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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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Schedule TO

 

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(Rule 14d-100)

Tender Offer Statement under Section 14(d)(1)

of the Securities Exchange Act of 1934

RINKER GROUP LIMITED

ABN 53 003 433 118

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(Name of Subject Company (issuer))

CEMEX Australia Pty Ltd

ACN 122 401 405

CEMEX, S.A.B. de C.V.

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(Names of Filing Persons (offerors))

Ordinary shares

American Depositary Shares (each representing five ordinary shares)

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(Titles of Classes of Securities)

Ordinary Shares, ISIN AU000000RIN3

American Depositary Shares, CUSIP 76687M101, ISIN US76687M1018

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(CUSIP and ISIN Numbers of Classes of Securities)

Mr. Ramiro G. Villarreal Morales

General Counsel

Av. Ricardo Margain Zozaya #325,

Colonia Valle del Campestre,

Garza Garcia, Nuevo Leon, Mexico 66265

+52 81 8888 8888

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(Name, address and telephone number of person authorized to receive notices and communications on behalf of filing persons)

Copy to:

Richard Hall

Cravath, Swaine & Moore LLP

Worldwide Plaza

825 Eighth Avenue

New York, NY 10019

(212) 474-1000

 

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CALCULATION OF FILING FEE

 

Transaction Valuation(1)		Amount of Filing Fee(2)
$2,676,229,274		$286,357

(1)

Estimated solely for the purpose of calculating the filing fee in accordance with Rule 0-11(d) under the Securities Exchange Act of 1934 (the “Exchange Act”), the transaction valuation is calculated by multiplying (i) 895,059,958 ordinary shares, which is the maximum number of ordinary shares of Rinker Group Limited, including 22,479,805 ordinary shares represented by 4,495,961 ADSs (according to documents filed by Rinker with the Australian Stock Exchange), subject to the Offer, by (ii) 23%, which is the percentage of US Holders of Rinker Securities (according to Rinker’s annual report on Form 20-F filed on May 23, 2006), and by (iii) the purchase price of US$13.00 in cash for each ordinary share and US$65.00 for each ADS. Terms used and not defined in the preceding sentence are defined below.

(2)	The filing fee is calculated in accordance with Rule 0-11(d) of the Exchange Act and Fee Rate Advisory No. 3 for Fiscal Year 2007 issued by the Securities and Exchange Commission on September 29, 2006. Such fee equals .0107% of the transaction valuation.

 

¨	Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

Amount Previously Paid: N.A.

Form or Registration No.: N.A.

Filing Party: N.A.

Date Filed: N.A.

 

¨	Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

Check the appropriate boxes below to designate any transactions to which the statement relates:

 

x	third-party tender offer subject to Rule 14d-1.

¨	issuer tender offer subject to Rule 13e-4.

¨	going-private transaction subject to Rule 13e-3

¨	amendment to Schedule 13D under Rule 13d-2

 

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This Tender Offer Statement on Schedule TO (this “Schedule TO”) relates to the offer by CEMEX Australia Pty Ltd (“Bidder”), a proprietary company registered under the laws of Victoria, Australia and an indirect wholly-owned subsidiary of CEMEX, S.A.B. de C.V. (“CEMEX”), to acquire all the outstanding ordinary shares (the “ordinary shares”), and American depositary shares (the “ADSs”) of Rinker Group Limited, a public company registered under the laws of New South Wales, Australia (“Rinker”), at a purchase price of US$13 per ordinary share and US$65 per ADS in cash (less any applicable withholding taxes and without interest), upon the terms and subject to the conditions of the offer (the “Offer”) (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), as described in the Bidder’s Statement, dated October 30, 2006 (the “Bidder’s Statement”).

As permitted by General Instruction F to Schedule TO, the information set forth in the Bidder’s Statement, the Share Acceptance Form, the ADS Letter of Transmittal and the ADS Notice of Guaranteed Delivery, copies of which are attached hereto as Exhibits (a)(1)(A), (a)(1)(B), (a)(1)(C) and (a)(1)(D), respectively, is hereby expressly incorporated by reference in response to Items 1 through Item 11 of this Schedule TO.

Item 7. Source and Amount of Funds or Other Consideration.

Capitalized terms used but not otherwise defined in this Item 7 shall have the meanings ascribed to them in the respective agreements being referred to.

Pursuant to the Commitment Letter and Term Sheet dated October 26, 2006, as updated on November 9, 2006, to be arranged by CEMEX España, as borrower, and Citigroup Global Markets Limited and The Royal Bank of Scotland plc, as Mandated Lead Arrangers, attached hereto as exhibit (b)(1)(A), for each of Facility A, Facility B and Facility C, the interest rate is the aggregate of: (a) the applicable LIBOR rate, (b) a Margin, calculated on the basis of Net Borrowings to Adjusted EBITDA, and (c) any certain mandatory costs. The Margin ranges from 15 to 32.5 bps for Facility A (such levels of margin are increased if Facility A is extended), from 20 to 40 bps for Facility B and from 25 up to 45 bps on Facility C.

Pursuant to the Credit Agreement among CEMEX, S.A.B. de C.V., CEMEX Mexico S.A. de C.V., Empresas Tolteca de Mexico, S.A. de C.V., and BBVA Bancomer, S.A. Institución de Banca Múltiple, Grupo Financiero BBVA Bancomer, dated as of October 24, 2006, attached hereto as exhibit (b)(1)(B), the interest rates are set forth as follows: (a) for Mexican peso loans, the applicable domestic rate known as Tasa de Interes Interbancaria de Equilibrio plus the applicable margin which ranges from 0.175% to 0.40% based on the date of funding and (b) for US dollar loans, the applicable LIBOR rate plus the applicable margin which ranges from 0.20% to 0.35% based on the date of funding.

Pursuant to the Commitment Letter and Term Sheet dated October 25, 2006, as amended November 9, 2006, attached hereto as exhibit (b)(1)(C), between New Sunward Holding B.V., J.P. Morgan Securities Inc. and JPMorgan Chase Bank, N.A., the Bridge Loans will bear interest at a rate of LIBOR plus a margin equal to 0.30%.

Pursuant to the Credit Agreement among CEMEX, S.A.B. de C.V. (formerly CEMEX, S.A. de C.V.), CEMEX Mexico S.A. de C.V., Empresas Tolteca de Mexico, S.A. de C.V., the Lenders listed therein, Barclays Bank plc, New York Branch, Barclays Capital, The Investment Banking Division of Barclays Bank plc and Citigroup Global Markets Inc., dated as of May 31, 2005, as amended June 19, 2006, attached hereto as exhibit (b)(1)(D), the interest rates are as follows: (a) for the Base Rate Loans, the higher of (i) the average of the applicable Prime Rate in New York City announced by the Reference Banks (initially, Barclays Bank PLC and Citibank N.A.) and (ii) the applicable Federal Funds Rate increased by 0.5% per annum, (b) for the LIBOR Loans not denominated in Sterling, the applicable LIBOR rate, (c) for the LIBOR Loans denominated in Sterling, the applicable LIBOR rate plus any Mandatory Costs and (d) for the Euribor Loans, the applicable Euribor rate plus any Mandatory Costs. All such interest rates are increased by the Applicable Margin, which ranges from 0.25% to 0.40% based on the Borrower’s Consolidated Net Debt/EBITDA Ratio.

Pursuant to the Amended and Restated Credit Agreement among CEMEX, S.A.B. de C.V. (formerly CEMEX, S.A. de C.V.), CEMEX Mexico S.A. de C.V., Empresas Tolteca de Mexico, S.A. de C.V., Barclays Bank plc, New York

 

2

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Branch, ING Bank N.V. and the Lenders listed therein, dated as of June 6, 2005, as amended June 21, 2006, attached hereto as exhibit (b)(1)(E), the interest rate is the following: (a) for the Base Rate Loans and for the Swing Line Loans, the higher of (i) the average of the applicable Prime Rate in New York City announced by the Reference Banks (initially, Barclays Bank PLC, ING Bank N.V. and Citibank N.A.) and (ii) the applicable Federal Funds Rate increased by 0.5% per annum, (b) for the LIBOR Loans, the applicable LIBOR rate. All such interest rates are increased by the Applicable Margin, which ranges from 0.20% to 0.35% based on the Borrower’s Consolidated Net Debt/EBITDA Ratio.

 

3

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Item 12. Exhibits.

 

Exhibit		Description
(a)(1)(A)		Bidder’s Statement dated October 30, 2006.
(a)(1)(B)		Share Acceptance Form.
(a)(1)(C)		ADS Letter of Transmittal.
(a)(1)(D)		ADS Notice of Guaranteed Delivery.
(a)(1)(E)		Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(1)(F)		Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(5)(A)		Summary Advertisement published in The Wall Street Journal on November 14, 2006.
(b)(1)(A)		Commitment Letter and Term Sheet dated October 26, 2006, as updated on November 9, 2006, to be arranged by CEMEX España, as borrower, and Citigroup Global Markets Limited and The Royal Bank of Scotland plc, as Mandated Lead Arrangers
(b)(1)(B)		Translation of the Credit Agreement among CEMEX, S.A.B. de C.V., CEMEX Mexico S.A. de C.V., Empresas Tolteca de Mexico, S.A. de C.V., and BBVA Bancomer, S.A. Institución de Banca Múltiple, Grupo Financiero BBVA Bancomer, dated as of October 24, 2006.
(b)(1)(C)		Commitment Letter and Term Sheet dated October 25, 2006, as amended November 9, 2006, between New Sunward Holding B.V., J.P. Morgan Securities Inc. and JPMorgan Chase Bank, N.A.
(b)(1)(D)		Credit Agreement among CEMEX, S.A.B. de C.V. (formerly CEMEX, S.A. de C.V.), CEMEX Mexico S.A. de C.V., Empresas Tolteca de Mexico, S.A. de C.V., the Lenders listed therein, Barclays Bank plc, New York Branch, Barclays Capital, The Investment Banking Division of Barclays Bank plc and Citigroup Global Markets Inc., dated as of May 31, 2005, as amended June 19, 2006
(b)(1)(E)		Amended and Restated Credit Agreement among CEMEX, S.A.B de C.V. (formerly CEMEX, S.A. de C.V.), CEMEX Mexico S.A. de C.V., Empresas Tolteca de Mexico, S.A. de C.V., Barclays Bank plc, New York Branch, ING Bank N.V. and the lenders listed therein, dated as of June 6, 2005, as amended June 21, 2006.
(d)		Not Applicable.
(g)		Not Applicable.
(h)		Not Applicable.

Item 13. Information required by Schedule 13E-3.

Not applicable.

 

4

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SIGNATURES

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: November 14, 2006

 

 

5

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Exhibit Index.

 

Exhibit		Description
(a)(1)(A)		Bidder’s Statement dated October 30, 2006.
(a)(1)(B)		Share Acceptance Form.
(a)(1)(C)		ADS Letter of Transmittal.
(a)(1)(D)		ADS Notice of Guaranteed Delivery.
(a)(1)(E)		Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(1)(F)		Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(5)(A)		Summary Advertisement published in The Wall Street Journal on November 14, 2006.
(b)(1)(A)		Commitment Letter and Term Sheet dated October 26, 2006, as updated on November 9, 2006, to be arranged by CEMEX España, as borrower, and Citigroup Global Markets Limited and The Royal Bank of Scotland plc, as Mandated Lead Arrangers
(b)(1)(B)		Translation of the Credit Agreement among CEMEX, S.A.B. de C.V., CEMEX Mexico S.A. de C.V., Empresas Tolteca de Mexico, S.A. de C.V., and BBVA Bancomer, S.A. Institución de Banca Múltiple, Grupo Financiero BBVA Bancomer, dated as of October 24, 2006.
(b)(1)(C)		Commitment Letter and Term Sheet dated October 25, 2006, as amended November 9, 2006, between New Sunward Holding B.V., J.P. Morgan Securities Inc. and JPMorgan Chase Bank, N.A.
(b)(1)(D)		Credit Agreement among CEMEX, S.A.B. de C.V. (formerly CEMEX, S.A. de C.V.), CEMEX Mexico S.A. de C.V., Empresas Tolteca de Mexico, S.A. de C.V., the Lenders listed therein, Barclays Bank plc, New York Branch, Barclays Capital, The Investment Banking Division of Barclays Bank plc and Citigroup Global Markets Inc., dated as of May 31, 2005, as amended June 19, 2006
(b)(1)(E)		Amended and Restated Credit Agreement among CEMEX, S.A.B de C.V. (formerly CEMEX, S.A. de C.V.), CEMEX Mexico S.A. de C.V., Empresas Tolteca de Mexico, S.A. de C.V., Barclays Bank plc, New York Branch, ING Bank N.V. and the lenders listed therein, dated as of June 6, 2005, as amended June 21, 2006.
(d)		Not Applicable.
(g)		Not Applicable.
(h)		Not Applicable.

 

6

Table of Contents

Exhibit (a)(1)(A)

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Table of Contents

Important information

This Bidder’s Statement is given by CEMEX Australia Pty Ltd (ACN 122 401 405), an indirect wholly-owned subsidiary of CEMEX, to Rinker Group Limited (ABN 53 003 433 118) under Part 6.5 of the Corporations Act and relates to the Offer.

You should read this Bidder’s Statement in its entirety.

This Bidder’s Statement is dated 30 October 2006 and includes an offer dated 14 November 2006 in Section 8.

A copy of this Bidder’s Statement was lodged with ASIC on 30 October 2006. Neither ASIC nor any of its officers takes any responsibility for the contents of this Bidder’s Statement.

This Bidder’s Statement does not take into account your individual investment objectives, financial situation or particular needs. You may wish to seek independent financial and taxation advice before deciding whether to accept the Offer.

Although Rinker is an Australian company, the Offer is subject to both Australian and US laws. You should be aware that this Bidder’s Statement has been prepared substantially in accordance with Australian format and style, which differs from US format and style.

A number of defined terms are used in this Bidder’s Statement, which are explained in Section 9 along with certain rules of interpretation which apply to this Bidder’s Statement.

Forward-looking statements

This Bidder’s Statement may contain forward-looking statements. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of CEMEX, Bidder and Rinker and the estimates given here. These factors include the inability to obtain necessary regulatory approvals or to obtain them on acceptable terms; the inability to integrate Rinker within the CEMEX Group; costs related to the acquisition of Rinker; the economic environment of the industries in which CEMEX and Rinker operate; and other risk factors discussed in CEMEX’s public reports filed with SEC (including CEMEX’s annual report on Form 20-F) and in Rinker’s public reports filed with ASX and SEC (including Rinker’s annual report on Form 20-F).

Currencies

Bidder has used an exchange rate of A$1.00 to US$0.7645 for comparative purposes in this Bidder’s Statement, which represents the Reserve Bank Mid-Point Rate on 27 October 2006. (See Section 7.1 for a discussion of currency exchange rates.)

How do I accept the Offer?

You may only accept the Offer for all your Rinker Securities. Acceptances must be received before the end of the Offer Period.

For Issuer Sponsored Holdings of Rinker Shares (Securityholder Reference Number beginning with “I”)

To accept the Offer, complete the enclosed blue Share Acceptance Form in accordance with the instructions on it and return it in the enclosed envelope (where applicable) or to an address on the Share Acceptance Form.

For CHESS Holdings of Rinker Shares (Holder Identification Number beginning with “X”)

To accept the Offer, either contact your Controlling Participant (usually your broker) and instruct them to accept the Offer for you, or complete the enclosed blue Share Acceptance Form in accordance with the instructions on it and return it in the enclosed envelope (where applicable) or to an address on the Share Acceptance Form.

For holdings of Rinker ADSs

To accept the Offer, either: (i) complete and sign the yellow ADS Letter of Transmittal in accordance with the instructions on it and (A) return it, together with the ADRs evidencing your Rinker ADSs and any other documents required by the ADS Letter of Transmittal, in the enclosed envelope (where applicable) or to an address on the ADS Letter of Transmittal, or (B) tender your Rinker ADSs pursuant to the procedures for book-entry transfer set out in Section 8.3(d); or (ii) contact your broker or other nominee, and instruct them to accept the Offer for you.

If any of your Rinker ADSs are registered in the name of a broker or other nominee, you must contact such nominee to accept the Offer.

If the ADRs evidencing your Rinker ADSs are not immediately available, or you cannot comply with the procedures for book-entry transfer set out in Section 8.3(d) before the end of the Offer Period, you may tender your Rinker ADSs by following the procedures for guaranteed delivery set out in Section 8.3(d).

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Table of Contents

Chairman’s Letter

14 November 2006

Dear Rinker Shareholder,

I am pleased to enclose CEMEX’s Offer to acquire all of your Rinker Shares for US$13.00 per share (equivalent to A$17.00¹ per share) in cash. The Offer also relates to Rinker ADSs (each ADS represents five Rinker Shares and is being acquired for US$65.00 per ADS in cash).

The Offer values Rinker’s equity at US$11.6 billion (equivalent to A$15.2 billion¹), which corresponds to an enterprise value for Rinker of US$12.8 billion (equivalent to A$16.8 billion). The Offer implies a transaction multiple of 9.2 times EV/LTM EBITDA².

CEMEX is a global building-solutions company that produces, distributes and markets cement, ready-mix concrete, aggregates and related building materials in more than 50 countries.

CEMEX believes that Rinker’s operations are strategically attractive and are complementary to CEMEX’s business. In addition, CEMEX believes a combination of the two businesses has the potential to realise significant synergies. It is because of this that CEMEX is able to offer an attractive price for your shares.

The Offer represents a premium of 26.2%¹ to the three month volume weighted average price of Rinker Shares on the Australian Stock Exchange of A$13.47 and a premium of 27.0%¹ to the close of Rinker Shares on 27 October 2006³ (the date the Offer was announced).

CEMEX believes the Offer for Rinker is compelling for you as a shareholder. I encourage you to accept the Offer as soon as possible. Details of the Offer and associated conditions are set out in this Bidder’s Statement, which you should read in detail. The Offer is scheduled to close at 7pm Sydney time on 27 December 2006.

To accept the Offer, please follow the instructions on the enclosed Share Acceptance Form (for Rinker Shares) or ADS Letter of Transmittal (for Rinker ADSs). Shareholders may elect to receive their Offer consideration in Australian dollars by ticking the relevant box on these forms.

Yours faithfully,

Lorenzo H. Zambrano

Chairman and Chief Executive Officer

CEMEX, S.A.B. de C.V.

 

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1.	Based on an exchange rate of A$1.00 to US$0.7645 which represents the Reserve Bank Mid-Point Rate on 27 October 2006. See Section 7.1 for a discussion of currency exchange rates.

2.	See page 7 for further information concerning transaction multiples.

3.

Based on the last traded price of Rinker Shares during normal trading on ASX of A$13.39. Following close of normal trading on 27 October 2006, a wire service carried an article speculating on a takeover bid by CEMEX for Rinker as a result of which the post close ASX auction trading system produced a closing price of A$14.70.

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Table of Contents

Table of Contents

 

Summary of the Offer and other important information		1
10 reasons why you should accept the Offer		5
1.      Profile of CEMEX		14
2.      Profile of Rinker and information about Rinker Securities		17
3.      CEMEX’s intentions		23
4.      Funding arrangements		31
5.      Australian tax considerations		43
6.      United States tax considerations (for US Securityholders)		47
7.      Other material information		53
8.      Offer terms		67
9.      Definitions, interpretation and approval		89
Annexure A – Material announcements		97
Annexure B – Directors and executive officers		101
Corporate directory		111

Important dates

 

Bidder’s Statement lodged with ASIC		30 October 2006
Date of the Offer		14 November 2006
Offer scheduled to close (unless extended)		7pm (Sydney time) on 27 December 2006
		3am (New York time) on 27 December 2006

CEMEX Offer Information Line

If you have any questions in relation to the Offer, please call the CEMEX Offer Information Line on the following numbers:

 

Within Australia:		1300 721 344 (local call)
Within the US:		(866) 244 1296 (for retail investors) or (212) 750 5833 (for banks and brokers)
Elsewhere:		+61 3 9415 4344

Please note that, to the extent required by the Corporations Act, calls to these numbers will be recorded.

(Other telephone numbers have been set out in this Bidder’s Statement solely for the purpose of complying with US disclosure requirements, you should direct all your telephone enquiries to the CEMEX Offer Information Line.)

