fund that invests
in commercial loans, any other fund that invests in commercial loans and is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Asarco" has the meaning given to such term in the first recital
hereto.
"Asarco EBITDA" means "Consolidated Adjusted EBITDA" as that term is
defined in the Revolving Credit Agreement.
"Asarco Indentures" means (i) the Indenture dated as of October 1, 1994
between Asarco and Chemical Bank, as trustee, and (ii) the Indenture dated as of
February 1, 1993 between Asarco and Bankers Trust Company, as trustee, each as
in effect on the date hereof, and, except as otherwise specified herein, as the
same may be amended from time to time hereafter as permitted hereunder.
"Asarco Security Agreement" means a Security Agreement substantially in
the form of Annex 1 to the Revolving Credit Agreement, to be entered into
between Asarco and Chase, as Collateral Agent, as modified and supplemented and
in effect from time to time.
"Asarco Share Pledge Agreement" means the Pledge Agreement dated
November 10, 1999, among Grupo Mexico, Asmex and Chase, as Collateral Agent,
substantially in the form of Exhibit B, as modified and supplemented and in
effect from time to time.
"Asmex" has the meaning assigned to such term in the first introductory
paragraph hereto.
"Assessment Rate" means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in Dollars at the
offices of such member in the United States of America; provided that if, as a
result of any change in any law, rule or regulation, it is no longer possible to
determine the Assessment Rate as aforesaid, then the Assessment Rate shall be
such annual rate as shall be determined by the Administrative Agent to be
representative of the cost of such insurance to the Lenders.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.04), and accepted by the Administrative Agent, in the
form of Exhibit A or any other form approved by the Administrative Agent.
"Assumption Agreement" means the Assumption Agreement to be entered
into between Asarco and the Collateral Agent, substantially in the form of
Exhibit J, as modified and supplemented and in effect from time to time.
"Availability Period" means the period from and including the Effective
Date to and including the earlier of (a) the Tender Offer Closing Date and (b)
June 23, 2000.
"Banamex" means Banco Nacional de Mexico, S.A., Institucion de Banca
Multiple, Grupo Financiero Banamex-Accival, S.A. de C.V.
"Bancomer" means Bancomer, S.A., Institucion de Banca Multiple, Grupo
Financiero Bancomer, S.A. de C.V.
"Bank of America Facility" means the Credit Agreement dated September
28, 1998, among GMM, as borrower; Mexicana de Cobre, S.A. de C.V., Industrial
Minera Mexico, S.A. de C.V., Mexicana de Cananea, S.A. de C.V., Minerales
Metalicos del Norte, S.A., and Minera Mexico Internacional, Inc., as Guarantors;
Bank of America National Trust and Savings Association, as Administrative Agent;
and the other financial institutions party thereto, as in effect on the date
hereof, and, except as otherwise specified herein, as the same may be amended
from time to time hereafter as permitted hereunder.
"Base CD Rate" means, for any day, the sum of (a) the Three-Month
Secondary CD Rate for such day multiplied by the Statutory Reserve Rate for such
day plus (b) the Assessment Rate for such day.
"Bital Share Pledge Agreement" means the Pledge Agreement dated
November 10, 1999 between the Bital Trustee and Chase, as Collateral Agent,
substantially in the form of Exhibit L, as modified and supplemented and in
effect from time to time.
"Bital Share Trust" means the trust created pursuant to the Trust
Agreement Number 80985 dated September 24, 1997 between Mexico Desarollo
Industrial Minero, S.A. de C.V. (presently GMM) and Banco del Atlantico, S.A.,
Institucion de Banca Multiple, Grupo Financiero GBM (presently the Bital
Trustee) as amended to the date hereof.
"Bital Trustee" means Banco Internacional, S.A., Institucion de Banca
Multiple, Grupo Financiero Bital, S.A. de C.V., as trustee under the Bital Share
Trust.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Board of Directors" means either the board of directors of Asarco or
any duly authorized committee of that board or any directors and/or officers of
Asarco to whom that board or committee shall have duly delegated its authority.
"Borrower" has the meaning assigned to such term in the first
introductory paragraph hereto.
"Borrowing" means (a) all ABR Loans made, Converted or Continued on the
same date or (b) all Eurodollar Loans that have the same Interest Period. For
purposes hereof, the date of a Borrowing comprising Loans that have been
Converted or Continued shall be the effective date of the most recent Conversion
or Continuation of such Loans.
"Borrowing Request" means a request by the Borrower for a Borrowing in
accordance with Section 2.03.
"Business Day" means any day (a) that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed and (b) if such day relates to a borrowing of, a payment
or prepayment of principal of or interest on, a continuation or conversion of or
into, or the Interest Period for, a Eurodollar Borrowing, or to a notice by the
Borrower with respect to any such borrowing, payment, prepayment, continuation,
conversion, or Interest Period, that is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.
"Capital Expenditures" means, for any Person for any period, the
aggregate during such period of (i) all expenditures by such Person and its
Subsidiaries during such period for property, plant or equipment, including,
without limitation, renewals, improvements, replacements and capitalized
repairs, that would be reflected as additions to property, plant or equipment on
a consolidated balance sheet of such Person and its Subsidiaries prepared in
conformity with GAAP and (ii) the principal amount of all Indebtedness assumed
in connection with any such additions to property, plant or equipment. For the
purpose of this definition, the purchase price of equipment which is acquired
simultaneously with the trade-in of existing equipment owned by such Person or
any of its Subsidiaries or with insurance proceeds shall be included in Capital
Expenditures only to the extent of the gross amount of such purchase price less
the credit granted by the seller of such equipment being traded in at such time
or the amount of such proceeds, as the case may be.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Capitalization" means, with respect to any Person, an amount equal to
the sum of (a) Indebtedness of such Person and its Subsidiaries on a
consolidated basis and (b) Tangible Net Worth of such Person.
"CAPMac Agreement" means the Insurance and Reimbursement Agreement
dated as of August 1, 1997, between Capital Markets Assurance Corporation
(presently MBIA Insurance Corp.) and Mexico Desarrollo Industrial Minero, S.A.
de C.V. (presently known as GMM), as in effect on the date hereof, and, except
as otherwise specified herein, as the same may be amended from time to time
hereafter as permitted hereunder.
"Certificate of Incorporation" means the Restated Certificate of
Incorporation of Asarco dated June 24, 1998.
"Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the SEC
thereunder as in effect on the date hereof) other than Grupo Mexico, any
corporation or entity through which Grupo Mexico at any time indirectly owns or
Controls the Borrower in accordance with Section 7.03, or the Larrea Family (as
defined below), of shares representing more than 51% of the aggregate ordinary
voting power represented by the issued and outstanding capital stock of Grupo
Mexico, GMM or the Borrower, or, after the consummation of the Tender Offer, of
Asarco; (b) occupation of a majority of the seats (other than vacant seats) on
the board of directors of GMM or Grupo Mexico by Persons who were neither (i)
nominated by the board of directors of Grupo Mexico or by the Larrea Family nor
(ii) appointed by directors so nominated; or (c) the acquisition of direct or
indirect Control of Grupo Mexico by any Person or group other than the Larrea
Family. For purposes of the foregoing paragraph, the "Larrea Family" has the
meaning assigned to such term in Section 4.14(a).
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.12(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Chase" means The Chase Manhattan Bank.
"Closing Date" means the date, on or after the Effective Date, on which
the initial Loans hereunder are made to the Borrower.
"CNBV" means COMISION NACIONAL BANCARIA Y DE VALORES or any successor
thereto.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral Agent" means Chase, in its capacity as collateral agent
under the Security Documents and the Inter-Creditor Agreement, and its
successors in such capacity.
"Commitment" means, with respect to each Lender, the commitment of such
Lender to make a Loan hereunder during the Availability Period, expressed as an
amount representing the maximum principal amount of the Loan to be made by such
Lender hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.06 or 2.08(b) and (b) reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to Section 10.04. The
initial amount of each Lender's Commitment is set forth on Schedule I, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Commitment, as applicable. The initial aggregate amount of the Lenders'
Commitments is $817,000,000.
"Consolidated Adjusted EBITDA" for any period means the sum of the
amounts for such period of (a) Consolidated Net Income, plus (b) Consolidated
Interest Expense, to the extent such amount was deducted in calculating
Consolidated Net Income, plus (c) provisions for income and asset taxes and
employee profit sharing amounts, to the extent such amounts were deducted in
calculating Consolidated Net Income (other than such items (either positive or
negative) attributable to extraordinary gains or losses or to gains or losses on
sales of assets), plus (d) depreciation expense, to the extent such amount was
deducted in calculating Consolidated Net Income, plus (e) amortization expense,
to the extent such amount was deducted in calculating Consolidated Net Income,
plus (f) foreign exchange losses that are reported below the "operating income"
line on Grupo Mexico's consolidated income (loss) statements, plus (g) (i) all
non-cash items that are reported below the "operating income" line on Grupo
Mexico's consolidated income (loss) statements (including monetary losses and
equity in losses of Persons that are not consolidated Subsidiaries of Grupo
Mexico), to the extent reducing Consolidated Net Income (other than items that
will require cash payments and for which an accrual or reserve is, or is
required by GAAP to be, made) and (ii) Merger-related non-recurring charges not
exceeding $20,000,000 in the aggregate, less (h) deferred income taxes and
accrued employee profit sharing amounts (other than deferred income taxes
(either positive or negative) attributable to extraordinary and nonrecurring
gains or losses on sales of assets), less (i) foreign exchange gains that are
reported below the "operating income" line on Grupo Mexico's consolidated income
(loss) statements, and less (j) all non-cash items that are reported below the
"operating income" line on Grupo Mexico's consolidated income (loss) statement
(including monetary gains and equity in earnings of Persons that are not
consolidated Subsidiaries of Grupo Mexico), to the extent increasing
Consolidated Net Income (other than items that will result in the receipt of
cash payments), all determined on a consolidated basis for Grupo Mexico in
conformity with GAAP, provided, that, if any Subsidiary of Grupo Mexico is not a
wholly-owned Subsidiary, Consolidated Adjusted EBITDA shall be reduced (to the
extent not otherwise reduced in accordance with GAAP or otherwise reduced in
calculating Consolidated Net Income) by an amount equal to (A) the amount of the
Consolidated Net Income attributable to such Subsidiary, multiplied by (B) the
quotient of (1) the number of shares of outstanding common stock of such
Subsidiary not owned directly or indirectly on the last day of such period by
Grupo Mexico divided by (2) the total number of shares of outstanding common
stock of such Subsidiary on the last day of such period.
"Consolidated Adjusted EBITDA to Consolidated Interest Expense Ratio"
means, as at any date of determination thereof, the ratio of (a) Consolidated
Adjusted EBITDA for the preceding four fiscal quarters to (b) Consolidated
Interest Expense for the preceding four fiscal quarters.
"Consolidated Interest Expense" means, for any period, the aggregate
consolidated amount of interest accrued by Grupo Mexico and consolidated
Subsidiaries other than Southern Peru in respect of Indebtedness (including
amortization of original issue discount on any Indebtedness and the interest
portion of any deferred payment obligation, calculated in accordance with the
effective interest method of accounting); all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing; the net cost associated with interest rate or currency Hedging
Agreements; and interest paid (by any Person) with respect to Indebtedness that
is a Guarantee of or secured by any assets of Grupo Mexico or any consolidated
Subsidiary, plus, to the extent not included in such interest expense, (a)
Preferred Dividends in respect of all Redeemable Stock of Grupo Mexico held by
Persons other than Grupo Mexico or a wholly-owned Subsidiary of Grupo Mexico
whether or not declared or paid, and (b) all but the principal component of
rentals in respect of Capital Lease Obligations paid, accrued or scheduled to be
paid or to be accrued by Grupo Mexico or any consolidated Subsidiary of Grupo
Mexico during such period. All of the foregoing amounts shall be calculated on a
"gross" basis without crediting against such amounts any interest or other
investment income.
"Consolidated Net Income" for any period means the aggregate
consolidated net income (or loss) of Grupo Mexico and consolidated Subsidiaries
for such period determined in conformity with GAAP; provided, that the following
items shall be excluded in computing Consolidated Net Income (without
duplication): (a) the net income (or loss) of (i) Southern Peru and (ii) any
Person that is not a consolidated Subsidiary of Grupo Mexico, except that
Consolidated Net Income shall include the amount of any cash dividends or
distributions actually paid to Grupo Mexico or a consolidated Subsidiary of
Grupo Mexico by Southern Peru or such other Person during such period; (b) all
extraordinary gains and extraordinary losses; (c) any gains or losses
attributable to any sale of assets that are reported below the "operating loss
(profit)" line on Grupo Mexico's statement of results of operations; and (d) the
tax effect of any of the items described in clauses (a) through (c) above.
"Consolidated Net Tangible Assets" means, as at any date of
determination, the aggregate amount of assets (less applicable reserves and
other properly deductible items) after deducting therefrom (a) all current
liabilities (excluding any thereof constituting Funded Debt by reason of being
renewable or extendable) and (b) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, all as set
forth on the most recent balance sheet of Asarco and its consolidated
Subsidiaries and computed in accordance with GAAP.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.05 of a Loan of one Type as a Loan of the
same Type from one Interest Period to the next Interest Period.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.05 of one Type of Loans into another Type of Loans, which
may be accompanied by the transfer by a Lender (at its sole discretion) of a
Loan from one applicable lending office to another.
"Debt Incurrence" means the incurrence by the Borrower after the date
hereof of any Indebtedness, other than (a) Indebtedness incurred under this
Agreement and the Revolving Credit Agreement and (b) Indebtedness permitted to
be incurred under Section 7.01(b).
"Debt to Capitalization Ratio" means, for any Person at any time, the
ratio of consolidated Indebtedness of such Person and its consolidated
Subsidiaries at such time to Capitalization of such Person at such time.
"Debt to EBITDA Ratio" means, at any date, the ratio of (a)
consolidated Indebtedness of Grupo Mexico and consolidated Subsidiaries on such
date to (b) Consolidated Adjusted EBITDA for the period of four consecutive
fiscal quarters ending on such date (or if such date is not the last day of a
fiscal quarter, ending on the last day of the last fiscal quarter next preceding
such date).
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Depositary" means Citibank, N.A., in its capacity as depositary agent
under the Depositary Agreement, and its successors in such capacity.
"Depositary Agreement" means the Depositary Agreement dated September
27, 1999 between Asmex and Citibank, N.A., as depositary, as modified and
supplemented and in effect from time to time.
"Disposition" means any sale, assignment, transfer or other disposition
of any property (whether now owned or hereafter acquired) by Asarco or (prior to
the Merger) by Asmex, excluding any sale, assignment, transfer or other
disposition of property sold or disposed of in the ordinary course of business
and on ordinary business terms.
"Dollars" or "$" refers to lawful money of the United States of
America.
"Duff & Phelps" means Duff & Phelps Credit Rating Co. or any successor
thereto.
"Effective Date" means the date on which the conditions specified in
Section 5.01 are satisfied (except to the extent waived in accordance with
Section 10.02).
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any of its Subsidiaries directly
or indirectly resulting from or based upon (a) violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Equity Issuance" means (a) any issuance or sale by any issuer (as
defined below) after the Effective Date of (i) any of its capital stock, (ii)
any warrants or options exercisable in respect of its capital stock (other than
any warrants or options issued to directors, officers or employees of such
issuer pursuant to employee benefit plans established in the ordinary course of
business and any capital stock of such issuer issued upon the exercise of such
warrants or options) or (iii) any other security or instrument representing an
equity interest (or the right to obtain any equity interest) in such issuer or
(b) the receipt by any issuer after the Effective Date of any capital
contribution (whether or not evidenced by any equity security issued by the
recipient of such contribution); provided that Equity Issuance shall not include
(A) any such issuance or sale by Asmex or Asarco, as the case may be, to Grupo
Mexico or Asmex, as the case may be, or (B) any capital contribution by Grupo
Mexico or by any Affiliate of Grupo Mexico to the Borrower on or prior to the
Effective Date. As used in the foregoing paragraph, the "issuer" means each of
Asmex, Asarco, and any corporation or entity through which Grupo Mexico at any
time indirectly owns or Controls Asarco.
"Equity Rights" means, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including any shareholders' or voting trust agreements) for the issuance, sale,
registration or voting of, or securities convertible into, any additional shares
of capital stock of any class, or partnership or other ownership interests of
any type in, such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan (other than any such notice
received prior to the date of this Agreement and heretofore disclosed to the
Administrative Agent regarding the Retirement Income Plan for Hourly Rated
Employees of Asarco (and any subsequent such notice related thereto)); (f) the
incurrence by the Borrower or any of its ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal from any Plan or Multiemployer
Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice,
or the receipt by any Multiemployer Plan from the Borrower or any ERISA
Affiliate of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans constituting such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VIII.
"Exchange Act" means the Securities Exchange Act of 1934, together with
the Rules and Regulations of the SEC thereunder, as amended.
"Exchange Agent" has the meaning assigned to such term in the Exchange
Agent Agreement.
"Exchange Agent Agreement" means the Exchange Agent Agreement dated
November 8, 1999, between Grupo Mexico and Citibank, N.A., as exchange agent, as
modified and supplemented and in effect from time to time.
"Exchange Fund" has the meaning assigned to such term in the Merger
Agreement.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower or of Grupo Mexico hereunder, (a) income or franchise
Taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits Taxes imposed by the United States of America or any similar Tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.16(b)), any withholding Tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement or is attributable to such Foreign Lender's failure or
inability to comply with Section 2.14(e), except to the extent that such Foreign
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such withholding Tax
pursuant to Section 2.14(a).
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" means, with respect to any Person, the chief
financial officer, principal accounting officer, treasurer or controller of such
Person.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Funded Debt" means all indebtedness for money borrowed having a
maturity of more than 12 months from the date as of which the amount thereof is
to be determined or having a maturity of less than 12 months but by its terms
being renewable or extendable beyond 12 months from such date at the option of
Asarco.
"GAAP" means generally accepted accounting principles in the United
States of America, except in the case of each of (a) GMM, (b) Grupo Mexico, for
all accounting periods ending prior to January 1, 2000, and (c) Grupo
Ferroviario, in which case "GAAP" means generally accepted accounting principles
in Mexico.
"GMM" means Grupo Minero Mexico, S.A. de C.V., a SOCIEDAD ANONIMA DE
CAPITAL VARIABLE (corporation) organized and existing under the laws of Mexico.
"GMM Share Pledge Agreement" means the Pledge Agreement dated November
10, 1999, between Grupo Mexico, GMM and Chase, as Collateral Agent,
substantially in the form of Exhibit C, as modified and supplemented and in
effect from time to time.
"Governmental Authority" means the government of the United States of
America, or of Mexico, or of any other nation, or any political subdivision
thereof, whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.
"Grupo Ferroviario" means Grupo Ferroviario Mexicano, S.A. de C.V., a
SOCIEDAD ANONIMA DE CAPITAL VARIABLE (corporation) organized and existing under
the laws of Mexico.
"Grupo Mexico" has the meaning assigned to such term in the first
introductory paragraph hereto.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation, (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation, or (e) in respect of any Hedging Agreement. The amount of any
Guarantee shall be deemed equal to the stated or determinable amount of the
obligation in respect of which such Guarantee is made if such Guarantee is in
respect of the total stated or determinable amount thereof, or, if not stated or
if indeterminable, the maximum reasonably anticipated liability in respect
thereof, and, in respect of Hedging Agreements, shall be equal to the maximum
aggregate amount (giving effect to any netting agreements) that such Person
would be required to pay if such Hedging Agreement were terminated at such time;
provided, that the term Guarantee shall not include endorsements for collection
or deposit in the ordinary course of business.
"Guaranteed Obligations" has the meaning assigned to such term in
Section 3.01.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes, mandatorily redeemable or exchangeable stock or similar
instruments (to the extent so redeemable or exchangeable by their respective
terms prior to the Maturity Date), (c) all obligations of such Person upon which
interest charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h)
all Capital Lease Obligations of such Person, (i) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty and (j) all obligations, contingent or otherwise, of
such Person in respect of bankers' acceptances. The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Index Debt" means the Loans and the Revolving Loans.
"Inter-Creditor Agreement" means the agreement among the Obligors,
Asarco, the Administrative Agent (on behalf of the Lenders), the administrative
agent under the Revolving Credit Agreement (on behalf of the lenders
thereunder), the administrative agent on behalf of the lenders under the
Liquidity Facility (on behalf of the lenders thereunder) and the Collateral
Agent, substantially in the form of Exhibit I, as modified and supplemented and
in effect from time to time.
"Interest Election Request" means a request by the Borrower to Convert
or Continue a Borrowing in accordance with Section 2.05.
"Interest Payment Date" means (a) with respect to any ABR Loan, each
Quarterly Date and (b) with respect to any Eurodollar Loan, the last day of each
Interest Period therefor and, in the case of any Interest Period of more than
three months' duration, each day prior to the last day of such Interest Period
that occurs at three-month intervals after the first day of such Interest
Period.
"Interest Period" means:
(a) for any Borrowing (other than an ABR Borrowing), the Interest
Period of the Loan or Loans constituting such Borrowing; and
(b) for any Eurodollar Loan, the period commencing on the date of such
Loan and ending on the numerically corresponding day in the calendar month
that is one, two, three or six months thereafter, as specified in the
applicable Borrowing Request or Interest Election Request;
provided, that (i) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day, (ii) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period and
(iii) no Interest Period may extend beyond the Maturity Date. For purposes
hereof, the date of a Loan initially shall be the date on which such Loan is
made and thereafter shall be the effective date of the most recent Conversion or
Continuation of such Loan.
"Investment" means, for any Person: (a) the acquisition (whether for
cash, property, services or securities or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
of any other Person or any agreement to make any such acquisition (including any
"short sale" or any sale of any securities at a time when such securities are
not owned by the Person entering into such sale); (b) the making of any deposit
with, or advance, loan or other extension of credit to, any other Person
(including the purchase of property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such property to
such Person), but excluding any such advance, loan or extension of credit having
a term not exceeding 90 days arising in connection with the sale of inventory or
supplies by such Person in the ordinary course of business; (c) the entering
into of any Guarantee of, or other contingent obligation with respect to,
Indebtedness of any other Person and (without duplication) any amount committed
to be advanced, lent or extended to such Person; or (d) the entering into of any
Hedging Agreement.
"Lenders" has the meaning assigned to such term in the first
introductory paragraph hereto.
"LIBO Rate" means, for the Interest Period for any Eurodollar
Borrowing, the rate appearing on Page 3750 of the Telerate Service (or on any
successor or substitute page of such Service, or any successor to or substitute
for such Service, providing rate quotations comparable to those currently
provided on such page of such Service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates
applicable to Dollar deposits in the London interbank market) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, as the rate for the offering of Dollar deposits with a maturity
comparable to such Interest Period. In the event that such rate is not available
at such time for any reason, then the LIBO Rate for such Interest Period shall
be the rate at which Dollar deposits of $5,000,000 and for a maturity comparable
to such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Liquidity Facility" means a revolving credit facility in an amount up
to $150,000,000 provided to Grupo Mexico for the purpose of making equity
Investments in GMM and Asarco under an agreement with lenders and Chase, as
administrative agent.
"Loan Documents" means, collectively, this Agreement and the Security
Documents.
"Loans" means the loans made by the Lenders to the Borrower pursuant to
this Agreement.
"Material Adverse Effect" means a material adverse effect on, (a) prior
to the consummation of the Merger, (i) 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, without limitation, any material change, prior to the consummation
of the Tender Offer, in the 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 be
reasonably 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 (a)(i), (ii) the validity or enforceability
of this Agreement or any of the other Loan Documents or the rights and remedies
of the Administrative Agent, the Collateral Agent or the Lenders thereunder or
(iii) the Transactions; and (b) after the consummation of the Merger, (i) 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, (ii) the validity or enforceability
of any of the Loan Documents or (iii) the rights and remedies of the
Administrative Agent, the Collateral Agent and the Lenders thereunder.
"Material Indebtedness" means Indebtedness (other than the Loans), or
obligations in respect of one or more Hedging Agreements, of any one or more of
Grupo Mexico, the Borrower, GMM or any Subsidiary of any thereof in an aggregate
principal amount exceeding (a) in the case of Grupo Mexico, $5,000,000, (b) in
the case of GMM, $30,000,000, (c) in the case of the Borrower, $25,000,000 and
(d) in the case of any Subsidiaries of Grupo Mexico not referred to in (b) or
(c), $15,000,000 in the aggregate as to all such Subsidiaries. For purposes of
determining Material Indebtedness, the "principal amount" of the obligations of
any Person in respect of any Hedging Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that such Person
would be required to pay if such Hedging Agreement were terminated at such time.
"Material Subsidiary" means, at any time, any Subsidiary of GMM or any
Subsidiary of Grupo Mexico having at such time total assets or total revenue, as
of the last day of or for the preceding fiscal quarter, in excess of 10% of the
total assets or 10% of the total revenue of GMM and its Subsidiaries or Grupo
Mexico and its Subsidiaries, as the case may be, on a consolidated basis.
"Maturity Date" means the date eighteen (18) months after the date the
initial Loans are made hereunder.
"Measuring Period" means (a) the six-month period ending June 30, 2000,
(b) the nine-month period ending on September 30, 2000, and (c) at all times
thereafter, twelve-month periods.
"Merger" means the merger of Asmex with and into Asarco, with Asarco as
the surviving corporation pursuant to the Merger Agreement.
"Merger Agreement" means the Agreement and Plan of Merger among Asarco,
Grupo Mexico and Asmex dated as of October 25, 1999.
"Merger Closing Date" means the date on which the Merger shall become
effective.
"Merger Documents" means all agreements and instruments, including the
Merger Agreement, the certificates of Merger, all proxy materials and any other
document or information sent by Asarco, Asmex or Grupo Mexico to Asarco's
stockholders generally or filed with the SEC under the Exchange Act in respect
of the Merger, effecting, evidencing or governing the Merger and as the same may
be subsequently amended, modified or supplemented in accordance with the
provisions thereof and hereof.
"Mexico" means the United Mexican States.
"MMI" means Minera Mexico Internacional, Inc., a New York corporation.
"Moody's" means Moody's Investors Service, Inc. or any successor
thereto.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Available Proceeds" means:
(a) in the case of any Disposition, the amount of Net Payments received
by Asarco or Asmex in connection with such Disposition; (b) in the case of
any Equity Issuance, the aggregate amount of all cash received by any
issuer (as defined in the definition of Equity Issuance) in respect of such
Equity Issuance, net of reasonable expenses incurred by the issuer in
connection therewith;
(c) in the case of any Debt Incurrence, the aggregate amount of such
Debt Incurrence, net of reasonable expenses incurred by the Borrower in
incurring such Indebtedness; and
(d) in the case of any Share Trust Option Exercise, the aggregate
amount of all cash received by Asarco and its Subsidiaries in respect of or
as a consequence of such Share Trust Option Exercise.
"Net Payments" means, with respect to any Disposition, the aggregate
amount of all cash payments, and the fair market value of any non-cash
consideration, received by the Borrower, directly or indirectly, in connection
with such Disposition; provided that Net Payments shall be net of (i) the amount
of any legal, title and recording tax expenses, commissions and other fees and
expenses paid by Asarco or Asmex in connection with such Disposition and (ii)
any Federal, state and local income or other taxes estimated to be payable by
Asarco or Asmex as a result of such Disposition (but only to the extent that
such estimated taxes are in fact paid to the relevant Federal, state or local
governmental authority within three months of the date of such Disposition).
"Obligor" means each of the Borrower and Grupo Mexico.
"Offer to Purchase" means the Offer to Purchase for Cash All of the
Outstanding Shares of Common Stock of Asarco, by Asmex, dated September 27,
1999, as such Offer to Purchase has been modified and supplemented prior to the
date hereof.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made by any Obligor under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 6.04;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
and other like Liens imposed by law, arising in the ordinary course of
business and securing obligations that are not overdue by more than 30 days
or are being contested in compliance with Section 6.04;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) cash deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary course
of business;
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VIII; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere
with the ordinary conduct of business of the Person permitting or suffering
to exist such encumbrance;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness; and provided further that, with respect to each of Grupo
Mexico and Asmex, the term "Permitted Encumbrances" shall not include any of the
items in clauses (b), (c) or (d) or (f).
"Permitted Investments" means,
(a) for Permitted Investments denominated in Dollars:
(i) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(ii) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
Moody's;
(iii) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the United States of
America or any State thereof which has a combined capital and surplus
and undivided profits of not less than $250,000,000; and
(iv) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (i) of this
definition and entered into with a financial institution satisfying the
criteria described in clause (iii) of this definition; and
(b) for Permitted Investments denominated in Pesos or Dollars:
(i) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, Mexico (or by any
agency thereof to the extent such obligations are backed by the full
faith and credit of Mexico), in each case maturing within one year from
the date of acquisition thereof;
(ii) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of such
acquisition, the highest credit rating obtainable from S&P or from
Moody's; and
(iii) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by, and deposit accounts
issued or offered by, Banamex or Bancomer.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Pesos" or "Ps$" refers to lawful money of Mexico.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreements" means, collectively, (a) the Asarco Share Pledge
Agreement, (b) the GMM Share Pledge Agreement, (c) the SPC Holdings Share Pledge
Agreement and (d) the Bital Share Pledge Agreement.
"Preferred Dividends" for any Person means, for any period, the
quotient determined by dividing the amount of dividends and distributions paid
or accrued (whether or not declared) on preferred stock of such Person during
such period calculated in accordance with GAAP by 1 minus the actual combined
federal, state, local and foreign income tax rate of Grupo Mexico on a
consolidated basis (expressed as a decimal).
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by Chase as its prime rate in effect at its principal office
in New York City; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.
"Principal Consolidated Net Tangible Assets" means the aggregate amount
of assets comprising Principal Property (less applicable reserves and other
properly deductible items) after deducting therefrom (a) all current liabilities
attributable to Principal Property (excluding any thereof constituting Funded
Debt by reason of being renewable or extendable) and (b) all good will, trade
names, trademarks, patents, unamortized debt discount and expense and other like
intangibles attributable to Principal Property, all as set forth on the most
recent balance sheet of Asarco and its consolidated Subsidiaries and computed in
accordance with GAAP.
"Principal Property" means any smelters, refineries, mines,
concentrators or other facilities, located within the present 50 states of the
United States of America (excluding the territories and possessions of the
United States of America) and owned by Asarco or any Subsidiary of Asarco, in
each case the gross book value (without deduction of any depreciation reserves)
of which on the date as of which the determination is being made exceeds 3% of
Consolidated Net Tangible Assets, other than any such facility or portion
thereof which is pollution control or other equipment or facility financed by
obligations issued by a State or local government unit; provided, however, that
Principal Property shall not include any smelters, refineries, mines,
concentrators or facilities or any portions thereof which the Board of Directors
of Asarco declares by resolution are not of material importance to the total
business conducted by Asarco and its Subsidiaries as an entirety.
"Process Agent" has the meaning assigned to such term in Section
10.09(d).
"Quarterly Dates" means, initially, the date of the three-month
anniversary of the date the initial Loans are made hereunder; and, thereafter,
the last day of each consecutive three-month period thereafter.
"Receivables" means receivables, chattel paper, instruments, documents
or intangibles evidencing or relating to the right to payment of money.
"Redeemable Stock" of any Person means any capital stock of such Person
that by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable) or otherwise (including upon the occurrence of
any event) matures or is required to be redeemed (pursuant to any sinking fund
obligation or otherwise) or is convertible into or exchangeable for Indebtedness
or is redeemable at the option of the holder thereof, in whole or in part, at
any time on or prior to the Maturity Date; provided, however, that shares of
variable capital stock that have only statutory rights of redemption under
Mexican law shall not be considered "Redeemable Stock" until such rights are
exercised.
"Register" has the meaning set forth in Section 10.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having outstanding Loans
and unused Commitments representing more than 50% of the sum of the total
outstanding Loans and unused Commitments at such time.
"Responsible Officer" means the chief executive officer or the
president of the Borrower, or any other officer having substantially the same
authority and responsibility; or, with respect to compliance with financial
covenants, the chief financial officer or the treasurer of the Borrower, or any
other officer having substantially the same authority and responsibility.
"Restricted Payment" means (a) any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock of Grupo Mexico, or (b) any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such shares of capital stock of Grupo Mexico or any option,
warrant or other right to acquire any such shares of capital stock of Grupo
Mexico.
"Revolving Credit Agreement" means the Revolving Credit Agreement to be
entered into among Asarco, Grupo Mexico, Chase, as administrative agent
thereunder, and the lenders party thereto, substantially in the form of Exhibit
F, as modified and supplemented and in effect from time to time.
"Revolving Loans" has the meaning given to such term in the Revolving
Credit Agreement.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill,
Inc. or any successor thereto.
"SEC" means the Securities and Exchange Commission or any successor
thereto.
"Security Documents" means, collectively, the Asarco Security
Agreement, the Unclaimed Funds Security Agreement, the Pledge Agreements and all
Uniform Commercial Code financing statements required by the Asarco Security
Agreement, the Unclaimed Funds Security Agreement or the Pledge Agreements to be
filed with respect to the security interests created pursuant to the Asarco
Security Agreement, the Unclaimed Funds Security Agreement or the Pledge
Agreements.
"SEN Facility" means the Trust Indenture, Security Agreement and
Guaranty dated as of November 20, 1995, among Grupo Mexico Export Master Trust
No. 1, acting by and through The Bank of New York as Trustee, as Issuer of
Secured Export Notes; Mexico Desarollo Industrial Minero, S.A. de C.V.
(presently GMM), as Issuer of Medimsa Notes; Industrial Minera Mexico, S.A. de
C.V., Minera Mexico Internacional, Inc., Mexicana de Cobre, S.A. de C.V.,
Minerales Metalicos del Norte, S.A. de C.V., and Mexicana de Cananea, S.A. de
C.V., as Guarantors and as Principal Subsidiaries; and Chemical Bank, as
Collateral Agent, as supplemented by the Series Supplement No. 1 and Series
Supplement No. 2 thereto dated October 28, 1996 and August 28, 1997, and as
amended by Section 4.3(f) of the CAPMac Agreement, respectively, all as in
effect on the date hereof, and, except as otherwise specified herein, as the
same may be amended from time to time hereafter as permitted hereunder.
"Share Trust Option Exercise" means the exercise by the holder of
options relating to capital stock of Grupo Mexico pursuant to the option
agreement referred to in the Trust Agreement No. 12-816-1 dated August 4, 1994
among: ASARCO Incorporated, Asarco de Mexico (Delaware) Inc., Asarco (Delaware)
Incorporated, and Mexican Mine Holdings, Inc., as shareholders of Grupo Mexico,
S.A. de C.V.; Banco Nacional de Mexico, S.A., Division Fiduciaria, Grupo
Financiero Banamex Accival; and Mr. German Larrea Mota-Velasco.
"Significant Subsidiary" means any consolidated Subsidiary of Asarco
whose assets comprise 1 1/2% or more of the consolidated total assets of Asarco
and its consolidated Subsidiaries, as reflected in the latest consolidated
balance sheet delivered to the Lenders pursuant to Section 6.01.
"Solvent" means, with respect to any Person on a particular date, that
on such date (a) the fair market value of the property of such Person is greater
than the total amount of its liabilities, (b) the present fair salable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (c) such Person does not believe that it will incur debts or
liabilities beyond its ability to pay as such debts and liabilities mature and
(d) such Person is not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which its property would constitute an
unreasonably small capital.
"Southern Peru" means Southern Peru Copper Corporation, a Delaware
corporation.
"SPC Holdings Share Pledge Agreement" means the Pledge Agreement dated
November 10, 1999, between Asarco and Chase, as Collateral Agent, substantially
in the form of Exhibit H, as modified and supplemented and in effect from time
to time.
"Specialty Chemicals and Aggregates Business" means Enthone-OMI, Inc.
(a Delaware corporation), Enthone, Incorporated (a New York corporation), AR
Mexican Holdings, Inc. (a Delaware corporation), and American Limestone Company
(a Delaware corporation).
"Statutory Reserve Rate" means, for any day (or for the Interest Period
for any Eurodollar Borrowing), a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves), expressed as a decimal,
established by the Board to which the Administrative Agent is subject on such
day (or, with respect to an Interest Period, the denominator of which is the
number one minus the arithmetic mean of such aggregates for the days in such
Interest Period) (a) with respect to the Base CD Rate, for new negotiable
nonpersonal time deposits in Dollars of over $100,000 with maturities
approximately equal to three months and (b) with respect to the Adjusted LIBO
Rate, for eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent, provided that in the
case of Grupo Mexico, "Unrestricted Subsidiaries" (as defined in Section
7.02(a)(vii)) shall not otherwise be treated in this Agreement as Subsidiaries
of Grupo Mexico.
"Tangible Net Worth" means, as at any date for any Person, the sum for
such Person and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following:
(a) the amount of capital stock; plus
(b) the amount of surplus and retained earnings (or, in the case of a
surplus or retained earnings deficit, minus the amount of such deficit);
minus
(c) the sum of the following: cost of treasury shares and the book
value of all assets that should be classified as intangibles (without
duplication of deductions in respect of items already deducted in arriving
at surplus and retained earnings) but in any event including goodwill,
minority interests, research and development costs, trademarks, trade
names, copyrights, patents and franchises, unamortized debt discount and
expense, all reserves and any write-up in the book value of assets
resulting from a revaluation thereof subsequent to December 31, 1998.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Tender Offer" means the transactions contemplated by the Offer to
Purchase that are to take place either prior to or substantially simultaneously
with the Effective Date.
"Tender Offer Closing Date" means the date of consummation of the
Tender Offer and payment for the shares of Asarco tendered to Asmex pursuant
thereto.
"Tender Offer Documents" means the Offer to Purchase, the Schedule
14D-1 filed by Asmex and Grupo Mexico, the Schedule 14D-9 filed by Asarco and
all exhibits thereto and related documents filed by Asmex or Grupo Mexico with
the SEC or distributed to the stockholders of Asarco, in each case prior to the
date of this Agreement and shall include, in any event, any Merger Documents
delivered to the Lenders prior to the date of this Agreement.
"Three-Month Secondary CD Rate" means, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day is not a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day) or, if such rate is not so reported on such day or such
next preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 a.m., New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
"Transaction Documents" means, collectively, the Loan Documents, the
Offer to Purchase and the Merger Agreement.
"Transactions" means the execution, delivery and performance by each
Obligor of this Agreement and the other Loan Documents to which such Obligor is
intended to be a party, the borrowing of Loans and the use of the proceeds
thereof, the Tender Offer and the Merger.
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans constituting such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Unclaimed Funds Security Agreement" means a Security Agreement dated
November 10, 1999, between the Borrower and the Collateral Agent, substantially
in the form of Exhibit G, as modified and supplemented and in effect from time
to time.
"U.S. Registered Note Indenture" means the Indenture dated as of March
31, 1998 between GMM and The Bank of New York, as trustee thereunder, as in
effect on the date hereof, and, except as otherwise specified herein, as the
same may be amended from time to time hereafter as permitted hereunder.
"U.S. Registered Note Indebtedness" means GMM's and the Guarantors' (as
defined therein) Indebtedness in respect of the $375,000,000 (original principal
amount) 8.25% Series A Guaranteed Senior Notes Due 2008 and the $125,000,000
(original principal amount) 9.25% Series B Guaranteed Senior Notes Due 2028
issued thereunder.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.03. Accounting Terms; GAAP . Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
THE CREDITS
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SECTION 2.01. The Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees to make one Loan to the Borrower during the
Availability Period in a principal amount not exceeding such Lender's
Commitment. Amounts prepaid or repaid in respect of the Loans may not be
reborrowed.
SECTION 2.02. Loans and Borrowings.
(a) Obligations of Lenders. The Loan by each Lender shall be made as
part of a Borrowing consisting of Loans of the same Type made by the Lenders
ratably in accordance with their respective Commitments. The failure of any
Lender to make any Loan required to be made by it shall not relieve any other
Lender of its obligations hereunder; provided that the Commitments of the
Lenders are several and no Lender shall be responsible for any other Lender's
failure to make Loans as required.
(b) Type of Loans. Subject to Section 2.11, each Borrowing shall be
constituted entirely of ABR Loans or of Eurodollar Loans as the Borrower may
request in accordance herewith. Each Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance with the
terms of this Agreement.
(c) Limitation on Number of Borrowings. Borrowings of more than one
Type may be outstanding at the same time; provided that there shall not at any
time be more than a total of 1 Eurodollar Borrowing outstanding.
(d) Limitations on Interest Periods. Notwithstanding any other
provision of this Agreement, the Borrower shall not be entitled to request (or
to elect to Convert to or Continue as a Eurodollar Borrowing) any Borrowing if
the Interest Period requested therefor would end after the Maturity Date.
SECTION 2.03. Requests for Borrowings.