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Table of Contents

Summary of the Offer and other important information

The following are some of the questions that you, as a holder of Rinker Securities, may have and the answers to those questions. This summary of the Offer is not meant to be a substitute for the information contained in this Bidder’s Statement, the Share Acceptance Form (for Rinker Shares) and the ADS Letter of Transmittal and the ADS Notice of Guaranteed Delivery (for Rinker ADSs). Therefore, you should carefully read these documents in full prior to making any decision to accept the Offer or otherwise deal with your Rinker Securities.

Cross-references are included in this summary to other Sections of this Bidder’s Statement where you will find more complete descriptions of the topics mentioned in this summary. A number of defined terms are used in this Bidder’s Statement, which are explained in Section 9 along with certain rules of interpretation which apply to this Bidder’s Statement.

 

Who is making the Offer?		The Offer has been made by CEMEX Australia Pty Ltd (Bidder), an indirect wholly-owned subsidiary of CEMEX, S.A.B. de C.V. (CEMEX). CEMEX is a global building-solutions company that produces, distributes and markets cement, ready-mix concrete, aggregates and related building materials in more than 50 countries. (See Section 1.)
Why has the Offer been made?		The Offer has been made because CEMEX believes that Rinker’s operations are strategically attractive and are complementary to CEMEX’s business. In addition, CEMEX believes that a combination of the two businesses has the potential to realise significant synergies. It is because of this that CEMEX is able to make such an attractive offer for your Rinker Securities. (See “10 reasons why you should accept the Offer” commencing on page 5 and also Section 3.)
What is the Offer price?		Bidder is offering to acquire all your Rinker Shares for US$13.00 per share (equivalent to A$17.00 per share1) and all your Rinker ADSs for US$65.00 per ADS, in cash (less any applicable withholding taxes and without interest) on the terms and conditions set out in Section 8.
		Although the Offer price is in US dollars, you may elect to have it converted into, and then paid to you in, Australian dollars at the exchange rate obtainable on the day Bidder makes funds available to pay for your Rinker Securities. If you do not make a valid election, you will receive payment of the Offer price in US dollars for your Rinker Securities unless you are a Rinker Shareholder with a registered address in Australia, in which case the Offer price for your Rinker Shares will be converted into Australian dollars. (See Section 8.8(d).)
Why is the Offer price in US dollars?		In Rinker’s annual report for the year ended 31 March 2006, Rinker’s directors stated that they believe US dollar reporting represents the best measure of overall Rinker group performance. In recognition of this and consistent with the location of the majority of Rinker’s assets, CEMEX has priced the Offer in US dollars. (See Section 7.1 for a discussion of currency exchange rates.)
What are the total number and classes of securities sought in the Offer?		Bidder is offering to acquire all your ordinary shares in Rinker (Rinker Shares). Rinker Shares trade on ASX.   Bidder is also offering to acquire all your American depositary shares (Rinker ADSs) (if any) issued by JPMorgan, as depositary, which each represent a beneficial interest in five Rinker Shares and are evidenced by American depositary receipts (ADRs). Rinker ADSs trade on NYSE. (See Section 2.4.)

 

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1	Based on an exchange rate of A$1.00 to US$0.7645, which represents the Reserve Bank Mid-Point Rate on 27 October 2006. See Section 7.1 for a discussion of currency exchange rates.

 

CEMEX Bidder’s Statement    1

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Table of Contents

Summary of the Offer and other important information

 

Does Bidder have the resources to finance the Offer?		Yes. CEMEX has undertaken to provide Bidder with sufficient funds to purchase all Rinker Securities acquired under the Offer and all costs associated with the Offer. CEMEX will source the necessary funds from the Loan Facilities, or it may elect to source all or a portion of those funds from its own cash reserves or the cash reserves of other CEMEX Group members. The Offer is not itself subject to a financing condition. (See Section 4.)
When does the Offer close?		The Offer is scheduled to close at 7pm (Sydney time) on 27 December 2006 / 3am (New York time) on 27 December 2006. You should note that the Offer Period can be extended as permitted by applicable law or withdrawn with the written consent of ASIC, which consent may be subject to conditions.
		For US tender offer rules purposes, you should be aware that Bidder does not currently intend to make a subsequent offering period available after the close of the Offer Period. (See Sections 8.2 and 8.11.)
What are the conditions of the Offer?		The Offer is subject to the Defeating Conditions which are set out in full in Section 8.6. In summary, they include requirements that:
		•      Bidder obtains relevant interests in at least 90% of Rinker Shares;
		•      CEMEX obtains its own shareholders’ approval1;
		•      all regulatory approvals are obtained and no adverse regulatory actions occur, including no objections under Australian foreign investment laws or US antitrust (competition) laws;
		•      no material adverse change occurs in the Rinker Group;
		•      no mergers or material acquisitions, disposals or new commitments are undertaken by the Rinker Group;
		•      no material change of control rights exist;
		•      the S&P/ASX 200 Index does not fall below 4,800;
		•      CEMEX is granted equal access in certain circumstances to information about the Rinker Group;
		•      no distributions are made by Rinker other than cash dividends declared and paid in the ordinary course; and
		•      no Prescribed Occurrences occur.
		The status of each of the Defeating Conditions as at the date of this Bidder’s Statement is discussed in Sections 3.4 and 7.3 to 7.10. Bidder will give a notice on the status of the Defeating Conditions on 19 December 2006, unless the Offer Period is extended on or before that date.
		If the Defeating Conditions are not satisfied or waived prior to the end of the Offer Period, then the Offer will not proceed. (See Section 8.7.)

 

1.	An ordinary general meeting of CEMEX shareholders is scheduled to be held on 7 December 2006 for this purpose.

 

2    CEMEX Bidder’s Statement

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Table of Contents

Summary of the Offer and other important information

 

How do I accept the Offer?		Instructions on how to accept the Offer are described on the inside front cover of this Bidder’s Statement and in Section 8.3, as well as on the enclosed Share Acceptance Form (for Rinker Shares) or ADS Letter of Transmittal (for Rinker ADSs). You may only accept the Offer for all your Rinker Securities.
Can I withdraw my acceptance of the Offer?		You have the right to withdraw your acceptance of the Offer in certain circumstances, including prior to the fulfilment or waiver of certain conditions of the Offer and in the circumstances contemplated by the US Exchange Act (subject to any exemptive relief granted by SEC). (See Sections 7.3, 7.19, 8.7(a)(i) and 8.9 for a more detailed description of these rights and relevant instructions.)
If I accept the Offer, when will I be paid?		If you validly accept the Offer, you will be sent payment within one month after the later of:   •        the date that your acceptance is received; and   •        the date that the Offer becomes unconditional.   In any event, assuming the conditions of the Offer are satisfied or waived, you will be sent payment within 21 days after the Offer closes. (See Section 8.8.)
What are the tax implications of acceptance?		You should consult your financial, tax or other professional adviser on the tax implications of acceptance. However, a general summary of the major likely Australian tax consequences for Rinker Securityholders and United States tax consequences for US Securityholders, who accept the Offer, are set out in Sections 5 and 6, respectively.
Do I pay brokerage fees, stamp duty or other fees if I accept the Offer?		Bidder will pay any Australian or US security transfer taxes (including stamp duty) on the disposal of your Rinker Securities under the Offer.
		Rinker Shares
		If your Rinker Shares are registered in an Issuer Sponsored Holding in your name and you deliver them directly to Bidder, you will not incur any brokerage fees in connection with your acceptance of the Offer.
		If your Rinker Shares are registered in a CHESS Holding, or if you are a beneficial owner whose Rinker Shares are registered in the name of a broker or other nominee, you should ask your Controlling Participant (usually your broker) or that nominee whether it will charge any transaction fees or service charges in connection with acceptance of the Offer.
		Rinker ADSs
		If your Rinker ADSs are registered in your name, you will not incur any brokerage fees in connection with your acceptance of the Offer.
		If your Rinker ADSs are registered in the name of a broker or other nominee, you should ask that nominee whether it will charge any transaction fees or service charges in connection with acceptance of the Offer.

 

CEMEX Bidder’s Statement    3

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Summary of the Offer and other important information

 

What happens if I do not accept the Offer?		If you do not accept the Offer, you will remain a Rinker Securityholder and will not receive the consideration offered by Bidder. If Bidder becomes entitled to acquire compulsorily your Rinker Shares, or the Rinker Shares represented by your Rinker ADSs, it intends to do so. If your Rinker Shares, or the Rinker Shares represented by your Rinker ADSs, are acquired compulsorily by Bidder, it will be on the same terms as the Offer. However, you will receive payment later than the Rinker Securityholders who choose to accept the Offer.
		If Bidder does not become entitled to acquire compulsorily your Rinker Shares, or the Rinker Shares represented by your Rinker ADSs, you will remain a Rinker Securityholder.
What was the market value of my Rinker Securities immediately before announcement of the Offer?		On 27 October 2006, the last ASX trading day prior to the announcement of the Offer, the last traded price of Rinker Shares during normal trading on ASX was A$ 13.39 (equivalent to US$ 10.24 1 ). Following close of normal trading on 27 October 2006, a wire service carried an article speculating on a takeover bid by CEMEX for Rinker as a result of which the post close ASX auction trading system produced a closing price of A$14.70.
		On 26 October 2006, the last NYSE trading day prior to the announcement of the Offer, the closing price of Rinker ADSs on NYSE was US$53.40. Each Rinker ADS represents five Rinker Shares. (See Section 2.4 for more information concerning the trading prices of Rinker Securities.)
Following the Offer, will Rinker continue as a listed company?		Depending upon the number of Rinker Securities purchased pursuant to the Offer, it is possible Rinker Shares will fail to meet the criteria for continued listing on ASX and Rinker ADSs will fail to meet the criteria for continued listing on NYSE. If this were to happen, Rinker Securities could be delisted from their respective exchanges and this could, in turn, adversely affect the market or result in a lack of an established market for Rinker Shares or Rinker ADSs (as the case may be).
		If Bidder acquires relevant interests in 90% or more of Rinker Shares and it is entitled to proceed to compulsory acquisition of the remaining Rinker Shares under the Corporations Act, it will apply to remove Rinker Shares and Rinker ADSs from their respective exchanges listed above as soon as practicable after completion of the Offer or compulsory acquisition. In addition, Rinker may cease to be required to comply with applicable rules governing listed companies, including its continuous and periodic disclosure obligations. (See Sections 3.3(a) and 3.4(a).)
What if I require further information?		If you have any further questions in relation to the Offer or how to accept it, or if you have lost your Share Acceptance Form, ADS Letter of Transmittal or ADS Notice of Guaranteed Delivery and require a replacement, please call the CEMEX Offer Information Line on the following numbers:

 

		Within Australia:		1300 721 344
		Within the US:		(866) 244 1296 (for retail investors) or
				(212) 750 5833 (for banks and brokers)
		Elsewhere:		+ 61 3 9415 4344
		Please note that, to the extent required by the Corporations Act, calls to these numbers will be recorded.

 

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1	Based on an exchange rate of A$1.00 to US$0.7645, which represents the Reserve Bank Mid-Point Rate on 27 October 2006. See Section 7.1 for a discussion of currency exchange rates.

 

4    CEMEX Bidder’s Statement

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1		You will receive an attractive premium for your Rinker Shares

CEMEX is offering 100% cash consideration of US$13.00¹ (equivalent to A$17.00²) per share for each Rinker Share, which represents an attractive premium to key pricing benchmarks. The Offer price represents:

 

•

A premium of 20.4% to the volume weighted average price (VWAP) of Rinker Shares on ASX of A$14.13 for the one month prior to 27 October 2006;

 

•

A premium of 26.2% to the VWAP of Rinker Shares on ASX of A$13.47 for the three months prior to 27 October 2006;

 

•

A premium of 15.4% to the VWAP of Rinker Shares on ASX of A$14.74 for the six months prior to 27 October 2006;

 

•

A premium of 29.3% to the one month closing price of Rinker Shares on ASX of A$13.15 on 27 September 2006; and

 

•

A premium of 27.0% to the closing price3 of Rinker Shares on ASX of A$13.39 on 27 October 2006.

Offer price compared with Rinker Share prices

 

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1.	Securityholders may elect to receive their Offer consideration in Australian dollars by ticking the relevant box on the Share Acceptance Form or ADS Letter of Transmittal.

2.	Based on an exchange rate of A$1.00 to US$0.7645, which represents the Reserve Bank Mid-Point Rate on 27 October 2006. See Section 7.1 for a discussion of currency exchange rates.

3.

Based on the last traded price of Rinker Shares during normal trading on ASX. Following close of normal trading on 27 October 2006, a wire service carried an article speculating on a takeover bid by CEMEX for Rinker as a result of which the post close ASX auction trading system produced a closing price of A$14.70.

4.	Market speculation concerning CEMEX’s potential interest in Rinker was published in the Australian Financial Review and in the Sydney Morning Herald on 28 September 2006.

 

6    CEMEX Bidder’s Statement

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2		The Offer price represents an attractive multiple of Rinker’s earnings

 

•

CEMEX’s Offer represents an EV/LTM EBITDA1 multiple of 9.2 times Rinker’s EBITDA for the period ended 30 June 2006.

 

•

According to Rinker’s own analysis2, the average multiple paid in precedent industry transactions is 8.1 times EV/EBITDA. CEMEX’s Offer represents a significant premium to this and is equal to the highest multiple paid in any such transaction since 1998.

Offer multiple compared with other transaction multiples²

 

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1.

EV/LTM EBITDA is the enterprise value of the relevant company divided by its earnings before net interest, income tax, depreciation and amortisation. In the case of Rinker, enterprise value is calculated by multiplying the Offer price for Rinker Shares by the number of Rinker Shares reported to be outstanding as at 27 October 2006, and then adding borrowings and minority interests, and deducting cash and cash equivalents and investments accounted for using the equity method, in each case as reported by Rinker in US dollars as at 30 June 2006 in its first Quarter Trading Update filed with ASX on 18 July 2006. In the case of Rinker, LTM EBITDA is the aggregate EBITDA for the 12 months to 30 June 2006 (excluding the share of profits from investments accounted for using the equity method and exceptional income and expenses (gains on disposals)) reported by Rinker in US dollars in its first Quarter Trading Updates filed with ASX on 18 July 2006, the Annual Report reported filed with ASX 28 April 2006 and the Quarter Trading Update on 18 July 2005.

2.	The list of comparable transactions was disclosed in a presentation filed by Rinker with ASX on 22 September 2006.

 

CEMEX Bidder’s Statement    7

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3		The Offer gives you the opportunity to sell your Rinker Shares for a premium to independent brokers’ target share prices

 

•

CEMEX’s Offer represents a premium to the average broker target share price based on independent broker research.

Offer price compared with average broker target share price

 

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1.	Securityholders may elect to receive their Offer consideration in Australian dollars by ticking the relevant box on the Share Acceptance Form or ADS Letter of Transmittal.

2.	Based on an exchange rate of A$1.00 to US$0.7645, which represents the Reserve Bank Mid-Point Rate on 27 October 2006. See Section 7.1 for a discussion of currency exchange rates.

3.

The average broker target share price of A$15.62 represents the average of eight brokers’ target share prices for Rinker Shares in the most recent report disclosed by each broker on Bloomberg as at 27 October 2006. The brokers’ target share prices range from A$11.78 to A$21.03 per share and the source reports were issued in the period from 9 September 2005 to 25 October 2006. Only reports disclosed on Bloomberg have been included.

4.

Based on the last traded price of Rinker Shares during normal trading on ASX of A$13.39. Following close of normal trading on 27 October 2006, a wire service carried an article speculating on a takeover bid by CEMEX for Rinker as a result of which the post close ASX auction trading system produced a closing price of A$14.70.

 

8    CEMEX Bidder’s Statement

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4		Rinker is finding it difficult to implement its stated strategy, which over time will impact on its growth

 

•

A key element of Rinker’s stated strategy is to target growth by acquisition:

“Our strong preference and strategic priority is growth through value adding acquisitions and the further development of our base business”

John Morschel, Chairman, Rinker Group Limited, Annual General Meeting, 18 July 2006

 

•

Rinker has recently publicly acknowledged the scarcity of acquisition opportunities:

“…value-adding acquisitions that meet our strategic objectives have been hard to find in the past couple of years – while our high levels of cash have been increasing”

John Morschel, Chairman, Rinker Group Limited, Annual General Meeting, 18 July 2006

 

•

As acquisition opportunities in Rinker’s key markets become scarce, Rinker’s ability to deliver on its stated strategy has become increasingly questionable.

 

•

Failure to deliver on its strategy will have significant implications for Rinker’s future growth.

 

CEMEX Bidder’s Statement    9

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5		Rinker has an inefficient capital structure that is difficult to correct

 

•

Rinker has recently publicly acknowledged concerns in relation to its capital efficiency:

“At the rate we are generating cash, we would be debt free this year – which is not the best way to use our capital”

John Morschel, Chairman, Rinker Group Limited, Annual General Meeting, 18 July 2006

 

•

These concerns are compounded by Rinker’s inability to execute suitable acquisitions, resulting in the need for capital management initiatives:

“Larger, value-adding acquisitions have been hard to come by for the past two years – hence the capital return”

David Clarke, CEO, Rinker Group Limited, Year End Results Presentation, 11 May 2006

 

•

Rinker has acknowledged that its low level of Australian earnings impedes its ability to provide shareholders with fully franked dividends or tax-effective off-market buybacks or capital returns:

“…the one downside to higher dividends is that we are no longer able to pay fully franked dividends – because so much of our profit now comes from the US”

John Morschel, Chairman, Rinker Group Limited, Annual General Meeting, 18 July 2006

 

•

In these circumstances, CEMEX believes its Offer represents the most efficient way to unlock the value tied up in your Rinker Shares.

 

10    CEMEX Bidder’s Statement

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6		Rinker’s high level of revenue concentration increases earnings volatility

 

•

Rinker derives 44% of its total revenue from the Florida market, which is a more concentrated exposure to its largest US state market than that of most of its peers.

Concentration of exposure to largest revenue-contributing US state market

 

•

Rinker derives 61% of its total revenue from its top three markets (Florida (44%), Arizona (13%) and Nevada (4%)), which is a more concentrated exposure to its top three US state markets than that of most of its peers.

Concentration of exposure to top three revenue-contributing US state markets

 

•

Rinker’s concentration of exposures increases the inherent volatility of its earnings and raises its risk profile on a standalone basis.

 

•

In combination with CEMEX, Rinker’s concentration of exposures will be reduced, resulting in an expectation of lower earnings volatility. This contributes to CEMEX’s ability to pay the attractive cash premium it is offering.

 

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1.	CEMEX management estimate.

 

CEMEX Bidder’s Statement    11

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7		Rinker’s business is heavily exposed to residential construction in three underperforming US states

 

•

Rinker is heavily exposed to the US residential construction market, which contributes an estimated 56% of its total US revenue1.

 

•

The near term outlook for residential construction in Rinker’s three key US states, as evidenced by recent residential building permits (which are a leading indicator of forthcoming activity), is negative and below the national average (other than Nevada).

Total residential building permits²

 

•

CEMEX believes that the combination of Rinker’s residential and geographic concentration means that the near term outlook for Rinker’s business is highly uncertain.

 

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1.	US revenue has been assumed to wholly consist of Rinker’s US subsidiary, Rinker Materials, Inc., and is shown as reported in the Rinker annual report for the year ended 31 March 2006.

2.	From a presentation delivered by the CEO of Rinker to institutional analysts and fund managers in September 2006 and filed by Rinker with ASX on 22 September 2006.

 

12    CEMEX Bidder’s Statement

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8		CEMEX’s Offer is an all cash Offer which provides you certain value for your Rinker Shares

The Offer provides you with 100% cash consideration for your Rinker Shares at a substantial premium to historical trading levels. By accepting the Offer:

 

•

You will receive US$13.001 (equivalent to A$17.002) per share (subject to the conditions of the Offer being satisfied or waived) in cash

 

•

You will be paid within at least one month after the later of the date the Offer is accepted and the date the Offer becomes unconditional

 

•

You will not incur any brokerage charges by accepting the Offer from CEMEX, whereas such charges may be incurred if you choose to sell on-market3

The certainty provided by receiving cash at an attractive valuation under the Offer should be compared with the uncertainty associated with remaining a Rinker Shareholder.

 

9		Rinker’s share price may fall if the Offer does not proceed

 

•

If CEMEX’s Offer does not proceed, and no other takeover offers are made, Rinker Shares may trade at a substantial discount to the Offer price.

 

•

Recent increases in Rinker’s share price have co-incided with the publication of market speculation concerning CEMEX’s potential interest in Rinker4 and CEMEX’s announcement of the Offer. To the extent the Rinker share price has been supported by these events, that support will no longer be present if CEMEX’s Offer does not proceed and Rinker’s share price may fall to the levels which pre-dated these events.

 

10		Prospect of compulsory acquisition

 

•

If CEMEX becomes entitled to compulsorily acquire your Rinker Shares, it intends to do so. If your Rinker Shares are compulsorily acquired, you will be paid later than Rinker Shareholders who accept the Offer.

 

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1.	Securityholders may elect to receive their Offer consideration in Australian dollars by ticking the relevant box on the Share Acceptance Form or ADS Letter of Transmittal.

2.	Based on an exchange rate of A$1.00 to US$0.7645, which represents the Reserve Bank Mid-Point Rate on 27 October 2006. See Section 7.1 for a discussion of currency exchange rates.

3.	Subject to the comments on page 3.

4.	Market speculation concerning CEMEX’s potential interest in Rinker was published in the Australian Financial Review and in the Sydney Morning Herald on 28 September 2006.

 

CEMEX Bidder’s Statement    13

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Section 1

Profile of CEMEX

1.1 Overview of Bidder

Bidder is an indirect wholly-owned subsidiary of CEMEX which was registered on 27 October 2006 as a proprietary company under the laws of Victoria, Australia. The registered office of Bidder is located at Level 4, 126 Phillip Street, Sydney NSW 2000, Australia and its telephone number at that location is +61 2 9230 4000. However, if you have any questions in relation to the Offer, you should call the CEMEX Offer Information Line.

Bidder was formed for the purpose of acquiring Rinker Securities, including through the Offer, and is not involved in any other business, nor is it expected that Bidder will be involved in any other business before the end of the Offer Period.

Due to the fact that Bidder is newly-registered and, except for Rinker Securities recently purchased by it, has minimal assets and capitalisation, no meaningful financial information regarding Bidder is available.

1.2 Overview of CEMEX

CEMEX is a publicly-held company with variable capital (sociedad anonima bursatil de capital variable) organised under the laws of México. Its principal executive offices are located at Av. Ricardo Margain Zozaya #325, Colonia Valle del Campestre, Garza Garcia, Nuevo León, México 66265 and its telephone number at this location is +52 81 8888 8888. However, if you have any questions in relation to the Offer, you should call the CEMEX Offer Information Line.

CEMEX, which this year celebrates the centenary of its founding, is the ultimate holding company for the CEMEX Group. Through its operating subsidiaries, CEMEX is principally engaged in the business of producing, distributing and marketing cement, ready-mix concrete, aggregates and related building materials. It has operations in more than 50 countries, covering North America, Europe, South America, Central America, the Caribbean, the Middle East and Asia, and employs more than 50,000 people.

CEMEX is the:

 

•

third largest cement company in the world, based on installed capacity as at December 2005 of 98.2 million tons;

 

•

the largest ready-mix concrete company in the world with annual sales volumes of 70 million cubic metres in 2005; and

 

•

one of the largest aggregates companies in the world with annual sales volumes of 160 million tons in 2005.

CEMEX is listed on the Mexican Stock Exchange (La Bolsa Mexicana de Valores) through ordinary participating certificates traded under the symbol CEMEX.CPO and, since 1999, on NYSE through American depositary shares traded under the symbol CX.

1.3 Selected historical financial information for CEMEX

The following table sets out selected historical financial information for CEMEX derived from its audited consolidated financial statements for the year ended 31 December 2005 and its unaudited consolidated financial statements for the nine months ended 30 September 2006 and 30 September 2005. To the extent this information is derived from

 

CEMEX Bidder’s Statement    15

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Section 1

Profile of CEMEX

CEMEX’s audited consolidated financial statements, it is based on unaudited US dollar amounts set out in those financial statements which were, in turn, based on audited Mexican peso amounts converted at US$1.00 to Ps10.62 (the CEMEX accounting rate as at 31 December 2005).

Rinker Securityholders may obtain a copy of these financial statements by telephoning the CEMEX Offer Information Line.

 

1.4 Executive officers and directors

The name, citizenship, business address and telephone number, principal occupation or employment and five-year employment history for each executive officer and director (including any alternate directors) of CEMEX and Bidder are set out in Annexure B.

1.5 Additional information regarding CEMEX

CEMEX is subject to the informational requirements of the US Exchange Act and, in accordance with these requirements, is required to file reports and other information with SEC relating to its business, financial condition and other matters. This information can be inspected and copied at the Public Reference Section of SEC at Station Place, 100 F Street, NE, Washington, DC 20549, United States of America. SEC also maintains a website at www.sec.gov that contains information regarding registrants (including CEMEX) that are filed electronically with SEC.

Information about the CEMEX Group may also be obtained from CEMEX’s website at www.cemex.com.

Information contained in or otherwise accessible from the above websites are not part of this Bidder’s Statement.

 

16    CEMEX Bidder’s Statement

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Section 2

Profile of Rinker and information about Rinker Securities

2.1 Disclaimer

The information in this Section (other than Sections 2.6, 2.7, 2.8 and 2.9) concerning the Rinker Group has been prepared based on a review by Bidder of publicly available information (which has not been independently verified). Bidder does not make any representation or warranty, express or implied, as to the accuracy or completeness of such information, other than as required by applicable securities laws.

The information on the Rinker Group in this Bidder’s Statement should not be considered comprehensive. Further information relating to the Rinker Group and Rinker Securities may be included in Rinker’s target’s statement in relation to the Offer, which will be sent to you directly by Rinker.

2.2 Overview of Rinker

Rinker is a public company registered under the laws of New South Wales, Australia. Its principal executive offices are located at Level 8, Tower B, 799 Pacific Highway, Chatswood NSW 2067, Australia, and its telephone number at this location is +61 2 9412 6600.

Rinker has been listed on ASX since 31 March 2003 and on NYSE since 28 October 2003.

The Rinker Group, which was established following Rinker’s demerger from the CSR Group in April 2003, is a manufacturer and supplier of heavy building materials in the United States and Australia with its products including aggregate, cement, concrete, concrete block, asphalt, concrete pipe and other construction materials. It also has limited operations in China.

2.3 Publicly available information

Rinker is obliged to comply with the continuous disclosure requirements of ASX. A substantial amount of information concerning Rinker has previously been notified to ASX. Rinker’s annual report for the year ended 31 March 2006 was given to ASX on 23 May 2006. A description of each material announcement made to ASX in relation to Rinker since 31 March 2006 and the date of this Bidder’s Statement is set out in Part 1 of Annexure A.

Rinker is also subject to the informational requirements of the US Exchange Act and, in accordance with these requirements, is required to file reports and other information with SEC relating to its business, financial condition and other matters. This information can be inspected and copied at the Public Reference Section of SEC at Station Place, 100 F Street, NE, Washington, DC 20549, United States of America. SEC also maintains a website at www.sec.gov that contains information regarding registrants (including Rinker) that are filed electronically with SEC. A description of each material announcement filed with SEC in relation to Rinker since 31 March 2006 and the date of this Bidder’s Statement is set out in Part 2 of Annexure A.

Information about the Rinker Group (including copies of its financial statements) may also be obtained from Rinker’s website at www.rinker.com.

Information contained or otherwise accessible from the above websites are not part of this Bidder’s Statement.

 

18    CEMEX Bidder’s Statement

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Section 2

Profile of Rinker and information about Rinker Securities

2.4 Rinker securities on issue

Rinker Shares trade on ASX and Rinker ADSs trade on NYSE, both under the symbol RIN.

According to documents lodged by Rinker with ASX, as at 27 October 2006, the total number of Rinker Shares outstanding is 895,059,958, which includes 22,479,805 Rinker Shares represented by 4,495,961 Rinker ADSs. Bidder is not aware of any other Rinker Securities on issue.

The following table sets out, for the periods indicated, the low and high sales prices in A$ (and US$ equivalent) per Rinker Share on ASX and the low and high sales prices in US$ per Rinker ADS on NYSE.

 

1.

To close of trading on 27 October 2006 (Sydney time) and on 26 October 2006 (New York time).

2.

As reported by ASX.

3.

Based on a constant exchange rate of A$1.00 to US$0.7645 which represents the Reserve Bank Mid-Point Rate on 27 October 2006. See Section 7.1 for a discussion of currency exchange rates.

4.

With effect from 27 April 2005, the number of Rinker Shares represented by each Rinker ADS changed to five (from 10). The low and high sales prices per Rinker ADS have been adjusted to reflect the new ratio.

5.

As reported by NYSE.

2.5 Rinker employee share plans

According to documents lodged by Rinker with ASX, as at the date of this Bidder’s Statement, Rinker has the following employee share plans in operation. If you acquired any of your Rinker Securities under these plans, your ability to accept the Offer may be constrained by the relevant plan rules. For example, because you can only accept the Offer for all your Rinker Securities, if you acquired some of your Rinker Securities through a plan and the relevant plan rules prevent you from accepting the Offer in respect of those securities, you will not be able to accept the Offer for any of your Rinker Securities (even those acquired outside the plans).

 

•

Employee Share Acquisition Plan – the Rinker Board may issue invitations from time to time for eligible Rinker Group employees and directors in Australia to acquire a specified number of Rinker Shares using pre-tax compensation or bonuses. Those shares are purchased on-market by the plan administrator and held in trust for each participant and cannot be transferred until they are withdrawn from the plan. Withdrawal is subject to Rinker Board approval.

 

CEMEX Bidder’s Statement    19

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Section 2

Profile of Rinker and information about Rinker Securities

If Rinker is the subject of a takeover bid or other corporate control event, the Rinker Board may, in its discretion, direct the plan administrator to dispose of Rinker Shares under the plan or direct it to take such other action as the Rinker Board determines, provided that any action taken does not materially disadvantage plan participants.

 

•

Universal Share Plan – each year, Rinker Group employees in Australia who have been employed for at least one year may apply to acquire Rinker Shares at a market price up to a specified value during appropriate trading windows. Rinker will match the Rinker Shares acquired with an equal number of shares at no additional cost to the employees.

Rinker Shares acquired through the plan cannot be sold until three years have elapsed or employment has ceased. The plan does not make any provision for the early sale of shares in case a takeover bid or other corporate control event occurs, although the Rinker Board could amend the plan in order to allow for an early sale of shares.

 

•

Performance Share Plan – eligible Rinker Group executives in Australia and the United States are granted Rinker Shares or Rinker ADSs under the plan subject to time and performance qualifications. Those securities are purchased on-market by the plan administrators and held in trust for each participant subject to the qualifications being met (at which time they can be withdrawn from the plan and transferred).

If Rinker is the subject of a takeover bid or other corporate control event, the Rinker Board (acting as plan committee) may in its discretion waive performance requirements, vary the plan rules, direct a plan administrator to dispose of Rinker Shares or Rinker ADSs under the plan or direct it to take such other action as the Rinker Board determines, provided that any action taken does not materially disadvantage participants.

 

•

Cash Award Share Plan – the plan was superseded by the Performance Share Plan with effect from 1 April 2004. Eligible Rinker Group executives in Australia were granted Rinker Shares under the plan subject to time and performance qualifications. Those shares were acquired by the plan administrator and held in trust subject to the qualifications being met and cannot be transferred until they are withdrawn from the plan. Rinker Shares held under the plan cannot be withdrawn until 10 years from the date of grant or until the relevant plan participant is no longer an employee of any member of the Rinker Group.

If Rinker is the subject of a takeover bid or other corporate control event, the Rinker Board may, in its discretion, waive performance and holding requirements, direct the plan administrator to dispose of Rinker Shares under the plan or direct it to take such other action as the Rinker Board determines, provided that any action taken does not materially disadvantage plan participants.

Bidder is not aware of the number of Rinker Securities that are currently subject to the above plans. According to documents lodged by Rinker with ASX, Rinker also has an option plan. Bidder is not aware of any options having been granted under this plan.

 

20    CEMEX Bidder’s Statement

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Section 2

Profile of Rinker and information about Rinker Securities

2.6 Interests in Rinker Securities

(a) Bidder’s relevant interest in Rinker Shares and voting power in Rinker

On 27 October 2006, Bidder acquired 1,000 Rinker Shares in an on-market transaction through ASX for A$13.50 per share.

As at the date of this Bidder’s Statement and immediately before the Offer was sent or given to Rinker Securityholders, Bidder had a relevant interest in (within the meaning of the Corporations Act) and beneficially owned (within the meaning of Rule 13d-3 under the US Exchange Act) 1,000 Rinker Shares. None of the directors or executive officers of CEMEX or Bidder has a relevant interest in or beneficially own any Rinker Shares.

As at the date of this Bidder’s Statement and immediately before the Offer was sent or given to Rinker Securityholders, Bidder’s voting power in Rinker was less than 0.01%.

See Section 7.18 for information concerning relief ASIC has granted Bidder from its disclosure obligations in relation to the relevant interests of its foreign associates and the trustees of externally managed CEMEX Group superannuation funds.

(b) Transactions in Rinker Securities by Bidder or associates

Except as set out in paragraph (a), neither Bidder nor any associate of Bidder:

 

•

has provided, or agreed to provide, consideration for a Rinker Security under a purchase or agreement during the four months before the date of this Bidder’s Statement or in the period between the date of this Bidder’s Statement and the date of the Offer;

 

•

has engaged in any transactions in Rinker Securities during the 60 days prior to the date of this Bidder’s Statement; or

 

•

has any agreement, arrangement, understanding or relationship, whether or not legally enforceable, with any other person with respect to any Rinker Securities.

(c) Purchases of Rinker Shares outside the Offer

Bidder reserves the right to purchase, or cause an affiliate to purchase, Rinker Shares outside the Offer at any time during the Offer Period, subject to applicable laws and it obtaining a grant of exemptive relief by SEC.

Rule 14e-5 under the US Exchange Act prohibits Bidder or any other persons acting for the account or benefit of Bidder from purchasing Rinker Securities outside the Offer during the Offer Period. This prohibition applies from the Announcement Date until the end of the Offer Period. However, Bidder has sought exemptive relief from SEC to permit Bidder and any other persons acting for the account or benefit of Bidder to purchase or arrange to purchase Rinker Shares (but not Rinker ADSs) outside the Offer, subject to certain conditions including the condition that Bidder will not acquire any Rinker Shares in the US, otherwise than pursuant to the Offer. See Section 7.19 for more information concerning this and other exemptive relief which has been sought by Bidder.

Under the Corporations Act, Bidder is permitted to acquire relevant interests in Rinker Securities outside the Offer provided that, while the Offer remains subject to any conditions (other than those set out in Section 8.6(m)), its voting power in Rinker does not exceed 20%, or an exception is available. To the extent Bidder is able to acquire relevant interests

 

CEMEX Bidder’s Statement    21

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Section 2

Profile of Rinker and information about Rinker Securities

in Rinker Securities outside the Offer at a time when its voting power in Rinker exceeds 20% but is below 90%, its acquisition of such relevant interests must generally result from on-market transactions.

Bidder may make such purchases if and to the extent that it considers market conditions (including the trading price of Rinker Shares) and other factors make it desirable to do so. In no event will Bidder or any other persons acting for the account or benefit of Bidder purchase or arrange to purchase Rinker Shares during the Offer Period prior to the grant of exemptive relief by SEC. Rinker Shares purchased outside the Offer during the Offer Period will be counted in the determination as to whether the minimum acceptance condition in Section 8.6(a) has been fulfilled.

2.7 Background of the Offer

Shortly before CEMEX announced its intention to make the Offer on 27 October 2006, Mr Hector Medina, the Executive Vice President of Planning and Finance of CEMEX, acting on behalf of Mr Lorenzo Zambrano, the Chairman and Chief Executive Officer of CEMEX, telephoned Mr John Morschel, the Chairman of Rinker, to inform him of CEMEX’s intention to make the Offer. There have been no other prior discussions or negotiations between CEMEX and Rinker regarding the Offer.

2.8 Past contacts, transactions, negotiations and agreements

During the past two years, there have been purchases and sales of goods and services in the ordinary course of business between the CEMEX Group and the Rinker Group. These purchases and sales principally comprised aggregates and cement in the US with a combined value of US$117 million for the year ended 31 December 2005 and US$84 million for the eight months to 31 August 2006.

2.9 Arrangements, agreements or understandings

There is no other present or proposed material agreement, arrangement, understanding or relationship between Bidder or any of its executive officers, directors, controlling persons (including CEMEX) or its subsidiaries and Rinker or any of its executive officers, directors, controlling persons or subsidiaries.

There have not been any negotiations, transactions or material contacts during the past two years between CEMEX or its affiliates and Rinker or its affiliates concerning any merger, consolidation, acquisition, tender offer or any other acquisition of any class of Rinker Securities, election of Rinker’s directors or sale or other transfer of a material amount of assets of Rinker.

 

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3.1 Introduction

This Section sets out the rationale for the Offer and CEMEX’s intentions in relation to:

 

•

the continuation of the business of Rinker;

 

•

any major changes to be made to the business of Rinker, including any redeployment of the fixed assets of Rinker; and

 

•

the future employment of the present employees of Rinker.

These intentions are based on the information concerning Rinker, its business and the general business environment which is known to CEMEX at the time of preparation of this Bidder’s Statement. Information known to CEMEX concerning Rinker and its business is limited to publicly available information.

Final decisions regarding these matters will only be made by CEMEX in consideration of material information and circumstances at the relevant time. Accordingly, the statements set out in this Section are statements of current intention only, which may change as new information becomes available to CEMEX or as circumstances change. Any change in CEMEX’s intentions will be disclosed in the manner required by applicable law.

CEMEX’s intentions, as set out in this Section, also reflect the intentions of Bidder.

3.2 Rationale for the Offer

CEMEX has made the Offer because it expects the acquisition of Rinker will:

 

•

reinforce its strategy of investing across the industry’s value chain in cement, ready-mix concrete and aggregates;

 

•

significantly strengthen its ability to serve customers in the United States with complementary products and locations, therefore meeting its long-standing investment criteria;

 

•

provide it with a major presence in Australia;

 

•

create a significant opportunity to realise cost synergies by combining Rinker’s operations with its own and applying best business practices to them; and

 

•

reduce its cash flow volatility through increased exposure to the US market and, consequently, lower its cost of capital.

3.3 Intentions upon acquisition of 90% or more of Rinker Shares

This Section sets out CEMEX’s current intentions if Bidder acquires relevant interests in 90% or more of Rinker Shares and is entitled to proceed to compulsory acquisition of the remaining Rinker Shares under the Corporations Act.

(a) Corporate matters

It is intended that CEMEX would:

 

•

have Bidder proceed with compulsory acquisition of the outstanding Rinker Shares in accordance with the provisions of Chapter 6A of the Corporations Act;

 

•

arrange for Rinker to be removed from the official list of ASX and NYSE;

 

•

terminate the registration of Rinker Securities under the US Exchange Act;

 

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•

terminate Rinker’s employee share plans; and

 

•

replace all members of the Rinker Board with its own nominees. (Those nominees have not yet been identified – final decisions on the selection of nominees will be made by CEMEX in light of circumstances at the relevant time.)

(b) Review of operations

In the light of the more detailed information that will then be available to it and in the context of its rationale for the Offer (as described in Section 3.2), CEMEX will undertake a detailed review of the operations of the Rinker Group to evaluate its performance, profitability and prospects, and the extent to which synergies are available through consolidation with CEMEX’s existing operations.

It may become apparent that some of the assets and businesses of Rinker may not have strategic relevance to CEMEX. This review will consider the merits of, and opportunities for, divestiture of such assets and businesses. It is also possible that CEMEX will need to dispose of some assets or businesses in order to secure the US antitrust approval described in Section 7.6. CEMEX has not identified any assets or businesses which it believes should be divested and currently expects to retain all such assets and businesses (subject to any divestment necessary to secure US antitrust approval).