(a) Notice by the Borrower. To request a Borrowing, the Borrower shall
notify the Administrative Agent of such request by telephone (i) in the case of
a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of the proposed Borrowing or (ii) in the case of
an ABR Borrowing, not later than 11:00 a.m. (other than the initial Loan, which
shall be no later than 2:00 p.m.), New York City time, one Business Day before
the date of the proposed Borrowing. Each such telephonic Borrowing Request shall
be irrevocable and shall be confirmed promptly by hand delivery or telecopy to
the Administrative Agent of a written Borrowing Request in a form approved by
the Administrative Agent and signed by the Borrower.
(b) Content of Borrowing Requests. Each telephonic and written
Borrowing Request shall specify the following information in compliance with
Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the Interest Period
therefor, which shall be a period contemplated by the definition of the
term "Interest Period" and permitted under Section 2.02(d); and
(v) in the case of the initial Borrowing hereunder, the location
and number of the Borrower's accounts to which funds are to be
disbursed, which shall comply with the requirements of Section 2.04,
and the calculations specifying the portion of the proceeds of such
Borrowing to be credited to each such account (in accordance with
Section 2.04).
(c) Notice by the Administrative Agent to the Lenders. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
(d) Failure to Elect. If no election as to the Type of a Borrowing is
specified, then the requested Borrowing shall be an ABR Borrowing. If no
Interest Period is specified with respect to any requested Eurodollar Borrowing,
then the requested Borrowing shall have a one-month Interest Period.
SECTION 2.04. Funding of Borrowings.
(a) Funding by Lenders. Subject to the terms hereof, each Lender shall
make the Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 12:00 noon, New York City time, to
the account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders. The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts so received, in like
funds, (i) in an amount equal to (A) the number of shares of capital stock of
Asarco tendered under the Tender Offer, as notified by the Depositary to Asmex
pursuant to the Depositary Agreement, multiplied by $29.75, minus (B)
$330,000,000, to the account of the Borrower maintained with the Depositary (in
accordance with the Depositary Agreement) in New York City and designated by the
Borrower in the applicable Borrowing Request, (ii) in an amount equal to the
number of shares of capital stock of Asarco not tendered under the Tender Offer
and not owned by the Borrower or Grupo Mexico, multiplied by $29.75, to the
account of the Borrower maintained with the Exchange Agent (in accordance with
the Exchange Agent Agreement) in New York City and designated by the Borrower in
the applicable Borrowing Request, and (iii) in an amount equal to the remaining
balance of the proceeds of the initial Loans, to the account of the Borrower
maintained with the Administrative Agent.
(b) Presumption by the Administrative Agent. Unless the Administrative
Agent shall have received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender's share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Lender, the Federal Funds
Effective Rate or (ii) in the case of the Borrower, the interest rate applicable
to ABR Loans. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender's Loan included in such Borrowing.
SECTION 2.05. Interest Elections.
(a) Elections by the Borrower. The Loans constituting each Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurodollar Borrowing, shall have the Interest Period
specified in such Borrowing Request. Thereafter, the Borrower may elect to
Convert such Borrowing to a Borrowing of a different Type or to Continue such
Borrowing as a Borrowing of the same Type and, in the case of a Eurodollar
Borrowing, may elect the Interest Period therefor, all as provided in this
Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans constituting such
Borrowing, and the Loans constituting each such portion shall be considered a
separate Borrowing.
(b) Notice of Elections. To make an election pursuant to this Section,
the Borrower shall notify the Administrative Agent of such election by telephone
by the time that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such election to
be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.
(c) Content of Interest Election Requests. Each telephonic and written
Interest Election Request shall specify the following information in compliance
with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) of this paragraph shall be specified
for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing
or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period therefor after giving effect to such election, which
shall be a period contemplated by the definition of the term "Interest
Period" and permitted under Section 2.02(d).
(d) Notice by the Administrative Agent to the Lenders. Promptly
following receipt of an Interest Election Request, the Administrative Agent
shall advise each Lender of the details thereof and of such Lender's portion of
each resulting Borrowing.
(e) Failure to Elect; Events of Default. If the Borrower fails to
deliver a timely and complete Interest Election Request with respect to a
Eurodollar Borrowing prior to the end of the Interest Period therefor, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be Converted to an ABR Borrowing. Notwithstanding
any contrary provision hereof, if an Event of Default has occurred and is
continuing and the Administrative Agent, at the request of the Required Lenders,
so notifies the Borrower, then, so long as an Event of Default is continuing (i)
no outstanding Borrowing may be Converted to or Continued as a Eurodollar
Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be Converted
to an ABR Borrowing at the end of the Interest Period therefor.
SECTION 2.06. Termination and Reduction of the Commitments.
(a) Scheduled Termination. Unless previously terminated, the
Commitments shall terminate at 12:01 p.m., New York City time, on the last day
of the Availability Period.
(b) Voluntary Termination or Reduction. The Borrower may at any time
terminate, or from time to time reduce, the Commitments; provided that each
reduction of the Commitments pursuant to this Section shall be in an amount that
is $5,000,000 or a larger multiple of $1,000,000.
(c) Notice of Voluntary Termination or Reduction. The Borrower shall
notify the Administrative Agent of any election to terminate or reduce the
Commitments under paragraph (b) of this Section at least three Business Days
prior to the effective date of such termination or reduction, specifying such
election and the effective date thereof. Promptly following receipt of any
notice, the Administrative Agent shall advise the Lenders of the contents
thereof. Each notice delivered by the Borrower pursuant to this Section shall be
irrevocable.
(d) Effect of Termination or Reduction. Any termination or reduction of
the Commitments shall be permanent. Each reduction of the Commitments shall be
made ratably among the Lenders in accordance with their respective Commitments.
SECTION 2.07. Repayment of Loans; Evidence of Debt.
(a) Repayment. The Borrower hereby unconditionally promises to pay to
the Administrative Agent for account of the Lenders the outstanding principal
amount of the Loans on the Maturity Date.
(b) Manner of Payment. Prior to any prepayment of any Borrowings
hereunder that does not repay the Loans in full, the Borrower shall select the
Borrowing or Borrowings to be prepaid and shall notify the Administrative Agent
by telephone (confirmed by telecopy) of such selection not later than 11:00
a.m., New York City time, three Business Days before the scheduled date of such
prepayment in the case of a Eurodollar Borrowing and one Business Day before the
scheduled date of such prepayment in the case of an ABR Borrowing. If the
Borrower fails to make a timely selection of the Borrowing or Borrowings to be
prepaid, such payment shall be applied, first, to pay any outstanding ABR
Borrowings and, second, to other Borrowings in the order of the remaining
duration of their respective Interest Periods (the Borrowing with the shortest
remaining Interest Period to be repaid first). Each payment of a Borrowing shall
be applied ratably to the Loans included in such Borrowing.
(c) Maintenance of Records by Lenders. Each Lender shall maintain in
accordance with its usual practice records evidencing the indebtedness of the
Borrower to such Lender resulting from each Loan made by such Lender, including
the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.
(d) Maintenance of Records by the Administrative Agent. The
Administrative Agent shall maintain records in which it shall record (i) the
amount of each Loan made hereunder, the Type thereof and each Interest Period
therefor, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent hereunder for account of
the Lenders and each Lender's share thereof.
(e) Effect of Entries. The entries made in the records maintained
pursuant to paragraph (c) or (d) of this Section shall be prima facie evidence
of the existence and amounts of the obligations recorded therein; provided that
the failure of any Lender or the Administrative Agent to maintain such records
or any error therein shall not in any manner affect the obligation of the
Borrower to repay the Loans in accordance with the terms of this Agreement.
(f) Promissory Notes. Any Lender may request that the Loan made by it
be evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 10.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.08. Prepayment of Loans.
(a) Optional Prepayments. The Borrower shall have the right at any time
and from time to time to prepay any Borrowing in whole or in part, subject to
the requirements of this Section.
(b) Mandatory Prepayments. The Borrower will prepay the Loans, and any
then-unborrowed Commitments shall be subject to automatic reduction, as follows:
(i) Equity Issuance. Upon any Equity Issuance, the Borrower shall
prepay the Loans, and any then-unborrowed Commitments shall be subject
to automatic reduction, in an aggregate amount equal to 100% of the Net
Available Proceeds thereof, such prepayment and reduction to be
effected in each case in the manner and to the extent specified in
clause (vii) of this paragraph.
(ii) Sale of Assets. Without limiting the obligation of the
Borrower to obtain the consent of the Required Lenders pursuant to
Section 7.03 to any Disposition not otherwise permitted hereunder, the
Borrower shall prepay the Loans, and any then-unborrowed Commitments
shall be subject to automatic reduction, in an aggregate amount equal
to 100% of the Net Available Proceeds of any Disposition, such
prepayment and reduction to be effected in each case in the manner and
to the extent specified in clause (vii) of this paragraph.
(iii) Debt Incurrence. Upon any Debt Incurrence, the Borrower
shall prepay the Loans, and any then-unborrowed Commitments shall be
subject to automatic reduction, in an aggregate amount equal to 100% of
the Net Available Proceeds thereof, such prepayment and reduction to be
effected in each case in the manner and to the extent specified in
clause (vii) of this paragraph.
(iv) Sale of Capital Stock. Upon any sale by the Borrower or by
Grupo Mexico after the Effective Date of (A) any capital stock of
Asarco or of any corporation or entity (herein called an "intermediary
holding company") through which Grupo Mexico at any time indirectly
owns or Controls Asarco, (B) any warrants or options exercisable in
respect of capital stock of Asarco or of any intermediary holding
company (other than any warrants or options issued to directors,
officers or employees of Asarco or of any intermediary holding company
pursuant to employee benefit plans established in the ordinary course
of business and any capital stock of Asarco or of any intermediary
holding company issued upon the exercise of such warrants or options)
or (C) any other security or instrument representing an equity interest
(or the right to obtain any equity interest) in Asarco or in any
intermediary holding company, in each case, the Borrower shall prepay
the Loans, and any then-unborrowed Commitments shall be subject to
automatic reduction, in an amount equal to 100% of the aggregate cash
proceeds of such sale (net of reasonable expenses incurred in
connection with such sale), such prepayment and reduction to be
effected in each case in the manner and to the extent specified in
clause (vii) of this paragraph.
(v) Exercise of Share Trust Option. Upon any Share Trust Option
Exercise, the Borrower shall prepay the Loans, and any then-unborrowed
Commitments shall be subject to automatic reduction, in an amount equal
to 100% of the Net Available Proceeds thereof, such prepayment and
reduction to be effected in each case in the manner and to the extent
specified in clause (vii) of this paragraph.
(vi) Exchange Fund. Upon the termination of the Exchange Fund and
the delivery to the Borrower of undistributed amounts deposited therein
in accordance with the Exchange Agent Agreement and the Merger
Agreement, the Borrower shall prepay the Loans, and any then-unborrowed
Commitments shall be subject to automatic reduction, in an amount equal
to 100% of the aggregate cash amount so delivered, such prepayment and
reduction to be effected in the manner and to the extent specified in
clause (vii) of this paragraph.
(vii) Application. Prepayments of Loans and reductions of
unborrowed Commitments pursuant to this paragraph (b) shall be effected
not later than one Business Day following the event giving rise to the
requirement to prepay Loans and reduce Commitments hereunder, and shall
be applied as follows: (A) if such prepayment and reduction is required
to be made before the Commitments have terminated, first to reduce the
aggregate amount of the Commitments and second to prepay the Loans, and
(B) if such prepayment and reduction is required to be made after the
Commitments have terminated or have been borrowed, to prepay the Loans.
(c) Minimum Amounts; Notices, Etc. The Borrower shall notify the
Administrative Agent by telephone (confirmed by telecopy) of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later
than 11:00 a.m., New York City time, three Business Days (except, in the case of
a mandatory prepayment under Section 2.08(b), one Business Day) before the date
of prepayment or (ii) in the case of prepayment of an ABR Borrowing, not later
than 11:00 a.m., New York City time, one Business Day before the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date, the principal amount of each Borrowing or portion thereof to be
prepaid and, in the case of a mandatory prepayment, a reasonably detailed
calculation of the amount of such prepayment. Promptly following receipt of any
such notice relating to a Borrowing, the Administrative Agent shall advise the
Lenders of the contents thereof. Each voluntary partial prepayment of any
Borrowing shall be in an aggregate amount of $10,000,000 or a larger multiple of
$5,000,000. Each prepayment of a Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.10 and shall be made in the manner
specified in Section 2.07(b).
SECTION 2.09. Fees.
(a) Commitment Fee. The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee, which shall accrue at a
rate per annum equal to 0.50% on the average daily unused amount of the
Commitment of such Lender for the period from and including the date hereof to
but not including the earliest of the Closing Date, the date such Commitment
terminates and the last day of the Availability Period. Accrued commitment fees
shall be payable on each Quarterly Date (commencing on the first such date to
occur after the date hereof), on the earlier of the Closing Date and the date
the Commitments terminate, and on the last day of the Availability Period. All
commitment fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).
(b) Administrative Agent Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon between the Borrower and the Administrative
Agent.
(c) Payment of Fees. All fees payable hereunder shall be paid on the
dates due, in immediately available funds, to the Administrative Agent for
distribution, in the case of commitment fee, to the Lenders entitled thereto.
Fees paid shall not be refundable under any circumstances.
SECTION 2.10. Interest.
(a) ABR Loans. The Loans constituting each ABR Borrowing shall bear
interest at a rate per annum equal to the Alternate Base Rate plus the
Applicable Spread.
(b) Eurodollar Loans. The Loans constituting each Eurodollar Borrowing
shall bear interest at a rate per annum equal to the Adjusted LIBO Rate for the
Interest Period for such Borrowing plus the Applicable Spread.
(c) Default Interest. Notwithstanding the foregoing, if any principal
of or interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration,
by mandatory prepayment or otherwise, such overdue amount shall bear interest,
after as well as before judgment, at a rate per annum equal to (i) in the case
of overdue principal of any Loan, 2% plus the rate otherwise applicable to such
Loan as provided above or (ii) in the case of any other amount, 2% plus the rate
that would then be applicable to ABR Loans as provided in paragraph (a) of this
Section if any ABR Loans were outstanding.
(d) Payment of Interest. Accrued interest on each Loan shall be payable
in arrears on each Interest Payment Date for such Loan; provided that (i)
interest accrued pursuant to paragraph (c) of this Section shall be payable on
demand, (ii) in the event of any repayment or prepayment of any Loan, accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment and (iii) in the event of any Conversion of any
Eurodollar Borrowing prior to the end of the Interest Period therefor, accrued
interest on such Borrowing shall be payable on the effective date of such
Conversion.
(e) Computation. All interest hereunder shall be computed on the basis
of a year of 360 days, except that interest computed by reference to the
Alternate Base Rate at times when the Alternate Base Rate is based on the Prime
Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable Alternate
Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
SECTION 2.11. Alternate Rate of Interest. If prior to the commencement
of the Interest Period for any Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders of making or maintaining their
respective Loans included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or the
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and such Borrowing (unless prepaid) shall be Continued as, or Converted to, an
ABR Borrowing and (ii) if any Borrowing Request requests a Eurodollar Borrowing,
such Borrowing shall be made as an ABR Borrowing.
SECTION 2.12. Increased Costs.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any
other condition affecting this Agreement or Eurodollar Loans made by
such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.
(b) Capital Requirements. If any Lender determines that any Change in
Law regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender's capital or on the capital of such Lender's
holding company, if any, as a consequence of this Agreement or the Loans made by
such Lender to a level below that which such Lender or such Lender's holding
company could have achieved but for such Change in Law (taking into
consideration such Lender's policies and the policies of such Lender's holding
company with respect to capital adequacy), then from time to time the Borrower
will pay to such Lender such additional amount or amounts as will compensate
such Lender or such Lender's holding company for any such reduction suffered.
(c) Certificates from Lenders. A certificate of a Lender setting forth
the amount or amounts necessary to compensate such Lender or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's right to demand such compensation; provided that the Borrower
shall not be required to compensate a Lender pursuant to this Section for any
increased costs or reductions incurred more than six months prior to the date
that such Lender notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's intention to claim
compensation therefor; provided further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the six-month period
referred to above shall be extended to include the period of retroactive effect
thereof.
SECTION 2.13. Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period therefor (including as a result of an Event of Default), (b) the
conversion of any Eurodollar Loan other than on the last day of an Interest
Period therefor, (c) the failure to borrow, Convert, Continue or prepay any Loan
on the date specified in any notice delivered pursuant hereto (regardless of
whether such notice is permitted to be revocable under Section 2.08(c) and is
revoked in accordance herewith), or (d) the assignment as a result of a request
by the Borrower pursuant to Section 2.16 of any Eurodollar Loan other than on
the last day of an Interest Period therefor, then, in any such event, the
Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, the loss to any
Lender attributable to any such event shall be deemed to include an amount
determined by such Lender to be equal to the excess, if any, of (i) the amount
of interest that such Lender would pay for a deposit equal to the principal
amount of such Loan for the period from the date of such payment, conversion,
failure or assignment to the last day of the then current Interest Period for
such Loan (or, in the case of a failure to borrow, Convert or Continue, the
duration of the Interest Period that would have resulted from such borrowing,
Conversion or Continuation) if the interest rate payable on such deposit were
equal to the Adjusted LIBO Rate for such Interest Period, over (ii) the amount
of interest that such Lender would earn on such principal amount for such period
if such Lender were to invest such principal amount for such period at the
interest rate that would be bid by such Lender (or an affiliate of such Lender)
for Dollar deposits from other banks in the eurodollar market at the
commencement of such period. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
SECTION 2.14. Taxes.
(a) Payments Free of Taxes. Any and all payments by or on account of
any obligation of the Obligors hereunder or under any other Loan Document shall
be made free and clear of and without deduction for any Indemnified Taxes or
Other Taxes; provided that if any Obligor shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent or Lender (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii) such
Obligor shall make such deductions and (iii) such Obligor shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) Payment of Other Taxes by the Obligors. In addition, each Obligor
shall pay any Other Taxes (not covered by Section 2.14(a) hereof) to the
relevant Governmental Authority in accordance with applicable law.
(c) Indemnification by the Obligors. Each Obligor shall indemnify the
Administrative Agent and each Lender, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) paid by the Administrative Agent or such
Lender, as the case may be, and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
or Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Obligors by a Lender, or by the Administrative Agent
on its own behalf or on behalf of a Lender, shall be conclusive absent manifest
error.
(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by any Obligor to a Governmental Authority,
such Obligor shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) Foreign Lenders. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which the Borrower is located, or under any treaty to which such jurisdiction
is a party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law or reasonably requested by the Borrower, such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate.
SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.
(a) Payments by the Obligors. Each Obligor shall make each payment
required to be made by it hereunder (whether of principal, interest or fees, or
under Section 2.12, 2.13 or 2.14, or otherwise) or under any other Loan Document
(except to the extent otherwise provided therein) prior to 12:00 noon, New York
City time, on the date when due, in immediately available funds, without set-off
or counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to the Administrative Agent at its offices at 270
Park Avenue, New York, New York, except as otherwise expressly provided in the
relevant Loan Document and except payments pursuant to Sections 2.12, 2.13, 2.14
and 10.03, which shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day and, in the case of any payment accruing interest, interest thereon
shall be payable for the period of such extension. All payments hereunder or
under any other Loan Document (except to the extent otherwise provided therein)
shall be made in Dollars.
(b) Application of Insufficient Payments. If at any time insufficient
funds are received by and available to the Administrative Agent to pay fully all
amounts of principal, interest and fees then due hereunder, such funds shall be
applied (i) first, to pay interest and fees then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, to pay principal then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal then due to such parties.
(c) Pro Rata Treatment. Except to the extent otherwise provided herein:
(i) each Borrowing shall be made from the Lenders, each payment of commitment
fee under Section 2.09 shall be made for account of the Lenders, and each
termination or reduction of the amount of the Commitments under Section 2.06
shall be applied to the respective Commitments of the Lenders, pro rata
according to the amounts of their respective Commitments; (ii) each Borrowing
shall be allocated pro rata among the Lenders according to the amounts of their
respective Commitments (in the case of the making of Loans) or their respective
Loans that are to be included in such Borrowing (in the case of Conversions and
Continuations of Loans); (iii) each payment or prepayment of principal of Loans
by the Borrower shall be made for account of the Lenders pro rata in accordance
with the respective unpaid principal amounts of the Loans held by them; and (iv)
each payment of interest on Loans by the Borrower shall be made for account of
the Lenders pro rata in accordance with the amounts of interest on such Loans
then due and payable to the respective Lenders.
(d) Sharing of Payments by Lenders. If any Lender shall, by exercising
any right of set-off or counterclaim or otherwise, obtain payment in respect of
any principal of or interest on any of its Loans that results in such Lender
receiving payment of a greater proportion of the aggregate amount of its Loans
and accrued interest thereon then due than the proportion received by any other
Lender, then the Lender receiving such greater proportion shall purchase (for
cash at face value) participations in the Loans of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by any Obligor pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). Each Obligor
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against such Obligor rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of such Obligor in the amount of such participation.
(e) Presumptions of Payment. Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which any payment is due
to the Administrative Agent for account of the Lenders hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders the amount due. In
such event, if the Borrower has not in fact made such payment, then each of the
Lenders severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the Federal Funds
Effective Rate.
(f) Certain Deductions by the Administrative Agent. If any Lender shall
fail to make any payment required to be made by it pursuant to Section 2.04(b)
or 2.15(e), then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for account of such Lender to satisfy such
Lender's obligations under such Sections until all such unsatisfied obligations
are fully paid.
SECTION 2.16. Mitigation Obligations; Replacement of Lenders.
(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 2.12, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for account of any
Lender pursuant to Section 2.14, then such Lender shall use reasonable efforts
to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.12 or 2.14, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation under
Section 2.12, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for account of any Lender pursuant to
Section 2.14, or if any Lender defaults in its obligation to fund Loans
hereunder, then the Borrower may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 10.04), all its interests, rights and obligations under
this Agreement to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment); provided that (i)
the Borrower shall have received the prior written consent of the Administrative
Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts)
and (iii) in the case of any such assignment resulting from a claim for
compensation under Section 2.12 or payments required to be made pursuant to
Section 2.14, such assignment will result in a reduction in such compensation or
payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.
ARTICLE III
GUARANTEE
---------
SECTION 3.01. The Guarantee. Grupo Mexico hereby unconditionally
guarantees to each Lender and the Administrative Agent and their respective
successors and assigns the prompt payment in full when due (whether at stated
maturity, by acceleration or otherwise) of the principal of and interest on the
Loans made to the Borrower and all other amounts from time to time owing to the
Lenders or the Administrative Agent by the Borrower under this Agreement and
under any of the other Loan Documents, in each case strictly in accordance with
the terms thereof (such obligations being herein collectively called the
"Guaranteed Obligations"). Grupo Mexico hereby further agrees that if the
Borrower shall fail to pay in full when due (whether at stated maturity, by
acceleration or otherwise) any of the Guaranteed Obligations, Grupo Mexico will
promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, by acceleration or otherwise) in accordance with the terms of
such extension or renewal.
SECTION 3.02. Obligations Unconditional. The obligations of Grupo
Mexico under Section 3.01 are absolute and unconditional irrespective of the
value, genuineness, validity, regularity or enforceability of the obligations of
the Borrower under this Agreement or any other agreement or instrument referred
to herein, or any substitution, release or exchange of any other guarantee of or
security for any of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section that the obligations of
Grupo Mexico hereunder shall be absolute and unconditional under any and all
circumstances. Without limiting the generality of the foregoing, it is agreed
that the occurrence of any one or more of the following shall not alter or
impair the liability of Grupo Mexico hereunder, which shall remain absolute and
unconditional as described above:
(i) at any time or from time to time, without notice to Grupo
Mexico, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or any other agreement or instrument referred to herein shall
be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this
Agreement or any other agreement or instrument referred to herein shall
be waived or any other guarantee of any of the Guaranteed Obligations
or any security therefor shall be released or exchanged in whole or in
part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of,
the Administrative Agent or any Lender or Lenders as security for any
of the Guaranteed Obligations shall fail to be perfected.
Grupo Mexico hereby expressly waives diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Administrative
Agent or any Lender exhaust any right, power or remedy or proceed against the
Borrower under this Agreement or any other agreement or instrument referred to
herein, or against any other Person under any other guarantee of, or security
for, any of the Guaranteed Obligations. Grupo Mexico also hereby expressly
waives, to the extent (if any) Grupo Mexico may be entitled thereto, the
benefits of ORDEN Y EXCUSION and of prior judgment, levy, execution and other
rights provided for in Articles 2814, 2815, 2817, 2818, 2820, 2821, 2823, 2827
and 2836 of the Civil Code for the Federal District of Mexico (CODIGO CIVIL PARA
EL DISTRITO FEDERAL), and the corresponding articles of the civil codes of the
other states of Mexico, which articles are not reproduced herein by express
declaration that the contents of said articles are known to Grupo Mexico. Grupo
Mexico also hereby irrevocably and expressly waives its rights under and the
benefits of Articles 2846 and 2847 of the Civil Code for the Federal District of
Mexico (CODIGO CIVIL PARA EL DISTRITO FEDERAL) and the corresponding articles of
the civil codes of the other states of Mexico. Grupo Mexico also hereby
irrevocably and expressly waives any requirement of judicial demand for payment,
whether under Article 2848 or Article 2849 of the Civil Code of the Federal
District of Mexico (CODIGO CIVIL PARA EL DISTRITO FEDERAL) and the corresponding
articles of the civil codes of the other states of Mexico or otherwise. All such
articles are not reproduced herein by express declaration of Grupo Mexico that
the contents of said articles are known to it.
SECTION 3.03. Reinstatement. The obligations of Grupo Mexico under this
Article shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of the Borrower in respect of the Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any of
the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy
or reorganization or otherwise, and Grupo Mexico agrees that it will indemnify
the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including fees of counsel) incurred by the Administrative Agent or
such Lender in connection with such rescission or restoration, including any
such costs and expenses incurred in defending against any claim alleging that
such payment constituted a preference, fraudulent transfer or similar payment
under any bankruptcy, insolvency or similar law.
SECTION 3.04. Subrogation. Grupo Mexico hereby agrees that until the
payment and satisfaction in full of all Guaranteed Obligations and the
expiration and termination of the Commitments of the Lenders under this
Agreement it shall not exercise any right or remedy arising by reason of any
performance by it of its guarantee in Section 3.01, whether by subrogation or
otherwise, against the Borrower or any other guarantor of any of the Guaranteed
Obligations or any security for any of the Guaranteed Obligations.
SECTION 3.05. Remedies. Grupo Mexico agrees that, as between Grupo
Mexico and the Lenders, the obligations of the Borrower under this Agreement may
be declared to be forthwith due and payable as provided in Article VIII (and
shall be deemed to have become automatically due and payable in the
circumstances provided in Article VIII) for purposes of Section 3.01
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against the Borrower and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Borrower) shall forthwith
become due and payable by Grupo Mexico for purposes of Section 3.01.
SECTION 3.06. Instrument for the Payment of Money. Grupo Mexico hereby
acknowledges that the guarantee in this Article constitutes an instrument for
the payment of money, and consents and agrees that any Lender or the
Administrative Agent, at its sole option, in the event of a dispute by Grupo
Mexico in the payment of any moneys due hereunder, shall have the right to bring
motion-action under New York CPLR Section 3213.
SECTION 3.07. Continuing Guarantee. The guarantee in this Article is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
------------------------------
Each of the Borrower and Grupo Mexico represents and warrants to the
Lenders that:
SECTION 4.01. Organization; Powers. Each of Grupo Mexico and its
Subsidiaries (including the Borrower) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.
SECTION 4.02. Authorization; Enforceability. The Transactions are
within each Obligor's corporate powers and have been duly authorized by all
necessary corporate and, if required, by all necessary shareholder action. This
Agreement has been duly executed and delivered by each Obligor and constitutes,
and each of the other Loan Documents to which it is a party when executed and
delivered by such Obligor will constitute, a legal, valid and binding obligation
of such Obligor, enforceable against each Obligor in accordance with its terms,
except as such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability affecting
the enforcement of creditors' rights and (b) the application of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
SECTION 4.03. Governmental Approvals; No Conflicts. The Transactions
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority, except for (i) those consents,
approvals, registrations, filings and actions identified in the Offer to
Purchase, all of which have been obtained or made and are in full force and
effect and (ii) recordings in respect of the Liens created pursuant to the GMM
Share Pledge Agreement, (b) will not violate any applicable law or regulation or
the charter, by-laws or other organizational documents of Grupo Mexico or any of
its Subsidiaries (including the Borrower) or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon Grupo Mexico or any of its
Subsidiaries (including the Borrower) or assets, or give rise to a right
thereunder to require any payment to be made by any such Person, and (d) except
for the Liens created pursuant to the Security Documents, will not result in the
creation or imposition of any Lien on any asset of Grupo Mexico or any of its
Subsidiaries (including the Borrower).
SECTION 4.04. Financial Condition; No Material Adverse Change.
(a) Financial Condition. Grupo Mexico has heretofore furnished to the
Lenders the following financial statements:
(i) the consolidated balance sheet and statements of income,
stockholders' equity and cash flows of each of Grupo Mexico and its
Subsidiaries, GMM and its Subsidiaries, and Grupo Ferroviario and its
Subsidiaries (A) as of and for the fiscal years ended December 31,
1997, and December 31, 1998 (except in the case of Grupo Ferroviario,
which are as of and for the fiscal year ended December 31, 1998 only),
in each case reported on by independent public accountants, and (B) as
of and for the fiscal quarter and the portion of the fiscal year ended
September 30, 1999, certified by a Financial Officer of Grupo Mexico,
GMM and Grupo Ferroviario, respectively; and
(ii) the PRO FORMA consolidated balance sheet of Grupo Mexico and
its Subsidiaries as at September 30, 1999 as if the Tender Offer, the
Merger, and the transactions contemplated by the Offer to Purchase had
occurred as at the date thereof. Such PRO FORMA balance sheet is based
on good faith, reasonable assumptions as to all factual matters and as
to the matters covered thereby.
Such financial statements in clause (i) above present fairly, in all material
respects, the financial position and results of operations and cash flows of
Grupo Mexico and its respective Subsidiaries as of such dates and for such
periods in accordance with GAAP, subject to year-end audit adjustments and the
absence of footnotes in the case of the statements referred to in clause (i) of
the first sentence of this paragraph.
(b) No Material Adverse Change. Since December 31, 1998, there has been
no material adverse change in the business, assets, operations or condition,
financial or otherwise, of Grupo Mexico and its Subsidiaries, taken as a whole,
and no event, condition, occurrence or circumstance subsists which could
reasonably be expected to have a Material Adverse Effect.
(c) Year 2000 Issues. Any reprogramming required to permit the proper
functioning, in and following the year 2000, of (i) Grupo Mexico's computer
systems and (ii) equipment containing embedded microchips (including systems and
equipment supplied by others or with which Grupo Mexico's systems interface) and
the testing of all such systems and equipment, as so reprogrammed, has been
completed in all material respects. The cost to Grupo Mexico of such
reprogramming and testing and of the reasonably foreseeable consequences of year
2000 to Grupo Mexico (including reprogramming errors and the failure of others'
systems or equipment) will not result in a Default or a Material Adverse Effect.
The computer and management information systems of Grupo Mexico and its
Subsidiaries are and, with ordinary course upgrading and maintenance, will
continue for the term of this Agreement to be, sufficient to permit Grupo Mexico
to conduct its business without a Material Adverse Effect.
SECTION 4.05. Properties.
(a) Property Generally. Each of Grupo Mexico and its Subsidiaries
(including the Borrower) has good title to, or valid leasehold interests in or
concessions to, all its real and personal property material to its business,
subject only to Liens permitted by Section 7.02 and except for minor defects in
title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes.
(b) Intellectual Property. Each of Grupo Mexico and its Subsidiaries
(including the Borrower) owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its
business, and the use thereof by Grupo Mexico and its Subsidiaries (including
the Borrower) does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 4.06. No Prohibition. There are no statutes, rules,
regulations, judgments, orders or injunctions 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) prohibit, or
impose 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)
prohibit, or make illegal the acceptance for payment, payment for or purchase of
Asarco common stock or the consummation of the Tender Offer or the Merger, (iii)
result in a material delay in or restrict the ability of Asmex, or render Asmex
unable, to accept for payment, pay for or purchase some or all of the tendered
shares of Asarco common stock, or (iv) impose 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.
SECTION 4.07. Environmental Matters. Each of Grupo Mexico and its
Subsidiaries (including the Borrower) has obtained all environmental, health and
safety permits, licenses and other authorizations required under all
Environmental Laws to carry on its business as now being or as proposed to be
conducted, except to the extent failure to have any such permit, license or
authorization could not (either individually or in the aggregate) reasonably be
expected to have a Material Adverse Effect. Each of such permits, licenses and
authorizations is in full force and effect and each of Grupo Mexico and its
Subsidiaries (including the Borrower) is in compliance with the terms and
conditions thereof, and is also in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in any applicable Environmental Law or in any
regulation, code, plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder, except to the extent
failure to comply therewith could not (either individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect.
SECTION 4.08. Compliance with Laws and Agreements. Each of Grupo Mexico
and its Subsidiaries (including the Borrower) is in compliance with all laws,
regulations and orders of any Governmental Authority applicable to it or its
property and all indentures, agreements and other instruments binding upon it or
its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Default has occurred and is continuing.
SECTION 4.09. Investment and Holding Company Status. Neither Grupo
Mexico nor any of its Subsidiaries (including the Borrower) is (a) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 4.10. Taxes. Each of Grupo Mexico and its Subsidiaries
(including the Borrower) has timely filed or caused to be filed all Tax returns
and reports required to have been filed and has paid or caused to be paid all
Taxes required to have been paid by it, except (a) Taxes that are being
contested in good faith by appropriate proceedings and for which such Person has
set aside on its books adequate reserves or (b) to the extent that the failure
to do so could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 4.11. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.
SECTION 4.12. Disclosure. The Borrower and Grupo Mexico have disclosed
to the Lenders all agreements, instruments and corporate or other restrictions
to which it or any of its Subsidiaries is subject, and all other matters known
to it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. None of the reports, financial statements,
certificates or other information furnished by or on behalf of the Obligors to
the Lenders in connection with the negotiation of this Agreement, the other Loan
Documents, the Merger Agreement and the Tender Offer Documents or delivered
hereunder or thereunder (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrower and Grupo Mexico
represent only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time.
SECTION 4.13. Material Agreements and Liens.
(a) Material Agreements. Part A of Schedule II is a complete and
correct list of each credit agreement, loan agreement, indenture, purchase
agreement, guarantee, letter of credit or other arrangement providing for or
otherwise relating to any Indebtedness or any extension of credit (or commitment
for any extension of credit) to, or guarantee by, Grupo Mexico and any
Subsidiary of Grupo Mexico outstanding on the date hereof, or that (after giving
effect to the transactions contemplated to occur on or before the Effective
Date) will be outstanding on the Effective Date, the aggregate principal or face
amount of which equals or exceeds (or may equal or exceed) $1,000,000, and the
aggregate principal or face amount outstanding or that may become outstanding
under each such arrangement is correctly described in Part A of Schedule II.
(b) Liens. Part B of Schedule II is a complete and correct list of each
Lien securing Indebtedness of Grupo Mexico and any Subsidiary of Grupo Mexico
outstanding on the date hereof, or that (after giving effect to the transactions
contemplated to occur on or before the Effective Date) will be outstanding on
the Effective Date, the aggregate principal or face amount of which equals or
exceeds (or may equal or exceed) $1,000,000 and covering any property of Grupo
Mexico and any Subsidiary of Grupo Mexico, and the aggregate Indebtedness
secured (or that may be secured) by each such Lien and the property covered by
each such Lien is correctly described in Part B of Schedule II.
SECTION 4.14. Ownership.
(a) Present Ownership. On the date of this Agreement, Grupo Mexico
directly owns, beneficially and of record, (i) 98.85% of the shares of common
stock of GMM, (ii) 74% of the shares of capital stock of Grupo Ferroviario and
(iii) 89% of the shares of common stock of Asmex (with the remaining shares held
in the Bital Share Trust). Grupo Mexico owns such ownership interests free and
clear of Liens (other than Liens created pursuant to the Security Documents),
and has the unencumbered right to vote such ownership interests. The Larrea
Family Controls Grupo Mexico. For purposes hereof, the "Larrea Family" means Mr.
German Larrea Mota-Velasco and his spouse, siblings, parent and trusts and other
entities for the benefit of, or Controlled by, such Persons.
(b) Effective Date Ownership. As of the Effective Date (after giving
effect to the transactions contemplated to occur on or before the Effective
Date), (i) Grupo Mexico and Asmex will own not less than 80% of the shares of
capital stock of Asarco and (ii) Grupo Mexico will own not less than 89% of the
shares of common stock of Asmex, and the Bital Share Trust will own all
remaining shares of capital stock of Asmex not owned directly by Grupo Mexico.
As of the Merger Closing Date (upon giving effect to the Merger), Grupo Mexico
(together with the Bital Share Trust owning not more than 11% of the shares of
common stock of Asmex) will own 100% of the shares of capital stock of Asarco.
Each of Asmex and Grupo Mexico will own such ownership interests free and clear
of Liens (other than Liens created pursuant to the Security Documents), and will
have the unencumbered right to vote such ownership interests.
SECTION 4.15. Subsidiaries and Investments.
(a) Subsidiaries. Set forth in Part A of Schedule IV is a complete and
correct list of all of the Subsidiaries of Grupo Mexico as of the date hereof,
and as of the Effective Date (after giving effect to the transactions
contemplated to occur on or before the Effective Date). Except as disclosed in
Part A of Schedule IV, Grupo Mexico owns, or will own on the Effective Date
(after giving effect to the transactions contemplated to occur on or before the
Effective Date), free and clear of Liens (other than Liens created pursuant to
the Security Documents), and has the unencumbered right to vote, all outstanding
ownership interests in each Person shown to be held by it in Part A of Schedule
IV; and all of the issued and outstanding capital stock of each such Person
organized as a corporation is validly issued, fully paid and nonassessable, and
there are no outstanding Equity Rights with respect to such Person except as
disclosed in said Schedule IV.
(b) Investments. Set forth in Part B of Schedule IV is a complete and
correct list of all Investments (other than Investments disclosed in Part A of
Schedule IV and other than Investments of the types referred to in clauses (b),
(c), (d) and (e) of Section 7.04) held by Grupo Mexico in any Person on the date
hereof or that will be held on the Effective Date (after giving effect to the
transactions contemplated to occur on or before the Effective Date) and, for
each such Investment, (x) the identity of the Person or Persons holding such
Investment and (y) the nature of such Investment. Except as disclosed in Part B
of Schedule IV, Grupo Mexico owns (or will own, after giving effect to the
transactions contemplated to occur on or before the Effective Date), free and
clear of all Liens (other than Liens created pursuant to the Security
Documents), all such Investments.
(c) Restrictions on Subsidiaries. Except as described in Schedule III,
none of the Subsidiaries of Grupo Mexico is, on the date hereof, subject to any
indenture, agreement, instrument or other arrangement of the type described in
Section 7.07.
SECTION 4.16. Solvency. Each of the Borrower and Grupo Mexico,
individually and on a consolidated basis with its Subsidiaries is, and after
giving effect to the making of the Loans and the other Transactions will be,
Solvent.
SECTION 4.17. Validity of Security Interests. The Pledge Agreements and
the Unclaimed Funds Security Agreement, when executed and delivered in
accordance herewith, will create in favor of the Collateral Agent (for the
benefit of the Lenders and the lenders party to the Revolving Credit Agreement)
each security interest purported to be created thereunder, and the Asarco
Security Agreement to be executed and delivered by Asarco as contemplated by the
Revolving Credit Agreement, will, when executed and delivered, create each
security interest purported to be created thereby. Upon such creation, all such
security interests will be valid and binding, and upon (a) in the case of the
Pledge Agreements, delivery of the corresponding stock certificates together
with stock powers endorsed in blank or, in the case of the GMM Shares Pledge
Agreement, registration of the pledge created thereby in the stock registry of
the issuer, in each case as required thereby, and (b) in the case of the Asarco
Security Agreement and the Unclaimed Funds Security Agreement, the filing and
recording required by the respective terms of such agreements, will constitute
fully perfected first priority security interests in favor of the Collateral
Agent (for the benefit of the Lenders and the lenders party to the Revolving
Credit Agreement), as security for the Loans, the Revolving Loans and other
obligations specified therein, superior in right to any other Liens, except
Liens permitted by Section 7.02.
SECTION 4.18. Use of Proceeds, Etc.
(a) The proceeds of the Loans shall be used to finance the purchase of
shares of capital stock of Asarco pursuant to the Tender Offer and related
costs, and, after the Tender Closing Date, to acquire any remaining outstanding
shares of capital stock of Asarco upon and pursuant to the Merger and to pay
related fees and expenses, and for no other purpose; provided that until applied
for the foregoing purposes, such proceeds may be held in the accounts of the
Borrower with the Depositary, Exchange Agent and the Administrative Agent
identified in Section 2.04(a) and invested in Permitted Investments denominated
in Dollars.
(b) Neither the making of any Loan hereunder, nor the use of the
proceeds thereof, will violate the provisions of Regulation U or X of the Board
and no part of the proceeds of any Loan will be used to purchase or carry any
margin stock in violation of Regulation U or X or to extend credit for the
purpose of purchasing or carrying any margin stock in violation of Regulation U
or X. Each of the Borrower and Grupo Mexico will furnish to each Lender in
connection with any Loan a statement in conformity with the requirements of Form
U-1 referred to in Regulation U.
SECTION 4.19. Labor Relations. Neither Grupo Mexico nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. There is (i) no unfair labor
practice complaint and no grievance or arbitration proceeding arising out of or
under any collective bargaining agreement pending or threatened against Grupo
Mexico or any of its Subsidiaries and (ii) no strike, labor dispute, slowdown or
stoppage pending or threatened against Grupo Mexico or any of its Subsidiaries,
in each case, which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
ARTICLE V
CONDITIONS
----------
SECTION 5.01. Effective Date. The obligations of the Lenders to make
Loans hereunder shall not become effective until the date on which the
Administrative Agent shall have received each of the following documents, each
of which shall be satisfactory in form and substance to the Administrative Agent
(and to the extent specified below, to each Lender), except to the extent any
such condition shall have been waived in accordance with Section 10.02:
(a) Executed Counterparts. From each party hereto either (i) a
counterpart of this Agreement signed on behalf of such party or (ii)
written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signed signature page to this Agreement)
that such party has signed a counterpart of this Agreement.
(b) Opinions of Counsel to the Obligors. An opinion (addressed to the
Administrative Agent and the Lenders and dated the Effective Date) of each
of Brown & Wood LLP, special New York counsel to the Obligors, and of
Santamarina y Steta, S.C., Mexican counsel to the Obligors, substantially
in the form of Exhibits D-1 and D-2, respectively, and covering such other
matters relating to the Borrower, this Agreement or the Transactions as the
Required Lenders shall reasonably request (and each Obligor hereby
instructs such counsel to deliver such opinion to the Lenders and the
Administrative Agent).
(c) Opinions of Special Counsel to Chase. An opinion (addressed to the
Administrative Agent and the Lenders and dated the Effective Date) of each
of Milbank, Tweed, Hadley & McCloy LLP, special New York counsel to Chase,
and of Ritch, Heather y Mueller, S.C., special Mexican counsel to Chase,
substantially in the form of Exhibits E-1 and E-2, respectively (and Chase
hereby instructs such counsel to deliver such opinion to the Lenders).
(d) Corporate Documents. From each Obligor, certified copies of its
constitutive and governing documents, good standing certificates (if
available in such Obligor's jurisdiction of incorporation) and of the
actions of the board of directors or other governing body of each Obligor
taken to authorize the execution, delivery and performance of this
Agreement and each other Transaction Document to which it is a party, and
the performance by it of its obligations hereunder and thereunder.
(e) Officer's Certificate. A certificate, dated the Effective Date and
signed by the President, a Vice President or Financial Officer of each
Obligor in respect of the authority and incumbency, and containing a
specimen signature, of each person who has signed or will sign any
Transaction Document, on its behalf, or who will, until replaced by another
person or persons duly authorized for that purpose, otherwise act as
representative for the purposes of signing documents in connection with the
Transaction Documents, and the transactions contemplated thereby
(including, without limitation, the giving of notices, certificates,
directions and requests thereunder). In addition the certificate of the
Borrower shall confirm compliance with the conditions set forth in Section
5.02.
(f) Pledge Agreements. The Pledge Agreements, duly executed and
delivered by Grupo Mexico, the Borrower, Asarco, the Bital Trustee and the
Collateral Agent, as the case may be, and the stock certificates identified
therein, accompanied by undated stock powers executed in blank, in
accordance with the Pledge Agreements. In addition, the relevant pledgor
under each Pledge Agreement shall have taken such other action (including
delivering to the Administrative Agent evidence of the registration of the
pledges constituted by the GMM Share Pledge Agreement in the stock register
of GMM, any necessary acknowledgement from GMM and any supplemental
confirmation) as may be required by the terms of the relevant Pledge
Agreement or as the Administrative Agent shall have requested in order to
perfect the security interests created pursuant to the Pledge Agreements.
(g) Contributions to Asmex. On or prior to the Closing Date, evidence
in form and substance satisfactory to the Administrative Agent that (i)
cash in an aggregate amount not less than $430,000,000 has been contributed
to the equity capital of Asmex (A) through Grupo Mexico, from existing cash
resources of GMM, in an amount not less than $250,000,000, (B) from
existing cash resources of Grupo Mexico, in an amount not less than
$120,000,000, and (C) from the Bital Share Trust, in an amount not less
than $60,000,000 and (ii) of the amounts specified in item (i) above,
$330,000,000 has been deposited in the Borrower's account maintained with
the Depositary (identified in Section 2.04) and $100,000,000 has been
credited to the account of the Borrower maintained with the Administrative
Agent.
(h) Merger Agreement. True and correct copies of the Merger Agreement
(which Merger Agreement shall be satisfactory to the Administrative Agent),
and each of the conditions contained in the Merger Agreement shall have
been satisfied to the satisfaction of, or, if applicable, waived with the
consent of, the Administrative Agent. Such conditions shall include (i) the
acquisition by Grupo Mexico and Asmex of 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 capital stock of Asarco owned by Grupo Mexico
prior to the Tender Offer, (ii) arrangements pursuant to which Asarco will
become a substantially wholly-owned Subsidiary of Grupo Mexico (except as
specified in Section 4.14(b) hereof), with Grupo Mexico able to exercise
full Control over the business and affairs of Asarco, (iii) invalidation or
satisfaction of the requirements of Article 7 of the 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 shares of capital stock of Asarco
(other than Asmex and Grupo Mexico), (iv) invalidation, inapplicability or
satisfaction (if necessary) of Article 10 of the Certificate of
Incorporation with respect to the Transactions, (v) 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 shares of capital stock of Asarco
(other than Asmex and Grupo Mexico), and (vi) invalidation, redemption or
inapplicability of the rights issued under the Shareholders Rights
Agreement of Asarco dated January 28, 1998, as in effect on the date
hereof.
(i) Tender Offer Documents. True and correct copies of the Tender Offer
Documents, and each of the conditions to purchase contained in the Offer to
Purchase shall have been satisfied to the satisfaction of, or, if
applicable, waived with the consent of, the Administrative Agent.
(j) Consummation of the Tender Offer. Evidence that the Tender Offer
shall have been (or shall be simultaneously) consummated in all material
respects in accordance with the terms of the Offer to Purchase (except for
any modifications, supplements or material waivers thereof, or written
consents or determinations made by the parties thereto, that shall be
satisfactory to the Administrative Agent), and the Administrative Agent
shall have received a certificate of a Financial Officer of the Borrower to
such effect and to the effect that attached thereto are true and complete
copies of the Tender Offer Documents delivered in connection with the
closing of the Tender Offer pursuant to the Offer to Purchase.
(k) No Prohibition, etc. Evidence in form and substance satisfactory to
the Administrative Agent that 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 Asmex, or renders Asmex
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 to effectively exercise
full rights of ownership of the Asarco common stock, including, without
limitation, the right to vote the Asarco common stock purchased by Asmex on
all matters properly presented to Asarco's shareholders.
(l) Approvals. True and correct copies of all regulatory and third
party approvals and consents (including evidence of Hart-Scott-Rodino
approval and other approvals and consents, if any) necessary in connection
with the Transactions and the financing thereof 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.
(m) Margin Stock. For each Lender, a statement from the Borrower and
Grupo Mexico in connection with Form U-1 referred to in Regulation U of the
Board, in conformity with the requirements of such regulation.
(n) Process Agent. A letter of acceptance confirming the appointment of
MMI as Process Agent pursuant to Section 10.09(d), together with certified
copies of the notarial deeds pursuant to which Grupo Mexico shall have
granted to the Process Agent a power of attorney for such purpose.
(o) Unclaimed Funds Security Agreement. The Unclaimed Funds Security
Agreement, duly executed and delivered by the Borrower, the Collateral
Agent and consented to as provided therein by the Exchange Agent. In
addition, the Borrower shall have taken such other action as the
Administrative Agent shall have requested in order to perfect the security
interests created pursuant to the Unclaimed Funds Security Agreement.
(p) Repayment of Existing Asarco Indebtedness. Evidence that the
principal of and interest on, and all other amounts owing in respect of,
the Indebtedness (including any contingent or other amounts payable in
respect of letters of credit) indicated on Part II of Schedule V that is to
be repaid by Asarco on the Effective Date shall have been (or shall be
simultaneously) paid in full, and that any commitments to extend credit
under the agreements or instruments relating to such Indebtedness shall
have been cancelled or terminated.
(q) Other Documents. Such other documents as the Administrative Agent
or any Lender or special New York counsel to Chase may reasonably request.
The obligation of any Lender to make its Loan hereunder is also subject
to the payment by the Borrower and Grupo Mexico of such fees and expenses as the
Borrower and Grupo Mexico shall have agreed to pay to any Lender, Chase, Chase
Securities Inc., or the Administrative Agent in connection herewith, including
the reasonable fees and expenses of special counsel to Chase in connection with
the negotiation, preparation, execution and delivery of this Agreement and the
other Loan Documents and the Loans hereunder (to the extent that statements for
such fees and expenses have been delivered to the Borrower).
The Administrative Agent shall notify the Borrower and the Lenders of
the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans
hereunder shall not become effective unless each of the foregoing conditions is
satisfied (or waived pursuant to Section 10.02), and the Borrower has timely
submitted a Borrowing Request with a date for proposed Borrowing, on or prior to
12:00 noon, New York City time, on June 23, 2000 (and, in the event such
conditions are not so satisfied or waived, and the Borrower has not submitted
such Borrowing Request, the Commitments shall terminate at such time).
SECTION 5.02. Other Conditions. The obligation of each Lender to make
any Loan is subject to the satisfaction of the following conditions:
(a) the representations and warranties of the Borrower and Grupo Mexico
set forth in this Agreement, and of each Obligor in each of the other Loan
Documents to which it is a party, shall be true and correct on and as of
the date of such Loan;
(b) at the time of and immediately after giving effect to such Loan and
the use of proceeds thereof, no Default shall have occurred and be
continuing; and
(c) no event, development or circumstance has occurred which, in the
judgment of the Administrative Agent, has had or could reasonably be
expected to have a Material Adverse Effect.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower and Grupo Mexico on the date thereof as to the matters specified in
the preceding sentence.
ARTICLE VI
AFFIRMATIVE COVENANTS
---------------------
Until the Commitments have expired or been terminated and the principal
of and interest on each Loan and all fees payable hereunder shall have been paid
in full, each of the Borrower and Grupo Mexico covenants and agrees with the
Lenders that:
SECTION 6.01. Financial Statements and Other Information. The Borrower
and Grupo Mexico will furnish to the Administrative Agent and each Lender:
(a) within 120 days after the end of each fiscal year of the Borrower,
Grupo Mexico and GMM,
(i) the audited consolidated balance sheet and related statements
of operations, stockholders' equity and cash flows, separately stated,
of each of (A) the Borrower and its Subsidiaries, (B) Grupo Mexico and
its Subsidiaries, (C) GMM and its Subsidiaries and (D) Southern Peru,
as of the end of and for such year, setting forth in each case in
comparative form the corresponding figures for (or in the case of the
balance sheet, as of the end of) the previous fiscal year, all reported
on by independent public accountants of recognized national standing
(without a "going concern" or like qualification or exception and
without any qualification or exception as to the scope of such audit)
to the effect that such consolidated financial statements present
fairly in all material respects the financial condition and results of
operations of each such Person and its Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied; and
(ii) the unaudited consolidated and consolidating balance sheet
and related statements of operations, stockholders' equity and cash
flow of Grupo Mexico and its Subsidiaries as of the end of and for such
year, setting forth in comparative form the corresponding figures for
(or in the case of the balance sheet, as of the end of) the previous
fiscal year, certified by a Financial Officer of Grupo Mexico as
presenting fairly in all material respects the financial condition and
results of operations of Grupo Mexico and its Subsidiaries, on a
consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end adjustments and the absence of footnotes;
(b) within 60 days after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower, Grupo Mexico, Southern Peru and
GMM, the consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows, separately stated, of each of (i) the
Borrower and its Subsidiaries, (ii) Grupo Mexico and its Subsidiaries on a
consolidated basis with all of its Subsidiaries, and (iii) GMM and its
Subsidiaries, as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form the
corresponding figures for (or, in the case of the balance sheet, as of the end
of) the corresponding period or periods of the previous fiscal year, all
certified by a Financial Officer of the Borrower (or of Grupo Mexico or of GMM,
as the case may be) as presenting fairly in all material respects the financial
condition and results of operations of the Borrower and its Subsidiaries (and of
Grupo Mexico and its Subsidiaries and of GMM and its Subsidiaries) on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;
(c) concurrently with any delivery of financial statements under clause
(a) or (b) of this Section, a certificate of a Financial Officer of the Borrower
and a certificate of a Financial Officer of Grupo Mexico (i) certifying as to
whether a Default has occurred and, if a Default has occurred, specifying the
details thereof and any action taken or proposed to be taken by the Borrower (or
Grupo Mexico, as the case may be) with respect thereto, (ii) setting forth
reasonably detailed calculations demonstrating compliance with Sections 6.15,
7.01, and 7.09, and (iii) stating whether any change in GAAP or in the
application thereof has occurred since the date of the audited financial
statements referred to in Section 4.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate;
(d) concurrently with any delivery of financial statements under clause
(a) of this Section, a certificate of the accounting firm that reported on such
financial statements stating whether they obtained knowledge during the course
of their examination of such financial statements of any Default (which
certificate may be limited to the extent required by accounting rules or
guidelines);
(e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by the
Borrower or Grupo Mexico or any of their respective Subsidiaries with the SEC,
the CNBV, or any Governmental Authority succeeding to any or all of the
functions of the SEC or the CNBV, or with any national securities exchange, or
distributed by the Borrower or Grupo Mexico to its shareholders generally, as
the case may be; and
(f) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of Grupo
Mexico or any of its Subsidiaries, or compliance with the terms of this
Agreement and the other Loan Documents, as the Administrative Agent or any
Lender may reasonably request.
SECTION 6.02. Notices of Material Events. The Borrower (for itself and
on behalf of Grupo Mexico) will furnish to the Administrative Agent and each
Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting Grupo
Mexico or any of its Affiliates (including the Borrower) that, if adversely
determined, could reasonably be expected to result in a Material Adverse
Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower and its Subsidiaries in an aggregate
amount exceeding $10,000,000;
(d) the assertion of any claim of Environmental Liability by any Person
against, or with respect to the activities of, the Borrower or any of its
Subsidiaries or against Grupo Mexico or against GMM or any of its
Subsidiaries and any alleged violation of or non-compliance with any
Environmental Laws or any permits, licenses or authorizations, other than
any claim of Environmental Liability or alleged violation that, if
adversely determined, would not (either individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect; and
(e) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower or Grupo Mexico,
as the case may be, setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken by the
Borrower or Grupo Mexico, as the case may be, with respect thereto.
SECTION 6.03. Existence; Conduct of Business . Grupo Mexico will, and
will cause each of its Subsidiaries (including the Borrower) to, do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of its business; provided that the foregoing
shall not prohibit any transaction permitted under Section 7.03.
SECTION 6.04. Payment of Obligations. Grupo Mexico will, and will cause
each of its Subsidiaries (including the Borrower) to, pay its obligations,
including Tax liabilities, that, if not paid, could result in a Material Adverse
Effect before the same shall become delinquent or in default, except where (a)
the validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) Grupo Mexico or such Subsidiary has set aside on its books
adequate reserves with respect thereto in accordance with GAAP and (c) the
failure to make payment pending such contest could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 6.05. Maintenance of Properties. Grupo Mexico will, and will
cause each of its Subsidiaries (including the Borrower) to, keep and maintain
all property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
SECTION 6.06. Insurance. Grupo Mexico will, and will cause each of its
Subsidiaries (including the Borrower) to, maintain, with financially sound and
reputable insurance companies, insurance in such amounts and against such risks
as are customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations.
SECTION 6.07. Books and Records; Inspection Rights. Grupo Mexico will,
and will cause each of its Subsidiaries (including the Borrower) to, keep proper
books of record and account in which full, true and correct entries are made of
all dealings and transactions in relation to its business and activities. Grupo
Mexico will, and will cause each of its Subsidiaries (including the Borrower)
to, permit any representatives designated by the Administrative Agent or any
Lender, upon reasonable prior notice, to visit and inspect its properties, to
examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its officers and independent accountants,
all at such reasonable times and as often as reasonably requested.
SECTION 6.08. Compliance with Laws. Grupo Mexico will, and will cause
each of its Subsidiaries (including the Borrower) to, comply with all laws
(including Environmental Laws), rules, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements or other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 6.09. Use of Proceeds. The proceeds of the Loans will be used
only as set forth in Section 4.18(a).
SECTION 6.10. Hedging Agreements. Within 45 days after consummation of
the Tender Offer, Grupo Mexico will (a) cause GMM to obtain and maintain, and
(b) cause Asarco to obtain and maintain, in full force and effect, Hedging
Agreements with a term of at least one year with one or more counterparties
acceptable to the Administrative Agent, that consist of (i) the purchase of put
options covering (A) in the case of GMM, 70,000 tons of copper at $0.75/lb and
(B) in the case of Asarco, 100,000 tons of copper at $0.75/lb and (ii) the sale
of call options covering the tonnages of copper described in (A) and (B) at a
specified price, the premium on which would be substantially equivalent to the
premium paid for the purchase of the respective party's purchase of put options
described in item (i) above.
SECTION 6.11. Utilization of Revolving Loans. Grupo Mexico will cause
Asarco to borrow Revolving Loans under the Revolving Credit Agreement on the
Effective Date, and thereafter as needed, to the extent required to repay in
full (and cancel remaining commitments relating to) any Indebtedness of Asarco
under existing revolving credit and similar arrangements that would become due,
or could be caused to become due by holders thereof, upon and by reason of any
of the Transactions.
SECTION 6.12. Merger Covenants. Grupo Mexico will use its best efforts
to cause the Merger Closing Date to occur as soon as practicable after the date
hereof. Upon consummation of the Tender Offer, Grupo Mexico will cause Asarco to
execute and deliver the Revolving Credit Agreement and the Asarco Security
Agreement.
SECTION 6.13. Ownership of Subsidiaries. Grupo Mexico will at all times
own, directly or indirectly: (a) all of the outstanding capital stock of GMM
(other than up to 1.15% of the outstanding common stock of GMM); (b) at least
74% of the outstanding capital stock of Grupo Ferroviario; (c) all of the
outstanding capital stock of Asmex (other than up to 11% of the outstanding
common stock of Asmex presently held in the Bital Share Trust); (d)
substantially all of the outstanding capital stock of Mexicana de Cobre, S.A. de
C.V., Industrial Minera Mexico, S.A. de C.V., Mexicana de Cananea, S.A. de C.V.,
Minerales Metalicos del Norte, S.A., and Minera Mexico Internacional, Inc.; and
(e) after the consummation of the Merger and prior to any initial public
offering of any corporation or entity through which Grupo Mexico owns or
Controls Asarco, at least 89% of the outstanding capital stock of Asarco, and at
all times subsequent to such offering, it will cause the Borrower to be a
majority-owned and Controlled Subsidiary of Grupo Mexico.
SECTION 6.14. GMM Ratings. Grupo Mexico shall cause GMM to take
reasonable steps to (a) maintain ratings of the secured export notes issued
under the SEN Facility from at least two of the following agencies: S&P, Duff &
Phelps and Moody's of at least BBB-, BBB- and Baa3, respectively and (b) avoid
having adverse changes in such ratings affect the treatment of GMM's secured
export notes under the SEN Facility.
SECTION 6.15. Grupo Mexico Liquidity. Grupo Mexico shall at all times
maintain an aggregate amount of unencumbered cash held in Permitted Investments
equal to $20,000,000.
ARTICLE VII
NEGATIVE COVENANTS
------------------
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full,
each of the Borrower and Grupo Mexico covenants and agrees with the Lenders
that:
SECTION 7.01. Indebtedness.
(a) Grupo Mexico. Grupo Mexico will not create, incur, assume or permit
to exist any Indebtedness, except:
(i) Indebtedness created hereunder;
(ii) Indebtedness existing on the date hereof and set forth in
Part A of Schedule II (or, to the extent not meeting the minimum
thresholds for required listing on Schedule II pursuant to Section
4.13, in an aggregate amount not exceeding $1,000,000) and extensions,
renewals and replacements of any such Indebtedness that do not increase
the outstanding principal amount thereof;
(iii) other Indebtedness in an aggregate principal amount not
exceeding $225,000,000 at any one time outstanding, of which up to
$50,000,000 may be secured as permitted under Section 7.02 and the
remainder of which is unsecured;
(iv) Guarantees by Grupo Mexico of Indebtedness of Asarco under
the Revolving Credit Agreement; and
(v) Indebtedness under the Liquidity Facility.
(b) Asarco. Grupo Mexico will not permit Asarco to create, incur,
assume or permit to exist any Indebtedness of Asarco except:
(i) upon and after the Merger, Indebtedness created hereunder;
(ii) until the Effective Date, Indebtedness under existing
revolving credit facilities;
(iii) on and after the Effective Date, Indebtedness under the
Revolving Credit Agreement;
(iv) existing Indebtedness under the Asarco Indentures;
(v) Indebtedness existing on the date hereof and listed on Part I
of Schedule V, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof;
(vi) Indebtedness up to $180,000,000 for which Asarco is an
account party in respect of letters of credit or surety bonds issued in
connection with consent decrees;
(vii) Indebtedness up to $50,000,000 for which Asarco is an
account party in respect of letters of credit or surety bonds issued in
connection with Asarco's pension program; and
(viii) Indebtedness up to an aggregate principal amount of
$120,000,000 (prior to the payment in full of the Loans) or
$200,000,000 (after the payment in full of the Loans) for (A)
industrial development revenue bond financings under Section 103(b) of
the Code, (B) other unsecured Indebtedness and (C) Indebtedness
incurred solely to finance the acquisition of fixed or capital assets.
(c) GMM. Grupo Mexico will cause GMM to comply with Section 9.2 of the
SEN Facility and Section 4.04 of the U.S. Registered Note Indenture.
(d) Asmex. Asmex will not create, incur, assume or permit to exist any
Indebtedness of Asmex except Indebtedness created hereunder.
SECTION 7.02. Liens.
(a) Grupo Mexico. Grupo Mexico will not create, incur, assume or permit
to exist any Lien on any property or asset now owned or hereafter acquired by it
(including, without limitation, the capital stock of GMM, Asmex, Asarco and
Grupo Ferroviario), or assign or sell any income or revenues (including accounts
receivable) or rights in respect of any thereof, except:
(i) Liens created pursuant to the Security Documents;
(ii) Permitted Encumbrances;
(iii) any Lien on any property or asset of Grupo Mexico existing
on the date hereof and set forth in Part B of Schedule II (or, to the
extent not meeting the minimum thresholds for required listing on
Schedule II pursuant to Section 4.13, in an aggregate amount not
exceeding $1,000,000); provided that (i) no such Lien shall extend to
any other property or asset of Grupo Mexico and (ii) any such Lien
shall secure only those obligations which it secures on the date hereof
and extensions, renewals and replacements thereof that do not increase
the outstanding principal amount thereof;
(iv) from and after the payment in full of the Loans, Liens on
the capital stock of Grupo Ferroviario;
(v) Liens created on newly issued capital stock of GMM acquired
after the date hereof by investment of the proceeds of the Liquidity
Facility, provided that such stock is either nonvoting stock or does
not exceed 20% of the outstanding stock of GMM;
(vi) Liens securing Indebtedness not exceeding, in the aggregate,
$50,000,000; and
(vii) Liens created after the date hereof on any Investment in
any Unrestricted Subsidiary. For the purposes hereof, an "Unrestricted
Subsidiary" shall be any Subsidiary of Grupo Mexico created after the
date hereof in which the Investment by Grupo Mexico is in an amount
which would otherwise be permitted under Section 7.05 to be paid as a
Restricted Payment by Grupo Mexico.
(b) Asarco. Grupo Mexico will not permit Asarco or any Subsidiary of
Asarco to create, incur, assume or permit to exist any Lien on any property or
asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof or
enter into any sale-lease back transaction or similar arrangement that would
have the same effect as any of the foregoing, except (references in this Section
7.02(b) to a "Subsidiary" to be understood to mean a Subsidiary of Asarco):
(i) Liens created pursuant to the Security Documents;
(ii) any Lien on any property or asset of Asarco existing on the
date hereof and set forth in Schedule VI; provided that (A) no such
Lien shall extend to any other property or asset of Asarco and (B) any
such Lien shall secure only those obligations which it secures on the
date hereof and extensions, renewals and replacements thereof that do
not increase the outstanding principal amount thereof;
(iii) (A) pledges or deposits to obtain the benefits of any law,
regulation or arrangement pertaining to unemployment insurance, old age
pensions, employee benefits, social security or similar matters and
Liens or judgments under such laws which are not currently required to
be discharged, (B) pledges or deposits in connection with bids,
tenders, contracts or leases to which Asarco or any Subsidiary is a
party, in each case in the ordinary course of business, (C) Liens or
deposits to secure public or statutory obligations of Asarco or any
Subsidiary, materialmen's, mechanics', carriers', warehousemen's,
workmen's, repairmen's, vendors' or like liens or deposits to obtain
the release of such liens, (D) deposits to secure surety, stay, appeal
or customs bonds to which Asarco or any Subsidiary is a party, (E)
landlords' liens under leases to which Asarco or any Subsidiary is a
party, (F) zoning restrictions on the use of real property or
irregularities (including easements, rights of way and the like) in
title thereto which do not materially detract from the value of such
property or materially impair the use thereof and (G) Liens arising out
of contracts for the tolling of metals or minerals by Asarco or any
Subsidiary;
(iv) Liens on property in the process of export or import or on
the documents relating to thereto, securing current liabilities of
Asarco or any Subsidiary incurred for the purchase of such property or
in connection with the sale or discount of current receivables arising
out of the sale of such property;
(v) Liens in favor of the United States of America or any State
thereof, or any department, agency or instrumentality or political
subdivision of the United States of America or any State thereof, or in
favor of any other country, or any department, agency, instrumentality
or political subdivision thereof, arising out of contracts for the
purchase of products or services of Asarco or any Subsidiary or to
secure partial, progress, advance or other payments or other
obligations, pursuant to any contract or statute (other than taxes or
other governmental charges, assessments or penalties) or deposits or
pledges to obtain the release of any of the foregoing Liens; or Liens
for taxes or assessments or other governmental charges or levies not
yet due or delinquent or which are being contested in good faith by
appropriate proceedings;
(vi) production payments or other rights of others to the output
of mines, smelters or production facilities, including, without
limitation, the tolling of metals or minerals by Asarco or any
Subsidiary;
(vii) rights of a lessor under a lease or an operator under an
operating agreement;
(viii) Liens securing Indebtedness to the extent permitted under
Section 7.01(b)(viii)(A) arising out of industrial development revenue
bond financings under Section 103(b) of the Code and Liens on pollution
control facilities arising out of the financing of the acquisition or
use thereof by (or by lessors to) Asarco or any Subsidiary;
(ix) Liens upon any property or assets existing at the time of
acquisition thereof by Asarco or any Subsidiary, whether by merger,
consolidation, purchase, lease or otherwise (including Liens upon
property or assets of a corporation existing at the time such
corporation becomes a Significant Subsidiary), and not created in
contemplation of such acquisition or event;
(x) Liens securing Indebtedness to the extent permitted under
Section 7.01(b)(viii)(C) upon any property or assets acquired,
constructed or improved by Asarco or any Subsidiary after the date of
this Agreement which are created or assumed contemporaneously with such
acquisition, construction or improvement, or within 180 days after the
completion thereof, to secure or provide for the payment of all or any
part of the cost of such acquisition, construction or improvement
incurred after the date of this Agreement, provided that in the case of
any such acquisition, construction or improvement the Lien shall not
apply to any property or assets owned by Asarco or any Subsidiary at
the time of the commencement of such acquisition, construction or
improvement, other than any property or assets on which such
construction or improvement is located; and provided, further, that the
principal amount of Indebtedness secured by each Lien shall not exceed
100% of the cost of such property or assets at the time of the
acquisition thereof or, in the case of any construction or improvement,
100% of the cost of such construction or improvement at the time of
completion thereof;
(xi) renewals, extensions or replacements in whole or in part of
Liens referred to in clauses (i), (viii), (ix) and (x), or in this
paragraph (xi), for amounts which shall not exceed the principal amount
of the obligation or Indebtedness so renewed, extended or replaced at
the time of such renewal, extension or replacement and applying only to
the same property and assets theretofore subject to the Lien (plus
improvements on or to such property);
(xii) Liens created by Asarco and/or its Significant Subsidiaries
in the ordinary course of business in connection with Hedging
Agreements, provided that the counterparties in such Hedging Agreements
are Lenders hereunder; and
(xiii) Liens and sale-lease back transactions on assets or
property comprising Principal Property which do not in the aggregate
exceed 10% of Principal Consolidated Net Tangible Assets.
(c) GMM. Grupo Mexico will cause GMM to comply with Section 7.01 of the
Bank of America Facility and Section 9.12 of the SEN Facility.
(d) Asmex. Asmex will not create, incur, assume or permit to exist any
Lien on any property or asset now owned or hereafter acquired by it, or assign
or sell any income or revenues (including accounts receivable) or rights in
respect of any thereof, except:
(i) Liens created pursuant to the Security Documents; and
(ii) Permitted Encumbrances.
SECTION 7.03. Fundamental Changes.
(a) Mergers, Consolidations, Disposal of Assets, Etc. Grupo Mexico will
not, nor will it permit any of its Subsidiaries (including the Borrower) to,
merge into or consolidate with any other Person, or permit any other Person to
merge into or consolidate with it, or sell, transfer, lease or otherwise dispose
of (in one transaction or in a series of transactions) all or substantially all
of its assets, or all or substantially all of the stock of any of its
Subsidiaries (including the Borrower) (in each case, whether now owned or
hereafter acquired), or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing (i) any Person may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, (ii) any Person
may merge into any Subsidiary of Grupo Mexico in a transaction in which the
surviving entity is a Subsidiary of Grupo Mexico, (iii) Grupo Mexico may sell,
transfer, lease or otherwise dispose of its assets to the Borrower or to another
Subsidiary of Grupo Mexico and (iv) any Subsidiary of Grupo Mexico other than
the Borrower, GMM, Grupo Ferroviario or Southern Peru may liquidate or dissolve
if the Borrower determines in good faith that such liquidation or dissolution is
in the best interests of Grupo Mexico and is not materially disadvantageous to
the Lenders; provided that this Agreement shall not prevent:
(i) the Merger, so long as the Borrower satisfies the following
conditions: (A) execution and delivery of the Assumption Agreement and
(B) the Borrower shall provide to the Administrative Agent a
satisfactory written legal opinion, as to the matters set forth in
Exhibits K-1 and K-2;
(ii) the sale or disposition by Asarco of Specialty Chemicals and
Aggregates Business, so long as (a) such sale or disposition is
realized for not less than the fair market value thereof and for cash
proceeds only, and (b) the Net Available Proceeds of such sale or
disposition are applied pursuant to Section 2.08(b);
(iii) the creation by Grupo Mexico of a wholly-owned Subsidiary
of Grupo Mexico (herein called an "intermediary holding company")
through which Grupo Mexico will thereafter indirectly own and Control
Asarco and/or GMM, provided that the following conditions are met:
(A) the creation of the intermediary holding company and
transfer to it of the shares of capital stock of Asarco and/or
GMM shall not have any adverse effect upon the existence,
validity, perfection or priority of any security interests
granted in favor of the Collateral Agent pursuant to the Security
Documents; and
(B) Grupo Mexico shall provide to the Administrative Agent
written legal opinions of counsel in relevant jurisdictions
satisfactory to the Administrative Agent to the foregoing
effects; or
(iv) the sale of a minority interest in the intermediary holding
company referred to in clause (iii); provided the following conditions
are met:
(A) no Default shall have occurred or be continuing;
(B) the aggregate Net Available Proceeds from such offering
shall be applied in accordance with Section 2.08(b);
(C) subsequent to such offering, the Borrower continues to
be a majority-owned and Controlled Subsidiary of Grupo Mexico in
accordance with Section 6.13; and
(D) such offering shall be effected on terms and conditions
and pricing that are not materially disadvantageous to the
Lenders.
(b) Lines of Business. Grupo Mexico will not, nor will it permit any of
its Subsidiaries (including the Borrower) to, engage to any material extent in
any business other than businesses of the type conducted by the Borrower and its
Subsidiaries on the date of execution of this Agreement and businesses related
thereto, including any energy-related businesses.
SECTION 7.04. Investments.
(a) Grupo Mexico. Grupo Mexico will not make or permit to remain
outstanding any Investments except:
(i) Investments outstanding on the date hereof and identified in
Part B of Schedule IV;
(ii) Permitted Investments;
(iii) Investments by Grupo Mexico in the Borrower;
(iv) Additional Investments up to but not exceeding $50,000,000
per annum in the aggregate; and
(v) Investments in Unrestricted Subsidiaries.
(b) Asarco. Grupo Mexico will not permit Asarco to make or permit to
remain outstanding any Investments of Asarco except (i) Permitted Investments;
(ii) Investments outstanding on the date hereof and identified in Part C of
Schedule IV; and (iii) additional Investments in an aggregate amount not
exceeding $25,000,000 in any year prior to the payment in full of the Loans, and
$75,000,000 in any year after the payment in full of the Loans.
(c) GMM. Grupo Mexico will cause GMM to comply with Section 7.04 of the
Bank of America Facility.
(d) Asmex. Asmex will not to make or permit to remain outstanding any
Investments of Asmex except:
(i) Permitted Investments; and
(ii) Investments in, and the purchase of shares of capital stock
of, Asarco.
SECTION 7.05. Restricted Payments. Grupo Mexico will not declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment
(a) at any time during the continuance of a Default or (b) in any year in an
aggregate amount exceeding the sum of (i) Restricted Payments described in
clause (a) of the definition of Restricted Payments in an amount up to
$30,000,000 in each year, and Restricted Payments described in clause (b) of the
definition thereof in an amount up to $20,000,000 in each year minus (ii) the
amount of any Investment by Grupo Mexico in Unrestricted Subsidiaries (as
defined in Section 7.02) in such year.
SECTION 7.06. Transactions with Affiliates. Grupo Mexico will not, and
will not permit any of its Subsidiaries (including the Borrower) to, sell, lease
or otherwise transfer any property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) transactions in the
ordinary course of business at prices and on terms and conditions not less
favorable to Grupo Mexico, the Borrower or such Subsidiary than could be
obtained on an arm's-length basis from unrelated third parties, (b) the Merger
and (c) transactions between or among GMM and its substantially wholly-owned
Subsidiaries not involving any other Affiliate.
SECTION 7.07. Restrictive Agreements.
(a) Grupo Mexico. Grupo Mexico will not, and will not permit Asarco,
Grupo Ferroviario or Asmex, or any Subsidiary of any thereof, to, directly or
indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon the ability
of any Subsidiary of Grupo Mexico or of any such Person to pay dividends or
other distributions with respect to any shares of its capital stock or to make
or repay loans or advances to Grupo Mexico, Asarco, Grupo Ferroviario or Asmex
or to Guarantee Indebtedness of Grupo Mexico or Asarco; provided that the
foregoing shall not apply to (x) restrictions and conditions imposed by law or
by this Agreement or the Revolving Credit Agreement, (y) restrictions and
conditions existing on the date hereof identified on Schedule III (but shall
apply to any extension or renewal of, or any amendment or modification expanding
the scope of, any such restriction or condition) and (z) customary restrictions
and conditions contained in agreements relating to the sale of a Subsidiary
pending such sale, provided such restrictions and conditions apply only to the
Subsidiary that is to be sold and such sale is permitted hereunder.
(b) GMM. Grupo Mexico will cause GMM to comply with Section 7.14 of the
Bank of America Facility.
SECTION 7.08. Incorporation by Reference. The provisions of each of the
Bank of America Facility, the CapMAC Agreement, the SEN Facility, the Asarco
Indentures and the U.S. Registered Note Indenture which are specified in this
Article VII and with which, by the express terms hereof, Grupo Mexico agrees to
cause GMM and Asarco to comply, together with related definitions and exceptions
applicable to such specified provisions, in each case as in effect on the date
hereof, are hereby incorporated herein by reference as if set forth in full
herein (such provisions to enter into effect as of the date hereof and to remain
in effect for the purposes hereof notwithstanding any amendment or waiver
thereof under any such agreement, except to the extent amended or waived by the
Administrative Agent with the consent of the Required Lenders hereunder, and
notwithstanding any termination of any such agreement subsequent to the date
hereof), and Grupo Mexico agrees, for the benefit of the Lenders, to cause each
of GMM and Asarco to perform and observe, each of its respective covenants and
obligations set forth in said provisions.
SECTION 7.09. Certain Financial Covenants.
(a) Debt to Capitalization Ratio.
(1) Grupo Mexico will not permit its Debt to Capitalization Ratio to
exceed (i) 0.55 to 1.00 as at the end of any fiscal quarter ending on or
after June 30, 2000 and prior to December 31, 2001 and (ii) 0.50 to 1.00 as
at the end of any fiscal quarter ending on or after December 31, 2001.
(2) Grupo Mexico will not permit the Debt to Capitalization Ratio of
GMM to exceed 0.45 to 1.00 at any time.
(b) Debt to EBITDA Ratio. Grupo Mexico will not permit its Debt to
EBITDA Ratio to exceed the following respective ratios for the Measuring Periods
ending on the following dates:
Date Ratio
------------ ---------
June 30, 2000 6.0 to 1
September 30, 2000 5.75 to 1
December 31, 2000 4.5 to 1
March 31, 2001 4.5 to 1
June 30, 2001 4.5 to 1
September 30, 2001 4.5 to 1
December 31, 2001 3.5 to 1
Any quarter-end thereafter 3.25 to 1
(c) Consolidated Adjusted EBITDA to Consolidated Interest Expense
Ratio.
(1) Grupo Mexico will not permit its Consolidated Adjusted EBITDA to
Consolidated Interest Expense Ratio to be less than the following
respective ratios for the Measuring Periods ending on the following dates:
Date Ratio
------------ ---------
June 30, 2000 1.75 to 1
September 30, 2000 2.0 to 1
December 31, 2000 2.0 to 1
March 31, 2001 2.0 to 1
June 30, 2001 2.0 to 1
September 30, 2001 2.25 to 1
December 31, 2001 2.25 to 1
Any quarter-end thereafter 2.5 to 1
(2) Grupo Mexico will cause GMM to comply with Section 7.13(b) of the
Bank of America Facility.
(d) Capital Expenditures.
(1) Grupo Mexico will not make any Capital Expenditures.
(2) Grupo Mexico will not permit Asarco to make Capital Expenditures
exceeding $90,000,000 in aggregate amount in any year.
(3) Asmex will not make any Capital Expenditures.
(e) Tangible Net Worth. Grupo Mexico will cause GMM to comply with
Section 9.3 of the SEN Facility.
(f) Collections to Debt Service Ratio. Grupo Mexico will cause GMM to
comply with Section 9.4 and Section 9.5 of the SEN Facility.
(g) Export Receivables. Grupo Mexico will cause GMM to comply with
Section 9.11 of the SEN Facility.
(h) Permitted Export Receivables Transactions. Grupo Mexico will cause
GMM to comply with Section 7.02(b) of the Bank of America Facility.
(i) Asarco Consolidated EBITDA. Grupo Mexico will not permit, from and
after the consummation of the Tender Offer, the Asarco EBITDA to be less than
the following respective amounts for the Measuring Periods ending on the
following dates:
Date Amount
------------ ----------
June 30, 2000 $25,000,000
September 30, 2000 $50,000,000
December 31, 2000 $100,000,000
March 31, 2001 $125,000,000
June 30, 2001 $125,000,000
September 30, 2001 $135,000,000
Any quarter-end thereafter $150,000,000
SECTION 7.10. Activities of Asmex. Asmex will not engage in any
activity other than the Transactions (including, without limitation, the
Merger), the Loans and any activities to effect the Transactions (including,
without limitation, the Merger) and the Loans.
SECTION 7.11. Sale and Leaseback.
(a) Grupo Mexico. Grupo Mexico shall not enter into any agreement or
arrangement with any other Person providing for the leasing by Grupo Mexico of
property which has been or is to be sold or transferred by Grupo Mexico to such
other Person or to any other Person to whom funds have been or are to be
advanced by such Person on the security of such property or rental obligations
of Grupo Mexico.