Some Rinker Group operational employees may become redundant, in which case they will receive redundancy packages that include all payments and other benefits to which they are entitled under applicable law and terms of employment. CEMEX will not be in a position to determine whether there will be any redundancies until it has initiated its review.

(c) Review of management functions

CEMEX intends to review Rinker’s management functions (such as company secretarial, investor relations, treasury and finance, in-house legal, internal audit and taxation) integral to determining overall control and strategic direction of Rinker and explore the opportunities to consolidate them with those of the CEMEX Group. In so doing, CEMEX will endeavour to reduce or eliminate costs where possible and appropriate, particularly in relation to duplicated activities.

CEMEX will consider how many employees are required to manage Rinker’s assets within the CEMEX Group and (having made that assessment) whether the roles should be filled by existing Rinker Group or CEMEX Group employees. To the extent CEMEX decides that those roles will not be filled by existing Rinker Group employees, CEMEX will consider whether there are opportunities elsewhere in the CEMEX Group for them. Given that Rinker will be delisted from ASX and NYSE, Rinker will no longer need the employees who are currently required to support its listed company status. CEMEX will offer employment to these employees to the extent that it is able to identify appropriate opportunities for them within the CEMEX Group. However, there are likely to be redundancies of Rinker Group employees if such opportunities are not identified. CEMEX is not in a position to determine how many employees these intentions may affect, as it is not aware of how many employees are currently engaged in supporting the listed company status of Rinker and what suitable alternative opportunities may be otherwise available within the CEMEX Group.

 

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(d) United States operations and management functions

Subject to the outcome of the reviews referred to in paragraphs (b) and (c), CEMEX currently considers it likely that it will:

 

•

transfer ownership of Rinker Materials, Inc. and other US members of the Rinker Group (or the assets owned and businesses conducted by them) to CEMEX USA, Inc. and combine their operations with its own US operations; and

 

•

retain Rinker’s executive offices in West Palm Beach, Florida. (The nature of the management functions to be performed from that location is subject to the outcome of the review referred to in paragraph (c).)

(e) Australian operations and management functions

Subject to the outcome of the reviews referred to in paragraphs (b) and (c), CEMEX currently considers it likely that it will:

 

•

retain Rinker’s executive offices in Chatswood, Sydney for the purpose of managing Rinker’s Australian operations;

 

•

transfer management oversight of Rinker’s Chinese operations to CEMEX’s Asia executive offices in Singapore; and

 

•

form a consolidated tax group comprising Bidder and Australian members of the Rinker Group.

(f) General business integration

In addition to the process described above, CEMEX intends to pursue efficiencies which may be available to the Rinker Group business as part of the CEMEX Group, including:

 

•

identifying best business practices and applying them across the combined business;

 

•

centralising and standardising management processes;

 

•

optimising use of its plant network; and

 

•

taking advantage of opportunities to expand or implement global procurement arrangements.

Subject to the outcome of the reviews referred to in paragraphs (b) and (c), CEMEX intends that the Rinker Group business will continue in the manner in which it is currently conducted.

Based on its own experience and a preliminary analysis of the Rinker Group, CEMEX’s management anticipates that pre-tax cost synergies of approximately US$130 million per annum can be generated, within three years of Rinker becoming a wholly-owned subsidiary of CEMEX, at a one-time cost expected to be under US$100 million to be incurred over two years.

As noted in Section 3.1, information known to CEMEX concerning Rinker and its business is limited to publicly available information. The cost synergies that are actually realised may therefore differ from those currently anticipated by CEMEX management.

 

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3.4 Intentions upon acquisition of less than 90% of the Rinker Shares

The Offer includes a 90% minimum acceptance condition which, if satisfied, will entitle Bidder to acquire compulsorily remaining Rinker Shares (see Section 8.6(a)). While Bidder has no present intention to waive that condition, it reserves its right, subject to applicable law, to declare the Offer free of that condition (or any other Defeating Condition) prior to the end of the Offer Period.

This Section sets out CEMEX’s intentions if the Offer is declared free from the 90% minimum acceptance condition (without Bidder becoming entitled to acquire compulsorily remaining Rinker Shares) but, by virtue of acceptances of the Offer, CEMEX nevertheless gains effective control of Rinker.

(a) Corporate matters

It is intended that CEMEX would, subject to the Corporations Act and Rinker’s constitution, seek to add to or replace a proportion of the members of the Rinker Board with its own nominees (to at least reflect CEMEX’s proportionate ownership interest in Rinker), with minority Rinker Shareholders represented by at least two independent directors. (Those nominees have not yet been identified – final decisions on the selection of nominees will be made by CEMEX in light of circumstances at the relevant time.)

Although it is intended that Rinker would maintain its listing on ASX, subject to the requirements for listing (including a sufficient spread of Rinker Shareholders) continuing to be satisfied, CEMEX may, subject to review at the time, propose, through its nominees on the Rinker Board, that Rinker:

 

•

when and to the extent permitted by NYSE, seek to delist from NYSE and terminate its ADR program; and

 

•

when and to the extent permitted by the US Exchange Act, seek to terminate the registration of Rinker Securities under the US Exchange Act.

CEMEX notes that, in any event, the liquidity of Rinker Shares on ASX and Rinker ADSs on NYSE are likely to be materially diminished following the close of the Offer.

In the United States, the Rinker Securities are currently registered under the US Exchange Act. Such registration may be terminated upon application by Rinker to SEC if the Rinker Securities are not listed on a US national securities exchange or quoted on NASDAQ and there are fewer than the required holders of record of the Rinker Securities. The termination of registration of the Rinker Securities under the US Exchange Act would substantially reduce the information required to be furnished, under applicable US law, by Rinker to Rinker Securityholders and to SEC. It would also make certain provisions of the US Exchange Act, such as the disclosure requirements of the US Sarbanes-Oxley Act of 2002 and the requirements of Rule 13e-3 under the US Exchange Act with respect to “going-private” transactions, no longer applicable to Rinker. In addition, “affiliates” of Rinker and persons holding “restricted securities” of Rinker might be deprived of the ability to dispose of such securities pursuant to Rule 144 under the US Securities Act.

Additionally, Rinker ADSs are currently “margin securities” under the regulations of the US Federal Reserve Board, which has the effect, among other things, of allowing brokers to extend credit on the collateral of the Rinker ADSs. If the Rinker ADSs were to cease to

 

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be quoted on NYSE following the Offer, it is possible that the Rinker ADSs would no longer constitute “margin securities” for purposes of the margin regulations of US Federal Reserve Board, in which event they could no longer be used as collateral for loans made by brokers.

Through its nominees on the Rinker Board, CEMEX would propose a review of Rinker’s:

 

•

capital management policies (including gearing and dividend policies) to consider whether they reflect an appropriate balance between ensuring Rinker retains sufficient funds to meet its ongoing operational and capital requirements and the generation of returns on investment for Rinker Shareholders; and

 

•

employee share plans and other incentive schemes to consider whether they remain an appropriate basis on which to incentivise Rinker Group employees.

(b) Governance issues

CEMEX intends that the Rinker Board will include at least two independent directors. Any transactions between CEMEX Group members and Rinker required to effect CEMEX’s intentions will be entered into on terms which are at arm’s length. In addition, if required by applicable law,

CEMEX will seek any necessary approval of the remaining Rinker Shareholders to implement such transactions.

(c) Review of operations and management functions

CEMEX, through its nominees on the Rinker Board, would propose that reviews similar to those referred to in Sections 3.3(b) and 3.3(c) be undertaken based on terms of reference that are consistent with Rinker being controlled, but not wholly-owned, by CEMEX.

Subject to the outcome of any review of management functions, CEMEX may propose that some of its own management and operational functions could, in the interests of both groups, be made available to Rinker Group members under service agreements or other outsource arrangements with the CEMEX Group. CEMEX has not decided which functions would be likely to be the subject of such arrangements and does not intend to make a decision on those matters until after the close of the Offer Period.

(d) United States operations and management functions

Subject to market conditions prevailing at the time, CEMEX may propose to acquire Rinker Materials, Inc. and other US members of the Rinker Group (or the assets owned and businesses conducted by them) and combine their operations with its own US operations. CEMEX intends that the terms of any such transactions would be negotiated at arm’s length on a willing buyer and willing seller basis without a control premium.

(e) Australian operations and management functions

If, as a result of any potential transactions identified in paragraph (c), management functions required to support Rinker’s listed company status and Australian operations would (upon completion of the transactions) no longer be available to it, CEMEX would, through its nominees on the Rinker Board, work with Rinker to ensure their continuing availability. Where appropriate, this may include sourcing management functions from the CEMEX Group.

 

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(f) Synergies and other issues

CEMEX expects that the following issues are also likely to be addressed while Rinker is not wholly-owned by Bidder.

 

•

CEMEX will propose that protocols be established for executives from each group to collect and exchange information between them with a view to identifying synergies which may be available to each through integrating parts of their businesses and the basis on which those synergies should be realised. Synergies may be available through combining aspects of the operations of both groups and through exchange of assets between the groups. CEMEX intends that the terms of any transactions entered into for the purpose of realising synergies would be negotiated at arm’s length on a “willing buyer” and “willing seller” basis without a control premium.

 

•

Implementation of CEMEX’s objectives with respect to the strategic direction of Rinker may impact on the range of corporate or business opportunities which are presented to, or identified by, Rinker. However, to the extent that such opportunities are presented to Rinker (on the one hand) or CEMEX (on the other), the opportunity would belong to the party to whom it was presented. If it is appropriate for the opportunities to be pursued by the other, the transfer of each opportunity would be negotiated on arm’s length terms. CEMEX expects that it may be appropriate that protocols be established between CEMEX and Rinker to ensure an equitable allocation of such opportunities.

(g) “Going private” transactions

SEC has adopted Rule 13e-3 under the US Exchange Act which is applicable to certain “going private” transactions and which may be applicable as a consequence of the Offer. The rule may apply if Bidder acquires less than 90% of outstanding Rinker Shares under the Offer (and is consequently unable to acquire compulsorily all remaining Rinker Shares), and Bidder subsequently enters into certain business combinations with Rinker or makes certain acquisitions of Rinker Securities. If applicable, the rule would require, among other things, that certain financial information concerning Rinker and certain information relating to the fairness of the consideration offered to minority Rinker Securityholders be filed with SEC and distributed to minority Rinker Securityholders before the consummation of any such transaction.

The purchase of a substantial number of Rinker Securities by Bidder may result in termination, upon application by Rinker to SEC, of Rinker’s registration under the US Exchange Act. If such registration were terminated, Rule 13e-3 would not apply to any subsequent business combination or acquisition of Rinker Securities.

(h) Further acquisition of Rinker Securities

CEMEX may, at some later time, have Bidder acquire further Rinker Securities in a manner consistent with the Corporations Act and the US Exchange Act. In particular, CEMEX may consider having Bidder acquire additional Rinker Shares under the “creep” provisions of Item 9 in section 611 of the Corporations Act. In summary, those provisions permit Bidder (and its associates) to acquire up to 3% of Rinker Shares every six months. CEMEX has not yet decided whether it will have Bidder acquire further Rinker Shares under the “creep” provisions, as that will depend upon the extent to which CEMEX has capacity to acquire further Rinker Shares and market conditions prevailing at the time.

 

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(i) Compulsory acquisition at a later time

If Bidder becomes entitled at some later time to exercise general compulsory acquisition rights under the Corporations Act, CEMEX may have Bidder exercise those rights.

3.5 Other intentions

Other than as set out in this Section, it is the present intention of CEMEX to procure that Rinker will:

 

•

generally continue its businesses;

 

•

not make any major changes to its businesses nor redeploy any of its fixed assets; and

 

•

continue the employment of its present employees.

Except as otherwise specifically disclosed in this Bidder’s Statement, neither CEMEX nor any of its affiliates has any present plans or proposals which relate to, or would result in, an extraordinary transaction, such as a merger, reorganisation or liquidation, involving the Rinker Group, any purchase, sale or transfer of a material amount of assets of the Rinker Group, any material change in Rinker’s indebtedness or capitalisation or dividend rate or policy, or any other material change in Rinker’s corporate structure or business.

3.6 Limitations on intentions

The intentions and statements of future conduct set out in this Section must be read as being subject to:

 

•

the law (including the Corporations Act and the US Exchange Act) and the ASX Listing Rules and NYSE Listing Rules, including in particular the requirements in relation to conflicts of interest and “related party” transactions given that, if Bidder obtains control of Rinker but does not acquire all Rinker Shares, it and CEMEX will be treated as related parties of Rinker for these purposes;

 

•

the legal obligation of Rinker’s directors at the time, including any nominees of Bidder or CEMEX, to act in good faith in the best interests of Rinker and for proper purposes and to have regard to the interests of all Rinker Shareholders; and

 

•

the outcome of the reviews referred to in Sections 3.3 and 3.4.

 

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Section 4

Funding arrangements

4.1 Consideration under the Offer

The consideration for the acquisition of the Rinker Securities to which the Offer relates will be satisfied wholly by the payment of cash (in US dollars, subject to the currency election described in Section 8.8(d)).

Based on the number of Rinker Shares in issue as at the date of this Bidder’s Statement (see Section 2.4), and as Bidder already has a relevant interest in 1,000 Rinker Shares as at the date of this Bidder’s Statement, the maximum amount of cash that would be payable by Bidder under the Offer if acceptances were received for all Rinker Securities in which Bidder does not already have a relevant interest is US$11,635,766,454 (the Offer Amount).

4.2 Overview of Bidder’s funding arrangements

Bidder and CEMEX have entered into a takeover funding deed under which CEMEX has undertaken to provide, or procure the provision (supported by it) of, such amounts to Bidder which in aggregate are equal to the Offer Amount and all costs associated with the Offer. Bidder’s right to receive payments under the deed is not subject to any conditions precedent and no demand for repayment of funds provided to Bidder may be made during the period in which Bidder has an outstanding obligation to make payment under the Offer.

Funds may be provided to Bidder through any combination of cash contribution, equity subscription, loan arrangement or other debt financial arrangements as CEMEX sees fit. Bidder has agreed to negotiate in good faith such documents as requested by CEMEX to evidence CEMEX’s funding obligations and its performance of those obligations under the deed. Where such documents are entered into or give effect to the Loan Facilities and have become unconditional, they shall be taken to reduce, on a pro rata basis, CEMEX’s funding obligations. CEMEX also undertakes to enter into and otherwise procure that its subsidiaries which are party to the Loan Facilities enter into such documents within the timeframes described in the term sheets.

Under the deed, CEMEX has also agreed to indemnify Bidder on demand, to the maximum extent permitted by law, against any liability incurred by Bidder in connection with, or any costs or other expenses that may be incurred by Bidder as a result of, any claim made by a third party in relation to the acquisition of any Rinker Securities, the Offer, any matter preliminary to or associated with the acquisition of any Rinker Securities or the Offer, the preparation or issue of this Bidder’s Statement, anything stated in or omitted from this Bidder’s Statement, any other conduct of Bidder or any officer, director or person for whom Bidder may be liable or the funding by CEMEX of the Offer Amount.

The obligations of CEMEX under the deed are unconditional, irrevocable and provided on a continuing basis.

4.3 Overview of CEMEX’s funding arrangements

CEMEX will source the necessary funds to be made available to Bidder to pay the Offer Amount (and costs associated with the Offer) from a combination of drawdowns under:

 

(a)

a new US$9 billion acquisition facility (the Acquisition Facility) to be arranged by CEMEX España S.A. (CEMEX España), as borrower, with Citigroup Global Markets Limited and The Royal Bank of Scotland plc (the Acquisition Facility Mandated Lead

 

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Arrangers) and Citibank, N.A. and The Royal Bank of Scotland plc (the Acquisition Facility Underwriters), comprising:

 

(i)

a US$3 billion 364-day revolving credit facility, with two term-out options of 180 days each;

 

(ii)

a US$3 billion 36-month term loan facility; and

 

(iii)

a US$3 billion 60-month term loan facility;

 

(b)

a new US$1.2 billion committed acquisition facility (the Newly Committed Facility) arranged by CEMEX, as borrower, with BBVA Bancomer, S.A. (the Newly Committed Facility Lender) which is available for drawdown as at the date of this Bidder’s Statement and matures 12 months from the date of the initial drawing (unless extended). The Newly Committed Facility comprises a bridge loan and a back stop or stand-by loan;

 

(c)

a new US$1.5 billion senior bridge facility (the Bridge Facility) arranged by New Sunward Holding B.V. (CEMEX Netherlands), as borrower, with J.P. Morgan Securities Inc. and JPMorgan Chase Bank, N.A. (the Bridge Facility Lender) which matures on the earlier to occur of the first anniversary of the launch of the Offer and the date which is 364 days after the signing of the facility agreement in respect of the Bridge Facility; and

 

(d)

the following existing committed facilities (each an Existing Committed Facility):

 

(i)

a US$1.2 billion revolving loan facility (the US$1.2 billion Existing Committed Facility) arranged by CEMEX, as borrower, with the lenders referred to in such facility including Barclays Bank plc and Citigroup Global Markets Inc.; and

 

(ii)

a US$0.7 billion revolving, standby letter of credit and swing line loan facility (the US$0.7 billion Existing Committed Facility) arranged by CEMEX, as borrower, with the lenders referred to in such facility including Barclays Bank plc, Citigroup Global Markets Inc. and ING Bank NV;

from which an aggregate amount of at least US$1.1 billion is available for drawdown as at the date of this Bidder’s Statement.

The Loan Facilities are unsecured. Each Existing Committed Facility, the Bridge Facility and the Newly Committed Facility is or will be guaranteed by CEMEX or certain subsidiaries of CEMEX. The Acquisition Facility may be guaranteed by CEMEX España if CEMEX España ceases to be the borrower under the Acquisition Facility. In addition, CEMEX España shall have the right to request that any of its subsidiaries become guarantors under the Acquisition Facility.

At the time funds are required by Bidder, CEMEX may elect to source all or a portion of those funds from its own cash reserves or the cash reserves of other CEMEX Group members, in lieu of drawing under the Loan Facilities. These cash reserves may themselves include funds sourced from other loan facilities available to CEMEX Group members or from the issue of securities by CEMEX Group members. As CEMEX has not decided whether, or what proportion of, funds will be provided from such cash reserves, it has assumed for present purposes that all funds will be sourced from drawings under the Loan Facilities.

 

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Except for each Existing Committed Facility, the Loan Facilities are currently undrawn and are not required to meet other commitments of CEMEX and its subsidiaries.

4.4 Acquisition Facility

A binding commitment letter (the Commitment Letter) has been signed by CEMEX España with the Acquisition Facility Mandated Lead Arrangers and the Acquisition Facility Underwriters under which they have agreed to underwrite or make available (in equal proportions) the Acquisition Facility.

A term sheet for the Acquisition Facility has been agreed between CEMEX España, the Acquisition Facility Mandated Lead Arrangers and the Acquisition Facility Underwriters and sets out a description of the principal terms that are to govern the facility documents.

Each Acquisition Facility Mandated Lead Arranger and Acquisition Facility Underwriter may terminate its commitment to underwrite the Acquisition Facility if:

 

(a)

any of the following conditions occurs:

 

(i)

CEMEX España fails to comply with the Commitment Letter, term sheet or any fee letter;

 

(ii)

a representation or warranty made by CEMEX España as to written factual information is not materially correct at the date on which it is made;

 

(iii)

the facility documentation is not prepared and executed by the date which is 45 days after the date of the Commitment Letter or a later date as agreed by the parties;

 

(iv)

CEMEX España ceases to be a subsidiary of CEMEX; and

 

(v)

all necessary regulatory approvals from all relevant jurisdictions have not been obtained; or

 

(b)

CEMEX España fails or has failed to disclose to any of the Acquisition Facility Mandated Lead Arrangers and Acquisition Facility Underwriters information which in their reasonable opinion is relevant to the decision of the Acquisition Facility Underwriters to arrange or underwrite the Acquisition Facility.

CEMEX is not, nor has CEMEX España advised CEMEX that it is, aware of any reason which would give rise to a right of termination under the above conditions.

Other relevant provisions of the term sheet include the following.

 

(a)

The Acquisition Facility will be available for drawing from the date of the facility agreement and ending on the earlier of:

 

(i)

30 days after the date on which the Offer becomes unconditional (the Unconditional Date); and

 

(ii)

the date falling 364 days after the signing date of the facility agreement relating to the Acquisition Facility.