(b) Asarco. Grupo Mexico shall cause Asarco to comply with Section 1005
of each of the Asarco Indentures.
(c) GMM. Grupo Mexico shall cause GMM to comply with Section 7.08 of
the Bank of America Facility.
(d) Asmex. Asmex shall not enter into any agreement or arrangement with
any other Person providing for the leasing by Asmex of property which has been
sold or is to be sold or transferred by Asmex to such other Person or to any
other Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of Asmex.
SECTION 7.12. Accounting Changes. Neither Grupo Mexico nor its
Subsidiaries (including the Borrower) shall make any significant change in
accounting treatment or reporting practices, except as permitted by GAAP and set
forth in its financial statements, or change the fiscal year of Grupo Mexico or
its Subsidiaries (including the Borrower) unless such change shall be deemed by
Grupo Mexico or its Subsidiaries (including the Borrower) to be materially
advantageous to such Person and could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 7.13. Optional Prepayments.
(a) Grupo Mexico. Grupo Mexico shall not at any time make any optional
prepayment of any of its Indebtedness in whole or in part, other than
Indebtedness hereunder, under the Revolving Credit Agreement and under the
Liquidity Facility.
(b) Asarco. Grupo Mexico will not at any time permit Asarco to make any
optional prepayment of any Indebtedness of Asarco in whole or in part, other
than (i) Indebtedness hereunder and under the Revolving Credit Agreement, and
(ii) Indebtedness outstanding prior to the Effective Date under existing
revolving credit and similar arrangements which, in accordance herewith, is
repaid on the Effective Date.
ARTICLE VIII
EVENTS OF DEFAULT
-----------------
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan, or of any
Revolving Loan, when and as the same shall become due and payable, whether
at the due date thereof or at a date fixed for prepayment thereof or
otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement or under any other Loan Document,
when and as the same shall become due and payable, and such failure shall
continue unremedied for a period of five or more Business Days;
(c) any representation or warranty made or deemed made by or on behalf
of any Affiliated Party in or in connection with this Agreement or any
other Loan Document or any amendment or modification hereof or thereof, or
in any written report, certificate, financial statement or other document
furnished pursuant to or in connection with this Agreement or any other
Loan Document or any amendment or modification hereof or thereof, shall
prove to have been incorrect when made or deemed made; or any
representation or warranty made by Asarco, Grupo Mexico or Asmex pursuant
to the Merger Agreement shall prove to have been false or misleading as of
the time made in any material respect;
(d) the Borrower or Grupo Mexico (as applicable) shall fail to observe
or perform any covenant, condition or agreement contained in Section 6.02,
6.03 (with respect to the Borrower's existence) or 6.13 or in Article VII,
or either Obligor shall default in the performance of any of its
obligations contained in Section 5.01 or 5.02 of the Asarco Security
Agreement or the Unclaimed Funds Security Agreement or Section 4.01 or 4.02
of the Pledge Agreements, respectively, and such default shall continue
unremedied for a period of 10 days after the earlier of (i) the date upon
which a Responsible Officer knew or reasonably should have known of such
default and (ii) the date upon which written notice thereof is given to the
Borrower by the Administrative Agent or any Lender;
(e) (i) any of Grupo Mexico, the Borrower, GMM or any of their
respective Subsidiaries (A) fails to make any payment when due (whether at
scheduled maturity, required prepayment, acceleration, demand or otherwise)
of any Material Indebtedness, and such failure continues after the
applicable grace or notice period, if any, specified in the relevant
documents on the date of such failure; or (B) fails to perform or observe
any other condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any Material
Indebtedness, and such failure continues after the applicable grace or
notice period, if any, specified in the relevant document on the date of
such failure, if the effect of such failure, event or condition is to
cause, or to permit the holders or beneficiaries of such Material
Indebtedness (or a trustee or agent on behalf of such holders or
beneficiaries) to cause, such Material Indebtedness to be declared to be
due and payable prior to its stated maturity; or (C) without limiting the
foregoing, an "Accelerated Amortization Event", "Default" or "Event of
Default" under and as defined in the SEN Facility or any similar facility
entered into as a replacement for the SEN Facility, or a "Default" or
"Event of Default" under and as defined in the U.S. Registered Note
Indenture shall occur and be continuing (other than any such "Accelerated
Amortization Event" that arises solely as a result of a downgrading of the
credit rating of GMM, provided that such event continues unremedied for not
more than 60 days and, during such period, GMM and Grupo Mexico diligently
pursue avenues acceptable to the Administrative Agent to remedy such
occurrence); or (ii) there occurs under any Hedging Agreement an early
termination date resulting from any event of default under such Hedging
Agreement as to which Grupo Mexico, GMM or any of their respective
Subsidiaries is the defaulting party or similar status (however defined)
and the termination value or similar sum (however defined) owed by any such
Person as a result thereof constitutes Material Indebtedness; or (iii)
there occurs any termination, liquidation, unwind or similar event or
circumstance under any Receivables purchase facility which permits any
purchaser of Receivables thereunder to cease purchasing such Receivables or
to apply all collections on previously purchased Receivables thereunder to
the repayment of such purchaser's interest in such previously purchased
Receivables (other than any such event or circumstance that arises solely
as a result of (A) a downgrading of the credit rating of any bank or
financial institution not affiliated with Grupo Mexico that provides
liquidity, credit or other support in connection with such facility or (B)
a downgrading of the credit rating of GMM, subject to the provisos set
forth above in clause (i)(C);
(f) either Obligor shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those
specified in clause (a), (b), (d) or (e) of this Article) or any other Loan
Document and such failure shall continue unremedied for a period of 30 or
more days after notice thereof from the Administrative Agent (given at the
request of any Lender) to the Borrower;
(g) a Change in Control shall occur;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of any Affiliated Party or any Material Subsidiary of its
debts, or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for any Affiliated
Party or any Material Subsidiary or for a substantial part of its assets,
and, in any such case, such proceeding or petition shall continue
undismissed for a period of 60 or more days or an order or decree approving
or ordering any of the foregoing shall be entered;
(i) any Affiliated Party or any Material Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to contest
in a timely and appropriate manner, any proceeding or petition described in
clause (h) of this Article, (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar
official for any Affiliated Party or any Material Subsidiary or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make
a general assignment for the benefit of creditors or (vi) take any action
for the purpose of effecting any of the foregoing;
(j) any Affiliated Party or any Material Subsidiary shall become
unable, admit in writing its inability or fail generally to pay its debts
as they become due;
(k) one or more judgments for the payment of money shall be rendered
against any Affiliated Party or any Material Subsidiary or any combination
thereof in an aggregate amount in excess of the amount of Indebtedness that
would constitute Material Indebtedness of such Person, and the same shall
remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally
taken by a judgment creditor to attach or levy upon any assets of any
Affiliated Party or any Material Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken individually or together with all other ERISA
Events that have occurred, could reasonably be expected to result in a
Material Adverse Effect or result in liability of the Borrower and its
Subsidiaries in an aggregate amount at any one time exceeding 1.5% of the
consolidated total assets of the Borrower and its consolidated
Subsidiaries;
(m) a reasonable basis shall exist for the assertion against the
Borrower or any of its Subsidiaries (or any predecessor in interest of the
Borrower or any of its Subsidiaries) of, or there shall have been asserted
against the Borrower or any of its Subsidiaries, a claim of Environmental
Liability that, in the judgment of the Required Lenders, is reasonably
likely to be determined adversely to the Borrower or any of its
Subsidiaries, and the amount thereof (either individually or in the
aggregate) is reasonably likely to have a Material Adverse Effect (insofar
as such amount is payable by the Borrower or any of its Subsidiaries but
after deducting any portion thereof that is reasonably expected to be paid
by other creditworthy Persons jointly and severally liable therefor); or
(n) any Lien stated to be created by any of the Security Documents
shall at any time not constitute a valid and perfected Lien on the
collateral intended to be covered thereby (to the extent perfection by
filing, registration, recordation or possession is required herein or
therein) in favor of the Collateral Agent (for the benefit of the Lenders
and the lenders party to the Revolving Credit Agreement), free and clear of
all other Liens (other than Liens permitted under Section 7.02 or under the
respective Security Documents), or, except for expiration in accordance
with its terms, any of the Security Documents shall for whatever reason be
terminated or cease to be in full force and effect, or the enforceability
thereof shall be contested by either Obligor;
then, and in every such event (other than an event with respect to either
Obligor described in clause (h) or (i) or (j) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Obligors accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
each Obligor; and in case of any event with respect to either Obligor described
in clause (h) or (i) or (j) of this Article, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and all fees and other obligations of the Obligors accrued
hereunder, shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
each Obligor.
ARTICLE IX
THE ADMINISTRATIVE AGENT
------------------------
Each of the Lenders hereby irrevocably appoints the Administrative
Agent as its agent hereunder and under the other Loan Documents, authorizes the
Administrative Agent to execute and deliver on its behalf the Inter-Creditor
Agreement (among other things, appointing the Collateral Agent and setting forth
the voting requirements for instructing the Collateral Agent), and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto.
The Person serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such
Person and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with Grupo Mexico or any Subsidiary or other
Affiliate thereof (including the Borrower) as if it were not the Administrative
Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall not
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Loan Documents that the Administrative Agent is required to
exercise in writing by the Required Lenders, and (c) except as expressly set
forth herein and in the other Loan Documents, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to Grupo Mexico or any of its Subsidiaries (including
the Borrower) that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders or in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until written notice
thereof is given to the Administrative Agent by the Borrower or a Lender, and
the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Loan Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article V or elsewhere herein or therein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for an Obligor), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
The Administrative Agent may resign at any time by notifying the
Lenders, the Borrower and Grupo Mexico. Upon any such resignation, the Required
Lenders shall have the right, in consultation with the Borrower, to appoint a
successor. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent's resignation shall nonetheless become effective and (1)
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and (2) the Required Lenders shall perform the duties of
the Administrative Agent (and all payments and communications provided to be
made by, to or through the Administrative Agent shall instead be made by or to
each Lender directly) until such time as the Required Lenders appoint a
successor agent as provided for above in this paragraph. Upon the acceptance of
its appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring (or retired) Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder (if not already discharged therefrom as provided above in this
paragraph). The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Administrative Agent's
resignation hereunder, the provisions of this Article and Section 10.03 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
Except as otherwise provided in Section 10.02(b) with respect to this
Agreement, the Administrative Agent may, with the prior consent of the Required
Lenders (but not otherwise), consent to any modification, supplement or waiver
under any of the Loan Documents, provided that, without the prior consent of
each Lender, the Administrative Agent shall not (except as provided herein or in
the Security Documents) grant any authorization to release any collateral or
otherwise to terminate any Lien under any Security Document providing for
collateral security, agree to additional obligations being secured by such
collateral security (unless the Lien for such additional obligations shall be
junior to the Lien in favor of the other obligations secured by such Security
Document, in which event the Administrative Agent may consent to such junior
Lien provided that it obtains the consent of the Required Lenders thereto), or
alter the relative priorities of the obligations entitled to the benefits of the
Liens created under the Security Documents, except that no such consent shall be
required, and the Administrative Agent is hereby authorized, to release or
consent to the release of any Lien covering property that is the subject of
either a disposition of property permitted hereunder or a disposition to which
the Required Lenders have consented.
ARTICLE X
MISCELLANEOUS
-------------
SECTION 10.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to Asmex (until the Merger) or Grupo Mexico, to it at Grupo
Mexico, S.A. de C.V., Baja California 200, Piso 4, Col. Roma Sur, 06760
Mexico, D.F., Attention of Daniel Tellechea Salido (Telecopy No. (525)
264-7664; Telephone No. (525) 574-7066);
(b) if to the Borrower (upon and subsequent to the Merger), to it at
180 Maiden Lane, New York, New York 10038, Attention: Chief Financial
Officer (Telecopy No. (212) 510-1855; Telephone No. (212) 510-2000);
(c) if to the Administrative Agent, to The Chase Manhattan Bank, 1
Chase Manhattan Plaza, 8th Floor, New York, New York 10081, Attention of
Loan and Agency Services Group (Telecopy No. (212) 522-7490; Telephone No.
(212) 522-7253), with a copy to The Chase Manhattan Bank, 270 Park Avenue,
New York, New York 10017, Attention of Nicholas Chirekos, Managing Director
(Telephone No. (212) 270-0400) and to Kenneth Kryzda, Managing Director,
Chase Mexico, 600 Prolongacion, Paseo de la Reforma, Col. Santa Fe, C.P.
01210 Mexico, D.F. (Telecopy No. (525) 258-1793; Telephone No. (525)
257-9734); and
(d) if to a Lender, to it at its address (or telecopy number) set forth
in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto (or, in the case
of any such change by a Lender, by notice to the Borrower and the Administrative
Agent). All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
SECTION 10.02. Waivers; Amendments.
(a) No Deemed Waivers; Remedies Cumulative. No failure or delay by the
Administrative Agent or any Lender in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by any Obligor
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such
Default at the time.
(b) Amendments. Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Lenders or by the Borrower
and the Administrative Agent with the consent of the Required Lenders; provided
that no such agreement shall (i) increase the Commitment of any Lender without
the written consent of such Lender, (ii) reduce the principal amount of any Loan
or reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled final maturity date of any Loan, or postpone the scheduled date of
payment of any interest thereon or any fees payable hereunder, or reduce the
amount of, waive or excuse any such payment or any mandatory prepayment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender affected thereby, (iv) alter the manner in which payments
or prepayments of principal, interest or other amounts hereunder shall be
applied as among the Lenders or Types of Loans, without the written consent of
each Lender, (v) change any of the provisions of this Section or the definition
of the term "Required Lenders" or any other provision hereof specifying the
number or percentage of Lenders required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder, without the
written consent of each Lender, or (vi) release Grupo Mexico from any of its
guarantee obligations under Article III without the written consent of each
Lender; and provided further that (x) no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent hereunder
without the prior written consent of the Administrative Agent, and (y) that any
modification or supplement of Article III shall require the consent of Grupo
Mexico.
SECTION 10.03. Expenses; Indemnity; Damage Waiver.
(a) Costs and Expenses. The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all out-of-pocket
expenses incurred by the Administrative Agent or (after the occurrence of an
Event of Default) any Lender, including the fees, charges and disbursements of
any counsel for the Administrative Agent or (after the occurrence of an Event of
Default) any Lender, in connection with the enforcement or protection of its
rights in connection with this Agreement and the other Loan Documents, including
its rights under this Section, or in connection with the Loans made hereunder,
including in connection with any workout, restructuring or negotiations in
respect thereof and (iii) and all costs, expenses, taxes, assessments and other
charges incurred in connection with any filing, registration, recording or
perfection of any security interest contemplated by any Security Document or any
other document referred to therein.
(b) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an "Indemnitee") against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or the use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) Reimbursement by Lenders. To the extent that the Borrower fails to
pay any amount required to be paid by it to the Administrative Agent under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent such Lender's Applicable Percentage (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent in its capacity as such.
(d) Waiver of Consequential Damages, Etc. To the extent permitted by
applicable law, neither Obligor shall assert, and each Obligor hereby waives,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement
or any agreement or instrument contemplated hereby, the Transactions, any Loan
or the use of the proceeds thereof.
(e) Payments. All amounts due under this Section shall be payable not
later than 3 Business Days after written demand therefor.
SECTION 10.04. Successors and Assigns.
(a) Assignments Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that neither Obligor may assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender (and any attempted assignment or transfer
by any Obligor without such consent shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Assignments by Lenders. Any Lender may assign to one or more
assignees, including an Approved Fund, all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans at the time owing to it); provided that (i) except in the case of
an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, each of
the Administrative Agent and Grupo Mexico (except, in the case of Grupo Mexico,
during the existence of a Default) must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii) except in
the case of an assignment to a Lender, an Affiliate of a Lender or an Approved
Fund or an assignment of the entire remaining amount of the assigning Lender's
Commitment, the amount of the Commitment of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $5,000,000 unless each of the Borrower and the Administrative Agent
otherwise consent, (iii) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's rights and obligations
under this Agreement, (iv) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,500, and (v) the assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; provided further that any consent of the Borrower otherwise
required under this paragraph shall not be required if an Event of Default under
clause (h) or (i) of Article VIII has occurred and is continuing. Upon
acceptance and recording pursuant to paragraph (d) of this Section, from and
after the effective date specified in each Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.12, 2.13, 2.14 and 10.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section.
(c) Maintenance of Register by the Administrative Agent. The
Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices in New York City a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive, and the Borrower,
the Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(d) Effectiveness of Assignments. Upon its receipt of a duly completed
Assignment and Acceptance executed by an assigning Lender and an assignee, the
assignee's completed Administrative Questionnaire (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall accept
such Assignment and Acceptance and record the information contained therein in
the Register. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this paragraph.
(e) Participations. Any Lender may, without the consent of the Borrower
or the Administrative Agent, sell participations to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement and the other Loan Documents (including all or
a portion of its Commitment and the Loans owing to it); provided that (i) such
Lender's obligations under this Agreement and the other Loan Documents shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrower,
the Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and the
other Loan Documents and to approve any amendment, modification or waiver of any
provision of this Agreement or any other Loan Document; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 10.02(b) that affects such
Participant. Subject to paragraph (f) of this Section, the Borrower agrees that
each Participant shall be entitled to the benefits of Sections 2.12, 2.13 and
2.14 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section.
(f) Limitations on Rights of Participants. A Participant shall not be
entitled to receive any greater payment under Section 2.12 or 2.14 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 2.14 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.14(e) as though it were a
Lender.
(g) Certain Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any such pledge or assignment to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such assignee for such Lender as a party hereto.
(h) No Assignments to the Obligors or Affiliates. Anything in this
Section to the contrary notwithstanding, no Lender may assign or participate any
interest in any Loan held by it hereunder to the Borrower or any of its
Affiliates or Subsidiaries without the prior consent of each Lender.
SECTION 10.05. Survival. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is outstanding and
unpaid and so long as the Commitments have not expired or terminated. The
provisions of Sections 2.12, 2.13, 2.14, 3.03 and 10.03 and Article IX shall
survive and remain in full force and effect regardless of the consummation of
the transactions contemplated hereby, the repayment of the Loans, the expiration
or termination of the Commitments or the termination of this Agreement or any
provision hereof.
SECTION 10.06. Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with Chase and Chase Securities Inc. covering, among
other matters, fees payable to the Administrative Agent, constitute the entire
contract between and among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 5.01, this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties named on the signature pages hereof, and thereafter shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
to this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 10.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of any Obligor against any of and all the
obligations of any Obligor now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
SECTION 10.09. Governing Law; Jurisdiction; Etc.
(a) Governing Law. This Agreement shall be construed in accordance with
and governed by the law of the State of New York.
(b) Submission to Jurisdiction. Each party hereto hereby irrevocably
and unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each party hereto further submits, for
the purpose of any such judgment, action or proceeding rendered or brought
against it, to the appropriate courts of the jurisdiction of its domicile. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Each party waives
the right to require that suits against it be brought in any other jurisdiction
to which it would otherwise be legally entitled.
(c) Waiver of Venue. Each Obligor hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any court referred to in paragraph (b) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(d) Service of Process. Grupo Mexico hereby irrevocably designates,
appoints and empowers MMI (the "Process Agent"), with offices on the date hereof
at 712 Fifth Avenue, 39th Floor, New York, New York 10019, as its designee,
appointee and agent with respect to any action or proceeding in New York to
receive, accept and acknowledge for and on its behalf, and in respect of its
property, service of any and all legal process, summons, notices and documents
which may be served in any such action or proceeding, and Grupo Mexico hereby
confirms and agrees that the Process Agent has been duly and irrevocably
appointed as its agent and true and lawful attorney-in-fact in its name, place
and stead to accept such service of any and all legal process, summons, notices
and documents, and agrees that the failure of such agent to give any advice of
any such service of process to Grupo Mexico shall not impair or affect the
validity of such service or of any judgment based thereon. If for any reason
such designee, appointee and agent shall cease to be available to act as such,
Grupo Mexico agrees to designate a new designee, appointee and agent in New York
City on the terms and for the purposes of this provision satisfactory to the
Lenders. Grupo Mexico further irrevocably consents to the service of process out
of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
each of Grupo Mexico and the Process Agent, at their respective addresses set
forth in this Section and Section 10.01, such service to become effective five
days after such mailing. Nothing in this Agreement will affect the right of any
party to this Agreement to serve process in any other manner permitted by law.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 10.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 10.12. Treatment of Certain Information; Confidentiality.
(a) Treatment of Certain Information. Each of the Borrower and Grupo
Mexico acknowledges that from time to time financial advisory, investment
banking and other services may be offered or provided to the Borrower, Grupo
Mexico or one or more of their Subsidiaries (in connection with this Agreement
or otherwise) by any Lender or by one or more subsidiaries or affiliates of such
Lender and each of the Borrower and Grupo Mexico hereby authorizes each Lender
to share any information delivered to such Lender by the Borrower, Grupo Mexico
and their Subsidiaries pursuant to this Agreement, or in connection with the
decision of such Lender to enter into this Agreement, with any such subsidiary
or affiliate, it being understood that any such subsidiary or affiliate
receiving such information shall be bound by the provisions of paragraph (b) of
this Section as if it were a Lender hereunder. Such authorization shall survive
the repayment of the Loans, the expiration or termination of the Commitments or
the termination of this Agreement or any provision hereof.
(b) Confidentiality. Each of the Administrative Agent and the Lenders
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (i) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (ii) to the extent requested
by any regulatory authority, (iii) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (iv) to any other party
to this Agreement, (v) in connection with the exercise of any remedies hereunder
or under any other Loan Document or any suit, action or proceeding relating to
this Agreement or any other Loan Document or the enforcement of rights hereunder
or thereunder, (vi) subject to an agreement containing provisions substantially
the same as those of this paragraph, to any assignee of or Participant in, or
any prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (vii) with the consent of the Borrower or Grupo Mexico or
(viii) to the extent such Information (A) becomes publicly available other than
as a result of a breach of this paragraph or (B) becomes available to the
Administrative Agent or any Lender on a nonconfidential basis from a source
other than an Obligor. For the purposes of this paragraph, "Information" means
all information received from any Obligor relating to any Obligor or its
business, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by an Obligor; provided that, in the case of information received
from an Obligor after the date hereof, such information is clearly identified at
the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
SECTION 10.13. Judgment Currency. This is a loan transaction in which
the specification of Dollars (the "Specified Currency"), and payment in New York
City (the "Specified Place"), is of the essence, and the Specified Currency
shall be the currency of account in all events relating to Loans denominated in
the Specified Currency. The payment obligations of each Obligor under this
Agreement shall not be discharged or satisfied 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 the Specified Currency and
transfer to the Specified Place under normal banking procedures does not yield
the amount of the Specified Currency at the Specified Place due hereunder. If
for the purpose of obtaining judgment in any court it is necessary to convert a
sum due hereunder in the Specified Currency into another currency (the "Second
Currency"), the rate of exchange that shall be applied shall be the rate at
which in accordance with normal banking procedures the Administrative Agent
could purchase the Specified Currency with the Second Currency on the Business
Day next preceding the day on which such judgment is rendered. The obligation of
each Obligor in respect of any such sum due from it to the Administrative Agent
or any Lender hereunder or under any other Loan Document (in this Section called
an "Entitled Person") 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 such Entitled Person of any sum adjudged to be
due hereunder in the Second Currency such Entitled Person may in accordance with
normal banking procedures purchase and transfer to the Specified Place the
Specified Currency with the amount of the Second Currency so adjudged to be due;
and each Obligor hereby, as a separate obligation and notwithstanding any such
judgment, agrees to indemnify such Entitled Person against, and to pay such
Entitled Person on demand, in the Specified Currency, the amount (if any) by
which the sum originally due to such Entitled Person in the Specified Currency
hereunder exceeds the amount of the Specified Currency so purchased and
transferred.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
ASMEX CORPORATION
By /s/ Daniel Tellechea Salido
-----------------------------------------
Name: Daniel Tellechea Salido
Title: Vice President and Treasurer
GRUPO MEXICO, S.A. DE C.V.
By /s/ Daniel Tellechea Salido
-----------------------------------------
Name: Daniel Tellechea Salido
Title: Managing Director
By /s/ Ernesto Duran Trinidad
-----------------------------------------
Name: Ernesto Duran Trinidad
Title: Comptroller
<PAGE>
LENDERS
-------
THE CHASE MANHATTAN BANK,
individually and as Administrative Agent
By /s/ Robert Anastasio
-----------------------------------------
Name: Robert Anastasio
Title: Vice President
<PAGE>
Exhibit 10.2
================================================================================
REVOLVING CREDIT AGREEMENT
dated as of
November 10, 1999
among
ASARCO INCORPORATED,
as Borrower,
GRUPO MEXICO, S.A. DE C.V.,
as Guarantor,
The LENDERS Party Hereto
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
$450,000,000
CHASE SECURITIES INC.,
as Sole Book Manager and Lead Arranger
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.........................................................1
SECTION 1.01. Defined Terms...................................1
SECTION 1.02. Terms Generally................................23
SECTION 1.03. Accounting Terms; GAAP.........................23
ARTICLE II THE CREDITS.......................................................23
SECTION 2.01. The Commitments................................23
SECTION 2.02. Revolving Loans and Borrowings.................23
SECTION 2.03. Requests for Borrowings........................24
SECTION 2.04. Funding of Borrowings..........................25
SECTION 2.05. Interest Elections.............................26
SECTION 2.07. Termination and Reduction of the Commitments...31
SECTION 2.08. Repayment of Revolving Loans; Evidence
of Debt .....................................31
SECTION 2.09. Prepayment of Revolving Loans..................32
SECTION 2.10. Fees...........................................33
SECTION 2.11. Interest.......................................34
SECTION 2.12. Alternate Rate of Interest.....................35
SECTION 2.13. Increased Costs................................35
SECTION 2.14. Break Funding Payments.........................36
SECTION 2.15. Taxes..........................................37
SECTION 2.16. Payments Generally; Pro Rata Treatment;
Sharing of Set-offs .........................38
SECTION 2.17. Mitigation Obligations; Replacement of
Lenders .....................................39
ARTICLE III GUARANTEE........................................................40
SECTION 3.01. The Guarantee..................................40
SECTION 3.02. Obligations Unconditional......................41
SECTION 3.03. Reinstatement..................................42
SECTION 3.04. Subrogation....................................42
SECTION 3.05. Remedies.......................................42
SECTION 3.06. Instrument for the Payment of Money............42
SECTION 3.07. Continuing Guarantee...........................42
SECTION 3.08. Representations and Warranties.................42
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BORROWER....................49
SECTION 4.01. Organization; Qualification; Etc...............49
SECTION 4.03. Corporate Authority Relative to this
Agreement ...................................50
SECTION 4.04. Non-Contravention; Consents and Approvals......50
SECTION 4.05. Reports and Financial Statements...............51
SECTION 4.06. Environmental Matters..........................52
SECTION 4.07. ERISA..........................................53
SECTION 4.08. Schedule 14D-9, Proxy Statement;
Schedule 14D-1; Other Information ...........54
SECTION 4.09. Rights Plan....................................54
SECTION 4.10. Tax Matters....................................54
SECTION 4.11. Absence of Certain Changes.....................55
SECTION 4.12. No Undisclosed Material Liabilities............56
SECTION 4.13. Labor Relations................................56
SECTION 4.14. Solvency.......................................57
SECTION 4.15. Validity of Security Interests.................57
SECTION 4.16. Use of Proceeds, Etc...........................57
SECTION 4.17. Legal or Arbitral Proceedings..................57
SECTION 4.18. Chief Executive Office.........................57
SECTION 4.19. Inventory......................................57
ARTICLE V CONDITIONS.........................................................58
SECTION 5.01. Effective Date.................................58
SECTION 5.02. Each Revolving Loan............................60
ARTICLE VI AFFIRMATIVE COVENANTS.............................................61
SECTION 6.01. Financial Statements and Other Information.....61
SECTION 6.02. Notices of Material Events.....................62
SECTION 6.03. Existence; Conduct of Business.................63
SECTION 6.04. Payment of Obligations.........................63
SECTION 6.05. Maintenance of Properties; Insurance...........63
SECTION 6.06. Books and Records; Inspection and Audit
Rights ......................................63
SECTION 6.07. Compliance with Laws...........................64
SECTION 6.08. Use of Proceeds and Letters of Credit..........64
SECTION 6.09. Hedging Agreements.............................64
SECTION 6.10. Grupo Mexico Affirmative Covenants.............64
ARTICLE VII NEGATIVE COVENANTS...............................................65
SECTION 7.01. Indebtedness...................................65
SECTION 7.02. Liens..........................................65
SECTION 7.03. Fundamental Changes............................67
SECTION 7.04. Investments....................................68
SECTION 7.05. Restricted Payments............................68
SECTION 7.06 Transactions with Affiliates...................69
SECTION 7.07. Restrictive Agreements.........................69
SECTION 7.08. Grupo Mexico Negative Covenants................69
SECTION 7.09. Consolidated Adjusted EBITDA...................69
SECTION 7.10. Accounting Changes.............................70
SECTION 7.11. Capital Expenditures.................................70
ARTICLE VIII EVENTS OF DEFAULT...............................................70
ARTICLE IX THE ADMINISTRATIVE AGENT..........................................74
ARTICLE X MISCELLANEOUS......................................................76
SECTION 10.01. Notices........................................76
SECTION 10.02. Waivers; Amendments............................77
SECTION 10.03. Expenses; Indemnity; Damage Waiver.............78
SECTION 10.04. Successors and Assigns.........................79
SECTION 10.05. Survival.......................................81
SECTION 10.06. Counterparts; Integration; Effectiveness.......82
SECTION 10.07. Severability...................................82
SECTION 10.08. Right of Setoff................................82
SECTION 10.09. Governing Law; Jurisdiction; Etc...............82
SECTION 10.10. WAIVER OF JURY TRIAL...........................83
SECTION 10.11. Headings.......................................84
SECTION 10.12. Treatment of Certain Information;
Confidentiality .............................84
SECTION 10.13. Judgment Currency .............................85
SCHEDULE I -- Commitments
SCHEDULE II -- Legal Proceedings (Grupo Mexico)
SCHEDULE III -- Material Agreements and Liens (Grupo Mexico)
SCHEDULE IV -- Subsidiaries and Investments of Grupo Mexico
SCHEDULE V -- Restrictive Agreements of Grupo Mexico
SCHEDULE VI -- Investments
SCHEDULE VII -- Consents, Material Agreements and Liens
SCHEDULE VIII -- Environmental Matters
SCHEDULE IX -- Material Changes
SCHEDULE X -- Material Liabilities
SCHEDULE XI -- Labor Agreements
SCHEDULE XII -- Legal Proceedings
SCHEDULE XIII -- Repayment of Existing Indebtedness
SCHEDULE XIV -- Restrictive Agreements
SCHEDULE XV -- Tax Matters
EXHIBIT A -- Form of Assignment and Acceptance
EXHIBIT B -- Borrowing Base Certificate
EXHIBIT C -- [Intentionally Omitted]
EXHIBIT D-1 -- Form of Opinion of Special New York Counsel to the Obligors
EXHIBIT D-2 -- Form of Opinion of Special New Jersey Counsel to Grupo Mexico
EXHIBIT D-3 -- Form of Opinion of Special Mexican Counsel to the Obligors
EXHIBIT E-1 -- Form of Opinion of Special New York Counsel to Chase
EXHIBIT E-2 -- Form of Opinion of Special Mexican Counsel to Chase
ANNEX 1 -- Form of Asarco Security Agreement
<PAGE>
REVOLVING CREDIT AGREEMENT dated as of November 10, 1999, among: ASARCO
INCORPORATED, a New Jersey corporation (together with its permitted successors
and assigns, the "Borrower"); GRUPO MEXICO, S.A. DE C.V., a SOCIEDAD ANONIMA DE
CAPITAL VARIABLE (corporation) organized and existing under the laws of Mexico
("Grupo Mexico"); each of the LENDERS identified under the caption "Lenders" on
the signature pages hereof or which, pursuant to Section 2.17(b) or Section
10.04, shall become a Lender hereunder (each, a "Lender"); and THE CHASE
MANHATTAN BANK, as administrative agent for the Lenders (in such capacity,
together with its successors in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, Grupo Mexico and Asmex Corporation, a Delaware corporation
("Asmex") and a subsidiary of Grupo Mexico, have made an offer to purchase 100%
of the shares of the outstanding capital stock of the Borrower not already owned
by Grupo Mexico, and has pursuant to the Credit Agreement referred to below
arranged to borrow loans in an aggregate principal amount not exceeding
$817,000,000 for the purpose of financing in part such purchase;
WHEREAS, in connection with such purchase by Asmex of capital stock of
the Borrower, Grupo Mexico and certain Affiliates of Grupo Mexico have
contributed approximately $430,000,000 to the equity capital of Asmex;
WHEREAS, subsequent to its purchase pursuant to such offer of at least
80% of the outstanding capital stock of the Borrower, and pursuant to the Merger
Agreement referred to below, Asmex is to be merged into the Borrower, with the
Borrower becoming an 89%-owned subsidiary of Grupo Mexico; and
WHEREAS, the Borrower requires certain financing for working capital
purposes and to refinance certain outstanding indebtedness, and has requested
that the Lenders make revolving loans to the Borrower in an aggregate principal
amount at any one time outstanding not to exceed $450,000,000;
NOW, THEREFORE, the Lenders are prepared to make such revolving loans
upon the terms and conditions hereof, and, accordingly, the parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Revolving Loan or Borrowing,
refers to whether such Revolving Loan, or the Revolving Loans constituting such
Borrowing, are bearing interest at a rate determined by reference to the
Alternate Base Rate.
"Adjusted LIBO Rate" means, for the Interest Period for any Eurodollar
Borrowing, an interest rate per annum (rounded upwards, if necessary, to the
next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied
by (b) the Statutory Reserve Rate for such Interest Period.
"Administrative Agent" has the meaning assigned to such term in the
first introductory paragraph hereto.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Affiliated Party" means each of the Borrower, ASMEX, Grupo Mexico and
GMM.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate for
such day plus 1% and (c) the Federal Funds Effective Rate for such day plus 1/2
of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate,
the Base CD Rate or the Federal Funds Effective Rate shall be effective from and
including the effective date of such change in the Prime Rate, the Base CD Rate
or the Federal Funds Effective Rate, as the case may be.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Applicable Spread" means, (a) from the date hereof to the Merger
Closing Date, (i) with respect to any ABR Revolving Loan, 3.50% per annum, (ii)
with respect to any Eurodollar Revolving Loan, 4.50%, and (iii) with respect to
the commitment fee, 0.625%;
(b) From the Merger Closing Date to the payment in full of the Tender
Offer Loans, with respect to any ABR Revolving Loan or Eurodollar Revolving Loan
or with respect to the commitment fees payable hereunder, as the case may be,
the applicable rate per annum set forth below under the caption "ABR Spread",
"Eurodollar Spread" or "Commitment Fee Rate", respectively, based upon the bank
loan ratings by Moody's and S&P, respectively, applicable on such date to the
Index Debt:
- --------------------------------------------------------------------------------
INDEX DEBT ABR EURODOLLAR COMMITMENT
CATEGORIES RATINGS SPREAD SPREAD FEE RATE
- ---------- ------- ------ ------ --------
- --------------------------------------------------------------------------------
Category A Ba3 or higher/ 2.50% 3.50% 0.625%
BB- or higher
- --------------------------------------------------------------------------------
Category B B1 or lower/ 2.75% 3.75% 0.625%
B+ or lower
- --------------------------------------------------------------------------------
(c) From and after the payment in full of the Tender Offer Loans, the
relevant "Applicable Spread" set forth in clause (b) minus 0.50%, and the
relevant "Commitment Fee Rate" set forth in clause (b) minus 0.125%.
For purposes of the foregoing, (a) if either Moody's or S&P shall not
have in effect a rating for the Index Debt (other than by reason of the
circumstances referred to in the last sentence of this definition), then such
rating agency shall be deemed to have established a rating in Category B; (b) if
the ratings established or deemed to have been established by Moody's and S&P
for the Index Debt shall fall within different Categories, the Applicable Rate
shall be based on the lower; and (c) if the ratings established or deemed to
have been established by Moody's and S&P for the Index Debt shall be changed
(other than as a result of a change in the rating system of Moody's or S&P),
such change shall be effective as of the date on which it is first announced by
the applicable rating agency. Each change in the Applicable Rate shall apply
during the period commencing on the effective date of such change and ending on
the date immediately preceding the effective date of the next such change. If
the rating system of Moody's or S&P shall change, or if either such rating
agency shall cease to be in the business of rating corporate debt obligations,
the Borrower and the Lenders shall negotiate in good faith to amend this
definition to reflect such changed rating system or the unavailability of
ratings from such rating agency and, pending the effectiveness of any such
amendment, the Applicable Rate shall be determined by reference to the rating
most recently in effect prior to such change or cessation.
"Approved Fund" means respect to any Lender that is a fund that invests
in commercial loans, any other fund that invests in commercial loans and is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Asarco Security Agreement" means the Security Agreement dated November
10, 1999, between the Borrower and Chase, as Collateral Agent, substantially in
the form of Annex 1, as modified and supplemented and in effect from time to
time.
"Asarco Share Pledge Agreement" means the Pledge Agreement dated
November 10, 1999, among Grupo Mexico, Asmex and Chase, as Collateral Agent, as
modified and supplemented and in effect from time to time.
"Asmex" has the meaning assigned to such term in the first recital
hereto.
"Assessment Rate" means, for any day, the annual assessment rate in
effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in Dollars at the
offices of such member in the United States of America; provided that if, as a
result of any change in any law, rule or regulation, it is no longer possible to
determine the Assessment Rate as aforesaid, then the Assessment Rate shall be
such annual rate as shall be determined by the Administrative Agent to be
representative of the cost of such insurance to the Lenders.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.04), and accepted by the Administrative Agent, in the
form of Exhibit A or any other form approved by the Administrative Agent.
"Assumption Agreement" means the Assumption Agreement to be entered
into between Asarco and the Collateral Agent, substantially in the form of
Exhibit J to the Credit Agreement, as modified and supplemented and in effect
from time to time.
"Availability Period" means the period from and including the Effective
Date to but excluding the earlier of the Commitment Termination Date and the
date of termination of the Commitments.
"Base CD Rate" means, for any day, the sum of (a) the Three-Month
Secondary CD Rate for such day multiplied by the Statutory Reserve Rate for such
day plus (b) the Assessment Rate for such day.
"Bital Share Pledge Agreement" means the Pledge Agreement dated
November 10, 1999, between the Bital Trustee and Chase, as Collateral Agent, as
modified and supplemented and in effect from time to time.
"Bital Share Trust" means the trust created pursuant to the Trust
Agreement Number 80985 dated September 24, 1997, between Mexico Desarollo
Industrial Minero, S.A. de C.V. (presently GMM) and Banco del Atlantico, S.A.,
Institucion de Banca Multiple, Grupo Financiero GBM (presently the Bital
Trustee), as amended to the date hereof.
"Bital Trustee" means Banco Internacional S.A. Institucion de Banca
Multiple, Grupo Financiero Bital, S.A. de C.V., as trustee under the Bital Share
Trust.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Board of Directors" means either the board of directors of the
Borrower or any duly authorized committee of that board or any directors and/or
officers of the Borrower to whom that board or committee shall have duly
delegated its authority.
"Borrower" has the meaning assigned to such term in the first
introductory paragraph hereto.
"Borrower Contracts" has the meaning assigned to such term in Section
4.04(a).
"Borrowing" means (a) all ABR Revolving Loans made, Converted or
Continued on the same date or (b) all Eurodollar Revolving Loans that have the
same Interest Period. For purposes hereof, the date of a Borrowing comprising
Revolving Loans that have been Converted or Continued shall be the effective
date of the most recent Conversion or Continuation of such Revolving Loans.
"Borrowing Base" means, as at any date, (a) 85% of the aggregate amount
of Eligible Receivables at such date, plus (b) 65% of the aggregate value of
Eligible Inventory at such date consisting of in-process metal, metal
concentrates at mine sites and refined metals, minus (c) an amount equal to the
lesser of $9,000,000 and the aggregate cost required to process Eligible
Inventory consisting of concentrates to satisfy obligations (if any) of gold or
silver leased or sold, plus (d) the lesser of (i) 60% of the aggregate value of
the shares of Class A Common Stock of Southern Peru owned by SPC Holdings so
long as the stock of SPC Holdings is then held in pledge under the SPC Holdings
Share Pledge Agreement and (ii) $300,000,000, plus (e) the aggregate amount of
cash collateral for LC Exposure held by the Administrative Agent in the
Collateral Account as contemplated in Section 2.06(k). For purposes of this
computation, (i) the "value" of Eligible Inventory shall (x) be determined at
the lower of cost or market in accordance with GAAP, except that cost shall be
determined on a current cost basis and (y) not include the amount (if any) by
which (A) the value of Borrower Inventory shipped to customers of the Borrower
by third parties exceeds (B) the value of third parties' products shipped by the
Borrower to such third parties' customers under Inventory exchange agreements,
if and to the extent such excess is greater than 5% of the Borrower's total
Inventory value at such time, and (ii) the "value" of the shares of Class A
Common Stock of Southern Peru owned by SPC Holdings on any date shall be equal
to the product of (x) the number of such shares multiplied by (y) the most
recent closing price per share of Southern Peru common stock traded on the New
York Stock Exchange, as reported in The Wall Street Journal, or, if no such
trading shall have taken place (or no such price shall have been so reported)
for a period of five or more consecutive Business Days ending on such date and
the Administrative Agent has determined that such most recently-reported price
no longer adequately reflects the fair value of such shares, then the price per
share that the Administrative Agent in good faith determines from time to time
to be a fair value at such time. The Administrative Agent may at any time adjust
the foregoing definition of "Borrowing Base", in the event that it reasonably
determines a change in accounting practices by the Borrower would materially
affect the Borrowing Base value of Eligible Inventory or Eligible Receivables,
to eliminate the effect of such change.
"Borrowing Base Certificate" means a certificate of a Financial Officer
of the Borrower, substantially in the form of Exhibit B (with such changes as
may be agreed to by the Administrative Agent) and appropriately completed.
"Borrowing Request" means a request by the Borrower for a Borrowing in
accordance with Section 2.03.
"Business Day" means any day (a) that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed and (b) if such day relates to a borrowing of, a payment
or prepayment of principal of or interest on, a continuation or conversion of or
into, or the Interest Period for, a Eurodollar Borrowing, or to a notice by the
Borrower with respect to any such borrowing, payment, prepayment, continuation,
conversion, or Interest Period, that is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.
"Capital Expenditures" means, for any Person for any period, the
aggregate during such period of (i) all expenditures by such Person and its
Subsidiaries during such period for property, plant or equipment, including,
without limitation, renewals, improvements, replacements and capitalized
repairs, that would be reflected as additions to property, plant or equipment on
a consolidated balance sheet of such Person and its Subsidiaries prepared in
conformity with GAAP and (ii) the principal amount of all Indebtedness assumed
in connection with any such additions to property, plant or equipment. For the
purpose of this definition, the purchase price of equipment which is acquired
simultaneously with the trade-in of existing equipment owned by such Person or
any of its Subsidiaries or with insurance proceeds shall be included in Capital
Expenditures only to the extent of the gross amount of such purchase price less
the credit granted by the seller of such equipment being traded in at such time
or the amount of such proceeds, as the case may be.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"CERCLA" shall have the meaning assigned to such term in Section
4.06(d).
"Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the SEC
thereunder as in effect on the date hereof) other than Grupo Mexico, any
corporation or entity through which Grupo Mexico at any time indirectly owns or
Controls the Borrower in accordance with Section 7.03, or the Larrea Family (as
defined in Section 3.08(n)), of shares representing more than 51% of the
aggregate ordinary voting power represented by the issued and outstanding
capital stock of Grupo Mexico, GMM, or the Borrower; (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of GMM
or Grupo Mexico by Persons who were neither (i) nominated by the board of
directors of Grupo Mexico or the Larrea Family nor (ii) appointed by directors
so nominated; or (c) the acquisition of direct or indirect Control of Grupo
Mexico by any Person or group other than the Larrea Family.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.13(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Chase" means The Chase Manhattan Bank.
"Class A Common Stock" has the meaning assigned to such term in the
Restated Certificate of Incorporation of Southern Peru.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral Agent" means Chase, in its capacity as collateral agent
under the Security Documents and the Inter-Creditor Agreement, and its
successors in such capacity.
"Commitment" means, with respect to each Lender, the commitment of such
Lender to make Revolving Loans and to acquire participations in Letters of
Credit hereunder during the Availability Period, expressed as an amount
representing the maximum principal amount of such Lender's Revolving Credit
Exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.07 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 10.04. The initial
amount of each Lender's Commitment is set forth on Schedule I, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Commitment, as applicable. The initial aggregate amount of the Lenders'
Commitments is $450,000,000.
"Commitment Termination Date" means August 10, 2002.
"Consolidated Adjusted EBITDA" for any period means the sum of the
amounts for such period, for the Borrower and its consolidated Subsidiaries, of
(a) Consolidated Net Income, plus (b) Consolidated Interest Expense, to the
extent such amount was deducted in calculating Consolidated Net Income, plus (c)
provisions for income and asset taxes and employee profit sharing amounts, to
the extent such amounts were deducted in calculating Consolidated Net Income
(other than such items (either positive or negative) attributable to
extraordinary gains or losses or to gains or losses on sales of assets), plus
(d) depreciation expense, to the extent such amount was deducted in calculating
Consolidated Net Income, plus (e) amortization expense, to the extent such
amount was deducted in calculating Consolidated Net Income, plus (f) foreign
exchange losses that are reported below the "operating income" line on the
Borrower's consolidated income (loss) statements, plus (g)(i) all non-cash items
that are reported below the "operating income" line on the Borrower's
consolidated income (loss) statements (including monetary losses and equity in
losses of Persons that are not consolidated Subsidiaries of the Borrower), to
the extent reducing Consolidated Net Income (other than items that will require
cash payments and for which an accrual or reserve is, or is required by GAAP to
be, made) and (ii) Merger-related non-recurring charges not exceeding
$20,000,000 in the aggregate, less (h) deferred income taxes and accrued
employee profit sharing amounts (other than deferred income taxes (either
positive or negative) attributable to extraordinary and nonrecurring gains or
losses on sales of assets), less (i) foreign exchange gains that are reported
below the "operating income" line on the Borrower's consolidated income (loss)
statements, and less (j) all non-cash items that are reported below the
"operating income" line on the Borrower's consolidated income (loss) statement
(including monetary gains and equity in earnings of Persons that are not
consolidated Subsidiaries of the Borrower), to the extent increasing
Consolidated Net Income (other than items that will result in the receipt of
cash payments), all determined on a consolidated basis for the Borrower in
conformity with GAAP.
"Consolidated Interest Expense" means, for any period, the aggregate
consolidated amount of interest accrued by the Borrower and its consolidated
Subsidiaries in respect of Indebtedness (including amortization of original
issue discount on any Indebtedness and the interest portion of any deferred
payment obligation, calculated in accordance with the effective interest method
of accounting); all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing; the net cost
associated with interest rate or currency Hedging Agreements; and interest paid
(by any Person) with respect to Indebtedness that is a Guarantee of or secured
by any assets of the Borrower or any of its consolidated Subsidiaries, plus, to
the extent not included in such interest expense, all but the principal
component of rentals in respect of Capital Lease Obligations paid, accrued or
scheduled to be paid or to be accrued by the Borrower or any consolidated
Subsidiary during such period. All of the foregoing amounts shall be calculated
on a "gross" basis without crediting against such amounts any interest or other
investment income.
"Consolidated Net Income" for any period means the aggregate
consolidated net income (or loss) of the Borrower and its consolidated
Subsidiaries for such period determined in conformity with GAAP; provided, that
the following items shall be excluded in computing Consolidated Net Income
(without duplication): (a) the net income (or loss) of (i) Southern Peru or (ii)
any Person that is not a consolidated Subsidiary of the Borrower, except that
Consolidated Net Income shall include the amount of any cash dividends or
distributions actually paid to the Borrower or a consolidated Subsidiary of the
Borrower by Southern Peru or such other Person during such period; (b) all
extraordinary gains and extraordinary losses; (c) any gains or losses
attributable to any sale of assets that are reported below the "operating loss
(profit)" line on the Borrower's statement of results of operations; and (d) the
tax effect of any of the items described in clauses (a) through (c) above.
"Consolidated Net Tangible Assets" means, as at any date of
determination, the aggregate amount of assets (less applicable reserves and
other properly deductible items) after deducting therefrom (a) all current
liabilities (excluding any thereof constituting Funded Debt by reason of being
renewable or extendable) and (b) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, all as set
forth on the most recent balance sheet of the Borrower and its consolidated
Subsidiaries and computed in accordance with GAAP.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.05 of a Revolving Loan of one Type as a
Revolving Loan of the same Type from one Interest Period to the next Interest
Period.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.05 of one Type of Revolving Loans into another Type of
Revolving Loans, which may be accompanied by the transfer by a Lender (at its
sole discretion) of a Revolving Loan from one applicable lending office to
another.
"Credit Agreement" means the Credit Agreement dated November 10, 1999,
among Asmex, Grupo Mexico, the lenders party thereto and Chase, as
administrative agent, providing for loans to Asmex in an aggregate principal
amount not exceeding US$817,000,000, as modified and supplemented and in effect
from time to time.
"Debt to EBITDA Ratio" means, at any date, the ratio of (a)
consolidated Indebtedness of the Borrower and its consolidated Subsidiaries on
such date to (b) Consolidated Adjusted EBITDA for the period of four consecutive
fiscal quarters ending on such date (or if such date is not the last day of a
fiscal quarter, ending on the last day of the last fiscal quarter next preceding
such date).
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Dollars" or "$" refers to lawful money of the United States of
America.
"Duff & Phelps" means Duff & Phelps Credit Rating Co. or any successor
thereto.
"Effective Date" means the date on which the conditions specified in
Section 5.01 are satisfied (except to the extent waived in accordance with
Section 10.02).
"Eligible Inventory" means, as at any date, the sum of the following
(determined without duplication):
(a) all Inventory (i) that is owned by (and in the possession or
under the control of) the Borrower as at such date, (ii) that is
located in a jurisdiction in the United States of America, (iii) as to
which appropriate Uniform Commercial Code financing statements have
been filed naming the Borrower as "debtor" and the Collateral Agent as
"secured party", (iv) that is in good condition, (v) that meets all
standards imposed by any governmental agency or department or division
thereof having regulatory authority over such Inventory, its use or
sale and (vi) that is either currently usable or currently saleable in
the normal course of the Borrower's business without any notice to, or
consent of, any governmental agency or department or division thereof
(excluding however, except to the extent that the Required Lenders
otherwise agree with respect to any specific customer or processor,
any such Inventory that has been shipped to a customer or processor of
the Borrower, even if on a consignment or "sale or return" basis),
minus
(b) Inventory deliverable to the Borrower under commodity Hedging
Agreements to the extent the value thereof exceeds 25% of total
Inventory.
"Eligible Receivables" means, as at any date, the aggregate amount of
all Receivables at such date payable to the Borrower other than the following
(determined without duplication):
(a) any Receivable not payable in Dollars,
(b) any Receivable that, at the date of issuance of the invoice
therefor, was payable more than 60 days after shipment of the related
Inventory,
(c) any Receivable owing from a Subsidiary or Affiliate of the
Borrower,
(d) any Receivable owing from an account debtor whose principal
place of business is located outside of the United States of America
(except in Canada or Europe, to the extent Receivables owing from
account debtors in such locations do not exceed 20% of total Eligible
Receivables),
(e) any Receivable that is more than 60 days past due,
(f) all Receivables of any account debtor if more than 50% of the
aggregate amount of the Receivables owing from such account debtor
shall at the time be more than 60 days past due,
(g) Receivables owing from any account debtor to the extent the
Receivables owing from such account debtor and its Affiliates at the
time exceed 25% of all Receivables then payable to the Borrower,
(h) any Receivable as to which there is any unresolved dispute or
other offsets with the respective account debtor (but only to the
extent of the amount thereof in dispute), and
(i) any Receivable representing an obligation for goods sold on
consignment, approval or a sale-or-return basis or subject to any
other repurchase or return arrangement.
"Environmental Claim" shall have the meaning assigned to such term in
Section 4.06(d).
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any of its Subsidiaries directly
or indirectly resulting from or based upon (a) violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Environmental Permits" has the meaning assigned to such term in
Section 4.06(a).
"Equity Rights" means, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including any shareholders' or voting trust agreements) for the issuance, sale,
registration or voting of, or securities convertible into, any additional shares
of capital stock of any class, or partnership or other ownership interests of
any type in, such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan (other than any such notice
received prior to the date of this Agreement and heretofore disclosed to the
Administrative Agent regarding the Retirement Income Plan for Hourly Related
Employees of the Borrower (and any subsequent such notice related thereto)); (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Revolving Loan or
Borrowing, refers to whether such Revolving Loan, or the Revolving Loans
constituting such Borrowing, are bearing interest at a rate determined by
reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
VIII.
"Exchange Act" means the Securities Exchange Act of 1934, together with
the Rules and Regulations of the SEC thereunder, as amended.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower or of Grupo Mexico hereunder, (a) income or franchise
Taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits Taxes imposed by the United States of America or any similar Tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.17(b)), any withholding Tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement or is attributable to such Foreign Lender's failure or
inability to comply with Section 2.15(e), except to the extent that such Foreign
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such withholding Tax
pursuant to Section 2.15(a).
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" means, with respect to any Person, the chief
financial officer, principal accounting officer, treasurer or controller of such
Person.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Funded Debt" means all indebtedness for money borrowed having a
maturity of more than 12 months from the date as of which the amount thereof is
to be determined or having a maturity of less than 12 months but by its terms
being renewable or extendable beyond 12 months from such date at the option of
the Borrower.
"GAAP" means generally accepted accounting principles in the United
States of America, except in the case of each of (a) GMM, (b) Grupo Mexico, for
all accounting periods ending prior to January 1, 2000, and (c) Grupo
Ferroviario, in which case "GAAP" means generally accepted accounting principles
in Mexico.
"GMM" means Grupo Minero Mexico, S.A. de C.V., a SOCIEDAD ANONIMA DE
CAPITAL VARIABLE (corporation) organized and existing under the laws of Mexico.
"GMM Share Pledge Agreement" means the Pledge Agreement dated November
10, 1999, between Grupo Mexico, GMM and Chase, as Collateral Agent, as modified
and supplemented and in effect from time to time.
"Governmental Authority" means the government of the United States of
America, or of Mexico, or of any other nation, or any political subdivision
thereof, whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.
"Grupo Ferroviario" means Grupo Ferroviario Mexicano, S.A. de C.V., a
SOCIEDAD ANONIMA DE CAPITAL VARIABLE (corporation) organized and existing under
the laws of Mexico.
"Grupo Mexico" has the meaning assigned to such term in the first
introductory paragraph hereto.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation, (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation, or (e) in respect of any Hedging Agreement. The amount of any
Guarantee shall be deemed equal to the stated or determinable amount of the
obligation in respect of which such Guarantee is made if such Guarantee is in
respect of the total stated or determinable amount thereof, or, if not stated or
if indeterminable, the maximum reasonably anticipated liability in respect
thereof, and, in respect of Hedging Agreements, shall be equal to the maximum
aggregate amount (giving effect to any netting agreements) that such Person
would be required to pay if such Hedging Agreement were terminated at such time;
provided, that the term Guarantee shall not include endorsements for collection
or deposit in the ordinary course of business.
"Guaranteed Obligations" has the meaning assigned to such term in
Section 3.01.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes, mandatorily redeemable or exchangeable stock or similar
instruments (to the extent so redeemable or exchangeable by their respective
terms prior to the Maturity Date), (c) all obligations of such Person upon which
interest charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h)
all Capital Lease Obligations of such Person, (i) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty and (j) all obligations, contingent or otherwise, of
such Person in respect of bankers' acceptances. The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Index Debt" means the Revolving Loans and the Tender Offer Loans.
"Initial Disbursement" means the first disbursement to the Borrower of
Revolving Loans under this Agreement.
"Initial Disbursement Date" means the date on which the Initial
Disbursement is made.
"Inter-Creditor Agreement" means the agreement among the Borrower,
Asmex, Grupo Mexico, the Administrative Agent (on behalf of the Lenders), the
administrative agent under the Credit Agreement (on behalf of the lenders
thereunder), the Liquidity Facility Agent referred to therein, and the
Collateral Agent, substantially in the form of Exhibit I to the Credit
Agreement, as modified and supplemented and in effect from time to time.
"Interest Election Request" means a request by the Borrower to Convert
or Continue a Borrowing in accordance with Section 2.05.
"Interest Payment Date" means (a) with respect to any ABR Revolving
Loan, each Quarterly Date, and (b) with respect to any Eurodollar Revolving
Loan, the last day of each Interest Period therefor and, in the case of any
Interest Period of more than three months' duration, each day prior to the last
day of such Interest Period that occurs at three-month intervals after the first
day of such Interest Period.
"Interest Period" means:
(a) for any Borrowing (other than an ABR Borrowing), the Interest
Period of the Revolving Loan or Revolving Loans constituting such
Borrowing; and
(b) for any Eurodollar Revolving Loan, the period commencing on the
date of such Revolving Loan and ending on the numerically corresponding day
in the calendar month that is one, two, three or six months thereafter, as
specified in the applicable Borrowing Request or Interest Election Request;
provided, that (i) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day, (ii) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period and
(iii) no Interest Period may extend beyond the Maturity Date. For purposes
hereof, the date of a Revolving Loan initially shall be the date on which such
Revolving Loan is made and thereafter shall be the effective date of the most
recent Conversion or Continuation of such Revolving Loan.
"Inventory" means copper, zinc, lead, gold, silver and other metals and
by-products extracted, processed, smelted or refined by the Borrower in the
ordinary course of business as presently conducted.
"Investment" means, for any Person: (a) the acquisition (whether for
cash, property, services or securities or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
of any other Person or any agreement to make any such acquisition (including any
"short sale" or any sale of any securities at a time when such securities are
not owned by the Person entering into such sale); (b) the making of any deposit
with, or advance, loan or other extension of credit to, any other Person
(including the purchase of property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such property to
such Person), but excluding any such advance, loan or extension of credit having
a term not exceeding 90 days arising in connection with the sale of inventory or
supplies by such Person in the ordinary course of business; (c) the entering
into of any Guarantee of, or other contingent obligation with respect to,
Indebtedness of any other Person and (without duplication) any amount committed
to be advanced, lent or extended to such Person; or (d) the entering into of any
Hedging Agreement.
"Issuing Lender" means Chase, in its capacity as issuer of Letters of
Credit hereunder, any other Lender acting as an additional Issuing Lender
pursuant to Section 2.06(c), and (in each case) its successors in such capacity
as provided in Section 2.06(j).
"LC Disbursement" means a payment made by the Issuing Lender pursuant
to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrower at such time. The LC Exposure of any Lender at any time shall be
its Applicable Percentage of the total LC Exposure at such time.
"Lenders" has the meaning assigned to such term in the first
introductory paragraph hereto.
"Letter of Credit" means any letter of credit issued pursuant to this
Agreement.
"Letter of Credit Documents" means, with respect to any Letter of
Credit, collectively, any application therefor and any other agreements,
instruments, guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing for (a) the
rights and obligations of the parties concerned or at risk with respect to such
Letter of Credit or (b) any collateral security for any of such obligations,
each as the same may be modified and supplemented and in effect from time to
time.
"LIBO Rate" means, for the Interest Period for any Eurodollar
Borrowing, the rate appearing on Page 3750 of the Telerate Service (or on any
successor or substitute page of such Service, or any successor to or substitute
for such Service, providing rate quotations comparable to those currently
provided on such page of such Service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates
applicable to Dollar deposits in the London interbank market) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, as the rate for the offering of Dollar deposits with a maturity
comparable to such Interest Period. In the event that such rate is not available
at such time for any reason, then the LIBO Rate for such Interest Period shall
be the rate at which Dollar deposits of $5,000,000 and for a maturity comparable
to such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, property or condition (financial or otherwise), or (after the
Merger Date) the prospects, of Grupo Mexico and its Subsidiaries, GMM and its
Subsidiaries, or the Borrower and its Subsidiaries, in each case taken as a
whole; 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 (a) at any time prior to the
Merger Closing Date, (b) the validity or enforceability of any of the Revolving
Loan Documents or (c) the rights and remedies of the Administrative Agent, the
Collateral Agent or the Lenders thereunder.
"Material Indebtedness" means Indebtedness (other than the Revolving
Loans), or obligations in respect of one or more Hedging Agreements, of any one
or more of Grupo Mexico, the Borrower, GMM or any Subsidiary of any thereof in
an aggregate principal amount exceeding (a) in the case of Grupo Mexico,
$5,000,000, (b) in the case of the Borrower, $25,000,000, (c) in the case of
GMM, $30,000,000, and (d) in the case of any Subsidiaries of Grupo Mexico not
referred to in (b) or (c), $15,000,000 in the aggregate as to all such
Subsidiaries. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of any Person in respect of any Hedging Agreement at
any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that such Person would be required to pay if such Hedging Agreement
were terminated at such time.
"Material Subsidiary" means, at any time, any Subsidiary of GMM or any
Subsidiary of Grupo Mexico having at such time total assets or total revenue, as
of the last day of or for the preceding fiscal quarter, in excess of 10% of the
total assets or 10% of the total revenue of GMM and its Subsidiaries or Grupo
Mexico and its Subsidiaries, as the case may be, on a consolidated basis.
"Maturity Date" means November 10, 2002.
"Measuring Period" means (a) the six-month period ending June 30, 2000,
(b) the nine-month period ending on September 30, 2000, and (c) at all times
thereafter, a twelve-month period.
"Merger" shall mean the merger of Asmex with and into the Borrower,
with the Borrower as the surviving corporation pursuant to the Merger Agreement.
"Merger Agreement" means the Agreement and Plan of Merger among the
Borrower, Grupo Mexico and Asmex dated as of October 25, 1999.
"Merger Closing Date" means the date on which the Merger shall become
effective. "Merger Documents" means all agreements and instruments, including
the Merger Agreement, the certificates of Merger, all proxy materials and any
other document or information sent by the Borrower, Asmex or Grupo Mexico to the
Borrower's stockholders generally or filed with the SEC under the Exchange Act
in respect of the Merger, effecting, evidencing or governing the Merger and as
the same may be subsequently amended, modified or supplemented in accordance
with the provisions thereof and hereof.
"Mexico" means the United Mexican States.
"MMI" means Minera Mexico Internacional, Inc., a New York corporation.
"Moody's" means Moody's Investors Service, Inc. or any successor
thereto.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Obligor" means each of the Borrower and Grupo Mexico.
"Offer to Purchase" means the Offer to Purchase for Cash All of the
Outstanding Shares of Common Stock of the Borrower, by Asmex, dated September
27, 1999, as such Offer to Purchase has been modified and supplemented prior to
the date hereof.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made by any Obligor under any Revolving Loan Document or from
the execution, delivery or enforcement of, or otherwise with respect to, any
Revolving Loan Document.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Investments" means each of the following, denominated in
Dollars:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed
by the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, any domestic office of any commercial bank organized
under the laws of the United States of America or any State thereof which
has a combined capital and surplus and undivided profits of not less than
$250,000,000; and
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) of this definition and
entered into with a financial institution satisfying the criteria described
in clause (c) of this definition.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreements" means, collectively, (a) the Asarco Share Pledge
Agreement, (b) the GMM Share Pledge Agreement , (c) the SPC Holdings Share
Pledge Agreement and (d) the Bital Share Pledge Agreement.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by Chase as its prime rate in effect at its principal office
in New York City; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.
"Principal Consolidated Net Tangible Assets" means the aggregate amount
of assets comprising Principal Property (less applicable reserves and other
properly deductible items) after deducting therefrom (a) all current liabilities
attributable to Principal Property (excluding any thereof constituting Funded
Debt by reason of being renewable or extendable) and (b) all good will, trade
names, trademarks, patents, unamortized debt discount and expense and other like
intangibles attributable to Principal Property, all as set forth on the most
recent balance sheet of the Borrower and its consolidated Subsidiaries and
computed in accordance with GAAP.
"Principal Property" means any smelters, refineries, mines,
concentrators or other facilities, located within the present 50 states of the
United States of America (excluding the territories and possessions of the
United States of America) and owned by the Borrower or any Subsidiary of the
Borrower, in each case the gross book value (without deduction of any
depreciation reserves) of which on the date as of which the determination is
being made exceeds 3% of Consolidated Net Tangible Assets, other than any such
facility or portion thereof which is pollution control or other equipment or
facility financed by obligations issued by a State or local government unit;
provided, however, that Principal Property shall not include any smelters,
refineries, mines, concentrators or facilities or any portions thereof which the
Board of Directors of the Borrower declares by resolution are not of material
importance to the total business conducted by the Borrower and its Subsidiaries
as an entirety.
"Process Agent" has the meaning assigned to such term in Section
10.09(d).
"Proxy Statement" has the meaning assigned to such term in Section
4.08.
"Quarterly Dates" means, initially, the date of the three-month
anniversary of the Initial Disbursement Date; and, thereafter, the last day of
each consecutive three-month period thereafter.
"Receivable" means, as at any date, the unpaid portion of the
obligation, as stated on the respective invoice, of a customer of the Borrower
in respect of Inventory sold and shipped by the Borrower to such customer, net
of any credits, rebates or offsets owed to such customer and also net of any
commissions payable to third parties (and for purposes hereof, a credit or
rebate paid by check or draft of the Borrower shall be deemed to be outstanding
until such check or draft shall have been debited to the account of the Borrower
on which such check or draft was drawn).
"Reference Banks" means the principal London office of each of the
Administrative Agent, Dresdner Bank AG and [__________].
"Register" has the meaning set forth in Section 10.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Revolving Credit
Exposures and unused Commitments representing more than 50% of the sum of the
total Revolving Credit Exposures and unused Commitments at such time. The
"Required Lenders" of a particular class of Revolving of Loans means Lenders
having Revolving Credit Exposures and unused Commitments of such class
representing more than 50% of the total Revolving Credit Exposures and unused
Commitments of such class at such time.
"Required Third Party Consents" shall have the meaning assigned to such
term in Section 4.04(b).
"Responsible Officer" means the chief executive officer or the
president of the Borrower, or any other officer having substantially the same
authority and responsibility; or, with respect to compliance with financial
covenants, the chief financial officer or the treasurer of the Borrower, or any
other officer having substantially the same authority and responsibility.
"Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any shares of any class
of capital stock of the Borrower or Grupo Mexico, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such shares of capital stock of the Borrower
or Grupo Mexico or any option, warrant or other right to acquire any such shares
of capital stock of the Borrower or Grupo Mexico.
"Revolving Credit Exposure" means, with respect to any Lender at any
time, the aggregate sum of the outstanding principal amount of such Lender's
Revolving Loans and its LC Exposure at such time.
"Revolving Loan Documents" means, collectively, this Agreement and the
Security Documents.
"Revolving Loans" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw-Hill,
Inc. or any successor thereto.
"SEC" means the Securities and Exchange Commission or any successor
thereto.
"SEC Reports" has the meaning assigned to such term in Section 4.05.
"Securities Act" means the Securities Act of 1933, together with the
rules and regulations of the SEC thereunder, as amended.
"Security Documents" means, collectively, the Asarco Security
Agreement, the Unclaimed Funds Security Agreement, the Pledge Agreements and all
Uniform Commercial Code financing statements required by the Asarco Security
Agreement, the Unclaimed Funds Security Agreement or the Pledge Agreements to be
filed with respect to the security interests created pursuant to the Asarco
Security Agreement, the Unclaimed Funds Security Agreement or the Pledge
Agreements.
"SEN Facility" means the Trust Indenture, Security Agreement and
Guaranty dated as of November 20, 1995, among Grupo Mexico Export Master Trust
No. 1, acting by and through The Bank of New York as Trustee, as Issuer of
Secured Export Notes; Mexico Desarollo Industrial Minera, S.A. de C.V.
(presently GMM), as Issuer of Medimsa Notes; Industrial Minero Mexico, S.A. de
C.V., Minera Mexico Internacional, Inc., Mexicana de Cobre, S.A. de C.V.,
Minerales Metalicos del Norte, S.A. de C.V., and Mexicana de Cananea, S.A. de
C.V., as Guarantors and as Principal Subsidiaries; and Chemical Bank, as
Collateral Agent, as supplemented by the Series Supplement No. 1 and Series
Supplement No. 2 thereto dated October 28, 1996 and August 28, 1997 and as
amended by Section 4.3(f) of the CAPMac Agreement, respectively, all as in
effect on the date hereof and except as otherwise specified herein, as the same
may be amended from time to time as permitted hereunder.
"Significant Subsidiary" means any consolidated Subsidiary of the
Borrower whose assets comprise 1 1/2% or more of the consolidated total assets
of the Borrower and its consolidated Subsidiaries, as reflected in the latest
consolidated balance sheet delivered to the Lenders pursuant to Section 6.01.
"Solvent" means, with respect to any Person on a particular date, that
on such date (a) the fair market value of the property of such Person is greater
than the total amount of its liabilities, (b) the present fair salable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (c) such Person does not believe that it will incur debts or
liabilities beyond its ability to pay as such debts and liabilities mature and
(d) such Person is not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which its property would constitute an
unreasonably small capital.
"Southern Peru" means Southern Peru Copper Corporation, a Delaware
corporation.
"SPC Holdings" means Southern Peru Holdings Corporation, a Delaware
corporation.
"SPC Holdings Share Pledge Agreement" means the Pledge Agreement dated
November 10, 1999, between the Borrower and Chase, as Collateral Agent,
substantially in the form of Exhibit H to the Credit Agreement, as modified and
supplemented and in effect from time to time.
"Specialty Chemicals and Aggregates Business" means Enthone-OMI, Inc.
(a Delaware corporation), Enthone, Incorporated (a New York corporation), AR
Mexican Holdings, Inc. (a Delaware corporation), and the American Limestone
Company, Inc. (a Delaware corporation).
"Statutory Reserve Rate" means, for any day (or for the Interest Period
for any Eurodollar Borrowing), a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves), expressed as a decimal,
established by the Board to which the Administrative Agent is subject on such
day (or, with respect to an Interest Period, the denominator of which is the
number one minus the arithmetic mean of such aggregates for the days in such
Interest Period) (a) with respect to the Base CD Rate, for new negotiable
nonpersonal time deposits in Dollars of over $100,000 with maturities
approximately equal to three months and (b) with respect to the Adjusted LIBO
Rate, for eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D. Eurodollar Revolving Loans
shall be deemed to constitute eurocurrency funding and to be subject to such
reserve requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. The Statutory Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.
"Subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Tax Return" has the meaning assigned to such term in Section 4.10(d).
"Tender Offer" means the transactions contemplated by the Offer to
Purchase that are to take place prior to the Effective Date.
"Tender Offer Commitments" has the meaning assigned to the term
"Commitment" in the Credit Agreement.
"Tender Offer Closing Date" means the date of consummation of the
Tender Offer and payment for the shares of the Borrower tendered to Asmex
pursuant thereto.
"Tender Offer Loans" has the meaning assigned to the term "Loans" in
the Credit Agreement.
"Three-Month Secondary CD Rate" means, for any day, the secondary
market rate for three-month certificates of deposit reported as being in effect
on such day (or, if such day is not a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of the
Board, be published in Federal Reserve Statistical Release H.15(519) during the
week following such day) or, if such rate is not so reported on such day or such
next preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 a.m., New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
"Transaction Documents" means, collectively, the Revolving Loan
Documents and the Merger Agreement.
"Transactions" means the execution, delivery and performance by each
Obligor of this Agreement and the other Revolving Loan Documents to which such
Obligor is intended to be a party, the borrowing and securing of Revolving Loans
as provided herein and therein, and the Merger.
"Type", when used in reference to any Revolving Loan or Borrowing,
refers to whether the rate of interest on such Revolving Loan, or on the
Revolving Loans constituting such Borrowing, is determined by reference to the
Adjusted LIBO Rate or the Alternate Base Rate.
"Unclaimed Funds Security Agreement" means the Security Agreement dated
November 10, 1999, between Asmex and the Collateral Agent, with the consent of
the Exchange Agent, substantially in the form of Exhibit G to the Credit
Agreement, as modified and supplemented and in effect from time to time.
"U.S. Registered Note Indenture" means the Indenture dated as of March
31, 1998 between GMM and The Bank of New York, as trustee thereunder, as in
effect on the date hereof and except as otherwise specified herein, as the same
may be amended from time to time as permitted hereunder.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.03. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
THE CREDITS
SECTION 2.01. The Commitments. Subject to the terms and conditions set
forth herein, each Lender agrees to make Revolving Loans to the Borrower from
time to time during the Availability Period in an aggregate principal amount
that will not result in (a) such Lender's Revolving Credit Exposure exceeding
such Lender's Commitment or (b) the total Revolving Credit Exposures exceeding
the Borrowing Base then in effect. Within the foregoing limits and subject to
the terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Revolving Loans.
SECTION 2.02. Revolving Loans and Borrowings.
(a) Obligations of Lenders. Each Revolving Loan shall be made as part
of a Borrowing consisting of Revolving Loans of the same Type made by the
Lenders ratably in accordance with their respective Commitments. The failure of
any Lender to make any Revolving Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender's failure to make Revolving Loans as required.
(b) Type of Revolving Loans. Subject to Section 2.12, each Borrowing
shall be constituted entirely of ABR Revolving Loans or of Eurodollar Revolving
Loans as the Borrower may request in accordance herewith. Each Swingline loan
shall ben an ABR Revolving Loan. Each Lender at its option may make any
Eurodollar Revolving Loan by causing any domestic or foreign branch or Affiliate
of such Lender to make such Revolving Loan; provided that any exercise of such
option shall not affect the obligation of the Borrower to repay such Revolving
Loan in accordance with the terms of this Agreement.
(c) Minimum Amounts; Limitation on Number of Borrowings. Each
Eurodollar Borrowing shall be in an aggregate amount of $5,000,000 or a larger
multiple of $1,000,000. Each ABR Borrowing shall be in an aggregate amount equal
to $5,000,000 or a larger multiple of $1,000,000; provided that an ABR Borrowing
may be in an aggregate amount that is equal to the entire unused balance of the
total Commitments of the applicable Class or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.06(f). Each
Swingline Loan shall be in an amount equal to $[_______] or a larger multiple of
$[__________]. Borrowings of more than one Class and Type may be outstanding at
the same time; provided that there shall not at any time be more than a total of
6 Eurodollar Borrowings outstanding.
(d) Limitations on Interest Periods. Notwithstanding any other
provision of this Agreement, the Borrower shall not be entitled to request (or
to elect to Convert to or Continue as a Eurodollar Borrowing) any Borrowing if
the Interest Period requested therefor would end after the Maturity Date.
SECTION 2.03. Requests for Borrowings.
(a) Notice by the Borrower. To request a Borrowing, the Borrower shall
notify the Administrative Agent of such request by telephone (i) in the case of
a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before the date of the proposed Borrowing or (ii) in the case of
an ABR Borrowing, not later than 11:00 a.m., New York City time, one Business
Day before the date of the proposed Borrowing; provided that any such notice of
an ABR Borrowing to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.06(f) may be given not later than 10:00 a.m., New York
City time, on the date of the proposed Borrowing]. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Borrowing Request
in a form approved by the Administrative Agent and signed by the Borrower.
(b) Content of Borrowing Requests. Each telephonic and written
Borrowing Request shall specify the following information in compliance with
Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the Interest Period
therefor, which shall be a period contemplated by the definition of
the term "Interest Period" and permitted under Section 2.02(d);
(v) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.04; and
(vi) the calculation of the Borrowing Base as at the end of the
most recent monthly accounting period, in the form of the Borrowing
Base Certificate.
(c) Notice by the Administrative Agent to the Lenders. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Revolving Loan to be made as part of the requested
Borrowing.
(d) Failure to Elect. If no election as to the Type of a Borrowing is
specified, then the requested Borrowing shall be an ABR Borrowing. If no
Interest Period is specified with respect to any requested Eurodollar Borrowing,
then the requested Borrowing shall have a one-month Interest Period.
SECTION 2.04. Funding of Borrowings.
(a) Funding by Lenders. Each Lender shall make each Revolving Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders; provided that Swingline Loans shall be made as provided
in Section 2.18. The Administrative Agent will make such Revolving Loans
available to the Borrower by promptly crediting the amounts so received, in like
funds, to an account of the Borrower maintained with the Administrative Agent in
New York City and designated by the Borrower in the applicable Borrowing
Request; provided that ABR Borrowings made to finance the reimbursement of an LC
Disbursement as provided in Section 2.06(f) shall be remitted by the
Administrative Agent to the Issuing Lender.
(b) Presumption by the Administrative Agent. Unless the Administrative
Agent shall have received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender's share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Lender, the Federal Funds
Effective Rate or (ii) in the case of the Borrower, the interest rate applicable
to ABR Revolving Loans. If such Lender pays such amount to the Administrative
Agent, then such amount shall constitute such Lender's Revolving Loan included
in such Borrowing.
SECTION 2.05. Interest Elections.
(a) Elections by the Borrower. The Revolving Loans constituting each
Borrowing initially shall be of the Type specified in the applicable Borrowing
Request and, in the case of a Eurodollar Borrowing, shall have the Interest
Period specified in such Borrowing Request. Thereafter, the Borrower may elect
to Convert such Borrowing to a Borrowing of a different Type or to Continue such
Borrowing as a Borrowing of the same Type and, in the case of a Eurodollar
Borrowing, may elect the Interest Period therefor, all as provided in this
Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Revolving Loans constituting
such Borrowing, and the Revolving Loans constituting each such portion shall be
considered a separate Borrowing. This section shall not apply to Swingline Loan
Borrowings, which may not be Converted or Continued.
(b) Notice of Elections. To make an election pursuant to this Section,
the Borrower shall notify the Administrative Agent of such election by telephone
by the time that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such election to
be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.
(c) Content of Interest Election Requests. Each telephonic and written
Interest Election Request shall specify the following information in compliance
with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) of this paragraph shall be
specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing
or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period therefor after giving effect to such election, which
shall be a period contemplated by the definition of the term "Interest
Period" and permitted under Section 2.02(d).
(d) Notice by the Administrative Agent to the Lenders. Promptly
following receipt of an Interest Election Request, the Administrative Agent
shall advise each Lender of the details thereof and of such Lender's portion of
each resulting Borrowing.
(e) Failure to Elect; Events of Default. If the Borrower fails to
deliver a timely and complete Interest Election Request with respect to a
Eurodollar Borrowing prior to the end of the Interest Period therefor, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be Converted to an ABR Borrowing. Notwithstanding
any contrary provision hereof, if an Event of Default has occurred and is
continuing and the Administrative Agent, at the request of the Required Lenders,
so notifies the Borrower, then, so long as an Event of Default is continuing (i)
no outstanding Borrowing may be Converted to or Continued as a Eurodollar
Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be Converted
to an ABR Borrowing at the end of the Interest Period therefor.
SECTION 2.06. Letters of Credit.
(a) General. Subject to the terms and conditions set forth herein, in
addition to the Revolving Loans provided for in Section 2.01, the Borrower may
request the Issuing Lender to issue, at any time and from time to time during
the Availability Period, Letters of Credit denominated in Dollars for its own
account in such form as is acceptable to such Issuing Lender in its reasonable
determination. Letters of Credit issued hereunder shall constitute utilization
of the Revolving Credit Commitments.
(b) Notice of Issuance, Amendment, Renewal or Extension. To request the
issuance of a Letter of Credit (or the amendment, renewal or extension of an
outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or
transmit by electronic communication, if arrangements for doing so have been
approved by the Issuing Lender) to the Issuing Lender and the Administrative
Agent (reasonably in advance of the requested date of issuance, amendment,
renewal or extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall be
a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with paragraph (d) of this Section), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Lender, the Borrower also shall submit a
letter of credit application on the Issuing Lender's standard form in connection
with any request for a Letter of Credit. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement submitted by the
Borrower to, or entered into by the Borrower with, the Issuing Lender relating
to any Letter of Credit, the terms and conditions of this Agreement shall
control.
(c) Limitations on Amounts. A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance, amendment, renewal or
extension of each Letter of Credit the Borrower shall be deemed to represent and
warrant that), after giving effect to such issuance, amendment, renewal or
extension, (i) the aggregate LC Exposure of the Issuing Lender (determined for
these purposes without giving effect to the participations therein of the
Lenders pursuant to paragraph (e) of this Section) shall not exceed $25,000,000
(except to the extent the Issuing Bank shall otherwise agree or shall arrange
for one or more other Lenders to act as an additional Issuing Lender), and (ii)
the sum of the total Revolving Credit Exposures shall not exceed the lesser of
the total Commitments and the Borrowing Base then in effect.
(d) Expiration Date. Each Letter of Credit shall expire at or prior to
the close of business on the earlier of (i) the date twelve months after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, twelve months after the then-current expiration date of such
Letter of Credit, so long as such renewal or extension occurs within three
months of such then-current expiration date) and (ii) the date that is five
Business Days prior to the Maturity Date.
(e) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) by the Issuing
Lender, and without any further action on the part of the Issuing Lender or the
Lenders, the Issuing Lender hereby grants to each Lender, and each Lender hereby
acquires from the Issuing Lender, a participation in such Letter of Credit equal
to such Lender's Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments.