 

(b)

The ability to drawdown under the Acquisition Facility (during the availability period described in (a) above) to fund the Offer Amount will only be subject to the conditions precedent that:

 

(i)

the following representations and warranties relating to each of CEMEX España and its subsidiaries (but excluding any member of the Rinker Group) in the facility

 

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agreement are correct (and only where the breach of such representations and warranties would lead to a material adverse effect):

 

(A)

its corporate existence and powers;

 

(B)

the obligations under the documents being legal, valid, binding and enforceable obligations;

 

(C)

the entry into and performance of the transactions contemplated by the documents will not conflict with any law, regulation, constitutional documents or any other agreement binding on it;

 

(D)

it has the power to enter into and has taken all necessary action to authorise its entry into the relevant documents; and

 

(E)

except as expressly permitted pursuant to the facility agreement relating to the Acquisition Facility, the offer documents contain all material terms of the Offer and reflect the relevant announcements; and

 

(ii)

that none of the following actual or potential events of default has occurred relating to CEMEX España and its subsidiaries (but excluding any member of the Rinker Group):

 

(A)

payment defaults;

 

(B)

breach of certain other obligations (subject to agreed remedy periods):

 

(1)

relating to the purpose of the facility;

 

(2)

regarding negative pledges;

 

(3)

regarding restriction on mergers;

 

(4)

requiring pari passu ranking; and

 

(5)

relating to certain offer undertakings;

 

(C)

breaches of any of the representations described in (i) above;

 

(D)

insolvency and other insolvency type proceedings and creditors’ process;

 

(E)

Bidder not being a subsidiary of CEMEX España within six months if it has not by such date acceded as a guarantor to the facility agreement;

 

(F)

repudiation;

 

(G)

unlawfulness; and

 

(H)

non-satisfaction of certain documentary conditions precedent.

 

The lenders will also be restricted from exercising rights under the facility agreement which would prevent or limit the making of a drawdown to fund the Offer Amount.

 

The ability to drawdown under the Acquisition Facility to fund any finance costs, fees, expenses, taxes and duties in connection with the Offer will be subject to the following additional conditions precedent:

 

•

receipt by the agent of a copy of a supplementary bidder’s statement and related press releases which confirm that the Offer has been declared unconditional;

 

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•

all regulatory approvals having been obtained;

 

•

evidence that funding (other than under the Acquisition Facility) of no less than US$3.8 billion is committed and available for the purposes of the Offer and a “funds flow” statement setting out how the Offer will be funded; and

 

•

compliance with certain regulatory requirements such as under US law and the takeover rules under Chapter 6 of the Corporations Act.

 

CEMEX considers that these conditions precedent will either be satisfied when the Offer becomes unconditional or are procedural in nature and within the sole control of CEMEX Group members.

 

(c)

The Acquisition Facility will be subject to events of default, which CEMEX considers to be customary for facilities of this nature, including without limitation:

 

(i)

payment defaults;

 

(ii)

breach of financial covenants or (subject to agreed cure periods) other obligations;

 

(iii)

breaches of representations;

 

(iv)

cross-acceleration (subject to an agreed minimum amount);

 

(v)

insolvency and other insolvency type proceedings and creditors’ process;

 

(vi)

failure to comply with judgments;

 

(vii)

unlawfulness;

 

(viii)

CEMEX ceasing to own other borrowers if other borrowers become parties to the facility;

 

(ix)

repudiation; and

 

(x)

following the acquisition of Rinker, material adverse change.

 

CEMEX is not aware of any occurrence which would or is likely to give rise to any such event.

 

(d)

CEMEX España will be required to give representations and undertakings, which CEMEX considers to be customary for facilities of this nature, including without limitation:

 

(i)

representations and warranties as to:

 

(A)

its corporate existence, power and authority;

 

(B)

the obligations under the documents being legal, valid, binding and enforceable obligations;

 

(C)

all authorisations in connection with the Acquisition Facility and related finance documents having been obtained and being in full force;

 

(D)

no default;

 

(E)

no misrepresentation;

 

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(F)

payment obligations under the Acquisition Facility ranking pari passu with all other unsecured and unsubordinated obligations of CEMEX España except for those obligations mandatorily preferred by law;

 

(G)

no winding-up proceedings; and

 

(H)

following the acquisition of Rinker, no material adverse change on CEMEX España’s business, condition, operations, performance or assets taken as a whole; and

 

(ii)

undertakings:

 

(A)

to satisfy certain agreed financial covenants;

 

(B)

not to change its business and preservation of corporate transactions;

 

(C)

to preserve its assets;

 

(D)

(apart from intra-group transactions) to restrict new debt of the Rinker Group to short-term working capital facilities; and

(E)

regarding negative pledges.

Amounts drawn under the Acquisition Facility may be refinanced or repaid at the end of the term without restriction. CEMEX plans to repay the Acquisition Facility through a combination of cash fl ow from operations, net proceeds from asset dispositions (if any) and from refinancing transactions. CEMEX does not at this time have any more specific plans or arrangements for the sources of repayment of the Acquisition Facility.

4.5 Newly Committed Facility

CEMEX has recently entered into facility documents with the Newly Committed Facility Lender in connection with the Newly Committed Facility. CEMEX’s obligations under the Newly Committed Facility are guaranteed by CEMEX México and Empresas Tolteca de México, S.A. de C.V. (ETM). Funds are available for drawdown under the Newly Committed Facility to support (whether directly or indirectly) CEMEX in an investing acquisition (which would include the Offer). As at the date of this Bidder’s Statement, no funds have been drawn under this facility nor have any funds available under the facility been earmarked for any purpose other than payment of the Offer Amount (and costs associated with the Offer) and acquisition of Rinker Securities outside the Offer.

The Newly Committed Facility Lender is BBVA Bancomer, S.A. de C.V., a Mexican subsidiary of Banco Bilbao Vizcaya Argentaria, S.A. (BBVA). BBVA is a company organised under the laws of Spain and the parent company of an international financial group with principal operations in Spain, Portugal and a number of countries in Central and South America. The operations of BBVA are supervised by the Bank of Spain in accordance with Spanish and European Union law and the US Federal Reserve Board under the U.S. Bank Holding Company Act of 1956. As at 31 December 2005, BBVA had total consolidated assets of €392.4 billion and total consolidated liabilities of €375.1 billion.

Relevant provisions of the facility documents include the following.

 

(a)

The Newly Committed Facility is to be available until 30 September 2007 (unless extended).

 

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(b)

The ability to drawdown under the Newly Committed Facility is subject to the following conditions precedent:

 

(i)

no default under the facility agreement;

 

(ii)

the guarantees are still outstanding;

 

(iii)

pari passu status is maintained;

 

(iv)

satisfactory legal documentation; and

 

(v)

commissions have been paid.

 

CEMEX considers that these conditions precedent are procedural in nature and within the sole control of CEMEX Group members. CEMEX is not aware of any occurrence which would or is likely to give rise to any such event.

 

(c)

The Newly Committed Facility is subject to events of default, which CEMEX considers to be customary for facilities of this nature, including without limitation:

 

(i)

payment default;

 

(ii)

representations or warranties being materially incorrect;

 

(iii)

cross-default and cross-acceleration to other indebtedness having an aggregate outstanding amount of at least US$50 million;

 

(iv)

bankruptcy and insolvency; (v) documents unenforceable; and

 

(vi)

failure to maintain obligations pari passu with all other unsecured and unsubordinated debt.

 

CEMEX is not aware of any occurrence which would or is likely to give rise to any such event.

 

(d)

Certain representations and undertakings given by CEMEX, which CEMEX considers to be customary for facilities of this nature, including without limitation:

 

(i)

representations as to:

 

(A)

corporate existence, power, authority and purpose;

 

(B)

binding obligations;

 

(C)

compliance with laws;

 

(D)

pari passu obligations; and

 

(E)

no default; and

 

(ii)

covenants:

 

(A)

regarding the financial condition of CEMEX;

 

(B)

to maintain pari passu ranking;

 

(C)

to restrict liens, mergers and consolidations and sale of assets; and

 

(D)

to restrict change of business.

 

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Borrowings incurred in connection with the Offer under the Newly Committed Facility may be refinanced or repaid by CEMEX without restriction. CEMEX plans to repay the Newly Committed Facility through a combination of cash flow from operations, net proceeds from asset dispositions (if any) and from refinancing transactions. CEMEX does not at this time have any more specific plans or arrangements for the sources of repayment of the Newly Committed Facility.

4.6 Bridge Facility

A binding commitment letter (the Letter) has been signed by CEMEX Netherlands with the Bridge Facility Lender under which it has agreed to underwrite the Bridge Facility. A term sheet for the Bridge Facility has been agreed between CEMEX and the Bridge Facility Lender and sets out a description of the principal terms that are to govern the facility documents.

Borrowings incurred in connection with the Offer under the Bridge Facility must be refinanced through the proceeds of the issuance of perpetual securities of a subsidiary of CEMEX in a placement issued in reliance on Rule 144A and Regulation S under the US Securities Act. If such an issuance is not possible, the Bridge Facility may be repaid by the issue of senior notes in the capital markets by CEMEX or one of its subsidiaries or on the terms of a term facility as detailed in the Letter (the Term Facility). The Term Facility is comprised of one, two and three year tranches.

The Bridge Facility Lender’s commitment to underwrite or make available the Bridge Facility is subject to:

 

(a)

the engagement letters being in full force and effect and being complied with;

 

(b)

the parties having executed facility documentation within 45 days of the Letter and the takeover is complete, and the Bridge Facility drawn, on or before the earlier of the first anniversary of the Offer date and the date which is 364 days from the signing of the facility documentation; and

 

(c)

satisfaction of the following conditions:

 

(i)

payment of fees to the lender, the agent and arranger before the funding date;

 

(ii)

the Offer having been completed in accordance with the applicable laws and the Offer closing for acceptance of more than 50% of the outstanding voting shares of Rinker;

 

(iii)

all material government and third party approvals necessary in connection with the Offer and the financing having been obtained on reasonably satisfactory terms;

 

(iv)

no investigation, litigation or proceedings pending or threatened that could reasonably be expected to have a material adverse effect on the Offer including the financing;

 

(v)

all additional financing required for the Offer having been or being obtained simultaneously with the Offer;

 

(vi)

legal opinions from each relevant jurisdiction (US, the Netherlands, Mexico) on the facility documents; and

 

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(vii)

all representations being true and no default existing before or after the funding.

CEMEX considers that these conditions precedent will either be satisfied when the Offer becomes unconditional or are procedural in nature and within the sole control of CEMEX Group members.

Other relevant provisions of the term sheet include the following.

 

•

The Bridge Facility is available until the earlier of the date which is the first anniversary of the Offer date and the date which is 364 days from the signing of the facility documentation.

 

•

The ability to drawdown under the Bridge Facility (during the availability period described in (a) above) to fund the Offer Amount will only be subject to the conditions precedent that documentation has been entered into within 30 days of the date of the Letter and on satisfaction of the conditions to the commitment (as described in (c) above).

 

•

The representations, warranties, covenants and events of default will be substantially similar to those contained in the US$0.7 billion Existing Committed Facility (as detailed in Section 4.7 below), which CEMEX considers to be customary for a facility of this nature.

The Term Facility has similar terms and conditions as those set out in (b) and (c). Borrowings incurred in connection with the Offer under the Term Facility may be refinanced or repaid by CEMEX without restriction.

4.7 Existing Committed Facilities

Funds are available for drawdown under the Existing Committed Facilities for general corporate purposes. As at the date of this Bidder’s Statement, an aggregate of at least US$1.1 billion is available for drawdown under the facilities and none of those funds have been earmarked for any purpose other than payment of the Offer Amount (and costs associated with the Offer) and acquisition of Rinker Securities outside the Offer.

Other relevant provisions of the credit agreements for the Existing Committed Facilities include the following.

 

(a)

The Existing Committed Facilities are available for at least:

 

(i)

in the case of the US$1.2 billion Existing Committed Facility, five years from its effective date, which was on or about June 2005. The term of the US$1.2 billion Existing Committed Facility may be extended for an additional year if an extension request is delivered 45 days before 6 June 2007 and the extension is accepted by the lenders; and

 

(ii)

in the case of the US$0.7 billion Existing Committed Facility, four years from its effective date, which was on or about 6 June 2005. The term of the US$0.7 billion Existing Committed Facility may be extended for an additional year if an extension request is delivered 45 days before 6 June 2007 and the extension is accepted by the lenders. Drawings under the swing line facility must be repaid within a shorter time frame of three days unless extended.

 

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CEMEX may on five business days’ notice terminate the existing commitments under an Existing Committed Facility but not if there are amounts outstanding under the relevant loan agreement.

 

(b)

The ability to drawdown under the Existing Committed Facilities is subject to one or more conditions precedent (which CEMEX considers to be procedural in nature and within its sole control), including without limitation:

 

(i)

in the case of the revolving loan components of the Existing Committed Facilities, providing a request in advance by telephone (of one, three or four business day(s) depending upon the nature of the loan requested) subsequently confirmed by a written notice. A request for a swingline loan or a standby letter of credit under the US$0.7 billion Existing Committed Facility requires notice to the relevant lender;

 

(ii)

no default or event of default; and

 

(iii)

accuracy of representations and warranties.

 

In the case of the issuance of a standby letter of credit under the US$0.7 billion Existing Committed Facility, CEMEX will also need to have paid all related fees in connection with the issuance of that standby letter of credit.

 

(c)

The Existing Committed Facilities are subject to one or more of the following events of default (which CEMEX considers to be customary for facilities of this nature), including without limitation:

 

(i)

payment defaults;

 

(ii)

material breach of representations and warranties unremedied for 30 days;

 

(iii)

default of its obligations under the credit agreement and related documents (which, in some cases, is unremedied for 30 days);

 

(iv)

default of its obligations under any indenture, agreement or instrument relating to a material debt (US$50 million or more) which results in the acceleration of that debt;

 

(v)

certain events of bankruptcy;

 

(vi)

certain judgments in excess of US$50 million;

 

(vii)

obligations of CEMEX (or a guarantor) under the credit agreement fail to rank pari passu with all of its (or the guarantor’s) other senior unsecured debt;

 

(viii)

CEMEX (or a guarantor) contests the validity of any liability under the credit agreement or related document;

 

(ix)

failure to obtain or revocation of a governmental authority necessary for the validity of the credit agreement and related documents;

 

(x)

expropriation, moratorium or limitation on the availability of foreign exchange; and

 

(xi)

certain changes of ownership in or control of CEMEX (or a guarantor).

 

CEMEX is not aware of any occurrence which would or is likely to give rise to any such event.

 

(d)

Certain representations and undertakings given by CEMEX, which CEMEX considers to be customary for facilities of this nature, including without limitation:

 

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(i)

representations and warranties as to:

 

(A)

its corporate existence, power and authority;

 

(B)

the enforceability of documents;

 

(C)

compliance with laws;

 

(D)

all approvals having been obtained;

 

(E)

no misrepresentations having been made; and

 

(F)

its obligations under the Existing Committed Facilities ranking pari passu with all its other unsubordinated and unsecured obligations; and

 

(ii)

covenants:

 

(A)

to maintain its financial condition above agreed ratios;

 

(B)

not to consolidate or merge;

 

(C)

not to sell its assets or create liens (other than in certain circumstances); and

 

(D)

not to materially change its business.

CEMEX’s obligations under the Existing Committed Facilities have been guaranteed by two of its wholly-owned subsidiaries, CEMEX México and ETM.

Amounts drawn under the Existing Committed Facilities may be refinanced or repaid at the end of the term without restriction. CEMEX plans to repay the Existing Committed Facilities through a combination of cash fl ow from operations, net proceeds from asset dispositions (if any) and from refinancing transactions. CEMEX does not at this time have any more specific plans or arrangements for the sources of repayment of the Existing Committed Facilities.

4.8 Provision of consideration

On the basis of the arrangements described in this Section, Bidder and CEMEX believe that they have reasonable grounds for holding the view, and hold the view, that Bidder will be able to provide the consideration offered under the Offer.

 

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Section 5

Australian tax considerations

5.1 Introduction

The following is a general description of the Australian income and capital gains tax consequences to Rinker Shareholders on disposing of their Rinker Shares (through acceptance of the Offer) in return for cash consideration. The comments set out below are relevant only to those Rinker Shareholders who hold their Rinker Shares as capital assets for the purpose of investment and who do not (or would not) hold those shares in connection with the conduct of a business. These comments relate to Rinker Shares only, and not to Rinker ADSs or any other rights held over Rinker Shares.

Certain Rinker Shareholders (such as those engaged in a business of trading or investment), those who acquired their Rinker Shares for the purpose of resale at a profit or those which are banks, insurance companies, tax exempt organisations, superannuation funds, or persons who acquired their Rinker Shares in respect of their employment with Rinker (including under Rinker’s Performance Share Plan, Cash Award Share Plan, Employee Share Acquisition Plan and Universal Share Plan) will or may be subject to special or different tax consequences peculiar to their circumstances.

Rinker Shareholders who are not resident in Australia for tax purposes should also take into account the tax consequences, under the laws of their country of residence, as well as under Australian law, of the disposal of Rinker Shares under the Offer. Rinker Shareholders who are resident in the United States should also refer to the information set out in Section 6.

The following description is based upon taxation law and practice in effect as at the date of this Bidder’s Statement. It is not intended to be an authoritative or complete statement or analysis of the taxation laws applicable to the particular circumstances of every Rinker Shareholder. Rinker Shareholders should seek independent professional advice regarding the taxation consequences of disposing of Rinker Shares in light of their own particular circumstances.

5.2 Australian resident Rinker Shareholders

Acceptance of the Offer will involve the disposal by Rinker Shareholders of their Rinker Shares, by way of transfer to Bidder.

In relation to Rinker Shares held on capital account and acquired, or deemed to have been acquired (eg, because, as a result of Rinker’s demerger from the CSR Group, Rinker Shares were acquired on account of shares held in CSR at the time of the demerger which had been acquired before 20 September 1985), by the relevant Rinker Shareholders before 20 September 1985, such disposal should not give rise to any Australian CGT implications.

Conversely, the disposal of Rinker Shares acquired, or deemed to have been acquired, on or after 20 September 1985 and which are held on capital account will generally have Australian CGT implications. Such disposal will constitute an Australian CGT event for Australian CGT purposes.

Australian resident Rinker Shareholders may make a capital gain or capital loss on the disposal of their Rinker Shares under the Offer.

Capital gains and capital losses of a taxpayer in a year of income are aggregated to determine whether there is a net capital gain. If so, that net capital gain is included in

 

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assessable income and is subject to income tax. However, a “CGT Discount” may be available to reduce the taxable gain for certain Rinker Shareholders (see further below).

Capital losses may not be deducted against other income for income tax purposes, but may be offset against capital gains realised in the same income year or be carried forward to be offset against future capital gains.

Where Rinker Shares were acquired as a result of Rinker’s demerger from the CSR Group in April 2003 and demerger capital gains tax rollover relief was claimed at the time, the cost base of the Rinker Shares will need to be calculated by reference to a portion of the cost base of the original shares held in CSR at the time of the demerger.

Otherwise, in general, the capital gain or loss on disposal of a Rinker Share under the Offer will be calculated on the basis of the difference between the value of the capital proceeds (ie, the cash consideration received from Bidder) and the cost base of the share.

The disposal will be deemed to have occurred on the date on which the Offer becomes unconditional and the capital proceeds will be the Australian dollar equivalent of the US dollar cash consideration, at the spot exchange rate on that day. Under the foreign exchange gain and loss rules, it is possible that currency fluctuations between the date the Offer becomes unconditional and the date of actual payment of the cash consideration could result in a taxable gain or deductible loss for certain Rinker Shareholders.

The cost base of Rinker Shares is generally their cost of acquisition or deemed cost of acquisition. Certain other amounts associated with acquisition and disposal, such as brokerage or stamp duty, may be added to the cost base. The capital loss will be calculated on the basis of the difference between the capital proceeds and the reduced cost base of the share.