In consideration and in furtherance of the foregoing, each Lender
hereby absolutely and unconditionally agrees to pay to the Administrative Agent,
for account of the Issuing Lender, such Lender's Applicable Percentage of each
LC Disbursement made by the Issuing Lender promptly upon the request of the
Issuing Lender at any time from the time of such LC Disbursement until such LC
Disbursement is reimbursed by the Borrower or at any time after any
reimbursement payment is required to be refunded to the Borrower for any reason.
Such payment shall be made without any offset, abatement, withholding or
reduction whatsoever. Each such payment shall be made in the same manner as
provided in Section 2.04 with respect to Revolving Loans made by such Lender
(and Section 2.04 shall apply, mutatis mutandis, to the payment obligations of
the Lenders), and the Administrative Agent shall promptly pay to the Issuing
Lender the amounts so received by it from the Lenders. Promptly following
receipt by the Administrative Agent of any payment from the Borrower pursuant to
the next following paragraph, the Administrative Agent shall distribute such
payment to the Issuing Lender or, to the extent that the Lenders have made
payments pursuant to this paragraph to reimburse the Issuing Lender, then to
such Lenders and the Issuing Lender as their interests may appear. Any payment
made by a Lender pursuant to this paragraph to reimburse the Issuing Lender for
any LC Disbursement shall not constitute a Loan and shall not relieve the
Borrower of its obligation to reimburse such LC Disbursement.
(f) Reimbursement. If the Issuing Lender shall make any LC Disbursement
in respect of a Letter of Credit, the Borrower shall reimburse the Issuing
Lender in respect of such LC Disbursement by paying to the Administrative Agent
an amount equal to such LC Disbursement not later than 12:00 noon, New York City
time, on the Business Day immediately following the day that the Borrower
receives such notice, provided that, if such LC Disbursement is not less than
$1,000,000, the Borrower may, subject to the conditions to borrowing set forth
herein, request in accordance with Section 2.03 or 2.18 that such payment be
financed with an ABR Borrowing or a Swingline Loan in an equivalent amount and,
to the extent so financed, the Borrower's obligation to make such payment shall
be discharged and replaced by the resulting ABR Borrowing or Swingline Loan.
If the Borrower fails to make such payment when due, the Administrative
Agent shall notify each Lender of the applicable LC Disbursement, the payment
then due from the Borrower in respect thereof and such Lender's Applicable
Percentage thereof.
(g) Obligations Absolute. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (f) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit, or any term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in any
respect, (iii) payment by the Issuing Lender under a Letter of Credit against
presentation of a draft or other document that does not comply strictly with the
terms of such Letter of Credit, and (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of the
Borrower's obligations hereunder.
Neither the Administrative Agent, the Lenders nor the Issuing Lender,
nor any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
by the Issuing Lender or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in transmission
or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder),
any error in interpretation of technical terms or any consequence arising from
causes beyond the control of the Issuing Lender; provided that the foregoing
shall not be construed to excuse the Issuing Lender from liability to the
Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
the Issuing Lender's gross negligence or willful misconduct when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that:
(i) the Issuing Lender may accept documents that appear on their
face to be in substantial compliance with the terms of a Letter of
Credit without responsibility for further investigation, regardless of
any notice or information to the contrary, and may make payment upon
presentation of documents that appear on their face to be in
substantial compliance with the terms of such Letter of Credit;
(ii) the Issuing Lender shall have the right, in its sole
discretion, to decline to accept such documents and to make such
payment if such documents are not in strict compliance with the terms
of such Letter of Credit; and
(iii) this sentence shall establish the standard of care to be
exercised by the Issuing Lender when determining whether drafts and
other documents presented under a Letter of Credit comply with the
terms thereof (and the parties hereto hereby waive, to the extent
permitted by applicable law, any standard of care inconsistent with
the foregoing).
(h) Disbursement Procedures. The Issuing Lender for any Letter of
Credit shall, within a reasonable time following its receipt thereof, examine
all documents purporting to represent a demand for payment under such Letter of
Credit. The Issuing Lender shall promptly after such examination notify the
Administrative Agent and the Borrower by telephone (confirmed by telecopy) of
such demand for payment and whether the Issuing Lender has made or will make an
LC Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve the Borrower of its obligation to reimburse the
Issuing Lender and the Lenders with respect to any the LC Disbursement.
(i) Interim Interest. If the Issuing Lender for any Letter of Credit
shall make any LC Disbursement, then, unless the Borrower shall reimburse such
LC Disbursement in full on the date such LC Disbursement is made, the unpaid
amount thereof shall bear interest, for each day from and including the date
such LC Disbursement is made to but excluding the date that the Borrower
reimburses such LC Disbursement, at the rate per annum then applicable to ABR
Revolving Loans; provided that, if the Borrower fails to reimburse such LC
Disbursement when due pursuant to paragraph (f) of this Section, then Section
2.11(c) shall apply. Interest accrued pursuant to this paragraph shall be for
account of such Issuing Lender, except that interest accrued on and after the
date of payment by any Lender pursuant to paragraph (e) of this Section to
reimburse such Issuing Lender shall be for account of such Lender to the extent
of such payment.
(j) Replacement of an Issuing Lender. The Issuing Lender may be
replaced at any time by written agreement between the Borrower, the
Administrative Agent, the replaced Issuing Lender and the successor Issuing
Lender. The Administrative Agent shall notify the Lenders of any such
replacement of the Issuing Lender. At the time any such replacement shall become
effective, the Borrower shall pay all unpaid fees accrued for account of the
replaced Issuing Lender pursuant to Section 2.10(b). From and after the
effective date of any such replacement, (i) the successor Issuing Lender shall
have all the rights and obligations of the replaced Issuing Lender under this
Agreement with respect to Letters of Credit to be issued by it thereafter and
(ii) references herein to the term "Issuing Lender" shall be deemed to include
such successor or any previous Issuing Lender, or such successor and all
previous Issuing Lenders, as the context shall require. After the replacement of
an Issuing Lender hereunder, the replaced Issuing Lender shall remain a party
hereto and shall continue to have all the rights and obligations of an Issuing
Lender under this Agreement with respect to Letters of Credit issued by it prior
to such replacement, but shall not be required to issue additional Letters of
Credit.
(k) Cash Collateralization. If either (i) an Event of Default shall
occur and be continuing and the Borrower receives notice from the Administrative
Agent or the Required Lenders (or, if the maturity of the Revolving Loans has
been accelerated, Lenders with LC Exposure representing more than 50% of the
total LC Exposure) demanding the deposit of cash collateral pursuant to this
paragraph, or (ii) the Borrower shall be required to provide cover for LC
Exposure pursuant to Section 2.08(a) or 2.09(b), the Borrower shall immediately
deposit into the Collateral Account (as defined in the Asarco Security
Agreement) an amount in cash equal to, in the case of an Event of Default, the
LC Exposure as of such date plus any accrued and unpaid interest thereon and, in
the case of cover pursuant to Section 2.08(a) or 2.09(b), the amount required
under Section 2.08(a) or 2.09(b), as the case may be; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower described in clause (g), (h) or (i) of Article VIII.
SECTION 2.07. Termination and Reduction of the Commitments.
(a) Scheduled Termination. Unless previously terminated, the
Commitments shall terminate on the Commitment Termination Date.
(b) Voluntary Termination or Reduction. The Borrower may terminate, or
from time to time reduce, the Commitments; provided that (i) each reduction of
the Commitments pursuant to this Section shall be in an amount that is
$5,000,000 or a larger multiple of $1,000,000 and (ii) concurrently with any
termination or reduction of the Commitments, the Borrower will prepay
outstanding Revolving Loans to the extent necessary so that the total Revolving
Credit Exposures do not exceed the total Commitments (as so reduced or
terminated).
(c) Notice of Voluntary Termination or Reduction. The Borrower shall
notify the Administrative Agent of any election to terminate or reduce the
Commitments under paragraph (b) of this Section at least three Business Days
prior to the effective date of such termination or reduction, specifying such
election and the effective date thereof. Promptly following receipt of any
notice, the Administrative Agent shall advise the Lenders of the contents
thereof. Each notice delivered by the Borrower pursuant to this Section shall be
irrevocable; provided that a notice of termination of the Commitments delivered
by the Borrower may state that such notice is conditioned upon the effectiveness
of other credit facilities, in which case such notice may be revoked by the
Borrower (by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied.
(d) Effect of Termination or Reduction. Any termination or reduction of
the Commitments shall be permanent. Each reduction of the Commitments shall be
made ratably among the Lenders in accordance with their respective Commitments.
SECTION 2.08. Repayment of Revolving Loans; Evidence of Debt.
(a) Repayment. The Borrower hereby unconditionally promises to pay to
the Administrative Agent for account of the Lenders the outstanding principal
amount of the Revolving Loans on the Maturity Date. In addition, if the total
Revolving Credit Exposures shall exceed the Commitments, the Borrower shall,
first, prepay the Revolving Credit Loans and, second, provide cover for LC
Exposure as specified in Section 2.06(k) in an aggregate amount equal to such
excess.
(b) Manner of Payment. Prior to any prepayment of any Borrowings
hereunder, the Borrower shall select the Borrowing or Borrowings to be paid and
shall notify the Administrative Agent by telephone (confirmed by telecopy) of
such selection not later than 11:00 a.m., New York City time, three Business
Days before the scheduled date of such prepayment in the case of a Eurodollar
Borrowing and one Business Day before the scheduled date of such prepayment in
the case of an ABR Borrowing. If the Borrower fails to make a timely selection
of the Borrowing or Borrowings to be prepaid, such payment shall be applied,
first, to pay any outstanding ABR Borrowings and, second, to other Borrowings in
the order of the remaining duration of their respective Interest Periods (the
Borrowing with the shortest remaining Interest Period to be repaid first). Each
payment of a Borrowing shall be applied ratably to the Revolving Loans included
in such Borrowing.
(c) Maintenance of Records by Lenders. Each Lender shall maintain in
accordance with its usual practice records evidencing the indebtedness of the
Borrower to such Lender resulting from each Revolving Loan made by such Lender,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.
(d) Maintenance of Records by the Administrative Agent. The
Administrative Agent shall maintain records in which it shall record (i) the
amount of each Revolving Loan made hereunder, the Type thereof and each Interest
Period therefor, (ii) the amount of any principal or interest due and payable or
to become due and payable from the Borrower to each Lender hereunder and (iii)
the amount of any sum received by the Administrative Agent hereunder for account
of the Lenders and each Lender's share thereof.
(e) Effect of Entries. The entries made in the records maintained
pursuant to paragraph (c) or (d) of this Section shall be prima facie evidence
of the existence and amounts of the obligations recorded therein; provided that
the failure of any Lender or the Administrative Agent to maintain such records
or any error therein shall not in any manner affect the obligation of the
Borrower to repay the Revolving Loans in accordance with the terms of this
Agreement.
SECTION 2.09. Prepayment of Revolving Loans.
(a) Optional Prepayments. The Borrower shall have the right at any time
and from time to time to prepay any Borrowing in whole or in part, subject to
the requirements of this Section.
(b) Mandatory Prepayments - Borrowing Base Fluctuation and Commitment
Reduction. The Borrower will prepay the Revolving Loans (and/or provide cover
for LC Exposure as specified in Section 2.06(k)) (i) from time to time, in such
amounts as shall be necessary so that at no time shall the total Revolving
Credit Exposures exceed the Borrowing Base, and (ii) upon any voluntary
reduction of Commitments pursuant to Section 2.07(b), in such amounts as shall
be necessary so that the total Revolving Credit Exposures do not exceed the
total Commitments (as so reduced).
(c) Minimum Amounts; Notices, Etc. The Borrower shall notify the
Administrative Agent by telephone (confirmed by telecopy) of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later
than 11:00 a.m., New York City time, three Business Days before the date of
prepayment or (ii) in the case of prepayment of an ABR Borrowing, not later than
11:00 a.m., New York City time, one Business Day before the date of prepayment.
Each such notice shall be irrevocable and shall specify the prepayment date, the
principal amount of each Borrowing or portion thereof to be prepaid and, in the
case of a mandatory prepayment, a reasonably detailed calculation of the amount
of such prepayment; provided that, if a notice of prepayment is given in
connection with a conditional notice of termination of the Commitments as
contemplated by Section 2.07, then such notice of prepayment may be revoked if
such notice of termination is revoked in accordance with Section 2.07. Promptly
following receipt of any such notice relating to a Borrowing, the Administrative
Agent shall advise the Lenders of the contents thereof. Each voluntary partial
prepayment of any Borrowing shall be in an aggregate amount of $5,000,000 or a
larger multiple of $1,000,000. Each prepayment of a Borrowing shall be applied
ratably to the Revolving Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by accrued interest to the extent required by Section 2.11
and shall be made in the manner specified in Section 2.08(b).
SECTION 2.10. Fees.
(a) Commitment Fee. The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee, which shall accrue at the
Applicable Spread, on the average daily unused amount of the Commitment of such
Lender during the period from and including the date hereof to but not including
the earlier of the date such Commitment terminates and the Commitment
Termination Date. Accrued commitment fees shall be payable on each Quarterly
Date (commencing on the first such date to occur after the date hereof) and on
the earlier of the date the Commitments terminate and the Commitment Termination
Date. All commitment fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).
(b) Letter of Credit Fees. The Borrower agrees to pay (i) to the
Administrative Agent for account of each Lender a participation fee with respect
to its participations in Letters of Credit, which shall accrue at a rate per
annum equal to the Applicable Spread applicable to interest on Eurodollar
Revolving Loans on the average daily amount of such Lender's LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date on which such Lender's Commitment terminates and the date on
which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Lender
a fronting fee separately arranged in a letter agreement with the Issuing
Lender, during the period from and including the Effective Date to but excluding
the later of the date of termination of the Commitments and the date on which
there ceases to be any LC Exposure, as well as the Issuing Lender's standard
fees with respect to the issuance, amendment, renewal or extension of any Letter
of Credit or processing of drawings thereunder. Participation fees and fronting
fees accrued through and including each Quarterly Date shall be payable on the
third Business Day following such Quarterly Date, commencing on the first such
date to occur after the Effective Date; provided that all such fees shall be
payable on the date on which the Commitments terminate and any such fees
accruing after the date on which the Commitments terminate shall be payable on
demand. Any other fees payable to the Issuing Lender pursuant to this paragraph
shall be payable within 10 days after demand. All participation fees and
fronting fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).
(c) Administrative Agent Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon between the Borrower and the Administrative
Agent.
(d) Payment of Fees. All fees payable hereunder shall be paid on the
dates due, in immediately available funds, to the Administrative Agent for
distribution, in the case of a commitment fee, to the Lenders entitled thereto.
Fees paid shall not be refundable under any circumstances.
SECTION 2.11. Interest.
(a) ABR Revolving Loans. The Revolving Loans constituting each ABR
Borrowing shall bear interest at a rate per annum equal to the Alternate Base
Rate plus the Applicable Spread.
(b) Eurodollar Revolving Loans. The Revolving Loans constituting each
Eurodollar Borrowing shall bear interest at a rate per annum equal to the
Adjusted LIBO Rate for the Interest Period for such Borrowing plus the
Applicable Spread.
(c) Default Interest. Notwithstanding the foregoing, if any principal
of or interest on any Revolving Loan or any fee or other amount payable by the
Borrower hereunder is not paid when due, whether at stated maturity, upon
acceleration, by mandatory prepayment or otherwise, such overdue amount shall
bear interest, after as well as before judgment, at a rate per annum equal to
(i) in the case of overdue principal of any Revolving Loan, 2% plus the rate
otherwise applicable to such Revolving Loan as provided above or (ii) in the
case of any other amount, 2% plus the rate that would then be applicable to ABR
Revolving Loans as provided in paragraph (a) of this Section if any ABR
Revolving Loans were outstanding.
(d) Payment of Interest. Accrued interest on each Revolving Loan shall
be payable in arrears on each Interest Payment Date for such Revolving Loan and
upon termination of the Commitments; provided that (i) interest accrued pursuant
to paragraph (c) of this Section shall be payable on demand, (ii) in the event
of any repayment or prepayment of any Revolving Loan (other than a prepayment of
an ABR Revolving Loan prior to the Commitment Termination Date), accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment and (iii) in the event of any Conversion of any
Eurodollar Borrowing prior to the end of the Interest Period therefor, accrued
interest on such Borrowing shall be payable on the effective date of such
Conversion.
(e) Computation. All interest hereunder shall be computed on the basis
of a year of 360 days, except that interest computed by reference to the
Alternate Base Rate at times when the Alternate Base Rate is based on the Prime
Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable Alternate
Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
SECTION 2.12. Alternate Rate of Interest. If prior to the commencement
of the Interest Period for any Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders of making or maintaining their
respective Revolving Loans included in such Borrowing for such Interest
Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or the
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and such Borrowing (unless prepaid) shall be Continued as, or Converted to, an
ABR Borrowing and (ii) if any Borrowing Request requests a Eurodollar Borrowing,
such Borrowing shall be made as an ABR Borrowing.
SECTION 2.13. Increased Costs.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or the
Issuing Lender; or
(ii) impose on any Lender or Issuing Lender or the London
interbank market any other condition affecting this Agreement or
Eurodollar Revolving Loans made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender or Issuing Lender of making or maintaining any Eurodollar Revolving Loan
(or of maintaining its obligation to make any such Revolving Loan) or to reduce
the amount of any sum received or receivable by such Lender or the Issuing
Lender hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Lender such additional amount or
amounts as will compensate such Lender or the Issuing Lender for such additional
costs incurred or reduction suffered.
(b) Capital Requirements. If any Lender or the Issuing Lender
determines that any Change in Law regarding capital requirements has or would
have the effect of reducing the rate of return on such Lender's or the Issuing
Lender's capital or on the capital of such Lender's or the Issuing Lender's
holding company, if any, as a consequence of this Agreement or the Revolving
Loans made by, or participations in Letters of Credit held by, such Lender, or
the Letters of Credit issued by the Issuing Lender, to a level below that which
such Lender or the Issuing Lender or such Lender's or the Issuing Lender's
holding company could have achieved but for such Change in Law (taking into
consideration such Lender's or the Issuing Lender's policies and the policies of
such Lender's or the Issuing Lender's holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender or the
Issuing Lender, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Lender or such Lender's or the Issuing
Lender's holding company for any such reduction suffered.
(c) Certificates from Lenders. A certificate of a Lender or the Issuing
Lender setting forth the amount or amounts necessary to compensate such Lender
or the Issuing Lender or its holding company, as the case may be, as specified
in paragraph (a) or (b) of this Section shall be delivered to the Borrower and
shall be conclusive absent manifest error. The Borrower shall pay such Lender or
the Issuing Lender the amount shown as due on any such certificate within 10
days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender or
the Issuing Lender to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender's or the Issuing Lender's right to demand
such compensation; provided that the Borrower shall not be required to
compensate a Lender or the Issuing Lender pursuant to this Section for any
increased costs or reductions incurred more than six months prior to the date
that such Lender or the Issuing Lender, as the case may be, notifies the
Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender's or the Issuing Lender's intention to claim compensation
therefor; provided further that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the six-month period referred
to above shall be extended to include the period of retroactive effect thereof.
SECTION 2.14. Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Revolving Loan other than on the last day of
an Interest Period therefor (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Revolving Loan other than on the last day of an
Interest Period therefor, (c) the failure to borrow, convert, continue or prepay
any Revolving Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice is permitted to be revocable under Section
2.09(c) and is revoked in accordance herewith), or (d) the assignment as a
result of a request by the Borrower pursuant to Section 2.17 of any Eurodollar
Revolving Loan other than on the last day of an Interest Period therefor, then,
in any such event, the Borrower shall compensate each Lender for the loss, cost
and expense attributable to such event. In the case of a Eurodollar Revolving
Loan, the loss to any Lender attributable to any such event shall be deemed to
include an amount determined by such Lender to be equal to the excess, if any,
of (i) the amount of interest that such Lender would pay for a deposit equal to
the principal amount of such Revolving Loan for the period from the date of such
payment, conversion, failure or assignment to the last day of the then current
Interest Period for such Revolving Loan (or, in the case of a failure to borrow,
convert or continue, the duration of the Interest Period that would have
resulted from such borrowing, conversion or continuation) if the interest rate
payable on such deposit were equal to the Adjusted LIBO Rate for such Interest
Period, over (ii) the amount of interest that such Lender would earn on such
principal amount for such period if such Lender were to invest such principal
amount for such period at the interest rate that would be bid by such Lender (or
an affiliate of such Lender) for Dollar deposits from other banks in the
eurodollar market at the commencement of such period. A certificate of any
Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.15. Taxes.
(a) Payments Free of Taxes. Any and all payments by or on account of
any obligation of the Obligors hereunder or under any other Revolving Loan
Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if either Obligor shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) the Administrative Agent, Lender or Issuing Lender (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) such Obligor shall make such deductions and
(iii) such Obligor shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) Payment of Other Taxes by the Obligors. In addition, each Obligor
shall pay any Other Taxes (not covered by Section 2.15(a) hereof) to the
relevant Governmental Authority in accordance with applicable law.
(c) Indemnification by the Obligors. Each Obligor shall indemnify the
Administrative Agent, each Lender and the Issuing Lender within 10 days after
written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by the Administrative
Agent, such Lender or the Issuing Lender, as the case may be, and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Obligors by a Lender or
Issuing Lender, or by the Administrative Agent on its own behalf or on behalf of
a Lender or the Issuing Lender, shall be conclusive absent manifest error.
(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by any Obligor to a Governmental Authority,
such Obligor shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) Foreign Lenders. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which the Borrower is located, or under any treaty to which such jurisdiction
is a party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law or reasonably requested by the Borrower, such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate.
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.
(a) Payments by the Obligors. Each Obligor shall make each payment
required to be made by it hereunder (whether of principal, interest, fees,
reimbursement of LC Disbursements, or under Section 2.13, 2.14 or 2.15, or
otherwise) or under any other Revolving Loan Document (except to the extent
otherwise provided therein) prior to 12:00 noon, New York City time, on the date
when due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue, New
York, New York, except as otherwise expressly provided in the relevant Revolving
Loan Document and except payments to be made directly to an Issuing Lender as
expressly provided herein and payments pursuant to Sections 2.13, 2.14, 2.15 and
10.03, which shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day and, in the case of any payment accruing interest, interest thereon
shall be payable for the period of such extension. All payments hereunder or
under any other Revolving Loan Document (except to the extent otherwise provided
therein) shall be made in Dollars.
(b) Application of Insufficient Payments. If at any time insufficient
funds are received by and available to the Administrative Agent to pay fully all
amounts of principal of the Revolving Loans and unreimbursed LC Disbursements,
interest and fees then due hereunder, such funds shall be applied (i) first, to
pay interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, to pay principal of the Revolving Loans and
unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
(c) Pro Rata Treatment. Except to the extent otherwise provided herein:
(i) each Borrowing shall be made from the Lenders, each payment of commitment
fee under Section 2.10 shall be made for account of the Lenders, and each
termination or reduction of the amount of the Commitments under Section 2.07
shall be applied to the respective Commitments of the Lenders, pro rata
according to the amounts of their respective Commitments; (ii) each Borrowing
shall be allocated pro rata among the Lenders according to the amounts of their
respective Commitments (in the case of the making of Revolving Loans) or their
respective Revolving Loans that are to be included in such Borrowing (in the
case of Conversions and Continuations of Revolving Loans); (iii) each payment or
prepayment of principal of Revolving Loans by the Borrower shall be made for
account of the Lenders pro rata in accordance with the respective unpaid
principal amounts of the Revolving Loans held by them; and (iv) each payment of
interest on Revolving Loans by the Borrower shall be made for account of the
Lenders pro rata in accordance with the amounts of interest on such Revolving
Loans then due and payable to the respective Lenders.
(d) Sharing of Payments by Lenders. If any Lender shall, by exercising
any right of set-off or counterclaim or otherwise, obtain payment in respect of
any principal of or interest on any of its Revolving Loans or participations in
LC Disbursements that results in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving Loans and participations in
LC Disbursements, and accrued interest thereon, then due than the proportion
received by any other Lender, then the Lender receiving such greater proportion
shall purchase (for cash at face value) participations in the Revolving Loans
and participations in LC Disbursements of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared by the Lenders ratably
in accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans and participations in LC Disbursements;
provided that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by any Obligor pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Revolving Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). Each Obligor
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against such Obligor rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of such Obligor in the amount of such participation.
(e) Presumptions of Payment. Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which any payment is due
to the Administrative Agent for account of the Lenders or the Issuing Lender
hereunder that the Borrower will not make such payment, the Administrative Agent
may assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders or
the Issuing Lender, as the case may be, the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders or the
Issuing Lender, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or the Issuing Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the Federal Funds Effective Rate.
(f) Certain Deductions by the Administrative Agent. If any Lender shall
fail to make any payment required to be made by it pursuant to Section 2.04(b)
or 2.15(e), then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for account of such Lender to satisfy such
Lender's obligations under such Sections until all such unsatisfied obligations
are fully paid.
SECTION 2.17. Mitigation Obligations; Replacement of Lenders.
(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 2.13, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for account of any
Lender pursuant to Section 2.15, then such Lender shall use reasonable efforts
to designate a different lending office for funding or booking its Revolving
Loans hereunder or to assign its rights and obligations hereunder to another of
its offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.13 or 2.15, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation under
Section 2.13, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for account of any Lender pursuant to
Section 2.15, or if any Lender defaults in its obligation to fund Revolving
Loans hereunder, then the Borrower may, at its sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 10.04), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent (and, if a Commitment is being
assigned, the Issuing Lender), which consent shall not unreasonably be withheld,
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Revolving Loans and participations in LC
Disbursements, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under Section 2.13 or payments required to be made
pursuant to Section 2.15, such assignment will result in a reduction in such
compensation or payments. A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.
ARTICLE III
GUARANTEE
SECTION 3.01. The Guarantee. Grupo Mexico hereby unconditionally
guarantees to each Lender and the Administrative Agent and their respective
successors and assigns the prompt payment in full when due (whether at stated
maturity, by acceleration or otherwise) of the principal of and interest on the
Revolving Loans made by the Lenders to the Borrower and the LC Exposures and all
other amounts from time to time owing to the Lenders and the Issuing Lender or
the Administrative Agent by the Borrower under this Agreement and by Grupo
Mexico under any of the other Revolving Loan Documents, in each case strictly in
accordance with the terms thereof (such obligations being herein collectively
called the "Guaranteed Obligations"). Grupo Mexico hereby further agrees that if
the Borrower shall fail to pay in full when due (whether at stated maturity, by
acceleration or otherwise) any of the Guaranteed Obligations, Grupo Mexico will
promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, by acceleration or otherwise) in accordance with the terms of
such extension or renewal.
SECTION 3.02. Obligations Unconditional. The obligations of Grupo
Mexico under Section 3.01 are absolute and unconditional, irrespective of the
value, genuineness, validity, regularity or enforceability of the obligations of
the Borrower under this Agreement or any other agreement or instrument referred
to herein, or any substitution, release or exchange of any other guarantee of or
security for any of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section that the obligations of
Grupo Mexico hereunder shall be absolute and unconditional under any and all
circumstances. Without limiting the generality of the foregoing, it is agreed
that the occurrence of any one or more of the following shall not alter or
impair the liability of Grupo Mexico hereunder, which shall remain absolute and
unconditional as described above:
(a) at any time or from time to time, without notice to Grupo Mexico,
the time for any performance of or compliance with any of the Guaranteed
Obligations shall be extended, or such performance or compliance shall be
waived;
(b) any of the acts mentioned in any of the provisions of this
Agreement or any other agreement or instrument referred to herein shall be
done or omitted;
(c) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this Agreement
or any other agreement or instrument referred to herein shall be waived or
any other guarantee of any of the Guaranteed Obligations or any security
therefor shall be released or exchanged in whole or in part or otherwise
dealt with; or
(d) any lien or security interest granted to, or in favor of, the
Administrative Agent or any Lender or Lenders as security for any of the
Guaranteed Obligations shall fail to be perfected.
Grupo Mexico hereby expressly waives diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Administrative
Agent or any Lender exhaust any right, power or remedy or proceed against the
Borrower under this Agreement or any other agreement or instrument referred to
herein, or against any other Person under any other guarantee of, or security
for, any of the Guaranteed Obligations. Grupo Mexico also hereby expressly
waives, to the extent (if any) Grupo Mexico may be entitled thereto, the
benefits of ORDEN Y EXCUSION and of prior judgment, levy, execution and other
rights provided for in Articles 2814, 2815, 2817, 2818, 2820, 2821, 2823, 2827
and 2836 of the Civil Code for the Federal District of Mexico (CODIGO CIVIL PARA
EL DISTRITO FEDERAL), and the corresponding articles of the civil codes of the
other states of Mexico, which articles are not reproduced herein by express
declaration that the contents of said articles are known to Grupo Mexico. Grupo
Mexico also hereby irrevocably and expressly waives its rights under and the
benefits of Articles 2846 and 2847 of the Civil Code for the Federal District of
Mexico (CODIGO CIVIL PARA EL DISTRITO FEDERAL) and the corresponding articles of
the civil codes of the other states of Mexico. Grupo Mexico also hereby
irrevocably and expressly waives any requirement of judicial demand for payment,
whether under Article 2848 or Article 2849 of the Civil Code of the Federal
District of Mexico (CODIGO CIVIL PARA EL DISTRITO FEDERAL) and the corresponding
articles of the civil codes of the other states of Mexico or otherwise. All such
articles are not reproduced herein by express declaration of Grupo Mexico that
the contents of said articles are known to it.
SECTION 3.03. Reinstatement. The obligations of Grupo Mexico under this
Article shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of the Borrower in respect of the Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any of
the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy
or reorganization or otherwise, and Grupo Mexico agrees that it will indemnify
the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including fees of counsel) incurred by the Administrative Agent or
such Lender in connection with such rescission or restoration, including any
such costs and expenses incurred in defending against any claim alleging that
such payment constituted a preference, fraudulent transfer or similar payment
under any bankruptcy, insolvency or similar law.
SECTION 3.04. Subrogation. Grupo Mexico hereby agrees that until the
payment and satisfaction in full of all Guaranteed Obligations and the
expiration and termination of the Commitments of the Lenders under this
Agreement it shall not exercise any right or remedy arising by reason of any
performance by it of its guarantee in Section 3.01, whether by subrogation or
otherwise, against the Borrower or any other guarantor of any of the Guaranteed
Obligations or any security for any of the Guaranteed Obligations.
SECTION 3.05. Remedies. Grupo Mexico agrees that, as between Grupo
Mexico and the Lenders, the obligations of the Borrower under this Agreement may
be declared to be forthwith due and payable as provided in Article VIII (and
shall be deemed to have become automatically due and payable in the
circumstances provided in Article VIII) for purposes of Section 3.01
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against the Borrower and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Borrower) shall forthwith
become due and payable by Grupo Mexico for purposes of Section 3.01.
SECTION 3.06. Instrument for the Payment of Money. Grupo Mexico hereby
acknowledges that the guarantee in this Article constitutes an instrument for
the payment of money, and consents and agrees that any Lender or the
Administrative Agent, at its sole option, in the event of a dispute by Grupo
Mexico in the payment of any moneys due hereunder, shall have the right to bring
motion-action under New York CPLR Section 3213.
SECTION 3.07. Continuing Guarantee. The guarantee in this Article is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
SECTION 3.08. Representations and Warranties. Grupo Mexico represents
and warrants to the Lenders that:
(a) Organization; Powers. Each of Grupo Mexico and its Subsidiaries is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to
carry on its business as now conducted and, except where the failure to do
so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect, is qualified to do business in, and is
in good standing in, every jurisdiction where such qualification is
required.
(b) Authorization; Enforceability. The Transactions are within Grupo
Mexico's corporate powers and have been duly authorized by all necessary
corporate and, if required, by all necessary shareholder action. This
Agreement has been duly executed and delivered by and constitutes, and each
of the other Revolving Loan Documents to which it is a party when executed
and delivered by Grupo Mexico will constitute, a legal, valid and binding
obligation of Grupo Mexico, enforceable against Grupo Mexico in accordance
with its terms, except as such enforceability may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or similar laws of
general applicability affecting the enforcement of creditors' rights and
(ii) the application of general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
(c) Governmental Approvals; No Conflicts. The Transactions (i) do not
require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except for (A) those consents,
approvals, registrations, filings and actions identified in the Merger
Agreement, all of which have been obtained or made and are in full force
and effect and (B) recordings in respect of the Liens created pursuant to
the Asarco Security Agreement and the Unclaimed Funds Security Agreement,
(ii) will not violate any applicable law or regulation or the charter,
by-laws or other organizational documents of Grupo Mexico or any of its
Subsidiaries or any order of any Governmental Authority, (iii) will not
violate or result in a default under any indenture, agreement or other
instrument binding upon Grupo Mexico or any of its Subsidiaries or assets,
or give rise to a right thereunder to require any payment to be made by any
such Person, and (iv) except for the Liens created pursuant to the Security
Documents, will not result in the creation or imposition of any Lien on any
asset of Grupo Mexico or any of its Subsidiaries.
(d) Financial Condition; No Material Adverse Change.
(i) Financial Condition. Grupo Mexico has heretofore furnished to
the Lenders the following financial statements:
(A) the consolidated balance sheet and statements of income,
stockholders' equity and cash flows of each of Grupo Mexico and
its Subsidiaries, GMM and its Subsidiaries, and Grupo Ferroviario
and its Subsidiaries (1) as of and for the fiscal years ended
December 31, 1997, and December 31, 1998 (except in the case of
Grupo Ferroviario, which are as of and for the fiscal year ended
December 31, 1998 only), in each case reported on by independent
public accountants, and (2) as of and for the fiscal quarter and
the portion of the fiscal year ended September 30, 1999,
certified by a Financial Officer of Grupo Mexico, GMM and Grupo
Ferroviario, respectively; and
(B) the PRO FORMA consolidated balance sheet of Grupo Mexico
and its Subsidiaries as at September 30, 1999 as if the Merger
had occurred as at the date thereof. Such PRO FORMA balance sheet
is based on good faith, reasonable assumptions as to all factual
matters and as to the matters covered thereby.
Such financial statements in clause (A) above present fairly,
in all material respects, the financial position and results
of operations and cash flows of Grupo Mexico and its
respective Subsidiaries as of such dates and for such periods
in accordance with GAAP, subject to year-end audit adjustments
and the absence of footnotes in the case of the statements
referred to in clause (A) of the first sentence of this
paragraph.
(ii) No Material Adverse Change. Since December 31, 1998, there
has been no material adverse change in the business, assets,
operations or condition, financial or otherwise (or, at any time this
representation is made or repeated after the Merger Closing Date, the
prospects), of Grupo Mexico and its Subsidiaries, taken as a whole,
and no event, condition, occurrence or circumstance subsists which
could reasonably be expected to have a Material Adverse Effect.
(iii) Year 2000 Issues. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (A) Grupo
Mexico's computer systems and (B) equipment containing embedded
microchips (including systems and equipment supplied by others or with
which Grupo Mexico's systems interface) and the testing of all such
systems and equipment, as so reprogrammed, has been completed in all
material respects. The cost to Grupo Mexico of such reprogramming and
testing and of the reasonably foreseeable consequences of year 2000 to
Grupo Mexico (including reprogramming errors and the failure of
others' systems or equipment) will not result in a Default or a
Material Adverse Effect. The computer and management information
systems of Grupo Mexico and its Subsidiaries are and, with ordinary
course upgrading and maintenance, will continue for the term of this
Agreement to be, sufficient to permit Grupo Mexico to conduct its
business without a Material Adverse Effect.
(e) Properties.
(i) Property Generally. Each of Grupo Mexico and its Subsidiaries
has good title to, or valid leasehold interests in or concessions to,
all its real and personal property material to its business, subject
only to Liens permitted by the terms of this Agreement and except for
minor defects in title that do not interfere with its ability to
conduct its business as currently conducted or to utilize such
properties for their intended purposes.
(ii) Intellectual Property. Each of Grupo Mexico and its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, patents and other intellectual property material to its
business, and the use thereof by Grupo Mexico and its Subsidiaries
does not infringe upon the rights of any other Person, except for any
such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
(f) Legal or Arbitral Proceedings. Except as disclosed in Schedule II,
there are no legal or arbitral proceedings or any proceedings by or before
any Governmental Authority, now pending or (to the knowledge of Grupo
Mexico) threatened against Grupo Mexico or any of its Subsidiaries in which
there is a reasonable possibility of an adverse decision that would
reasonably be expected to have a Material Adverse Effect.
(g) Environmental Matters. Each of Grupo Mexico and its Subsidiaries
has obtained all environmental, health and safety permits, licenses and
other authorizations required under all Environmental Laws to carry on its
business as now being or as proposed to be conducted, except to the extent
failure to have any such permit, license or authorization could not (either
individually or in the aggregate) reasonably be expected to have a Material
Adverse Effect. Each of such permits, licenses and authorizations is in
full force and effect and each of Grupo Mexico and its Subsidiaries is in
compliance with the terms and conditions thereof, and is also in compliance
with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained
in any applicable Environmental Law or in any regulation, code, plan,
order, decree, judgment, injunction, notice or demand letter issued,
entered, promulgated or approved thereunder, except to the extent failure
to comply therewith could not (either individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect.
(h) Compliance with Laws and Agreements. Grupo Mexico and its
Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default
has occurred and is continuing.
(i) Investment and Holding Company Status. Neither Grupo Mexico nor
any of its Subsidiaries is (i) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940 or (ii) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
(j) Taxes. Grupo Mexico and its Subsidiaries has timely filed or
caused to be filed all Tax returns and reports required to have been filed
and has paid or caused to be paid all Taxes required to have been paid by
it, except (i) Taxes that are being contested in good faith by appropriate
proceedings and for which such Person has set aside on its books adequate
reserves or (ii) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.
(k) ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.
(l) Disclosure. Grupo Mexico has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which it or
any of its Subsidiaries is subject, and all other matters known to it,
that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. None of the reports, financial
statements, certificates or other information furnished by or on behalf of
the Obligors to the Lenders in connection with the negotiation of this
Agreement, the other Revolving Loan Documents and the Merger Agreement or
delivered hereunder or thereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided that, with respect to projected financial information,
Grupo Mexico represents only that such information was prepared in good
faith based upon assumptions believed to be reasonable at the time.
(m) Material Agreements and Liens.
(i) Material Agreements. Part A of Schedule III is a complete and
correct list of each credit agreement, loan agreement, indenture,
purchase agreement, guarantee, letter of credit or other arrangement
providing for or otherwise relating to any Indebtedness or any
extension of credit (or commitment for any extension of credit) to, or
guarantee by, Grupo Mexico and any Subsidiary of Grupo Mexico
outstanding on the date hereof, or that (after giving effect to the
transactions contemplated to occur on or before the Effective Date)
will be outstanding on the Effective Date, the aggregate principal or
face amount of which equals or exceeds (or may equal or exceed)
$1,000,000, and the aggregate principal or face amount outstanding or
that may become outstanding under each such arrangement is correctly
described in Part A of Schedule III.
(ii) Liens. Part B of Schedule III is a complete and correct list
of each Lien securing Indebtedness of Grupo Mexico and any Subsidiary
of Grupo Mexico outstanding on the date hereof, or that (after giving
effect to the transactions contemplated to occur on or before the
Effective Date) will be outstanding on the Effective Date, the
aggregate principal or face amount of which equals or exceeds (or may
equal or exceed) $1,000,000 and covering any property of Grupo Mexico
and any Subsidiary of Grupo Mexico, and the aggregate Indebtedness
secured (or that may be secured) by each such Lien and the property
covered by each such Lien is correctly described in Part B of Schedule
III.
(n) Ownership.
(i) Present Ownership. On the date of this Agreement, Grupo
Mexico directly owns, beneficially and of record, (A) 98.85% of the
shares of common stock of GMM, (B) 74% of the shares of capital stock
of Grupo Ferroviario, (C) not less than 89% of the shares of common
stock of Asmex, and Affiliates of Grupo Mexico will own all remaining
shares of capital stock of Asmex not directly owned by Grupo Mexico
and (D) through Asmex, not less than 80% of the outstanding shares of
common stock of the Borrower. Grupo Mexico owns such ownership
interests free and clear of Liens (other than Liens created pursuant
to the Security Documents), and has the unencumbered right to vote
such ownership interests. The Larrea Family Controls Grupo Mexico. For
purposes hereof, the "Larrea Family" means Mr. German Larrea
Mota-Velasco and his spouse, siblings and parent, and trusts and other
entities for the benefit of, or Controlled by such Persons.
(ii) Merger Closing Date Ownership. As of the Merger Closing Date
(upon giving effect to the Merger), Grupo Mexico (together with the
Bital Share Trust owning not more than 11% of the shares of common
stock) will own 100% of the shares of capital stock of the Borrower.
Grupo Mexico will own such ownership interests free and clear of Liens
(other than Liens created pursuant to the Security Documents), and
will have the unencumbered right to vote such ownership interests.
(o) Subsidiaries and Investments.
(i) Subsidiaries. Set forth in Part A of Schedule IV is a
complete and correct list of all of the Subsidiaries of Grupo Mexico
as of the date hereof, and as of the Effective Date (after giving
effect to the transactions contemplated to occur on or before the
Effective Date). Except as disclosed in Part A of Schedule IV, Grupo
Mexico owns, or will own on the Effective Date (after giving effect to
the transactions contemplated to occur on or before the Effective
Date), free and clear of Liens (other than Liens created pursuant to
the Security Documents), and has the unencumbered right to vote, all
outstanding ownership interests in each Person shown to be held by it
in Part A of Schedule IV; and all of the issued and outstanding
capital stock of each such Person organized as a corporation is
validly issued, fully paid and nonassessable, and there are no
outstanding Equity Rights with respect to such Person, except as
disclosed in said Schedule III.
(ii) Investments. Set forth in Part B of Schedule IV is a
complete and correct list of all Investments (other than Investments
disclosed in Part A of Schedule IV and other than Investments of the
types referred to in Section 7.04(a)) held by Grupo Mexico in any
Person on the date hereof or that will be held on the Effective Date
(after giving effect to the transactions contemplated to occur on or
before the Effective Date) and, for each such Investment, (x) the
identity of the Person or Persons holding such Investment and (y) the
nature of such Investment. Except as disclosed in Part B of Schedule
IV, Grupo Mexico owns (or will own, after giving effect to the
transactions contemplated to occur on or before the Effective Date),
free and clear of all Liens (other than Liens created pursuant to the
Security Documents), all such Investments.
(iii) Restrictions on Subsidiaries. Except as described in
Schedule V, none of the Subsidiaries of Grupo Mexico is, on the date
hereof, subject to any indenture, agreement, instrument or other
arrangement that prohibits, restricts or imposes any condition upon
the ability of such Subsidiary to pay dividends or other distributions
with respect to any shares of its capital stock or to make or repay
loans or advances to Grupo Mexico or to Guarantee Indebtedness of
Grupo Mexico; provided that the foregoing shall not apply to (x)
restrictions and conditions imposed by law or by this Agreement or the
Credit Agreement, (y) restrictions and conditions existing on the date
hereof identified on Schedule V (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of,
any such restriction or condition) and (z) customary restrictions and
conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such
sale is permitted hereunder.
(p) Solvency. Grupo Mexico, individually and on a consolidated basis
with its Subsidiaries is, and after giving effect to the making of the
Loans and the other Transactions will be, Solvent.
(q) Validity of Security Interests. The Pledge Agreements create in
favor of the Collateral Agent (for the benefit of the Lenders and the
lenders party to the Credit Agreement) each security interest purported to
be created thereunder. All such security interests are valid and binding
and, upon delivery of the corresponding stock certificates together with
stock powers endorsed in blank or, in the case of the GMM Share Pledge
Agreement, registration of the pledge created thereby in the stock registry
of the issuer, in each case as required by the respective Pledge Agreement,
will constitute fully perfected first priority security interests in favor
of the Collateral Agent (for the benefit of the Lenders and the lenders
party to the Credit Agreement), as security for the Revolving Loans, the
Tender Offer Loans and other obligations specified therein, superior in
right to any other Liens, except Liens permitted by Section 7.02 of the
Credit Agreement as incorporated herein by Section 7.08.
(r) Labor Relations. Neither Grupo Mexico nor any of its Subsidiaries
is engaged in any unfair labor practice that could reasonably be expected
to have a Material Adverse Effect. There is (i) no unfair labor practice
complaint and no grievance or arbitration proceeding arising out of or
under any collective bargaining agreement pending or, to the knowledge of
Grupo Mexico, threatened against Grupo Mexico or any of its Subsidiaries
and (ii) no strike, labor dispute, slowdown or stoppage pending or, to the
knowledge of Grupo Mexico, threatened against Grupo Mexico or any of its
Subsidiaries which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE BORROWER
The Borrower represents and warrants to the Lenders that:
SECTION 4.01. Organization; Qualification; Etc.
(a) Borrower. The Borrower is a corporation duly organized, validly
existing and in good standing (or other equivalent status) under the laws of the
jurisdiction of its incorporation and has the corporate power and authority to
own, operate and lease all of its properties and assets and to carry on its
business as it is now being conducted or presently proposed to be conducted and
is duly qualified to do business and is in good standing (or other equivalent
status) in each jurisdiction in which the ownership, operation or leasing of its
properties or assets or the conduct of its business requires such qualification,
except for jurisdictions in which the failure to be so qualified or in good
standing (or other equivalent status) would not, individually or in the
aggregate, have a Material Adverse Effect on the Borrower and its Subsidiaries,
taken as a whole. The copies of the Borrower's certificate of incorporation and
by-laws which have been delivered to the Administrative Agent are complete and
correct and in full force and effect.
(b) Subsidiaries. Each of the Borrower's Exchange Act Subsidiaries is a
corporation duly organized, validly existing and in good standing (or other
equivalent status) under the laws of its jurisdiction of incorporation or
organization, has the power and authority to own, operate and lease its
properties and to carry on its business as it is now being conducted or
presently proposed to be conducted, and is duly qualified to do business and is
in good standing (or equivalent status) in each jurisdiction in which the
ownership, operation or leasing of its properties or assets or the conduct of
its business requires such qualification, except for jurisdictions in which the
failure to be so qualified or in good standing (or other equivalent status)
would not, individually or in the aggregate, have a Material Adverse Effect on
the Borrower. As used in the foregoing clause, "Exchange Act Subsidiaries" means
Subsidiaries which constitute "significant subsidiaries" under Rule 405
promulgated by the SEC under the Securities Act.
(c) Ownership Interests. There are no (i) securities of the Borrower or
any of its Subsidiaries convertible into or exchangeable or exercisable for
shares of capital stock or other voting securities or ownership interests in any
of the Borrower's Subsidiaries, (ii) warrants, calls, options or other rights to
acquire from the Borrower or any of its Subsidiaries, or any obligations of the
Borrower of its Subsidiaries to issue, any capital stock, voting securities or
other ownership interests in, or any securities convertible into or exchangeable
or exercisable for, any capital stock, voting securities or ownership interests
in any of the Borrower's Subsidiaries, or (iii) obligations of the Borrower or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any
outstanding securities of the Borrower's Subsidiaries or to issue, deliver or
sell, or cause to be issued, delivered or sold, any such securities.
(d) Investments. Except (i) for the Borrower's Subsidiaries, (ii) as
set forth in Schedule VI or the Borrower's (or any of its Subsidiaries') SEC
Reports, and (iii) in respect of minerals exploration or development agreements
in the ordinary course of business, the Borrower (excluding employee pension or
benefit plans) does not own any securities of, or have any debt or equity
investment in, or loans outstanding to, any corporation, partnership, joint
venture, limited liability company or other entity. The Borrower is not subject
to any contractual obligation under which it may be required to advance or
contribute capital to any entity, except in respect of minerals exploration or
development agreements in the ordinary course of business.
(e) Restrictive Agreements. Except as described in Schedule XIV, none
of the Subsidiaries of the Borrower is, on the date hereof, subject to any
indenture, agreement, instrument or other arrangement of the type described in
Section 7.07.
SECTION 4.02. Merger; Ownership of Borrower. Upon consummation of the
Merger, all of the issued and outstanding shares of capital stock of the
Borrower will be owned by Grupo Mexico (other than up to 11% of the shares of
common stock presently held in the Bital Share Trust) and will have been validly
issued and be fully paid and nonassessable, and there will be no other
authorized, issued, reserved for issuance or outstanding (a) shares of capital
stock or voting securities of the Borrower, (b) securities convertible into or
exchangeable for shares of capital stock or voting securities of the Borrower,
(c) warrants, calls, options or other rights to acquire from the Borrower or any
of its Subsidiaries, or any obligation of the Borrower or any of its
Subsidiaries to issue, any shares of capital stock or voting securities or
securities convertible into or exchangeable or exercisable for capital stock or
voting securities of the Borrower, or (d) obligations of the Borrower to
repurchase, redeem or otherwise acquire any such securities or to issue, deliver
or sell, or cause to be issued, delivered or sold, any such securities.
SECTION 4.03. Corporate Authority Relative to this Agreement. The
Borrower has the corporate power and authority to enter into this Agreement, the
SPC Holdings Share Pledge Agreement and the Asarco Security Agreement, and to
carry out its obligations hereunder and thereunder. The execution, delivery and
performance of this Agreement, the SPC Holdings Share Pledge Agreement, the
Asarco Security Agreement and the consummation of the Transactions have been
duly and validly authorized by the Board of Directors of the Borrower, and no
other corporate proceedings on the part of the Borrower are necessary to
authorize the consummation of the transactions contemplated hereby. This
Agreement, the SPC Holdings Share Pledge Agreement and the Asarco Security
Agreement have been duly and validly executed and delivered by the Borrower and
constitute valid and binding agreements of the Borrower, enforceable against the
Borrower in accordance with its terms (except insofar as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally, or by principles governing
the availability of equitable remedies).
SECTION 4.04. Non-Contravention; Consents and Approvals.
(a) Non-Contravention. None of the execution, delivery or performance
of this Agreement, the SPC Holdings Share Pledge Agreement or the Asarco
Security Agreement by the Borrower or the consummation by the Borrower of the
Transactions contemplated hereby will (i) violate the certificate of
incorporation or the bylaws or other similar governing documents of the Borrower
or any of its Subsidiaries, (ii) result in the violation or breach of or
constitute (with or without due notice or lapse of time or both) a Default (or
give rise to any right of termination, cancellation, vesting, payment, exercise,
acceleration, suspension or revocation) under any of the provisions of any note,
bond, mortgage, deed of trust, security interest, indenture, license, contract,
agreement, plan or other instrument or obligation to which the Borrower or any
of its Subsidiaries is a party or by which any of them or any of their
properties or assets may be bound (the "Borrower Contracts"), except the
Borrower Contracts under which Required Third Party Consents are required (as
specified in clause (b) of this Section 4.04) and the existing facilities which
are to be repaid in full and terminated on the Effective Date, (iii) violate any
order, writ, injunction, decree, judgment, permit, license, statute, law,
ordinance, policy, rule or regulation of any Governmental Authority applicable
to the Borrower or any of its Subsidiaries or any of their respective property
or assets, or (iv) result in the creation or imposition of any Lien on any asset
of the Borrower or any of its Subsidiaries, other than pursuant to the Asarco
Security Agreement and the SPC Holdings Share Pledge Agreement.
(b) Consents. The Transactions do not require any consent or approval
of, registration or filing with, or any other action by, any Governmental
Authority except for recordings in respect of the liens created pursuant to the
Asarco Security Agreement and the Unclaimed Funds Security Agreement. Part A of
Schedule VII sets forth a list of all third party consents and approvals
required to be obtained under Borrower Contracts prior to the consummation of
the transactions contemplated by this Agreement the failure of which to obtain
would have, individually or in the aggregate, a Material Adverse Effect on the
Borrower and its Subsidiaries, taken as a whole (the "Required Third Party
Consents").
(c) Material Agreements. Part B of Schedule VII is a complete and
correct list of each credit agreement, loan agreement, indenture, purchase
agreement, guarantee, letter of credit or other arrangement providing for or
otherwise relating to any Indebtedness or any extension of credit (or commitment
for any extension of credit) to, or guarantee by, the Borrower outstanding on
the date hereof, or that (after giving effect to the transactions contemplated
to occur on or before the Effective Date) will be outstanding on the Effective
Date, the aggregate principal or face amount of which equals or exceeds (or may
equal or exceed) $1,000,000, and the aggregate principal or face amount
outstanding or that may become outstanding under each such arrangement is
correctly described in Part B of Schedule VII.
(d) Liens. Part C of Schedule VII is a complete and correct list of
each Lien securing Indebtedness of the Borrower outstanding on the date hereof,
or that (after giving effect to the transactions contemplated to occur on or
before the Effective Date) will be outstanding on the Effective Date, the
aggregate principal or face amount of which equals or exceeds (or may equal or
exceed) $1,000,000 and covering any property of the Borrower, and the aggregate
Indebtedness secured (or that may be secured) by each such Lien and the property
covered by each such Lien is correctly described in Part C of Schedule VII.
SECTION 4.05. Reports and Financial Statements. The Borrower has
previously furnished or made available to the Administrative Agent complete and
correct copies of:
(a) the Borrower's (and any of its Subsidiaries') Annual Reports on
Form 10-K filed with the SEC for each of the years ended December 31, 1996
through 1998;
(b) the Borrower's (and any of its Subsidiaries') Quarterly Reports on
Form 10-Q filed with the SEC for each of the fiscal quarters ended
following the Borrower's last fiscal year end;
(c) each definitive proxy statement filed by the Borrower or any of
its Subsidiaries with the SEC since March 1, 1996;
(d) each final prospectus filed by the Borrower with the SEC since
December 31, 1995; and
(e) all Current Reports on Form 8-K filed by the Borrower with the SEC
since January 1, 1998.
As of their respective dates, such reports, proxy statements and prospectuses
(collectively, with any amendments, supplements and exhibits thereto, the "SEC
Reports") (i) complied as to form in all material respects with the applicable
requirements of the Securities Act, and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Except to the extent
that information contained in any SEC Report of the Borrower has been revised or
superseded by an SEC Report subsequently filed by the Borrower, none of the
Borrower's SEC Reports contains any untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. The audited consolidated financial statements and
unaudited consolidated interim financial statements included in the Borrower's
SEC Reports (including any related notes and schedules) fairly present the
financial position of the Borrower and its consolidated Subsidiaries as of the
dates thereof and the results of operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end
adjustments), in each case in accordance with past practice and GAAP
consistently applied during the periods involved (except as otherwise disclosed
in the notes thereto). Since January 1, 1998, the Borrower has timely filed all
reports, registration statements and other filings required to be filed by it
with the SEC under the rules and regulations of the SEC. Since December 31, 1998
and except for the effects of the Merger (including the assumption by the
Borrower of the Tender Offer Loans), there has been no material adverse change
in the business, assets, operations or condition, financial or otherwise (or, at
any time this representation is made or repeated after the Merger Closing Date,
the prospects), of the Borrower and its Subsidiaries, taken as a whole, and no
event, condition, occurrence or circumstance subsists which could reasonably be
expected to have a Material Adverse Effect.
SECTION 4.06. Environmental Matters.
(a) Except for Environmental Claims disclosed in or referred to in Part
A of Schedule VIII, as of the date of this Agreement, each of the Borrower and
its Subsidiaries has obtained all licenses, permits, authorizations, approvals
and consents from Governmental Authorities which are required under any
applicable Environmental Law in respect of its business, properties, assets and
operations ("Environmental Permits"), except (i) for such permits as to which
due and proper application is pending, and (ii) for such failures to have
Environmental Permits which, individually or in the aggregate, are not
reasonably expected to have a Material Adverse Effect on the Borrower and its
Subsidiaries, taken as a whole. Each of such Environmental Permits is in full
force and effect, and each of the Borrower and its Subsidiaries is in compliance
with the terms and conditions of all such Environmental Permits and with all
applicable Environmental Laws, except for such exceptions as would not,
individually or in the aggregate, have a Material Adverse Effect on the Borrower
and its Subsidiaries, taken as a whole.
(b) Except for Environmental Claims disclosed in or referred to in Part
A of Schedule VIII, as of the date of this Agreement, there is no Environmental
Claim filed, pending, or to the best knowledge of the Borrower threatened or in
process, against the Borrower or any of its Subsidiaries or any person whose
liability for such Environmental Claim the Borrower or any of its Subsidiaries
has or may have retained or assumed either contractually or by operation of law,
that would, individually or in the aggregate, have a Material Adverse Effect on
the Borrower and its Subsidiaries, taken as a whole.
(c) Except as disclosed or referred to in Part B of Schedule VIII, no
Liens have arisen under or pursuant to any Environmental Law on any property,
site or facility owned, operated or leased by the Borrower or any of its
Subsidiaries, except for such Liens which would not, individually or in the
aggregate, have a Material Adverse Effect on the Borrower and its Subsidiaries,
taken as a whole, and no action of any Governmental Authority has been taken or,
to the best knowledge of the Borrower, is threatened or in process which could
subject any of such properties to such Liens, except for such action which would
not, individually or in the aggregate, have a Material Adverse Effect on the
Borrower and its Subsidiaries, taken as a whole.
(d) As used in this Agreement, "Environmental Claim" means any claim,
action, cause of action, order, investigation or notice (written or oral) by any
person alleging potential or actual liability (including, without limitation,
potential or actual liability for investigation, evaluation, cleanup, removal
actions, remedial actions, response actions, natural resources damages, property
damages, personal injuries or penalties) arising out of, based on or resulting
from any Environmental Law, including any claim under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), and shall include any request for information under CERCLA or any
comparable state or local law.
SECTION 4.07. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $5,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed the fair market value of the assets
of all such underfunded Plans.
SECTION 4.08. Schedule 14D-9, Proxy Statement; Schedule 14D-1; Other
Information. None of the Schedule 14D-9, the Proxy Statement (with respect to
the information included therein relating to the Borrower or its Subsidiaries)
or the Schedule 14D-1 (with respect to the information included therein relating
to the Borrower or its Subsidiaries) filed by Grupo Mexico or filed by the
Borrower with the SEC in connection with the Tender Offer and the Merger will,
at the respective times the Schedule 14D-9, the Schedule 14D-1 and the Proxy
Statement are filed with the SEC, and at the time of the mailing of the Schedule
14D-9, the Proxy Statement or the Schedule 14D-1 or any amendments or
supplements thereto, and at the time of the Shareholders Meeting (as defined in
the Merger Agreement), contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation is made by the Borrower
with respect to information supplied in writing by Grupo Mexico or any of its
affiliates specifically for inclusion in the Proxy Statement. The Proxy
Statement will comply as to form in all material respects with the provisions of
the applicable federal securities laws and the rules and regulations promulgated
thereunder. The letter to shareholders, notice of meeting, proxy statement and
form of proxy to be distributed to the Borrower's shareholders in connection
with the Merger and any schedules required to be filed with the SEC in
connection therewith are collectively referred to herein as the "Proxy
Statement."
SECTION 4.09. Rights Plan. The Borrower represents and warrants that
the Board of Directors of the Borrower has taken all necessary action to render
the Rights Agreement between the Borrower and The Bank of New York, dated as of
January 28, 1998, as amended as of July 15, 1999, inapplicable to the
Transactions contemplated by the Merger Agreement.
SECTION 4.10. Tax Matters . Except as disclosed in Schedule XV,
(a) All federal, state, local and foreign Tax Returns required to be
filed by or on behalf of the Borrower, each of its Subsidiaries, and each
affiliated, combined, consolidated or unitary group of which the Borrower
or any of its Subsidiaries (i) is a member (a "Current Group") or (ii) was
a member during six years prior to the date hereof but is not currently a
member, but only insofar as any such Tax Return relates to a taxable period
ending on a date within the last six years (a "Past Group," together with
Current Groups, an "Affiliated Group") have been timely filed, and all such
Tax Returns filed are complete and accurate except to the extent any
failure to file or any inaccuracies in filed Tax Returns would not,
individually or in the aggregate, have a Material Adverse Effect on the
Borrower (it being understood that the representations made in this
Section, to the extent that they relate to Past Groups, are made to the
knowledge of the Borrower). All Taxes due and owing by the Borrower, any
Subsidiary of the Borrower or any Affiliated Group have been paid, or
adequately reserved for, except to the extent any failure to pay or reserve
would not, individually or in the aggregate, have a Material Adverse Effect
on the Borrower. There is no audit examination, deficiency, refund
litigation, proposed adjustment or matter in controversy with respect to
any Taxes due and owing by the Borrower, any Subsidiary of the Borrower or
any Affiliated Group which would, individually or in the aggregate, have a
Material Adverse Effect on the Borrower. All assessments for Taxes due and
owing by the Borrower, any Subsidiary of the Borrower, or any Affiliated
Group with respect to completed and settled examinations or concluded
litigation have been paid. The Borrower and each of its Subsidiaries have
complied in all material respects with all rules and regulations relating
to the withholding of Taxes, except to the extent any such failure to
comply would not, individually or in the aggregate, have a Material Adverse
Effect on the Borrower;
(b) Neither the Borrower nor any of its Subsidiaries has (i) entered
into a closing agreement or similar agreement with a taxing authority
relating to Taxes of the Borrower or any of its Subsidiaries with respect
to a taxable period for which the statute of limitations is still open, or
(ii) with respect to U.S. federal income Taxes, granted any waiver of any
statute of limitations with respect to, or any extension of a period for
the assessment of, any such income Tax, in either case, that is still
outstanding;
(c) There are no Liens relating to Taxes upon the assets of the
Borrower other than Liens relating to Taxes not yet due, except as would
not have a Material Adverse Effect on the Borrower. Neither the Borrower
nor any of its Subsidiaries is a party to any agreement relating to the
allocating or sharing of Taxes, other than an agreement with each other;
and
(d) For purposes of this Section: "Tax Return" means any return,
report or similar statement (including the attached schedules) required to
be filed with respect any Tax, including, without limitation, any
information return, claim for refund, amended return or declaration of
estimated Tax.
SECTION 4.11. Absence of Certain Changes. Except as set forth in
Schedule IX, since December 31, 1998, and, other than with respect to clause (a)
below, prior to the date hereof, except as set forth in the Borrower's (or any
of its Subsidiaries') SEC Reports filed prior to the date hereof, the Borrower
and its Subsidiaries have conducted their respective businesses in the ordinary
course, consistent with past practice and there has not been:
(a) any event, occurrence or development (including the discovery of
new or additional information concerning an existing environmental
condition) which, individually or in the aggregate, would have a Material
Adverse Effect on the Borrower;
(b) any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock of the Borrower
(other than regular quarterly cash dividends payable by the Borrower in
respect of shares of its capital stock consistent with past practice) or
any repurchase, redemption or other acquisition by the Borrower or any of
its Subsidiaries of any outstanding shares of its capital stock except (y)
as required by the terms of any employee or stock option plan or
compensation plan or arrangement, (z) in accordance with any dividend
reinvestment plan as in effect as of the date of this Agreement in the
ordinary course of operation of such plan consistent with past practice;
(c) any amendment of any material term of any outstanding security of
the Borrower or any of its Subsidiaries;
(d) any transaction or commitment made, or any contract, agreement or
settlement entered into, by (or judgment, order or decree affecting) the
Borrower or any of its Subsidiaries relating to its assets or business
(including the acquisition or disposition of any material amount of assets)
or any relinquishment by the Borrower or any of its Subsidiaries of any
contract or other right, in either case, material to the Borrower and its
Subsidiaries taken as a whole, other than transactions, commitments,
contracts, agreements or settlements (including, without limitation,
settlements of litigation and tax proceedings) in the ordinary course of
business consistent with past practice and those contemplated by this
Agreement;
(e) any change prior to the date hereof in any method of accounting or
accounting practice by the Borrower or any of its Subsidiaries, except for
any such change which is not material or which is required by reason of a
concurrent change in GAAP;
(f) any (i) grant of any severance or termination pay to (or amendment
to any such existing arrangement with) any director, officer or employee of
the Borrower or any of its Subsidiaries, (ii) entering into of any
employment, deferred compensation, supplemental retirement or other similar
agreement (or any amendment to any such existing agreement) with any
director, officer or employee of the Borrower or any of its Subsidiaries,
(iii) increase in, or accelerated vesting and/or payment of, benefits under
any existing severance or termination pay policies or employment agreements
or (iv) increase in or enhancement of any rights or features related to
compensation, bonus or other benefits payable to directors, officers or
employees of the Borrower or any of its Subsidiaries, in each case, other
than in the ordinary course of business consistent with past practice or as
permitted by this Agreement; or
(g) any material Tax election made or changed, any material audit
settled or any material amended Tax Returns filed.
SECTION 4.12. No Undisclosed Material Liabilities. There are no
liabilities of the Borrower or any of its Subsidiaries of any kind whatsoever,
whether accrued, contingent, absolute, determined or determinable, other than:
(a) liabilities which, individually or in the aggregate, would not
have a Material Adverse Effect on the Borrower;
(b) liabilities disclosed in the SEC Reports of the Borrower or except
as disclosed pursuant to Schedule X hereto; and
(c) liabilities under or arising as a result of this Agreement.
SECTION 4.13. Labor Relations. As of the date of this Agreement: (a)
Schedule XI sets forth a complete list of each collective bargaining agreement
to which the Borrower or any of its Subsidiaries is a party, (b) no labor
organization or group of employees of the Borrower (or any of its Subsidiaries)
has made a pending demand for recognition or certification, and there are no
representation or certification proceedings or petitions seeking a
representation proceeding presently pending or, to the knowledge of the
Borrower, threatened to be brought or filed, with the National Labor Relations
Board or any other labor relations tribunal or authority, and (c) there are no
organizing activities, strikes, work stoppages, slowdowns, lockouts, material
arbitrations or material grievances, or other material labor disputes pending
or, to the knowledge of the Borrower, threatened against or involving the
Borrower or any of its Subsidiaries.
SECTION 4.14. Solvency. The Borrower, individually and on a
consolidated basis with its Subsidiaries is, and after giving effect to the
making of the Revolving Loans and the other Transactions will be, Solvent.
SECTION 4.15. Validity of Security Interests. Each of the Asarco
Security Agreement, the SPC Holdings Share Pledge Agreement and the Unclaimed
Funds Security Agreement creates in favor of the Collateral Agent (for the
benefit of the Lender and the lenders party to the Credit Agreement) each
security interest purported to be created thereunder each security interest
purported to be created thereby. All such security interests are valid and
binding, and upon the filing and recording required by Section 5.01 of the
Asarco Security Agreement will constitute fully perfected first priority
security interests or assignments of rights as a way of security, as the case
may be, superior in right to any other Liens, except Liens permitted by Section
7.02.
SECTION 4.16. Use of Proceeds, Etc.
(a) Working Capital. The proceeds of the Revolving Loans shall be used
for working capital purposes and for refinancing of Indebtedness under existing
revolving credit facilities as contemplated in Section 4.04(a).
(b) Regulations of the Board. Neither the making of any Revolving Loan
hereunder, nor the use of the proceeds thereof, will violate the provisions of
Regulation U or X of the Board and no part of the proceeds of any Revolving Loan
will be used to purchase or carry any margin stock in violation of Regulation U
or X or to extend credit for the purpose of purchasing or carrying any margin
stock in violation of Regulation U or X.
SECTION 4.17. Legal or Arbitral Proceedings. Except as disclosed in
Schedule XII, there are no legal or arbitral proceedings or any proceedings by
or before any Governmental Authority, now pending or (to the knowledge of the
Borrower) threatened against the Borrower or any of its Subsidiaries in which
there is a reasonable possibility of an adverse decision that would reasonably
be expected to have a Material Adverse Effect.
SECTION 4.18. Chief Executive Office. The chief executive office of the
Borrower is at 180 Maiden Lane, New York, New York 10038.
SECTION 4.19. Inventory. On the date of this Agreement, the inventory
(as defined in the Uniform Commercial Code as in effect in the State of New
York) of the Borrower is located in the following states: Arizona, Colorado,
Illinois, Indiana, Mississippi, Montana, New York, Pennsylvania, Tennessee and
Texas.
ARTICLE V
CONDITIONS
SECTION 5.01. Effective Date. The obligations of the Lenders to make
Revolving Loans and of the Issuing Lender to issue Letters of Credit hereunder
shall not become effective until the date on which the Administrative Agent
shall have received each of the following documents, each of which shall be
satisfactory in form and substance to the Administrative Agent (and to the
extent specified below, to each Lender), except to the extent any such condition
shall have been waived in accordance with Section 10.02:
(a) Executed Counterparts. From each party named on the signature
pages hereof and of the Inter-Creditor Agreement, either (i) a counterpart
of this Agreement and the Inter-Creditor Agreement, respectively, signed on
behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page to this Agreement) that such party has signed a counterpart
of this Agreement and the Inter-Creditor Agreement.
(b) Opinion of Counsel to the Obligors. An opinion (addressed to the
Administrative Agent and the Lenders, and the lenders and the
Administrative agent under the Credit Agreements and dated the Effective
Date) of each of Brown & Wood LLP, special New York counsel to the Obligors
and Wilentz, Goldman & Spitzer, P.A., special New Jersey counsel to Grupo
Mexico; and Santamarina y Steta, S.C., special Mexican counsel to the
Obligors, substantially in the form of Exhibits D-1, D-2 and D-3,
respectively, and covering such other matters relating to the Borrower,
Grupo Mexico, this Agreement or the Transactions as the Required Lenders
shall reasonably request (and each Obligor hereby instructs such counsel to
deliver such opinion to all such Persons.
(c) Opinion of Special Counsel to Chase. An opinion (addressed to the
Administrative Agent and the Lenders, and the lenders and the
administrative agent under the Credit Agreements and dated the Effective
Date) of each of Milbank, Tweed, Hadley & McCloy LLP, special New York
counsel to Chase and of Ritch, Heather y Mueller, S.C., special Mexican
counsel to Chase, substantially in the form of Exhibits E-1 and E-2,
respectively (and Chase hereby instructs such counsel to deliver such
opinion to all such Persons.
(d) Corporate Documents. From each Obligor, certified copies of its
constitutive and governing documents, good standing certificates (if
available in such Obligor's jurisdiction of incorporation) and of the
actions of the board of directors or other governing body of each Obligor
taken to authorize the execution, delivery and performance of this
Agreement and each other Transaction Document to which it is a party, and
the performance by it of its obligations hereunder and thereunder, all in
form and substance satisfactory to the Administrative Agent and its
counsel.
(e) Officer's Certificate. A certificate, dated the Effective Date and
signed by the President, a Vice President or a Financial Officer of each
Obligor in respect of the authority and incumbency, and containing a
specimen signature, of each person who has signed or will sign any
Transaction Document, on its behalf, or who will, until replaced by another
person or persons duly authorized for that purpose, otherwise act as
representative for the purposes of signing documents in connection with the
Transaction Documents, and the transactions contemplated thereby
(including, without limitation, the giving of notices, certificates,
directions and requests thereunder). In addition the certificate of the
Borrower shall confirm compliance with the conditions set forth in the
lettered clauses of the first sentence of Section 5.02.
(f) Borrowing Base Certificate. A Borrowing Base Certificate as of a
date not more than 10 days prior to the Effective Date.
(g) Asarco Security Agreement and the SPC Holdings Share Pledge
Agreement. The Asarco Security Agreement and the SPC Holdings Share Pledge
Agreement, duly executed and delivered by the Borrower and the Collateral
Agent, and the stock certificates identified therein, accompanied by
undated stock powers executed in blank, in accordance with the SPC Holdings
Share Pledge Agreement. In addition, the Borrower shall have taken such
other action (including delivering to the Administrative Agent, for filing,
appropriately completed and duly executed copies of Uniform Commercial Code
financing statements) as the Administrative Agent shall have requested in
order to perfect the security interests created pursuant to the Asarco
Security Agreement.
(h) GMM Share Pledge Agreement, Asarco Pledge Agreement and Unclaimed
Funds Security Agreement. The GMM Share Pledge Agreement, the Bital Share
Pledge Agreement, the Asarco Pledge Agreement and Unclaimed Funds Security
Agreement shall be in full force and effect.
(i) Repayment of Existing Indebtedness. Evidence that the principal of
and interest on, and all other amounts owing in respect of, the
Indebtedness (including any contingent or other amounts payable in respect
of letters of credit) indicated on Schedule XIII that is to be repaid on
the Effective Date shall have been (or shall be simultaneously) paid in
full, that any commitments to extend credit under the agreements or
instruments relating to such Indebtedness shall have been canceled or
terminated and that all Guarantees in respect of, and all Liens securing,
any such Indebtedness shall have been released (or arrangements for such
release satisfactory to the Required Lenders shall have been made) or, in
the alternative, a certificate from the Borrower confirming that the
failure by the Borrower to pay such Indebtedness will not, after giving
effect to the Loans, constitute a Default hereunder or a breach or default
(with or without notice, lapse of time or other condition) under the
agreements or instruments relating to such Indebtedness to or any other
Indebtedness of the Borrower.
(j) Process Agent. A letter of acceptance confirming the appointment
of MMI as Process Agent pursuant to Section 10.09(d), together with
certified copies of the notarial deeds pursuant to which Grupo Mexico shall
have granted to the Process Agent a power of attorney for such purposes.
(k) Required Third Party Consents. True and correct copies of all
Required Third Party Consents, in form and substance satisfactory to the
Administrative Agent.
(l) Tender Offer Loans. Evidence that the lenders under the Credit
Agreement shall have made the Tender Offer Loans.
(m) Other Documents. Such other documents as the Administrative Agent
or any Lender or special New York counsel to Chase may reasonably request.
The obligation of any Lender to make its initial Revolving Loan
hereunder is also subject to the payment by the Borrower and Grupo Mexico of
such fees as the borrower and Grupo Mexico shall have agreed to pay to any
Lender or the Administrative Agent in connection herewith, including the
reasonable fees and expenses of special counsel to Chase, in connection with the
negotiation, preparation, execution and delivery of this Agreement and the other
Revolving Loan Documents and the Revolving Loans hereunder (to the extent that
statements for such fees and expenses have been delivered to the Borrower).
The Administrative Agent shall notify the Borrower and the Lenders of
the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Revolving
Loans hereunder shall not become effective unless each of the foregoing
conditions is satisfied (or waived pursuant to Section 10.02) and the Borrower
has timely submitted a Borrowing Request with a date for proposed Borrowing on
or prior to 12:00 noon, New York City time, on the Commitment Termination Date
(and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time).
SECTION 5.02. Each Revolving Loan. The obligation of each Lender to
make any Revolving Loan, and of the Issuing Lender to issue, amend, renew or
extend any Letter of Credit, is subject to the satisfaction of the following
conditions:
(a) the representations and warranties of the Borrower and of Grupo
Mexico set forth in this Agreement shall be true and correct on and as of
the date of such Revolving Loan or the date of issuance, amendment, renewal
or extension of such Letter of Credit, as applicable (other than, if such
borrowing is not for the Initial Disbursement, Sections 4.01(b), 4.07 and
4.10);
(b) at the time of and immediately after giving effect to such
Revolving Loan and the use of proceeds thereof, or the issuance, amendment,
renewal or extension of such Letter of Credit, as applicable, no Default
shall have occurred and be continuing;
(c) no event, development or circumstance has occurred which, in the
judgment of the Administrative Agent, has had or could reasonably be
expected to have a Material Adverse Effect; and
(d) upon giving of effect to the making of such Revolving Loan, the
total Revolving Credit Exposures shall not exceed the Borrowing Base
reflected on the most recent Borrowing Base Certificate delivered pursuant
to Section 5.01(f) or 6.01(e), as applicable.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower and by Grupo Mexico on the date thereof as to the matters specified in
the preceding sentence.
ARTICLE VI
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the principal
of and interest on each Revolving Loan and all fees payable hereunder shall have
been paid in full, and all Letters of Credit shall have expired or terminated
and all LC Disbursements shall have been reimbursed, each of the Borrower and
Grupo Mexico, as the case may be, covenants and agrees with the Lenders that:
SECTION 6.01. Financial Statements and Other Information. The Borrower
will furnish to the Administrative Agent and each Lender:
(a) within 120 days after the end of each fiscal year of the Borrower,
the audited consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows of the Borrower and its
Subsidiaries as of the end of and for such year, setting forth in each case
in comparative form the corresponding figures for (or in the case of the
balance sheet, as of the end of) the previous fiscal year, all reported on
by independent public accountants of recognized national standing (without
a "going concern" or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect
that such consolidated financial statements present fairly in all material
respects the financial condition and results of operations of each such
Person on a consolidated basis in accordance with GAAP consistently
applied; and
(b) within 60 days after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower, the consolidated balance
sheet and related statements of operations, stockholders' equity and cash
flows of the Borrower and its Subsidiaries, as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for (or, in the case of
the balance sheet, as of the end of) the corresponding period or periods of
the previous fiscal year, all certified by a Financial Officer of the
Borrower as presenting fairly in all material respects the financial
condition and results of operations of the Borrower and its Subsidiaries on
a consolidated basis in accordance with GAAP consistently applied, subject
to normal year-end audit adjustments and the absence of footnotes;
(c) concurrently with any delivery of financial statements under
clause (a) or (b) of this Section, a certificate of a Financial Officer of
the Borrower (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken
or proposed to be taken by the Borrower with respect thereto, (ii) setting
forth reasonably detailed calculations demonstrating compliance with
Section 7.09, and (iii) stating whether any change in GAAP or in the
application thereof has occurred since the date of the audited financial
statements referred to in Section 4.05 and, if any such change has
occurred, specifying the effect of such change on the financial statements
accompanying such certificate;
(d) concurrently with any delivery of financial statements under
clause (a) of this Section, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the extent
required by accounting rules or guidelines);
(e) as soon as available and in any event within 10 Business Days
after the end of each monthly accounting period (ending on the last day of
each calendar month), a Borrowing Base Certificate as at the last day of
such accounting period;
(f) periodically at the request of the Administrative Agent or the
Required Lenders, a report of an independent collateral auditor (which may
be, or be affiliated with, one of the Lenders) with respect to the
Receivables and Inventory components included in the Borrowing Base as at
the end of any monthly accounting period, which report shall indicate that,
based upon a review by such auditors of the Receivables (including
verification with respect to the amount, aging, identity and credit of the
respective account debtors and the billing practices of the Borrower and
its Subsidiaries) and Inventory (including verification as to the value,
location and respective types), the information set forth in the Borrowing
Base Certificate delivered by the Borrower as at the end of the relevant
period is accurate and complete in all material respects and in addition,
as soon as available and in any event within 90 days after the end of each
fiscal year of the Borrower, a like report of PricewaterhouseCoopers,
Arthur Andersen and Co. or other independent public accountants with
respect to the Receivables and Inventory components included in the
Borrowing Base as at the end of such fiscal year;
(g) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
the Borrower or any of its respective Subsidiaries with the SEC, or any
Governmental Authority succeeding to any or all of the functions of the
SEC, or with any national securities exchange, or distributed by the
Borrower to its shareholders generally, as the case may be; and
(h) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower, or compliance with the terms of this Agreement and the other
Revolving Loan Documents, as the Administrative Agent or any Lender may
reasonably request.
SECTION 6.02. Notices of Material Events. The Borrower will furnish to
the Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting the
Borrower or any of its Subsidiaries that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower and its Subsidiaries in an aggregate
amount exceeding $10,000,000;
(d) the assertion of any claim of Environmental Liability by any
Person against, or with respect to the activities of, the Borrower or any
of its Subsidiaries and any alleged violation of or non-compliance with any
Environmental Laws or any permits, licenses or authorizations, other than
any claims of Environmental Liability or alleged violation that, if
adversely determined, would not (either individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect; and
(e) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower, setting forth
the details of the event or development requiring such notice and any action
taken or proposed to be taken by the Borrower with respect thereto.
SECTION 6.03. Existence; Conduct of Business. The Borrower will, and
will cause each of its Subsidiaries to, cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges and franchises material to the conduct of
its business; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 7.03; and
provided further that this Section 6.03 shall not prohibit the sale of Specialty
Chemicals and Aggregates Business.
SECTION 6.04. Payment of Obligations. The Borrower will, and will cause
each of its Subsidiaries to, pay its obligations, including Tax liabilities,
that, if not paid, could result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 6.05. Maintenance of Properties; Insurance. The Borrower will,
and will cause each of its Subsidiaries to, (a) keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted, and (b) maintain, with financially sound and
reputable insurance companies, insurance in such amounts and against such risks
as are customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations.
SECTION 6.06. Books and Records; Inspection and Audit Rights.
(a) Books and Records; Inspection Rights. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries are made of all dealings and transactions
in relation to its business and activities. The Borrower will, and will cause
each of its Subsidiaries to, permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit and
inspect its properties, to examine and make extracts from its books and records,
and to discuss its affairs, finances and condition with its officers and
independent accountants, all at such reasonable times and as often as reasonably
requested.
(b) Audit Rights. The Borrower will, and will cause each of its
Subsidiaries to, permit any representatives designated by Administrative Agent
(including any consultants, accountants, lawyers and appraisers retained by the
Administrative Agent) to conduct evaluations and appraisals of the Borrower's
computation of the Borrowing Base and the assets included in the Borrowing Base,
all at such reasonable times and as often as reasonably requested. The Borrower
shall pay the reasonable fees and expenses of any representatives retained by
the Administrative Agent to conduct any such evaluation or appraisal; provided
that the Borrower shall not be required to pay such fees and expenses unless an
Event of Default has occurred and is continuing. The Borrower also agrees to
modify or adjust the computation of the Borrowing Base (which may include
maintaining additional reserves or modifying the eligibility criteria for the
components of the Borrowing Base) to the extent required by the Administrative
Agent or the Required Lenders as a result of any such evaluation or appraisal.