However, if the Rinker Share was acquired (or deemed to be acquired) at or before 11.45am on 21 September 1999, the cost base may be indexed for inflation, by reference to changes in the Consumer Price Index from the calendar quarter in which the Rinker Share was acquired (or deemed to be acquired) until the calendar quarter ended 30 September 1999. Rinker Shareholders who are individuals, complying superannuation entities or trustees of a trust must make an election if they wish to rely on indexation. Companies will be entitled to include the indexation without making an election. Indexation adjustments are taken into account only for the purposes of calculating a capital gain, and not a capital loss.

On the other hand, if the Rinker Share was acquired (or deemed to be acquired) after 11.45am on 21 September 1999, the capital gain or loss is generally calculated on the difference between the capital proceeds and the cost base for the share, with no indexation.

A Rinker Shareholder who is an individual, complying superannuation entity or trustee of a trust, and who does not or cannot elect to adjust their cost base for indexation (as described above), may choose to claim a “CGT Discount” if they acquired (or are deemed to have acquired) their Rinker Shares 12 months or more before the time they accept the Offer (or, if later, the time when the Defeating Conditions in Sections 8.6(b), 8.6(c) and 8.6(d) are satisfied or waived). This means that:

 

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•

in the case of an individual (and, generally speaking, a trustee of a trust), only one half of their net capital gain on those shares (after deducting available capital losses) will be taxable; and

 

•

in the case of a complying superannuation entity, only two thirds of their net capital gain on those shares (after deducting available capital losses) will be taxable.

However, the methodology for trustees is complex, and such Rinker Shareholders should obtain specific advice in this regard, including in relation to the tax consequences of distributions attributable to discounted capital gains.

Whether it is better for any given Rinker Shareholder to make the indexation election or not will depend upon the particular Rinker Shareholder’s individual circumstances, including the cost base of the Rinker Shares and whether the Rinker Shareholder has any available losses. Rinker Shareholders should consult their own tax advisers in this regard.

The “CGT Discount” is not available to companies, nor does it apply to Rinker Shares owned (or deemed to be owned) for less than the relevant 12-month period.

5.3 Non-Australian resident Rinker Shareholders

Assuming that Rinker will be treated as a public company for tax purposes, a Rinker Shareholder who is a non-resident of Australia for taxation purposes and holds their Rinker Shares on capital account will not make a taxable capital gain in Australia on the disposal of Rinker Shares under the Offer, if that Rinker Shareholder (together with any associates) has not, at any time during the five years immediately preceding the disposal, owned 10% or more (by value) of the issued share capital of Rinker. If this requirement is not satisfied, then the Australian CGT provisions will apply to the disposal, unless the Rinker Shareholder is entitled to claim relief from Australian taxation under a relevant double tax treaty.

The Australian Government recently released legislation that will change the current Australian CGT rules that apply to non-residents by narrowing the range of assets to which those rules apply. These new rules will apply from the date of Royal Assent, which is not yet known. Non-resident Rinker Shareholders should take independent tax advice in respect of these new rules if they are enacted prior to the acceptance of the Offer (or, if later, when the Defeating Conditions in Sections 8.6(b), 8.6(c) and 8.6(d) are satisfied or waived).

5.4 Stamp duty and GST

Bidder will pay the stamp duty (if any) payable in Australia on the transfers of Rinker Shares under the Offer. No GST will be payable on such transfers, except that GST will be payable on any fees or charges that a Controlling Participant (in respect of Rinker Shares in a CHESS Holding) or a broker or other nominee (in respect of Rinker Shares held for a separate beneficial owner) may charge in connection with acceptance of the Offer.

 

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United States tax considerations (for US Securityholders)

6.1 Introduction

The following describes the material US federal income tax consequences to Rinker Securityholders that are US Securityholders (as defined below) and that accept, or do not accept, the Offer.

For US federal income tax purposes, a holder of Rinker ADSs will generally be treated as the beneficial owner of the underlying Rinker Shares. Thus, a holder of Rinker ADSs is treated like a holder of Rinker Shares for US federal income tax purposes.

This description is based upon the US Tax Code, US Treasury regulations, administrative rulings and judicial decisions currently in effect, all of which are subject to change, possibly with retroactive effect. This description applies only to US Securityholders that hold their Rinker Securities as a capital asset (generally, for investment purposes). Further, this description does not constitute tax advice and therefore does not address all aspects of US federal income taxation that may be relevant to particular US Securityholders in light of their personal investment circumstances or to US Securityholders subject to special treatment under US federal income tax laws, including:

 

•

insurance companies;

 

•

tax-exempt organisations;

 

•

dealers in securities or foreign currency;

 

•

banks or trusts;

 

•

persons that hold their Rinker Securities as part of a straddle, a hedge against currency risk or a constructive sale or conversion transaction;

 

•

investors in pass-through entities (including entities taxable as partnerships); or

 

•

US Securityholders who acquired their Rinker Securities through the exercise of options, or otherwise as compensation or through a tax-qualified retirement plan.

If a partnership (including any entity taxable as a partnership) under US federal income tax laws holds Rinker Securities, the tax treatment of a partner will generally depend upon the status of the partner and the activities of that partnership. A partner of a partnership holding Rinker Securities should consult his or her own tax advisers.

Furthermore, this description does not address any non-income tax or any state, local or non-US tax consequences of a US Securityholder’s acceptance or rejection of the Offer. Accordingly, each US Securityholder should consult with his or her own tax advisers to determine his or her particular federal, state, local or non-US income or other tax consequences of the acceptance or rejection of the Offer.

 

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6.2 Material income tax consequences

For purposes of this description, a US Securityholder means a Rinker Securityholder who is:

 

•

a citizen or resident of the United States;

 

•

a corporation, or other entity taxable as a corporation, created under the laws of the United States or any of its political subdivisions;

 

•

a trust, if a US court is able to exercise primary supervision over the administration of that trust and one or more US fiduciaries have the authority to control all substantial decisions of that trust; or

 

•

an estate that is subject to US federal income tax on its income regardless of its source.

Tendering US Securityholders. The tendering of Rinker Securities in exchange for the cash consideration offered by Bidder will constitute a taxable sale of those Rinker Securities for US federal income tax purposes. A US Securityholder generally will recognise gain or loss equal to the difference, if any, between the US dollar value of the cash received by that US Securityholder pursuant to the terms of the Offer and that US Securityholder’s tax basis in the Rinker Securities surrendered. Gain or loss will be determined on the date of the taxable sale and will be calculated separately for each block of Rinker Securities surrendered pursuant to the terms of the Offer (ie, Rinker Securities acquired at the same cost in a single transaction).

For a cash basis US Securityholder who elects to receive Australian dollars pursuant to the Offer, the amount realised will be based on the US dollar value of the Australian dollars received with respect to the Rinker Securities tendered as determined on the settlement date of the taxable sale of those Rinker Securities. An accrual basis US Securityholder who elects to receive Australian dollars pursuant to the Offer may elect the same treatment required of a cash basis US Securityholder with respect to a taxable sale of his or her Rinker Securities, provided, however, that the election is applied consistently from year to year. That election may not be changed without the consent of the US Internal Revenue Service. An accrual basis US Securityholder who does not elect to be treated like a cash basis US Securityholder for this purpose may have a so-called foreign currency gain or loss for US federal income tax purposes because of differences between the US dollar value of the Australian dollars received prevailing on the date of the taxable sale of Rinker Securities and the date of the payment. That foreign currency gain or loss, if any, generally will constitute US source gain or loss for purposes of calculating the foreign tax credit limitations. That foreign currency gain or loss would be ordinary in nature and would be in addition to any gain or loss recognised on the taxable sale of the Rinker Securities.

 

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Subject to the discussion of the “passive foreign investment company” rules in Section 6.3, if a US Securityholder that is an individual has a holding period in his or her Rinker Securities surrendered of more than one year, then his or her gain recognised will constitute long-term capital gain, which will be subject to US federal income tax at a maximum rate of 15%. If, however, the holding period of that US Securityholder in his or her Rinker Securities surrendered is less than one year, then any gain will be subject to US federal income tax at the same graduated rates as ordinary income. The deductibility of capital losses against ordinary income is subject to limitations.

For a US Securityholder that is a corporation, any capital gain recognised is taxed at the same rate as ordinary income, and the use of capital losses to offset ordinary income is subject to limitations.

Gains or losses recognised by a US Securityholder are generally US source gains or losses for purposes of calculating the foreign tax credit limitations.

Non-Tendering US Securityholders. A US Securityholder that does not tender his or her Rinker Securities pursuant to the terms of the Offer will not recognise any gain or loss as a result of the Offer. However, that US Securityholder will recognise gain or loss if his or her Rinker Securities are subsequently purchased for cash in accordance with the “compulsory acquisition” rules of Chapter 6A of the Corporations Act. The receipt of cash by that US Securityholder in exchange for his or her Rinker Securities pursuant to the “compulsory acquisition” rules will result in taxable gain or loss to him or her for US federal income tax purposes based upon the difference, if any, between the US dollar value of the cash received and his or her tax basis in those Rinker Securities.

Subject to the discussion of the “passive foreign investment company” rules in Section 6.3, that gain will constitute capital gain or loss and will constitute long-term capital gain or loss if the US Securityholder has held those Rinker Securities for more than a year. For individuals, any such long-term capital gain will be taxed at a maximum rate of 15%. The deductibility of capital losses against ordinary income is subject to limitations.

Gains or losses recognised pursuant to the “compulsory acquisition” rules will generally constitute US source gains or losses for purposes of calculating the foreign tax credit limitations.

 

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6.3 Passive foreign investment company status of Rinker

In general, the rules in respect of passive foreign investment companies (PFICs) are designed to eliminate the benefit of deferral of US federal income tax that a US Securityholder could derive from investing in certain corporations organised outside the United States that do not distribute all their earnings on a current basis. A non-US corporation will be treated as a PFIC for US federal income tax purposes in any taxable year in which either:

 

(a)

at least 75% of its gross income is “passive income”; or

 

(b)

on average at least 50% of the value of its assets is attributable to assets that produce passive income or are held for the production of passive income.

Passive income for this purpose generally includes, among other things, dividends, interest, certain royalties, rents and gains from commodities and securities transactions. In determining whether a non-US corporation is a PFIC, a pro rata portion of the income and assets of each corporation in which it owns, directly or indirectly, at least a 25% interest (by value) is taken into account.

According to its annual report on Form 20-F for the year ended 31 March 2006, Rinker believes that it has not been a PFIC. However, if Rinker were to be treated as a PFIC, a US Securityholder would be subject to adverse tax consequences unless that US Securityholder has made certain elections under the PFIC rules in respect of Rinker. In particular, any gain recognised by that US Securityholder on the taxable sale of Rinker Securities in accordance with the terms of the Offer would be ordinary income, and not capital gain. In addition, that US Securityholder may be subject to an interest charge.

 

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6.4 US back-up withholding and information reporting

A US Securityholder (other than an exempt person, such as a corporation) that tenders his or her Rinker ADSs may be subject to US information reporting and US back-up withholding at a 28% rate in respect of cash received in accordance with the terms of the Offer. US back-up withholding will not apply, however, to that US Securityholder if he or she:

 

(a)

furnishes a correct taxpayer identification number and certifies that he or she is not subject to US back-up withholding on substitute Form W-9 (or successor form) included with the ADS Letter of Transmittal; or

 

(b)

otherwise establishes an exemption from US back-up withholding.

US back-up withholding is not an additional tax. Amounts withheld under the US back-up withholding rules may be credited against a US Securityholder’s US federal income tax liability, and a refund of any excess amounts withheld under the US back-up withholding rules may be obtained by filing the appropriate form with the US Internal Revenue Service.

 

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7.1 Discussion of currency exchange rates

(a) Offer priced in US dollars

In Rinker’s annual report for the year ended 31 March 2006, Rinker’s directors stated that they believe US dollar reporting represents the best measure of overall Rinker group performance. In recognition of this and consistent with the location of the majority of Rinker’s assets, CEMEX has priced the Offer in US dollars.

When accepting the Offer, you may elect to have the Offer price converted from US dollars into Australian dollars. The actual amount of Australian dollars you receive will depend upon the spot exchange rate available on the day Bidder pays funds to the relevant payment agent for the purpose of paying the Offer price to you (see Section 8.8(d)). This spot exchange rate may be different to the rate that was available on the date you accepted the Offer.

The chart below shows the movements which have occurred in the Reserve Bank Mid-Point Rate between 1 April 2003 (the day after Rinker Shares were first listed on ASX) and the Announcement Date. You should note that the table reflects historical rates only and is not intended to imply the future direction of US dollar to Australian dollar exchange rates.

If there was a significant change in the value of the US dollar compared to the Australian dollar, this may have an impact on the value of the Offer price to you (in Australian dollar terms). If the US dollar appreciated against the Australian dollar, the value of the Offer price may be higher in Australian dollar terms. If, instead, the US dollar depreciated against the Australian dollar, the value of the Offer price may be lower in Australian dollar terms.

(b) Beneficial owners of Rinker Securities

If you are a beneficial owner of Rinker Securities registered in the name of a broker or other nominee and would like your nominee to accept the Offer for your Rinker Securities,

1. Reserve Bank Mid-Point Rate on 27 October 2006.

2. To 27 October 2006.

 

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you should confirm that it has the facilities to receive payment of the Offer price (and transfer that payment to you) in the currency (US dollars or Australian dollars) in which you wish to receive it.

(c) Impact of currency exchange rate movements on information presented in this Bidder’s Statement

Some of the information presented in this Bidder’s Statement, including the premia represented by the Offer price (see the Chairman’s Letter and pages 6 and 8) and the US dollar equivalent of low and high sales prices for Rinker Shares on ASX (see Section 2.4), has been calculated using an exchange rate of US$1.00 to A$0.7645, which represents the Reserve Bank Mid-Point Rate on 27 October 2006. The Reserve Bank Mid-Point Rate is an indication of market value only and may differ from exchange rates quoted by foreign exchange dealers.

This information is sensitive to changes in the value of the US dollar compared to the Australian dollar. The analysis below sets out the potential impact on this information from such changes. Care should be taken in interpreting this analysis as it treats exchange rate fluctuations in isolation of any other events, whereas in many cases other events may have a cumulative or offsetting impact. This analysis is not intended to imply the future direction of US dollar to Australian dollar exchange rates.

Sensitivity analysis – changes in the Reserve Bank Mid-Point Rate

 

Change in FX rate		(0.08	)		(0.04	)		(0.02	)		0.00			0.02			0.04			0.08
Variation		(10.0	)%		(5.0	)%		(2.5	)%		0.0	%		2.5	%		5.0	%		10.0	%
Reserve Bank Mid-Point Rate		0.6881			0.7263			0.7454			0.7645	1		0.7836			0.8027			0.8410
Offer price (US$)		13.00			13.00			13.00			13.00			13.00			13.00			13.00
Offer price (A$)		18.89			17.90			17.44			17.00			16.59			16.19			15.46
1-mth VWAP (A$)		14.13			14.13			14.13			14.13			14.13			14.13			14.13
Premium to 1-mth VWAP		33.7	%		26.7	%		23.4	%		20.4	%		17.4	%		14.6	%		9.4	%
3-mth VWAP (A$)		13.47			13.47			13.47			13.47			13.47			13.47			13.47
Premium to 3-mth VWAP		40.2	%		32.9	%		29.5	%		26.2	%		23.1	%		20.2	%		14.7	%
6-mth VWAP (A$)		14.74			14.74			14.74			14.74			14.74			14.74			14.74
Premium to 6-mth VWAP		28.2	%		21.5	%		18.4	%		15.4	%		12.6	%		9.9	%		4.9	%
Previous close2 (A$)		13.39			13.39			13.39			13.39			13.39			13.39			13.39
Premium to previous close		41.1	%		33.7	%		30.3	%		27.0	%		23.9	%		20.9	%		15.4	%
Broker target share price		15.62			15.62			15.62			15.62			15.62			15.62			15.62
Premium to broker target share price		21.0	%		14.6	%		11.7	%		8.9	%		6.2	%		3.7	%		(1.0	)%

1.

Reserve Bank Mid-Point Rate on 27 October 2006.

2.

Based on the last traded price of Rinker Shares during normal trading on ASX. Following close of normal trading on 27 October 2006, a wire service carried an article speculating on a takeover bid by CEMEX for Rinker as a result of which the post close ASX auction trading system produced a closing price of A$14.70.

 

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7.2 Potential for waiver of conditions

The Offer is subject to the Defeating Conditions (which are set out in Section 8.6), including a minimum acceptance condition (see Section 8.6(a)). Under the terms of the Offer and the Corporations Act, any or all of the Defeating Conditions (other than the conditions in Sections 8.6(b), 8.6(c) and 8.6(d)) may be waived by Bidder prior to the end of the Offer Period.

If an event occurs which results (or would result) in the non-fulfilment of a Defeating Condition, Bidder (in conjunction with CEMEX) might not make a decision as to whether it will either rely on that occurrence, or instead waive the Defeating Condition in respect of that occurrence, until the date for giving a notice on the status of the Defeating Conditions under section 630(3) of the Corporations Act (see Section 8.7(e)). If Bidder decides that it will waive a Defeating Condition, it will announce that decision to ASX in accordance with section 650F of the Corporations Act and in accordance with other applicable law.

If any Defeating Condition is not fulfilled or otherwise not satisfied, and Bidder decides to rely on that occurrence, then any contract resulting from acceptance of the Offer will become void at the end of the Offer Period, and the relevant Rinker Securities will be returned to the holder promptly. If the Defeating Conditions in Sections 8.6(b), 8.6(c) and 8.6(d) are not fulfilled, and Bidder decided to rely on that non-fulfilment, then no contract will be capable of arising at all from acceptance of the Offer.

7.3 Withdrawal rights

You have a right to withdraw your acceptance under the terms of the Offer set out in Sections 8.7(a) and 8.9.

Pursuant to Rule 14d-7 under the US Exchange Act, a Rinker Securityholder who accepts the Offer has the right to withdraw that acceptance at any time before the end of the Offer Period. Additionally, pursuant to section 14(d)(5) of the US Exchange Act, unless previously accepted for payment by Bidder pursuant to the Offer, Rinker Securityholders have the right to withdraw their acceptances after 60 days from the commencement of the Offer. Bidder has sought exemptive relief from Rule 14d-7 under, and section 14(d)(5) of, the US Exchange Act from SEC to permit these withdrawal rights to terminate upon the later of 20 US Business Days following the date of commencement of the Offer and the day on which the Offer becomes wholly unconditional (except for Prescribed Occurrences), subject to Bidder giving at least five US Business Days’ notice of its intention to do so.

In addition to those rights, you will have a statutory withdrawal right under section 650E of the Corporations Act if you have accepted the Offer and the Offer is varied in a way which delays payment to you by more than one month. You will be sent a notice of variation which describes that right, should it accrue.

 

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7.4 CEMEX Shareholder approval

Pursuant to article 47 of the Mexican Securities Law and in accordance with CEMEX’s By Laws, a general meeting of CEMEX’s shareholders must approve any transaction that CEMEX or any of its controlled affiliated companies desires to undertake within a fiscal year, when such transaction represents 20% or more of CEMEX’s consolidated assets (based on the financial results for the immediately preceding quarter).

CEMEX must give at least 15 days’ notice of a general meeting of its shareholders by publishing notice of the meeting in the official gazette of the State of Nuevo León, México or in any of the major newspapers in Monterrey, Nuevo León, México. The attendance quorum for a general meeting of CEMEX’s shareholders is persons representing more than 50% of the CEMEX shares that are entitled to be voted and the resolutions must be approved by a majority of the CEMEX shares represented by those attending.

The CEMEX Board has convened a general meeting of CEMEX’s shareholders to be held on 7 December 2006 for the purpose of considering resolutions which will authorise the acquisition of Rinker Securities by Bidder or any other CEMEX Group member.

7.5 Foreign investment approval – Australia

Bidder is a foreign person under the Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA) because it is wholly-owned by CEMEX, which is itself a foreign person under FATA.

Accordingly, the Offer is subject to the approval or non-objection of the Treasurer, who receives advice from FIRB, under FATA (see Section 8.6(c)). Approval will not be given to the Offer if the Treasurer, on advice from FIRB, considers that the result of the acquisition of Rinker Securities will be contrary to the national interest.

Bidder filed the necessary application, together with a detailed submission, with FIRB on 30 October 2006. CEMEX and Bidder believe that the proposed acquisition of Rinker Securities under the Offer is consistent with the Australian Government’s foreign investment policy, and are not aware of any reason why foreign investment approval would not be given (and therefore why the relevant Defeating Condition would not be satisfied) in due course.

7.6 Antitrust approvals – United States

Under the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) certain acquisition transactions may not be consummated until certain information and documentary materials have been furnished to the Antitrust Division of the United States Department of Justice (the Antitrust Division) and the United States Federal Trade Commission (the FTC) and the applicable waiting period has expired or been terminated. The acquisition of Rinker Securities pursuant to the Offer is subject to the HSR Act. CEMEX expects to file a Pre-merger Notification and Report Form with the Antitrust Division and the FTC in connection with the Offer (the HSR Filing) within two US Business Days after the date of the Offer.

 

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Under the provisions of the HSR Act applicable to the Offer, the purchase of Rinker Securities pursuant to the Offer may not be consummated until the expiration of a 15-day waiting period following the filing by CEMEX, unless the last day of the waiting period ends on a Saturday, Sunday or legal holiday, in which case the waiting period will continue until the next US Business Day. Accordingly, the waiting period under the HSR Act applicable to such purchases of Rinker Securities pursuant to the Offer should expire before the end of the Offer Period, unless such waiting period is extended by a request from the FTC or the Antitrust Division for additional information or documentary material prior to the expiration of the waiting period.

If the FTC or the Antitrust Division were to request additional information or documentary material from CEMEX, the waiting period would expire at 11.59pm, New York City time, on the tenth calendar day after the date of substantial compliance by CEMEX with such request, unless such tenth calendar day is a Saturday, Sunday or legal holiday, in which case the waiting period would expire on the next US Business Day.

If the acquisition of Rinker Securities is delayed pursuant to a request by the FTC or the Antitrust Division for additional information or documentary material pursuant to the HSR Act, the Offer may, but need not, be extended and, in any event, the purchase of and payment for Rinker Securities will be deferred until 10 days after the request is substantially complied with, unless the waiting period is sooner terminated by the FTC and the Antitrust Division. Only one extension of such waiting period pursuant to a request for additional information is authorised by the HSR Act, except by court order. Any extension of the waiting period will not give rise to any withdrawal rights not otherwise provided for in the Offer or by applicable law.

Although Rinker is required to file certain information and documentary material with the Antitrust Division and the FTC in connection with the Offer and may receive a request from the Antitrust Division or the FTC for additional information or documentary material, Rinker’s failure to make such filings or respond to any such questions will not extend the waiting period.

7.7 Index out condition

The purpose of the Defeating Condition in Section 8.6(j) is to protect CEMEX and Bidder against significant downward movements in the S&P/ASX 200 Index which could materially adversely affect the Offer and the commercial viability of an acquisition of Rinker Securities.

The Defeating Condition will not be satisfied, unless waived by Bidder, if at any time on an ASX trading day from the Announcement Date to the end of the Offer Period, the S&P/ASX 200 Index falls below 4,800, which is 11.6% below its last on-market value on the Announcement Date.

 

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7.8 Equal access to information condition

The purpose of the Defeating Condition in Section 8.6(k) is to ensure that Bidder is provided with equality of treatment by Rinker in terms of any non-public information that the Rinker Group makes available to third parties in connection with any proposed transaction competitive with, or may otherwise impact on the Offer.

It is possible that, as a result of the Offer being made, Rinker may seek to engage with third parties to solicit or facilitate an alternative transaction for control of Rinker, or the acquisition of a substantial interest in Rinker Securities or an interest in substantial assets of the Rinker Group. In any such circumstances, the bid condition would require access to be provided to Bidder of any undisclosed information of the Rinker Group that is provided to such a third party, so that the Offer is able to be progressed in an efficient, competitive and informed market.

The provision to Bidder of the information described above would enable Bidder to assess the position of the Offer in the context of any possible competitive transaction.

7.9 Dividends

The purpose of the Defeating Condition in Section 8.6(i) is to protect CEMEX and Bidder from the impact of any distribution (whether by way of dividend, capital reduction or otherwise and whether in cash or in specie) made by Rinker other than interim or final cash dividends which are in line with the Rinker Board’s current dividend policy of distributing around 35% of available net profit after finance and income tax in the form of dividends.

Pursuant to Section 8.8(e), Bidder will be entitled to deduct the amount of any dividend or other distribution (or an amount equal to the value, as reasonably assessed by Bidder including by reference to US dollar to Australian dollar exchange rates prevailing at the time) received by you (or any previous holder of your Rinker Securities) from any consideration otherwise payable to you under the Offer.

If a dividend or other distribution is paid, or announced, by Rinker which breaches, or is likely to breach, the Defeating Condition in Section 8.6(l), Bidder will consider the circumstances then existing at the time (including its rights under Section 8.8(e)) before deciding what, if any, action it will take in relation to the distribution.

 

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7.10 Status and effect of other Defeating Conditions

Sections 7.4 to 7.9 describe matters relevant to the status, purpose and/or effect of the Defeating Conditions in Sections 8.6(b), 8.6(c), 8.6(d), 8.6(j), 8.6(k) and 8.6(l), respectively. This Section describes the status of the remaining Defeating Conditions.

In relation to the Defeating Condition in Section 8.6(f), Bidder is not aware, as at the date of this Bidder’s Statement, of any decision, action, investigation or application which would result in the non-fulfilment of that condition. Nor has Bidder identified, as at the date of this Bidder’s Statement, any particular regulatory actions or approvals which could lead to that condition being triggered or which would be relevant to the Defeating Condition in Section 8.6(e). However, it should be noted that it is not feasible for Bidder to identify in advance all such regulatory actions or related regulatory approvals, as Rinker conducts its business in a number of jurisdictions and Bidder has not had access to detailed information regarding Rinker’s operations and assets in those jurisdictions, and whether they are subject to particular approvals or conditions.

As at the date of this Bidder’s Statement, Bidder is not aware of any events or circumstances which may result in the non-fulfilment of any of the Defeating Conditions in Sections 8.6(g), 8.6(h), 8.6(i), 8.6(m) to 8.6(n). If Bidder becomes aware of any such developments and a breach of the condition arises, Bidder will lodge with ASIC and despatch to Rinker Securityholders a supplementary bidder’s statement as soon as practicable after it has decided whether it will rely on that breach and, in any event, on or before the date for giving notice on the status of the Defeating Conditions (see Section 8.7(e)).

7.11 Social security and superannuation implications of the Offer

Acceptance of the Offer may have implications under your superannuation or pension arrangements or on your social security entitlements. If in any doubt, Rinker Securityholders should seek specialist advice before accepting the Offer.

7.12 Payment restrictions under Australian and US law

Bidder is not aware of any Rinker Securityholders who require any approval referred to in Section 8.8(f) in order to be entitled to receive any consideration under the Offer.

So far as Bidder is aware, unless the Reserve Bank of Australia has given specific approval under the Banking (Foreign Exchange) Regulations 1959 (Cth), payments or transfers to or for the order of prescribed governments (and their statutory authorities, agencies and entities) and, in certain cases, nationals of prescribed countries are subject to certain limited exceptions, restrictions or prohibitions. Based on Bidder’s searches, the prescribed governments, countries and entities are as follows:

 

•

supporters of the former government of the Federal Republic of Yugoslavia;

 

•

ministers and senior officials of the Government of Zimbabwe; and

 

•

certain entities associated with the Democratic People’s Republic of Korea (North Korea).

 

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The places to which, and persons to whom, the Charter of the United Nations Act 1945 (Cth) currently apply include the Kurdistan People’s Congress, the People’s Congress of Kurdistan, Kongra Gel, and any person or entity listed as a terrorist by the Australian Minister for Foreign Affairs in the Commonwealth of Australia Gazette.

The places to which, and persons to whom, the Charter of the United Nations (Terrorism and Dealing with Assets) Regulations 2002 (Cth) currently apply include the Taliban, Usama bin Laden (also known as Osama bin Laden), a member of the Al-Qaida organisation (also known as the Al-Qaeda organisation), and any person named on the list maintained pursuant to United Nations Resolution 1390 (2002) by the Committee of the United Nations Security Council established pursuant to United Nations Resolution 1267 (1999).

The places to which and persons to whom the Charter of the United Nations (Sanctions – Afghanistan) Regulations 2001 (Cth) currently apply include a Bin Laden Entity and a Taliban Entity (as those terms are defined in those regulations).

The Iraq (Reconstruction and Repeal of Sanctions) Regulations 2003 (Cth) apply in respect of assets of the previous government of Iraq, and assets removed from Iraq or acquired by or on behalf of a senior official of the previous government of Iraq or their immediate families. Transactions with such assets (including, if relevant, Rinker Securities) require Ministerial approval.

Financial restrictions also exist relating to certain entities associated with Liberia pursuant to United Nations Resolution 1532 (2004) and the Charter of the United Nations (Sanctions – Liberia) Regulations 2002 (Cth) and are pending relating to the Democratic Republic of Congo and Sudan pursuant to United Nations Resolution 1596 (2005) and United Nations Resolution 1591 (2005), respectively.

The places to which and the persons to whom the United States Office of Foreign Asset Control Specially Designated National and Blocked Persons List currently apply include Cuba, Iran, Iraq, Libya, North Korea and Zimbabwe, and any person named on the list maintained by the Office of Foreign Asset Control of the US Department of the Treasury.

Bidder will not transfer consideration for Rinker Securities in violation of the United States Cuban Assets Control Regulations, Iranian Assets Control Regulations, Burmese Sanctions Regulations, Sudanese Sanctions Regulations, Syrian Sanctions Regulations, Iraqi Sanctions Regulations, Terrorist List Governments Sanctions Regulations, or any other US federal regulation prohibiting the transfer of funds to designated entities.

 

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7.13 Withholding of consideration

Bidder is not currently aware of any amounts that are or would be treated as withholding amounts under Section 8.8(g). However, it is possible that Bidder may become aware of an obligation in this regard after the date of this Bidder’s Statement.

For example, under section 255 of the Income Tax Assessment Act 1936 (Cth), the Australian Taxation Office may notify Bidder that all or part of the consideration otherwise payable under the Offer to Rinker Securityholders who are non-residents of Australia is to be retained by Bidder, or paid to the Australian Taxation Office, instead of being paid to the relevant Rinker Securityholder. Similarly, under section 260-5 of Schedule 1 to the Taxation Administration Act 1953 (Cth), the Australian Taxation Office may require Bidder to pay to the Australian Taxation Office all or part of the consideration otherwise payable under the Offer to Rinker Securityholders who owe tax-related debts to the Australian Government.

In general, no US withholding taxes will apply to the payment of consideration to a US Securityholder pursuant to the Offer. However, the US Depositary will be required to withhold 28% of the consideration payable under the Offer pursuant to the US back-up withholding rules if a US Securityholder who tenders his or her Rinker ADSs fails to provide certain US tax information and does not otherwise qualify for an exemption from the US back-up withholding. (For a more detailed discussion of the US back-up withholding rules, see Section 6.4.)

7.14 No collateral benefits

Neither Bidder nor any of its associates has, in the four months before the date of this Bidder’s Statement, or in the period between the date of this Bidder’s Statement and the date of the Offer, given, offered to give or agreed to give a benefit which is not offered to all Rinker Securityholders under the Offer to another person which was likely to induce the other person (or an associate) to accept the Offer or dispose of Rinker Securities.

7.15 No escalation agreements

Neither Bidder nor any of its associates has entered into any escalation agreement that is prohibited by section 622 of the Corporations Act.

7.16 Fees and expenses

Except as set out below and in this Section, Bidder will not pay any fees or commissions to any person to make solicitations or recommendations in connection with the Offer.

Bidder may offer to pay a commission to brokers who solicit acceptances of the Offer from their clients, but has made no final decision in relation to the matter at this stage.

If a commission is offered, it will be payable to brokers only and subject to the condition that no part of the fee will be able to be passed on, or paid, to Rinker Securityholders.

If and when Bidder decides to offer such a commission to any broker, it will make an announcement to ASX disclosing the commission rate and terms on which it is payable.

 

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It is Bidder’s intention that, if and when an offer of commission has been made to any broker by Bidder, the commission arrangement will remain in place for the balance of the Offer Period and the amount of the commission offered will not be increased during the Offer Period.

Bidder will pay the fees charged by JPMorgan, as depositary for Rinker’s ADR program for Rinker ADSs tendered into the Offer, including any fees charged by the depositary for Rinker’s ADR program to redeposit ordinary shares underlying tendered Rinker ADSs that have been previously withdrawn by Bidder from deposit with the depositary for Rinker’s ADR program in the event that the Offer is not consummated. Rinker Securityholders will bear all other fees and expenses which may be incurred as a result of their acceptance of the Offer.

CEMEX has retained Citigroup to act as its lead financial adviser in connection with the Offer. Citigroup will receive reasonable and customary compensation for its services as lead financial adviser, will be reimbursed for certain reasonable out-of-pocket expenses and will be indemnified against certain liabilities in connection therewith, including certain liabilities under the US federal securities laws. The Citigroup Group has also, in the past, rendered various investment banking and financial advisory services to CEMEX for which it has received customary compensation.

CEMEX has retained JPMorgan Australia to act as its co-financial adviser in connection with the Offer. JPMorgan Australia will receive reasonable and customary compensation for its services as co-financial adviser, will be reimbursed for certain reasonable out-of-pocket expenses and will be indemnified against certain liabilities in connection therewith, including certain liabilities under the US federal securities laws. The JPMorgan Group has also, in the past, rendered various investment banking and financial advisory services to CEMEX for which it has received customary compensation.

Bidder has retained Computershare Investor Services Pty Limited and Computershare Trust Company, N.A. to act as Australian Registry for the Offer and US Depositary for the Offer, respectively. Neither company has been retained to make solicitations or recommendations in connection with these roles. They will receive reasonable and customary compensation for their services, will be reimbursed for certain reasonable out-of-pocket expenses and will be indemnified against certain liabilities in connection therewith, including certain liabilities under the US federal securities laws.

CEMEX has retained Georgeson Shareholder Communications Australia Pty Ltd to operate the CEMEX Offer Information Line in Australia and for retail investors in the United States. Georgeson has not been retained to make solicitations or recommendations in connection with this role. Georgeson will receive reasonable and customary compensation for its services, will be reimbursed for certain reasonable out-of-pocket expenses and will be indemnified against certain liabilities in connection therewith, including certain liabilities under the US federal securities laws.

 

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CEMEX has retained Innisfree M&A Incorporated to operate the CEMEX Offer Information Line for banks, brokers and other wholesale investors in the United States. Innisfree has not been retained to make solicitations or recommendations in connection with this role. Innisfree will receive reasonable and customary compensation for its services, will be reimbursed for certain reasonable out-of-pocket expenses and will be indemnified against certain liabilities in connection therewith, including certain liabilities under the US federal securities laws.

7.17 Consents

This Bidder’s Statement contains statements made by, or statements based on statements made by, CEMEX. CEMEX has consented to being named in this Bidder’s Statement and to the inclusion of:

 

•

each statement it has made; and

 

•

each statement which is said in this Bidder’s Statement to be based on a statement it has made,

in the form and context in which the statements have been included, and has not withdrawn that consent.

The following persons have given, and have not at the date of this Bidder’s Statement withdrawn, their written consent to being named in this Bidder’s Statement:

 

		Allens Arthur Robinson		Australian Legal Adviser to CEMEX
		Citigroup Global Markets Australia Pty Limited		Lead Financial Adviser to CEMEX
		Computershare Investor Services Pty Limited		Australian Registry for the Offer
		Computershare Trust Company, N.A.		US Depositary for the Offer
		Cravath, Swaine & Moore LLP		US Legal Adviser to CEMEX
		Innisfree M&A Incorporated		US Information Agent
		J.P. Morgan Australia Limited		Co-Financial Adviser
		walterwakefield Pty Ltd		Designer of this Bidder’s Statement

None of these persons has caused or authorised the issue of this Bidder’s Statement or has in any way been involved in the making of the Offer. The Offer is made by Bidder. Each of these persons, to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any part of this Bidder’s Statement.

In addition, this Bidder’s Statement includes statements which are made in, or based on statements made in, documents lodged with ASIC or given to ASX. Under the terms of ASIC Class Order 01/1543, the persons making those statements are not required to consent to, and have not consented to, the inclusion of those statements, or of statements based on those statements, in this Bidder’s Statement.

 

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7.18 ASIC modifications and exemptions

Class Orders

ASIC has published various “Class Order” instruments providing for modifications and exemptions that apply generally to all persons, including Bidder, in relation to the operation of Chapter 6 of the Corporations Act.

Among others, Bidder and CEMEX have relied on the modification to section 636(3) of the Corporations Act set out in paragraph 11 of ASIC Class Order 01/1543 “Takeover Bids” to include in this Bidder’s Statement references to certain statements by Rinker without obtaining its consent. The relevant statements were respectively taken from:

 

•

Rinker’s daily share buy back notice on appendix 3E dated 25 October 2006, which was filed by Rinker with ASX on 26 October 2006;

 

•

a presentation delivered by senior executives of Rinker to institutional analysts and fund managers in September 2006 which was filed by Rinker with ASX on 22 September 2006;

 

•

Rinker’s full financial report, concise annual report and annual report on Form 20-F which were filed by Rinker with ASX on 23 May 2006;

 

•

a presentation entitled “Results presentation for the year ended March 2006”, which was filed by Rinker with ASX on 11 May 2006; and

 

•

the “AGM Address to Shareholders”, delivered by John Morschel and filed by Rinker with ASX on 18 July 2006.

As required by Class Order 01/1543, Bidder will make available a copy of these documents (or relevant extracts of these documents), free of charge, to Rinker Securityholders who request them during the Bid Period. To obtain a copy of these documents (or the relevant extracts), Rinker Securityholders may telephone the CEMEX Offer Information Line.

Specific relief

ASIC has modified the application of or exempted Bidder from compliance with provisions of the Corporations Act in relation to the Offer, the effect of which is:

 

(a)

to permit Rinker ADSs to be treated as securities in the bid class, along with Rinker Shares;

 

(b)

to ensure that the Offer Period remains open for the period required under Rule 14e-1 of the Securities Act;

 

(c)

to clarify that any statutory withdrawal rights which accrue under the Corporations Act apply to securityholders who have accepted the Offer at the time those rights accrue; and

 

(d)

to delay disclosure of any relevant interests held or dealings in Rinker Securities by certain CEMEX Group members.

 

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7.19 SEC relief

Bidder is requesting from SEC certain exemptions from sections of, and rules under, the US Exchange Act, as described below with respect to the Offer:

 

(a)

Rule 14e-5 under the US Exchange Act, among other things, prohibits a person (and its affiliates) making a tender offer for any equity securities from, directly or indirectly, purchasing or making any arrangement to purchase those securities, or any security which is immediately convertible into or exchangeable for such securities, except pursuant to the Offer. This prohibition applies from the time the Offer is publicly announced until the end of the Offer Period. Bidder has applied to SEC for exemptive relief from the provisions of Rule 14e-5 under the US Exchange Act, in order to permit Bidder, from the date of the grant of exemptive relief during the Offer Period and as permitted by the Corporations Act, to purchase Rinker Shares outside the Offer, subject to conditions including that Bidder will not acquire any Rinker Securities in the US otherwise than pursuant to the Offer.

 

(b)

Pursuant to Rule 14d-7 under the US Exchange Act, a Rinker Securityholder who accepts the Offer has the right to withdraw that acceptance at any time before the end of the Offer Period. Additionally, pursuant to section 14(d)(5) of the US Exchange Act, unless previously accepted for payment by Bidder pursuant to the Offer, Rinker Securityholders have the right to withdraw their acceptances after 60 days from the commencement of the Offer. Bidder has sought exemptive relief from section 14(d)(5) of, and Rule 14d-7 under, the US Exchange Act to permit Bidder to terminate withdrawal rights under the Offer upon the later of 20 US Business Days following the commencement of the Offer and the day on which the Offer becomes wholly unconditional except for Prescribed Occurrences (ie, all other conditions of the Offer have been satisfied or, where permissible, waived), subject to Bidder giving at least five US Business Days’ notice of its intention to so.