SECTION 6.07. Compliance with Laws. The Borrower will, and will cause
each of its Subsidiaries to, comply with all laws (including Environmental
Laws), rules, regulations and orders of any Governmental Authority applicable to
it or its property and all indentures, agreements or other instruments binding
upon it or its property, except where the failure to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 6.08. Use of Proceeds and Letters of Credit. The proceeds of
the Revolving Loans will be used only for working capital purposes and for
payment of existing Indebtedness and for payment of the Tender Offer Loans. No
part of the proceeds of any Revolving Loan will be used, whether directly or
indirectly, for any purpose that entails a violation of any of the regulations
of the Board, including Regulations U and X. Letters of Credit will be issued
only to support permitted purposes.
SECTION 6.09. Hedging Agreements. The Borrower will, within 45 days
after the Tender Offer Closing Date, obtain and thereafter maintain, in full
force and effect, Hedging Agreements with a term of at least one year from the
Effective Date with one or more counterparties acceptable to the Administrative
Agent, that consist of (a) the purchase of put options covering 100,000 tons of
copper at $0.75/lb and (b) the sale of call options covering such tonnage of
copper at a specified price, the premium on which would be substantially
equivalent to the premium paid for the Borrower's purchase of put options
described in item (a) above.
SECTION 6.10. Grupo Mexico Affirmative Covenants. Grupo Mexico will
comply with its affirmative covenants set forth in Article VI of the Credit
Agreement. Article VI of the Credit Agreement, together with related definitions
and exceptions applicable to such specified Article, is hereby incorporated
herein by reference as if set forth in full herein (such Article VI to enter
into effect as of the date hereof and to remain in effect for the purposes
hereof, notwithstanding any amendment or waiver thereof under the Credit
Agreement, except to the extent amended or waived by the Administrative Agent
with the consent of the Required Lenders hereunder, and notwithstanding any
termination of the Credit Agreement subsequent to the date hereof).
ARTICLE VII
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of
and interest on each Revolving Loan and all fees payable hereunder have been
paid in full, and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, each of the Borrower and Grupo Mexico,
as the case may be, covenants and agrees with the Lenders that:
SECTION 7.01. Indebtedness. The Borrower will not create, incur, assume
or permit to exist any Indebtedness, except:
(a) Indebtedness created hereunder and under the Credit Agreement
(assumed by the Borrower upon the Merger);
(b) Indebtedness existing on the date hereof and set forth in Part B
of Schedule VII (excluding, however, following the initial disbursement of
Revolving Loans hereunder, the Indebtedness to be repaid with the proceeds
of such Revolving Loans, as indicated on Schedule XIII), and extensions,
renewals and replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof;
(c) Indebtedness up to $180,000,000 for which the Borrower is an
account party in respect of letters of credit or surety bonds issued in
connection with consent decrees;
(d) Indebtedness up to $50,000,000 for which the Borrower is an
account party in respect of letters of credit or surety bonds issued in
connection with Asarco's pension program; and
(e) Indebtedness up to an aggregate principal amount of $120,000,000
(prior to the payment in full of the Tender Offer Loans) or $200,000,000
(after the payment in full of the Tender Offer Loans) for (A) industrial
development revenue bond financings under Section 103(b) of the Code, (B)
other unsecured Indebtedness and (C) Indebtedness incurred solely to
finance the acquisition of fixed or capital assets.
SECTION 7.02. Liens. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof or
enter into any sale-leaseback transaction or similar arrangement that would have
the same effect as any of the foregoing, except (references in this Section 7.02
to a "Subsidiary" to be understood to mean a Subsidiary of the Borrower):
(a) Liens created pursuant to the Security Documents;
(b) any Lien on any property or asset of the Borrower existing on the
date hereof and set forth in Part C of Schedule VII (or, to the extent not
meeting the minimum thresholds for required listing on Schedule VII
pursuant to Section 4.04, in an aggregate amount not exceeding $1,000,000);
provided that (A) no such Lien shall extend to any other property or asset
of the Borrower and (B) any such Lien shall secure only those obligations
which it secures on the date hereof and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;
(c) (i) pledges or deposits to obtain the benefits of any law,
regulation or arrangement pertaining to unemployment insurance, old age
pensions, employee benefits, social security or similar matters and Liens
or judgments under such laws which are not currently required to be
discharged, (ii) pledges or deposits in connection with bids, tenders,
contracts or leases to which the Borrower or any Subsidiary is a party, in
each case in the ordinary course of business, (iii) Liens or deposits to
secure public or statutory obligations of the Borrower or any Subsidiary,
materialmen's, mechanics', carriers', warehousemen's, workmen's,
repairmen's, vendors' or like liens or deposits to obtain the release of
such liens, (iv) deposits to secure surety, stay, appeal or customs bonds
to which the Borrower or any Subsidiary is a party, (v) landlords' liens
under leases to which the Borrower or any Subsidiary is a party, (vi)
zoning restrictions on the use of real property or irregularities
(including easements, rights of way and the like) in title thereto which do
not materially detract from the value of such property or materially impair
the use thereof and (vii) Liens arising out of contracts for the tolling of
metals or minerals by the Borrower or any Subsidiary;
(d) Liens on property in the process of export or import or on the
documents relating to thereto, securing current liabilities of the Borrower
or any Subsidiary incurred for the purchase of such property or in
connection with the sale or discount of current receivables arising out of
the sale of such property;
(e) Liens in favor of the United States of America or any State
thereof, or any department, agency or instrumentality or political
subdivision of the United States of America or any State thereof, or in
favor of any other country, or any department, agency, instrumentality or
political subdivision thereof, arising out of contracts for the purchase of
products or services of the Borrower or any Subsidiary or to secure
partial, progress, advance or other payments or other obligations, pursuant
to any contract or statute (other than taxes or other governmental charges,
assessments or penalties) or deposits or pledges to obtain the release of
any of the foregoing Liens; or Liens for taxes or assessments or other
governmental charges or levies not yet due and delinquent or which are
being contested in good faith by appropriate proceedings;
(f) production payments or other rights of others to the output of
mines, smelters or production facilities, including, without limitation,
the tolling of metals or minerals by the Borrower or any Subsidiary;
(g) rights of a lessor under a lease or an operator under an operating
agreement;
(h) Liens securing Indebtedness to the extent permitted under Section
7.01(e)(A) arising out of industrial development revenue bond financings
under Section 103(b) of the Code and Liens on pollution control facilities
arising out of the financing of the acquisition or use thereof by (or by
lessors to) the Borrower or any Subsidiary;
(i) Liens upon any property or assets existing at the time of
acquisition thereof by the Borrower or any Subsidiary, whether by merger,
consolidation, purchase, lease or otherwise (including Liens upon property
or assets of a corporation existing at the time such corporation becomes a
Significant Subsidiary), and not created in contemplation of such
acquisition or event;
(j) Liens securing Indebtedness to the extent permitted under Section
7.01(e)(C) upon any property or assets acquired, constructed or improved by
the Borrower or any Subsidiary after the date of this Agreement which are
created or assumed contemporaneously with such acquisition, construction or
improvement, or within 180 days after the completion thereof, to secure or
provide for the payment of all or any part of the cost of such acquisition,
construction or improvement incurred after the date of this Agreement,
provided that in the case of any such acquisition, construction or
improvement the Lien shall not apply to any property or assets owned by the
Borrower or any Subsidiary at the time of the commencement of such
acquisition, construction or improvement, other than any property or assets
on which such construction or improvement is located; and provided,
further, that the principal amount of Indebtedness secured by each Lien
shall not exceed 100% of the cost of such property or assets at the time of
the acquisition thereof or, in the case of any construction or improvement,
100% of the cost of such construction or improvement at the time of
completion thereof;
(k) renewals, extensions or replacements in whole or in part of Liens
referred to in clauses (a), (h), (i) and (j), or in this paragraph (k), for
amounts which shall not exceed the principal amount of the obligation or
Indebtedness so renewed, extended or replaced at the time of such renewal,
extension or replacement and applying only to the same property and assets
theretofore subject to the Lien (plus improvements on or to such property);
(l) Liens created by the Borrower and/or its Significant Subsidiaries
in the ordinary course of business in connection with Hedging Agreements,
provided that the counterparties in such Hedging Agreements are Lenders
hereunder; and
(m) Liens and sale-leaseback transactions on assets or property
comprising Principal Property which do not in the aggregate exceed 10% of
Principal Consolidated Net Tangible Assets.
SECTION 7.03. Fundamental Changes.
(a) Mergers, Consolidations, Disposal of Assets, Etc. The Borrower will
not, and will not permit any of its Subsidiaries to, merge into or consolidate
with any other Person, or permit any other Person to merge into or consolidate
with it, or sell, transfer, lease or otherwise dispose of (in one transaction or
in a series of transactions) all or substantially all of its assets, or all or
substantially all of the stock of any of its Subsidiaries (in each case, whether
now owned or hereafter acquired), or liquidate or dissolve except that, if at
the time thereof and immediately after giving effect thereto no Default shall
have occurred and be continuing, (i) any Person may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, (ii) any Person
may merge into any Subsidiary of the Borrower in a transaction in which the
surviving entity is a Subsidiary of the Borrower and (iii) any Subsidiary of the
Borrower other than Southern Peru may liquidate or dissolve if the Borrower
determines in good faith that such liquidation or dissolution is in the best
interests of the Borrower and is not materially disadvantageous to the Lenders;
provided that this Section shall not prevent (i) the Merger, so long as the
Borrower satisfies the following conditions: (A) execution and delivery of the
Assumption Agreement and (B) the Borrower shall provide to the Administrative
Agent written legal opinions of counsel in form and substance satisfactory to
the Administrative Agent, and (ii) the sale or disposition by the Borrower of
Specialty Chemicals and Aggregates Business as permitted under Section 6.03, so
long as such sale or disposition is effected for not less than fair market value
and for cash proceeds only.
(b) Lines of Business. The Borrower will not, and will not permit any
of its Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Borrower and its Subsidiaries on the
date of execution of this Agreement and businesses reasonably related thereto,
including any energy - related businesses.
SECTION 7.04. Investments.
The Borrower will not make or permit to remain outstanding any
Investments except:
(a) Permitted Investments of the Borrower;
(b) any Investments of the Borrower in its Subsidiaries existing on
the date hereof;
(c) prior to payment in full of the Tender Offer Loans, additional
Investments in an aggregate amount not exceeding $25,000,000 per
year; and
(d) after the payment in full of the Tender Offer Loans, additional
Investments in an aggregate amount not exceeding $75,000,000 per
year.
SECTION 7.05. Restricted Payments. The Borrower will not declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
except that the Borrower may declare and make Restricted Payments in cash,
subject to the satisfaction of each of the following conditions on the date of
such Restricted Payment and upon giving effect thereto:
(a) no Default shall have occurred and be continuing;
(b) the Borrower is in compliance with Section 7.09;
(c) prior to the payment in full of the Tender Offer Loans, aggregate
Restricted Payments made in any year do not exceed 25% of the Consolidated
Net Income for such year; and
(d) after the payment in full of the Tender Offer Loans, aggregate
Restricted Payments made in any year do not exceed 50% of Consolidated Net
Income for such year, provided that on any date on which any Restricted
Payment is made, the Borrowing Base on such date (computed without
including in such "Borrowing Base" any value whatsoever for the shares of
Southern Peru owned by SPC Holdings) is equal to or greater than the
unterminated Commitments (used or unused) as at such date.
SECTION 7.06 Transactions with Affiliates. The Borrower will not, nor
will it permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except transactions in the ordinary course of business at prices and
on terms and conditions not less favorable to the Borrower or such Subsidiary
than could be obtained on an arm's-length basis from unrelated third parties.
SECTION 7.07. Restrictive Agreements. The Borrower will not permit any
of its Subsidiaries to, directly or indirectly, enter into, incur or permit to
exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon the ability of such Subsidiary to pay dividends or other
distributions with respect to any shares of its capital stock or to make or
repay loans or advances to the Borrower or to Guarantee Indebtedness of the
Borrower; provided that the foregoing shall not apply to (x) restrictions and
conditions imposed by law or by this Agreement, (y) restrictions and conditions
existing on the date hereof identified on Schedule XIV (but shall apply to any
extension or renewal of, or any amendment or modification expanding the scope
of, any such restriction or condition) and (z) customary restrictions and
conditions contained in agreements relating to the sale of a Subsidiary pending
such sale, provided such restrictions and conditions apply only to the
Subsidiary that is to be sold and such sale is permitted hereunder.
SECTION 7.08. Grupo Mexico Negative Covenants. Grupo Mexico will comply
with its negative covenants set forth in Article VII of the Credit Agreement.
Article VII of the Credit Agreement, together with related definitions and
exceptions applicable to such specified Article, is hereby incorporated herein
by reference as if set forth in full herein (such Article VII to enter into
effect as of the date hereof and to remain in effect for the purposes hereof,
notwithstanding any amendment or waiver thereof under the Credit Agreement,
except to the extent amended or waived by the Administrative Agent with the
consent of the Required Lenders hereunder, and notwithstanding any termination
of the Credit Agreement subsequent to the date hereof).
SECTION 7.09. Consolidated Adjusted EBITDA. The Borrower will not
permit its Consolidated Adjusted EBITDA to be less than the following respective
amounts for the Measuring Periods ending on the following dates:
Date Amount
---------- -----------
June 30, 2000 $25,000,000
September 30, 2000 $50,000,000
December 31, 2000 $100,000,000
March 31, 2001 $125,000,000
June 30, 2001 $125,000,000
September 30, 2001 $135,000,000
Any quarter-end thereafter $150,000,000
SECTION 7.10. Accounting Changes. The Borrower shall not make any
significant change in accounting treatment or reporting practices, except as
permitted by GAAP and set forth in its financial statements, or change the
fiscal year of the Borrower unless such change shall be deemed by the Borrower
to be materially advantageous to such Person and could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 7.11. Capital Expenditures. The Borrower will not make Capital
Expenditures which exceed in the aggregate $90,000,000 per year.
ARTICLE VIII
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Revolving
Loan, or any reimbursement obligation in respect of any LC Disbursement, or
(after the Merger) any Tender Offer Loan, when and as the same shall become
due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Revolving Loan
or any fee or any other amount (other than an amount referred to in clause
(a) of this Article) payable under this Agreement or under any other
Revolving Loan Document, when and as the same shall become due and payable,
and such failure shall continue unremedied for a period of five or more
Business Days;
(c) any representation or warranty made or deemed made by or on behalf
of any Affiliated Party in or in connection with this Agreement or any
other Revolving Loan Document or any amendment or modification hereof or
thereof, or in any written report, certificate, financial statement or
other document furnished pursuant to or in connection with this Agreement
or any other Revolving Loan Document or any amendment or modification
hereof or thereof, shall prove to have been incorrect when made or deemed
made; or any representation or warranty made by the Borrower or Grupo
Mexico pursuant to the Merger Agreement shall prove to have been false or
misleading as of the time made in any material respect;
(d) the Borrower or Grupo Mexico shall fail to observe or perform any
covenant, condition or agreement contained in Section 6.02 or 6.03 (with
respect to the Borrower's existence), or in Sections 6.02 or 6.03 (with
respect to Grupo Mexico's existence) of the Credit Agreement, as
incorporated by reference in Section 6.10 hereof, or any Obligor shall
default in the performance of any of its obligations contained in Section
5.01 or 5.02 of the Unclaimed Funds Security Agreement or Section 4.01 or
4.02 of the Pledge Agreements or the Asarco Security Agreement,
respectively, and such default shall continue unremedied for a period of 10
days after the earlier of (i) the date upon which a Responsible Officer
knew or reasonably should have known of such default and (ii) the date upon
which written notice thereof is given to the Borrower by the Administrative
Agent or any Lender;
(e) (i) any of Grupo Mexico, the Borrower, GMM or any of their
respective Subsidiaries (A) fails to make any payment (whether of principal
or interest and regardless of amount) when due (whether at scheduled
maturity, required prepayment, acceleration, demand or otherwise) of any
Material Indebtedness, and such failure continues after the applicable
grace or notice period, if any, specified in the relevant documents on the
date of such failure; or (B) fails to perform or observe any other
condition or covenant, or any other event shall occur or condition exist,
under any agreement or instrument relating to any Material Indebtedness,
and such failure continues after the applicable grace or notice period, if
any, specified in the relevant document on the date of such failure, if the
effect of such failure, event or condition is to cause, or to permit the
holders or beneficiaries of such Material Indebtedness (or a trustee or
agent on behalf of such holders or beneficiaries) to cause, such Material
Indebtedness to be declared to be due and payable prior to its stated
maturity; or (C) without limiting the foregoing, an "Accelerated
Amortization Event", "Default" or "Event of Default" under and as defined
in the SEN Facility or any similar facility entered into as a replacement
for the SEN Facility, or a "Default" or "Event of Default" under and as
defined in the U.S. Registered Note Indenture shall occur and be continuing
(other than any such "Accelerated Amortization Event" that arises solely as
a result of a downgrading of the credit rating of GMM, provided that such
event continues unremedied for not more than 60 days and, during such
period, GMM and Grupo Mexico diligently pursue avenues acceptable to the
Administrative Agent to remedy such occurrence); or (ii) there occurs under
any Hedging Agreements an early termination date resulting from any event
of default under such Hedging Agreement as to which Grupo Mexico, GMM or
any of their respective Subsidiaries is the defaulting party or similar
status (however defined) and the termination value or similar sum (however
defined) owed by any such Person as a result thereof constitutes Material
Indebtedness; or (iii) there occurs any termination, liquidation, unwind or
similar event or circumstance under any Receivables purchase facility which
permits any purchaser of Receivables thereunder to cease purchasing such
Receivables or to apply all collections on previously purchased Receivables
thereunder to the repayment of such purchaser's interest in such previously
purchased Receivables (other than any such event or circumstance that
arises solely as a result of (A) a down-grading of the credit rating of any
bank or financial institution not affiliated with Grupo Mexico that
provides liquidity, credit or other support in connection with such
facility, or (B) a downgrading of the credit rating of GMM, subject to the
provisos set forth above in clause (i)(C) above);
(f) any Obligor shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those
specified in clause (a), (b), (d) or (e) of this Article) or any other
Revolving Loan Document and such failure shall continue unremedied for a
period of 30 or more days after notice thereof from the Administrative
Agent (given at the request of any Lender) to the Borrower;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of any Affiliated Party or any Material Subsidiary of its
debts, or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for any Affiliated
Party or any Material Subsidiary or for a substantial part of its assets,
and, in any such case, such proceeding or petition shall continue
undismissed for a period of 60 or more days or an order or decree approving
or ordering any of the foregoing shall be entered;
(h) any Affiliated Party or any Material Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to contest
in a timely and appropriate manner, any proceeding or petition described in
clause (g) of this Article, (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar
official for any Affiliated Party or any Material Subsidiary or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make
a general assignment for the benefit of creditors or (vi) take any action
for the purpose of effecting any of the foregoing;
(i) any Affiliated Party or any Material Subsidiary shall become
unable, admit in writing its inability or fail generally to pay its debts
as they become due;
(j) without limiting clause (e) above, the Borrower or Grupo Mexico
fails to perform or observe any other condition or covenant, or any other
event shall occur or condition exist, under the Credit Agreement, and such
failure continues after the applicable grace or notice period, if any,
specified in such agreement on the date of such failure, if the effect of
such failure, event or condition is to cause, or to permit the lenders
under the Credit Agreement (or an agent on behalf of such lenders) to
cause, any Tender Offer Loans to be declared to be due and payable prior to
their stated maturity;
(k) either the Borrower or GMM shall at any time cease to be a
substantially wholly-owned Subsidiary of Grupo Mexico, or, provided the
conditions specified in Section 7.03 of the Credit Agreement have been met,
either the Borrower or GMM shall at any time thereafter cease to be a
majority-owned and Controlled Subsidiary of Grupo Mexico; or Southern Peru
shall cease to be a majority-owned and Controlled Subsidiary of the
Borrower;
(l) one or more judgments for the payment of money shall be rendered
against any Affiliated Party or any Material Subsidiary or any combination
thereof in an aggregate amount in excess of the amount of Indebtedness that
would constitute Material Indebtedness of such Person and the same shall
remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally
taken by a judgment creditor to attach or levy upon any assets of any
Affiliated Party or any Material Subsidiary to enforce any such judgment;
(m) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken individually or together with all other ERISA
Events that have occurred, could reasonably be expected to result in a
Material Adverse Effect or result in liability of the Borrower and its
Subsidiaries in an aggregate amount at any one time exceeding 1.5% of the
consolidated total assets of the Borrower and its consolidated
Subsidiaries;
(n) a reasonable basis shall exist for the assertion against the
Borrower or any of its Subsidiaries (or any predecessor in interest of the
Borrower or any of its Subsidiaries), of, or there shall have been asserted
against the Borrower or any of its Subsidiaries, a claim of Environmental
Liability that, in the judgment of the Required Lenders, is reasonably
likely to be determined adversely to the Borrower or any of its
Subsidiaries, and the amount thereof (either individually or in the
aggregate) is reasonably likely to have a Material Adverse Effect (insofar
as such amount is payable by the Borrower or any of its Subsidiaries but
after deducting any portion thereof that is reasonably expected to be paid
by other creditworthy Persons jointly and severally liable therefor);
(o) a Change in Control shall occur; or
(p) any Lien stated to be created by any of the Security Documents
shall at any time not constitute a valid and perfected Lien on the
collateral intended to be covered thereby (to the extent perfection by
filing, registration, recordation or possession is required herein or
therein) in favor of the Collateral Agent (for the benefit of the Lenders
and the lenders party to the Credit Agreement), free and clear of all other
Liens (other than Liens permitted under paragraph (b) of Annex I or under
the respective Security Documents), or, except for expiration in accordance
with its terms, any of the Security Documents shall for whatever reason be
terminated or cease to be in full force and effect, or the enforceability
thereof shall be contested by either Obligor;
then, and in every such event (other than an event with respect to any Obligor
described in clause (g) or (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Revolving Loans then outstanding to be due and
payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Revolving Loans so declared to be due and payable, together
with accrued interest thereon and all fees and other obligations of the Obligors
accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by each Obligor; and in case of any event with respect to any
Obligor described in clause (g) or (h) or (i) of this Article, the Commitments
shall automatically terminate and the principal of the Revolving Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Obligors accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Obligor.
ARTICLE IX
THE ADMINISTRATIVE AGENT
Each of the Lenders and the Issuing Lender hereby irrevocably appoints
the Administrative Agent as its agent hereunder and under the other Revolving
Loan Documents, authorizes the Administrative Agent to execute and deliver on
its behalf the Inter-Creditor Agreement (among other things, appointing the
Collateral Agent and setting forth the voting requirements for instructing the
Collateral Agent) and authorizes the Administrative Agent to take such actions
on its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms hereof or thereof, together with such actions and powers as
are reasonably incidental thereto.
The Person serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such
Person and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with Grupo Mexico or any Subsidiary or other
Affiliate thereof (including the Borrower) as if it were not the Administrative
Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein and in the other Revolving Loan
Documents. Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Revolving Loan Documents that the
Administrative Agent is required to exercise in writing by the Required Lenders,
and (c) except as expressly set forth herein and in the other Revolving Loan
Documents, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to
Grupo Mexico or any of its Subsidiaries (including the Borrower) that is
communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders or in the absence of its own gross negligence or willful
misconduct. The Administrative Agent shall be deemed not to have knowledge of
any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this
Agreement or any other Revolving Loan Document, (ii) the contents of any
certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth herein or
therein, (iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Revolving Loan Document or any other agreement, instrument
or document, or (v) the satisfaction of any condition set forth in Article V or
elsewhere herein or therein, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for an Obligor), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
The Administrative Agent may resign at any time by notifying the
Lenders, the Issuing Lender and the Borrower and Grupo Mexico. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent's resignation shall nonetheless become
effective and (1) the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder and (2) the Required Lenders shall perform the
duties of the Administrative Agent (and all payments and communications provided
to be made by, to or through the Administrative Agent shall instead be made by
or to each Lender directly) until such time as the Required Lenders appoint a
successor agent as provided for above in this paragraph. Upon the acceptance of
its appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring (or retired) Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder (if not already discharged therefrom as provided above in this
paragraph). The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Administrative Agent's
resignation hereunder, the provisions of this Article and Section 10.03 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Revolving Loan Document or any related agreement or any document
furnished hereunder or thereunder.
Except as otherwise provided in Section 10.02(b) with respect to this
Agreement, the Administrative Agent may, with the prior consent of the Required
Lenders (but not otherwise), consent to any modification, supplement or waiver
under any of the Revolving Loan Documents, provided that, without the prior
consent of each Lender, the Administrative Agent shall not (except as provided
herein or in the Security Documents) grant any authorization to release any
collateral or otherwise to terminate any Lien under any Security Document
providing for collateral security, agree to additional obligations being secured
by such collateral security (unless the Lien for such additional obligations
shall be junior to the Lien in favor of the other obligations secured by such
Security Document, in which event the Administrative Agent may consent to such
junior Lien provided that it obtains the consent of the Required Lenders
thereto), or alter the relative priorities of the obligations entitled to the
benefits of the Liens created under the Security Documents, except that no such
consent shall be required, and the Administrative Agent is hereby authorized, to
release or consent to the release of any Lien covering property that is the
subject of either a disposition of property permitted hereunder or a disposition
to which the Required Lenders have consented.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to Grupo Mexico, to it at Grupo Mexico, S.A. de C.V., Baja
California 200, Piso 6, Col. Roma Sur, 06760 Mexico, D.F., Attention of
Daniel Tellechea Salido (Telecopy No. (525) 264-7664; Telephone No. (525)
574-7066);
(b) if to the Borrower, to it at 180 Maiden Lane, New York, New York
10038, Attention: Chief Financial Officer (Telecopy No. (212) 510-1855;
Telephone No. (212) 510-2000);
(c) if to the Administrative Agent, to The Chase Manhattan Bank, 1
Chase Manhattan Plaza, 8th Floor, New York, New York 10081, Attention of
Loan and Agency Services Group (Telecopy No. (212) 522-7490; Telephone No.
(212) 522-7253), with a copy to The Chase Manhattan Bank, 270 Park Avenue,
New York, New York 10017, Attention of Nicholas Chirekos, Managing Director
(Telephone No. (212) 270-0400) and to Kenneth Kryzda, Managing Director,
Chase Mexico, 600 Prolongacion, Paseo de la Reforma, Col. Santa Fe, C.P.
01210 Mexico, D.F. (Telecopy No. (525) 258-1793; Telephone No. (525)
257-9734); and
(d) if to a Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto (or, in the case
of any such change by a Lender, by notice to the Borrower and the Administrative
Agent). All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
SECTION 10.02. Waivers; Amendments.
(a) No Deemed Waivers; Remedies Cumulative. No failure or delay by the
Administrative Agent or any Lender or the Issuing Lender in exercising any right
or power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such .right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Lenders and the Issuing Lender
hereunder are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by any Obligor therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Revolving Loan or the issuance of a Letter of Credit
shall not be construed as a waiver of any Default, regardless of whether the
Administrative Agent, any Lender or the Issuing Lender may have had notice or
knowledge of such Default at the time.
(b) Amendments. Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Lenders or by the Borrower
and the Administrative Agent with the consent of the Required Lenders; provided
that no such agreement shall (i) increase the Commitment of any Lender without
the written consent of such Lender, (ii) reduce the principal amount of any
Revolving Loan or LC Disbursement or reduce the rate of interest thereon, or
reduce any fees payable hereunder, without the written consent of each Lender
affected thereby, (iii) postpone the scheduled final maturity date of any
Revolving Loan or LC Disbursement, or postpone the scheduled date of payment of
any interest thereon or any fees payable hereunder, or reduce the amount of,
waive or excuse any such payment or any mandatory prepayment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender affected thereby, (iv) alter the manner in which payments or
prepayments of principal, interest or other amounts hereunder shall be applied
as among the Lenders or Types of Revolving Loans, without the written consent of
each Lender, (v) change any of the provisions of this Section or the definition
of the term "Required Lenders" or any other provision hereof specifying the
number or percentage of Lenders required to waive, amend or modify any rights
hereunder or make any determination or grant any consent hereunder, without the
written consent of each Lender, or (vi) release Grupo Mexico from any of its
guarantee obligations under Article III without the written consent of each
Lender; provided further that (x) no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent or the Issuing
Lender hereunder without the prior written consent of the Administrative Agent
or the Issuing Lender, as the case may be, and (y) any modification or
supplement of Article III shall require the consent of Grupo Mexico.
SECTION 10.03. Expenses; Indemnity; Damage Waiver.
(a) Costs and Expenses. The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of this
Agreement and the other Revolving Loan Documents or any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
out-of-pocket expenses incurred by the Issuing Lender in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder, (iii) all out-of-pocket expenses incurred by the
Administrative Agent or (after the occurrence of an Event of Default) any Lender
or the Issuing Lender, including the fees, charges and disbursements of any
counsel for the Administrative Agent or (after the occurrence of an Event of
Default) any Lender or the Issuing Lender, in connection with the enforcement or
protection of its rights in connection with this Agreement and the other
Revolving Loan Documents, including its rights under this Section, or in
connection with the Revolving Loans made hereunder, including in connection with
any workout, restructuring or negotiations in respect thereof and (iv) and all
costs, expenses, taxes, assessments and other charges incurred in connection
with any filing, registration, recording or perfection of any security interest
contemplated by any Security Document or any other document referred to therein.
(b) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent, each Lender, the Issuing Lender and each Related Party of
any of the foregoing Persons (each such Person being called an "Indemnitee")
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Revolving Loan or Letter of Credit or
the use of the proceeds therefrom (including any refusal by the Issuing Lender
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by the Borrower or
any of its Subsidiaries, or any Environmental Liability related in any way to
the Borrower or any of its Subsidiaries, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) Reimbursement by Lenders. To the extent that the Borrower fails to
pay any amount required to be paid by it to the Administrative Agent or the
Issuing Lender under paragraph (a) or (b) of this Section, each Lender severally
agrees to pay to the Administrative Agent or the Issuing Lender, as the case may
be, such Lender's Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent or the Issuing Lender in its capacity
as such.
(d) Waiver of Consequential Damages, Etc. To the extent permitted by
applicable law, no Obligor shall assert, and each Obligor hereby waives, any
claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Revolving
Loan or Letter of Credit or the use of the proceeds thereof.
(e) Payments. All amounts due under this Section shall be payable not
later than 3 Business Days after written demand therefor.
SECTION 10.04. Successors and Assigns.
(a) Assignments Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that, other than as contemplated
by the Merger, no Obligor may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by any Obligor without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Issuing Lender and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(b) Assignments by Lenders. Any Lender may assign to one or more
assignees, including an Approved Fund, all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Revolving Loans at the time owing to it); provided that (i) except in
the case of an assignment to a Lender, an Affiliate of a Lender or an Approved
Fund, each of the Administrative Agent and Grupo Mexico (except, in the case of
Grupo Mexico, during the existence of a Default) (and, in the case of an
assignment of all or a portion of a Commitment or any Lender's obligations in
respect of its LC Exposure, the Issuing Lender) must give their prior written
consent to such assignment (which consent shall not be unreasonably withheld),
(ii) except in the case of an assignment to a Lender, an Affiliate of a Lender
or an Approved Fund or an assignment of the entire remaining amount of the
assigning Lender's Commitment, the amount of the Commitment of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, (iii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement, (iv) the parties
to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a processing and recordation fee of
$3,500, and (v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; provided further that any
consent of the Borrower otherwise required under this paragraph shall not be
required if an Event of Default under clause (g) or (h) of Article VIII has
occurred and is continuing. Upon acceptance and recording pursuant to paragraph
(d) of this Section, from and after the effective date specified in each
Assignment and Acceptance, the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.13, 2.14, 2.15 and 10.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section.
(c) Maintenance of Register by the Administrative Agent. The
Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices in New York City a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Revolving Loans and LC Disbursements owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, the Issuing Lender and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Lender and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(d) Effectiveness of Assignments. Upon its receipt of a duly completed
Assignment and Acceptance executed by an assigning Lender and an assignee, the
assignee's completed Administrative Questionnaire (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) of this Section and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall accept
such Assignment and Acceptance and record the information contained therein in
the Register. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this paragraph.
(e) Participations. Any Lender may, without the consent of the
Borrower, the Administrative Agent or the Issuing Lender sell participations to
one or more banks or other entities (a "Participant") in all or a portion of
such Lender's rights and obligations under this Agreement and the other
Revolving Loan Documents (including all or a portion of its Commitment and the
Revolving Loans owing to it); provided that (i) such Lender's obligations under
this Agreement and the other Revolving Loan Documents shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations and (iii) the Borrower, the Administrative
Agent, the Issuing Lender and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Revolving Loan Documents. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and the other Revolving Loan Documents and to approve any amendment,
modification or waiver of any provision of this Agreement or any other Revolving
Loan Document; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 10.02(b) that
affects such Participant. Subject to paragraph (f) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.13,
2.14 and 2.15 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section.
(f) Limitations on Rights of Participants. A Participant shall not be
entitled to receive any greater payment under Section 2.13 or 2.15 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 2.15 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.15(e) as though it were a
Lender.
(g) Certain Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any such pledge or assignment to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such assignee for such Lender as a party hereto.
(h) No Assignments to the Obligors or Affiliates. Anything in this
Section to the contrary notwithstanding, no Lender may assign or participate any
interest in any Revolving Loan or LC Exposure held by it hereunder to the
Borrower or any of its Affiliates or Subsidiaries without the prior consent of
each Lender.
SECTION 10.05. Survival. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Revolving Loans and issuance of any Letters of Credit, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent, the Issuing Lender or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Revolving Loan
or any fee or any other amount payable under this Agreement is outstanding and
unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not expired or terminated. The provisions of Sections 2.13, 2.14, 2.15,
3.03 and 10.03 and Article IX shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Revolving Loans, the expiration or termination of the Letters
of Credit and the Commitments or the termination of this Agreement or any
provision hereof.
SECTION 10.06. Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements to the Administrative Agent, including those
agreements with Chase and Chase Securities Inc. covering, among other matters,
fees payable to the Administrative Agent, constitute the entire contract between
and among the parties relating to the subject matter hereof and supersede any
and all previous agreements and understandings, oral or written, relating to the
subject matter hereof. Except as provided in Section 5.01, this Agreement shall
become effective when it shall have been executed by the Administrative Agent
and when the Administrative Agent shall have received counterparts hereof which,
when taken together, bear the signatures of each of the other parties named on
the signature pages hereof, and thereafter shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 10.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of any Obligor against any of and all the
obligations of any Obligor now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
SECTION 10.09. Governing Law; Jurisdiction; Etc.
(a) Governing Law. This Agreement shall be construed in accordance with
and governed by the law of the State of New York.
(b) Submission to Jurisdiction. Each party hereto hereby irrevocably
and unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each party hereto further submits, for
the purpose of any such judgment, action or proceeding rendered or brought
against it, to the appropriate courts of the jurisdiction of its domicile. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Each party hereto
waives the right to require that suits against it be brought in any other
jurisdiction to which it would otherwise be legally entitled.
(c) Waiver of Venue. Each Obligor hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any court referred to in paragraph (b) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(d) Service of Process. Grupo Mexico hereby irrevocably designates,
appoints and empowers MMI (the "Process Agent"), with offices on the date hereof
at 712 Fifth Avenue, 39th Floor, New York, New York 10011, as its designee,
appointee and agent with respect to any action or proceeding in New York to
receive, accept and acknowledge for and on its behalf, and in respect of its
property, service of any and all legal process, summons, notices and documents
which may be served in any such action or proceeding, and Grupo Mexico hereby
confirms and agrees that the Process Agent has been duly and irrevocably
appointed as its agent and true and lawful attorney-in-fact in its name, place
and stead to accept such service of any and all legal process, summons, notices
and documents, and agrees that the failure of such agent to give any advice of
any such service of process to Grupo Mexico shall not impair or affect the
validity of such service or of any judgment based thereon. If for any reason
such designee, appointee and agent shall cease to be available to act as such,
Grupo Mexico agrees to designate a new designee, appointee and agent in New York
City on the terms and for the purposes of this provision satisfactory to the
Lenders. Grupo Mexico further irrevocably consents to the service of process out
of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
each of Grupo Mexico and the Process Agent, at their respective addresses set
forth in this Section and Section 10.01, such service to become effective five
days after such mailing. Nothing in this Agreement will affect the right of any
party to this Agreement to serve process in any other manner permitted by law.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 10.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 10.12. Treatment of Certain Information; Confidentiality.
(a) Treatment of Certain Information. Each of the Borrower and Grupo
Mexico acknowledges that from time to time financial advisory, investment
banking and other services may be offered or provided to the Borrower, Grupo
Mexico or one or more of their Subsidiaries (in connection with this Agreement
or otherwise) by any Lender or by one or more subsidiaries or affiliates of such
Lender and each of the Borrower and Grupo Mexico hereby authorizes each Lender
to share any information delivered to such Lender by the Borrower, Grupo Mexico
and their Subsidiaries pursuant to this Agreement, or in connection with the
decision of such Lender to enter into this Agreement, with any such subsidiary
or affiliate, it being understood that any such subsidiary or affiliate
receiving such information shall be bound by the provisions of paragraph (b) of
this Section as if it were a Lender hereunder. Such authorization shall survive
the repayment of the Revolving Loans, the expiration or termination of the
Letters of Credit and the Commitments or the termination of this Agreement or
any provision hereof.
(b) Confidentiality. Each of the Administrative Agent, the Issuing
Lender and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (i) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (ii) to the
extent requested by any regulatory authority, (iii) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (iv)
to any other party to this Agreement, (v) in connection with the exercise of any
remedies hereunder or under any other Revolving Loan Document or any suit,
action or proceeding relating to this Agreement or any other Revolving Loan
Document or the enforcement of rights hereunder or thereunder, (vi) subject to
an agreement containing provisions substantially the same as those of this
paragraph, to any assignee of or Participant in, or any prospective assignee of
or Participant in, any of its rights or obligations under this Agreement, (vii)
with the consent of the Borrower or Grupo Mexico or (viii) to the extent such
Information (A) becomes publicly available other than as a result of a breach of
this paragraph or (B) becomes available to the Administrative Agent, the Issuing
Lender or any Lender on a nonconfidential basis from a source other than an
Obligor. For the purposes of this paragraph, "Information" means all information
received from any Obligor relating to any Obligor or its business, other than
any such information that is available to the Administrative Agent, the Issuing
Lender or any Lender on a nonconfidential basis prior to disclosure by an
Obligor; provided that, in the case of information received from an Obligor
after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.
SECTION 10.13. Judgment Currency. This is an international loan
transaction in which the specification of Dollars (the "Specified Currency"),
and payment in New York City (the "Specified Place"), is of the essence, and the
Specified Currency shall be the currency of account in all events relating to
Loans denominated in the Specified Currency. The payment obligations of each
Obligor under this Agreement shall not be discharged or satisfied 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 the Specified
Currency and transfer to the Specified Place under normal banking procedures
does not yield the amount of the Specified Currency at the Specified Place due
hereunder. If for the purpose of obtaining judgment in any court it is necessary
to convert a sum due hereunder in the Specified Currency into another currency
(the "Second Currency"), the rate of exchange that shall be applied shall be the
rate at which in accordance with normal banking procedures the Administrative
Agent could purchase the Specified Currency with the Second Currency on the
Business Day next preceding the day on which such judgment is rendered. The
obligation of each Obligor in respect of any such sum due from it to the
Administrative Agent or any Lender hereunder or under any other Loan Document
(in this Section called an "Entitled Person") 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 such Entitled Person of any
sum adjudged to be due hereunder in the Second Currency such Entitled Person may
in accordance with normal banking procedures purchase and transfer to the
Specified Place the Specified Currency with the amount of the Second Currency so
adjudged to be due; and each Obligor hereby, as a separate obligation and
notwithstanding any such judgment, agrees to indemnify such Entitled Person
against, and to pay such Entitled Person on demand, in the Specified Currency,
the amount (if any) by which the sum originally due to such Entitled Person in
the Specified Currency hereunder exceeds the amount of the Specified Currency so
purchased and transferred.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
ASARCO INCORPORATED
By /s/ Daniel Tellechea Salido
----------------------------------------
Name: Daniel Tellechea Salido
Title: Vice President
<PAGE>
GRUPO MEXICO, S.A. DE C.V.
By /s/ Daniel Tellechea Salido
----------------------------------------
Name: Daniel Tellechea Salido
Title: Managing Director
By /s/ Genaro Guerrero Diaz Mercado
----------------------------------------
Name: Genaro Guerrero Diaz Mercado
Title: Treasurer
<PAGE>
LENDERS
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THE CHASE MANHATTAN BANK,
individually and as Administrative Agent
By /s/ Robert Anastasio
----------------------------------------
Name: Robert Anastasio
Title: Vice President