7.20 Other material information

Except as disclosed in this Bidder’s Statement, there is no other information that:

 

•

is material to the making of the decision by a Rinker Securityholder whether to accept the Offer; and

 

•

is known to Bidder,

which has not previously been disclosed to Rinker Securityholders.

 

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8.1 Offer

 

(a)

Bidder offers to acquire all your Rinker Securities on the terms and subject to the conditions set out in this Section 8.

 

(b)

The consideration offered for each of your Rinker Shares is US$13.00 in cash and for each of your Rinker ADSs is US$65.00 in cash. You may elect to receive the consideration due to you in US dollars or Australian dollars – see Section 8.8(d). The consideration under this Offer is subject to reduction in accordance with Section 8.8(e). (c) If Bidder acquires your Rinker Securities under this Offer, it will also be entitled to all Rights in respect of your Rinker Securities.

 

(d)

This Offer is dated 14 November 2006.

8.2 Offer Period

 

(a)

This Offer will remain open for acceptance during the period that commences on the date of this Offer and ends at 7pm (Sydney time) on 27 December 2006 / 3am (New York time) on 27 December 2006, unless it is withdrawn or extended in accordance with the Corporations Act and the US Exchange Act.

 

(b)

Bidder may, in accordance with the Corporations Act and the US Exchange Act but subject to compliance with the procedures specified in Section 8.11(c), at any time and from time to time prior to the end of the Offer Period, extend the period during which this Offer remains open for acceptance, by giving written notice of the extension to the US Depositary and by making a public announcement of the extension, as described below, and by following the procedures prescribed by section 650C of the Corporations Act. Subject to any rights you may have to withdraw your acceptance of this Offer, Bidder also reserves the right to retain until the end of the Offer Period Rinker Securities which have been tendered during any periods for which this Offer is extended. During any such extension, your Rinker Securities previously tendered and not withdrawn will remain subject to the terms and conditions of this Offer, subject to any rights you may have to withdraw your acceptance of this Offer (see Section 8.9). Under no circumstance will interest be paid on the Offer price for tendered Rinker Securities, whether or not this Offer is extended. For US tender offer rules purposes, you should be aware that Bidder does not currently intend to make a subsequent offering period available after the close of the Offer Period.

8.3 How to accept this Offer

 

(a)

Accept for all your Rinker Securities

Subject to Section 8.10(c), you may only accept this Offer for all your Rinker Securities.

 

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(b)

Rinker Shares – Issuer Sponsored Holdings

If your Rinker Shares are held in an Issuer Sponsored Holding (in which case your Securityholder Reference Number will commence with “I”), to accept this Offer in respect of those Rinker Shares you must:

 

(i)

complete and sign the enclosed blue Share Acceptance Form in accordance with the instructions on it; and

 

(ii)

return the Share Acceptance Form (where applicable, using the enclosed reply paid envelope if you wish), together with all other documents required by the instructions on it, so that they are received before the end of the Offer Period at one of the addresses indicated on the Share Acceptance Form.

 

(c)

Rinker Shares – CHESS Holdings

If your Rinker Shares are held in a CHESS Holding (in which case your Holder Identification Number will commence with “X”), to accept this Offer in respect of those Rinker Shares you must either:

 

(i)

instruct your Controlling Participant, in accordance with the sponsorship agreement between you and the Controlling Participant, to initiate acceptance of this Offer in accordance with Rule 14.14 of the ASTC Settlement Rules, so as to be effective before the end of the Offer Period; or

 

(ii)

complete, sign and return the enclosed blue Share Acceptance Form (where applicable using the enclosed reply paid envelope if you wish) in accordance with the instructions on it, together with all other documents required by those instructions, so that they are received before the end of the Offer Period at one of the addresses indicated on the Share Acceptance Form. This will authorise Bidder to initiate, or alternatively to instruct your Controlling Participant to initiate, acceptance of this Offer on your behalf in accordance with Rule 14.14 of the ASTC Settlement Rules before the end of the Offer Period. You must ensure that the Share Acceptance Form (and the other required documents) are received in sufficient time for Bidder to give instructions to your Controlling Participant, and for your Controlling Participant to carry out those instructions, before the end of the Offer Period.

However, if you are the Controlling Participant in respect of your Rinker Shares, to accept this Offer you must yourself initiate the acceptance in accordance with Rule 14.14 of the ASTC Settlement Rules before the end of the Offer Period.

 

(d)

Rinker ADSs

This Section should be read together with the instructions on the enclosed yellow ADS Letter of Transmittal. The provisions of this Section are incorporated in, and form a part of, the relevant ADS Letter of Transmittal. The instructions printed on the ADS Letter of Transmittal form part of the terms of this Offer as it relates to Rinker ADSs. If you are either a record or beneficial holder of Rinker ADSs, this Bidder’s Statement, the ADS Letter of Transmittal, the ADS Notice of Guaranteed Delivery and other relevant materials will be mailed or furnished to you. If you would like to receive additional copies of that documentation, please call the CEMEX Offer Information Line to request those additional copies. You can accept this Offer for your Rinker ADSs by following the instructions below.

 

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Rinker ADSs held in certificated form

If you hold your Rinker ADSs in certificated form, you will need to do each of the following before the end of the Offer Period:

 

•

complete and sign the ADS Letter of Transmittal in accordance with its instructions; and

 

•

return the properly completed and duly executed ADS Letter of Transmittal, together with the ADRs evidencing your Rinker ADSs and any other documents specified in the ADS Letter of Transmittal, to the US Depositary (where applicable using the enclosed reply paid envelope if you wish), so that they are received before the end of the Offer Period at one of the addresses indicated on the ADS Letter of Transmittal.

If you hold your Rinker ADSs in certificated form and you fail to properly deliver a completed and executed ADS Letter of Transmittal, together with your ADRs and any other documents specified in the ADS Letter of Transmittal to the US Depositary before end of the Offer Period, your tender will not be valid and your Rinker ADSs will not be accepted for payment, unless you follow the procedures for guaranteed delivery in the manner described below.

Rinker ADSs held through a financial intermediary

If you hold your Rinker ADSs in book-entry form in a brokerage or custodian account through an agent, including a broker, dealer, bank, trust company or other financial intermediary, you will need to timely instruct your agent to take the following actions before the end of the Offer Period:

 

•

make a book-entry transfer of your Rinker ADSs to the account established by the US Depositary at The Depository Trust Company (DTC) for the purpose of receiving these transfers; and

 

•

either:

 

•

return a properly completed and duly executed ADS Letter of Transmittal (with any required signature guarantees) and any other documents required by the ADS Letter of Transmittal to the US Depositary (where applicable using the enclosed reply paid envelope if you wish), so that they are received before the end of the Offer Period at one of the addresses indicated on the ADS Letter of Transmittal; or

 

•

transmit an Agent’s Message via DTC’s confirmation system to the US Depositary stating that DTC has received an express acknowledgment from a participant in DTC that the participant tendering Rinker ADSs has received and agrees to be bound by the terms and conditions of this Offer, so that they are received before the end of the Offer Period at one of the addresses indicated on the ADS Letter of Transmittal.

If you hold your Rinker ADSs in book-entry form and you fail to timely instruct your agent to tender your Rinker ADSs on your behalf, your tender will not be valid and your Rinker ADSs will not be accepted for payment, unless you follow the procedures for guaranteed delivery in the manner described below.

 

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The US Depositary will establish an account at DTC with respect to the Rinker ADSs held in book-entry form for purposes of this Offer. Any financial institution that is a participant in DTC’s systems may make book-entry delivery of Rinker ADSs by causing DTC to transfer the Rinker ADSs into the US Depositary’s account at DTC. This must be done in accordance with DTC’s procedure for book-entry transfers. Please refer to the materials forwarded to you by your agent to determine the manner in which you can timely instruct your agent to take these actions.

Required documents must be transmitted to and received by the US Depositary at its address indicated on the ADS Letter of Transmittal. Delivery of documents to DTC in accordance with DTC’s procedures does not constitute delivery to the US Depositary.

The term Agent’s Message means a message, transmitted by DTC to, and received by, the US Depositary and forming a part of the book-entry confirmation, which states that DTC has received an express acknowledgment from the participant in the DTC’s systems tendering an interest in the Rinker ADSs, that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that Bidder may enforce such agreement against the participant.

Signature Guarantees

Your signature on the ADS Letter of Transmittal in some circumstances must be guaranteed by a financial institution that is a member in good standing of a recognised medallion program approved by the Securities Transfer Association, Inc., including the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program and the Stock Exchange Medallion Program. These institutions are commonly referred to as eligible institutions. Most banks, savings and loans associations and brokerage houses are participants in these programs and therefore are eligible institutions. You do not need to have your signature guaranteed by an eligible institution if:

 

•

you are the registered holder of Rinker ADSs tendered and you have not completed the box entitled “Special Payment Instructions” in the ADS Letter of Transmittal; or

 

•

you are tendering Rinker ADSs for the account of an eligible institution.

If the Rinker ADSs are registered in the name of a person other than the signatory of the ADS Letter of Transmittal, then the tendered Rinker ADRs must be endorsed or accompanied by appropriate stock powers. The stock powers must be signed exactly as the name or names of the registered owner or owners appear on the ADRs, with the signature on the ADRs or stock powers guaranteed as described above.

Procedures for Guaranteed Delivery of ADSs

If for any reason you cannot complete the tender of your Rinker ADSs in the manner set forth above on a timely basis, you may nevertheless tender your Rinker ADSs provided that all of the following conditions are satisfied:

 

•

the tender is made by or through an eligible institution;

 

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•

a properly completed and duly executed ADS Notice of Guaranteed Delivery, in the form provided by Bidder, is received by the US Depositary prior to the expiration of the acceptance period of the Offer; and

 

•

within three NYSE trading days after the date of the receipt of the ADS Notice of Guaranteed Delivery by the US Depositary, the following must be received by the US Depositary at one of the addresses shown on the last page of this Bidder’s Statement:

 

•

in the case of Rinker ADSs held in certificated form, the ADRs evidencing your Rinker ADSs, in proper form for transfer, together with a properly completed and duly executed ADS Letter of Transmittal (with any required signature guarantees) and any other documents required by the ADS Letter of Transmittal; or

 

•

in the case of Rinker ADSs held through a financial intermediary, confirmation of a book-entry transfer of your Rinker ADSs to the account of the US Depositary at DTC, together with (i) a properly completed and duly executed ADS Letter of Transmittal (with any required signature guarantees) or an Agent’s Message and (ii) any other documents required by the ADS Letter of Transmittal.

The ADS Notice of Guaranteed Delivery must be delivered to the US Depositary at one of the addresses shown on the last page of this Bidder’s Statement. The ADS Notice of Guaranteed Delivery must in all cases include a guarantee by an eligible institution in the form set forth in the ADS Notice of Guaranteed Delivery provided by Bidder.

If you are in any doubt about the procedures for guaranteed delivery or tendering your Rinker ADSs, please telephone the CEMEX Offer Information Line.

IF AN ADR EVIDENCING AN ADS HAS BEEN TENDERED BY A HOLDER OF ADSs, THEN THE RINKER SHARES REPRESENTED BY SUCH ADSs MAY NOT BE TENDERED INDEPENDENTLY OR IF RINKER SHARES HAVE BEEN TENDERED THEN NO RINKER ADSs REPRESENTING SUCH RINKER SHARES MAY BE TENDERED INDEPENDENTLY.

HOLDERS OF RINKER ADSs ARE ADVISED THAT THE METHOD CHOSEN TO SEND ADR CERTIFICATES, IF ANY, AND THE PROPER COMPLETION OF AND DELIVERY OF THE ADS LETTER OF TRANSMITTAL AND OTHER DOCUMENTS, INCLUDING DELIVERY THROUGH DTC, IS AT THE OPTION AND RISK OF EACH TENDERING HOLDER AND THE DELIVERY THEREBY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE US DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE DELIVERY PRIOR TO THE END OF THE OFFER PERIOD.

All questions as to the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Rinker Securities will be determined by Bidder in its sole discretion, which determination shall be final and binding on all parties. Bidder reserves the right to reject any and all tenders determined by it not to be in proper form or the acceptance for payment of which may be unlawful. Bidder also reserves the right to waive any defect or irregularity in the tender of any Rinker Securities of any particular Rinker Securityholder. No tender of Rinker Securities will deemed to have been validly made until

 

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all defects and irregularities have been cured or waived to the satisfaction of Bidder. None of CEMEX or Bidder (or any of their respective affiliates or assigns), the US Depositary, the US Information Agent or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification.

8.4 Status and effect of the Share Acceptance Form and ADS Letter of Transmittal

(a) Status of Share Acceptance Form and ADS Letter of Transmittal

The Share Acceptance Form and ADS Letter of Transmittal which accompanies this Bidder’s Statement forms part of this Offer, and the instructions on the Share Acceptance Form and ADS Letter of Transmittal must be followed in using it to accept this Offer.

(b) Effect of Share Acceptance Form and ADS Letter of Transmittal

By signing and returning the Share Acceptance Form or ADS Letter of Transmittal, as applicable, in accordance with Section 8.3, you irrevocably authorise Bidder and its nominees:

 

(i)

to rectify any errors in, or omissions from, the Share Acceptance Form or ADS Letter of Transmittal that are necessary to make it an effective acceptance of this Offer or to enable registration of the transfer of all your Rinker Securities to Bidder; and

 

(ii)

(in respect of any of your Rinker Shares in a CHESS Holding) to:

 

(A)

initiate, or alternatively instruct your Controlling Participant to initiate, acceptance of this Offer in respect of all such Rinker Shares in accordance with Rule 14.14 of the ASTC Settlement Rules; and

 

(B)

give any other instructions concerning those Rinker Shares to your Controlling Participant on your behalf under the sponsorship agreement between you and the Controlling Participant.

(c) Validation of Share Acceptance Form and ADS Letter of Transmittal

Notwithstanding Section 8.3, Bidder may treat the receipt by it of a signed Share Acceptance Form or ADS Letter of Transmittal, as applicable, before the end of the Offer Period as valid even though it does not receive the other documents required by the instructions on the Share Acceptance Form or ADS Letter of Transmittal or there is not compliance with any one or more of the other requirements for acceptance. If Bidder does treat such a Share Acceptance Form or ADS Letter of Transmittal as valid, subject to Section 8.8, Bidder will not be obliged to give the consideration to you until Bidder receives all those documents and all of the requirements for acceptance referred to in Section 8.3 and in the Share Acceptance Form or ADS Letter of Transmittal, as applicable, have been met.

 

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8.5 Agreement resulting from acceptance

By signing and returning the Share Acceptance Form (in respect of your Rinker Shares), the ADS Letter of Transmittal (in respect of your Rinker ADSs), initiating or causing acceptance of this Offer under the ASTC Settlement Rules (in respect of your Rinker Shares) or transmitting an Agent’s Message (in respect of your Rinker ADSs) in accordance with Section 8.3:

 

(a)

you accept this Offer in respect of all your Rinker Securities at the date your acceptance is processed (even if the number of Rinker Shares specified on the Share Acceptance Form or the number of Rinker ADSs specified on the ADS Letter of Transmittal differs from the number of your Rinker Shares or your Rinker ADSs (as applicable) and agree to the terms and conditions of this Offer;

 

(b)

subject to all of the Defeating Conditions being fulfilled or waived prior to the end of the Offer Period, you transfer, and (in the case of Rinker Shares) consent to the transfer in accordance with the ASTC Settlement Rules of, all your Rinker Securities to Bidder in accordance with this Offer and (in the case of Rinker Shares) subject to the conditions of the constitution of Rinker on which they were held immediately before your acceptance of this Offer (and Bidder agrees to take those Rinker Shares subject to those conditions);

 

(c)

you represent and warrant to Bidder that, at the time of your acceptance and at the time the transfer of your Rinker Securities to Bidder is registered, all your Rinker Securities are and will be fully paid, and Bidder will acquire good title to them and full beneficial ownership of them free from all Encumbrances;

 

(d)

subject to all of the Defeating Conditions being fulfilled or waived prior to the end of the Offer Period, you irrevocably appoint Bidder and each of its directors and nominees severally as your attorney to exercise all powers and rights that you have as the registered holder of your Rinker Securities, including:

 

(i)

attending any meeting of Rinker, and voting in respect of your Rinker Shares, proposing or seconding any motion, and demanding a poll for any vote at, any such meeting;

 

(ii)

requisitioning the convening of any general meeting of Rinker and convening a general meeting pursuant to any such requisition; and

 

(iii)

signing any form, notice, instrument or other document (including any proxy appointment) relating to your Rinker Securities.

Such appointment will terminate on the earlier of the withdrawal of your acceptance of this Offer and the end of the Offer Period or, if all Defeating Conditions have been fulfilled or waived, the registration of Bidder as the holder of your Rinker Securities;

 

(e)

you authorise the US Depositary to surrender your Rinker ADSs to the depositary for Rinker’s ADR program and instruct such depositary to deliver the underlying Rinker Shares to Bidder;

 

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(f)

you agree that, in exercising the powers and rights conferred by the power of attorney in Section 8.5(d), each attorney may act in the interests of Bidder as the intended registered holder and beneficial owner of your Rinker Securities;

 

(g)

except as contemplated by Section 8.5(d) and while the appointment in that Section continues and is in effect, you agree not to attend or vote in person or by proxy, attorney or corporate representative at any meeting of Rinker, or to exercise or purport to exercise (in person or by proxy, attorney, or corporate representative or otherwise) any of the powers conferred by the power of attorney in Section 8.5(d);

 

(h)

you irrevocably authorise and direct Rinker to pay to Bidder, or to account to Bidder for, all Rights in respect of your Rinker Securities subject, however, to any such Rights received by Bidder being accounted for by Bidder to you if any contract resulting from your acceptance of this Offer is rescinded or rendered void;

 

(i)

subject to all of the Defeating Conditions being fulfilled or waived prior to the end of the Offer Period, you irrevocably authorise Bidder and its nominees to do all things necessary to transfer your Rinker Securities to Bidder (including to cause a message to be transmitted in accordance with ASTC Settlement Rule 14.17.1 so as to transfer your Rinker Shares, if held in a CHESS Holding, to the Takeover Transferee Holding), even if Bidder has not at that time paid or provided the consideration due to you under this Offer; and

 

(j)

you agree to indemnify Bidder and each of its agents in respect of any claim or action against it or any loss, damage or liability whatsoever incurred by it as a result of you not producing your Holder Identification Number or your Securityholder Reference Number or in consequence of the transfer of your Rinker Shares to Bidder being registered by Rinker without production of your Holder Identification Number or your Securityholder Reference Number.

8.6 Defeating Conditions

(a) Minimum acceptance

At or before the end of the Offer Period, Bidder has relevant interests in at least 90% of Rinker Shares.

(b) CEMEX shareholder approval

Before the end of the Offer Period, all resolutions necessary to approve, effect and implement the Offer and the acquisition of Rinker Securities by Bidder or any other CEMEX Group member are passed by the requisite majority of CEMEX shareholders at a general shareholders’ meeting of CEMEX.

(c) Foreign investment approval – Australia

One of the following occurs before the end of the Offer Period:

 

(i)

the Treasurer or his agent advises Bidder to the effect that there are no objections to the acquisition of up to all the Rinker Securities by Bidder (by any means permitted by the Corporations Act) in terms of the Commonwealth Government’s foreign investment policy;

 

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(ii)

no order is made in relation to this Offer under section 22 of FATA within a period of 40 days after Bidder has notified the Treasurer that it proposes to acquire Rinker Securities under this Offer, and no notice is given by the Treasurer to Bidder during that period to the effect that there are any objections to the acquisition of the Rinker Securities by Bidder (by any means permitted by the Corporations Act) in terms of the Commonwealth Government’s foreign investment policy; or

 

(iii)

where an order is made under section 22 of FATA, a period of 90 days has expired after the order comes into operation and no notice has been given by the Treasurer to Bidder during that period to the effect that there are any objections to the acquisition of the Rinker Securities by Bidder (by any means permitted by the Corporations Act) in terms of the Commonwealth Government’s foreign investment policy.

(d) Antitrust approvals – United States

Before the end of the Offer Period, all applicable waiting periods (including any extensions) under the HSR Act shall have expired or been otherwise terminated in respect of this Offer.

(e) Other regulatory approvals

Before the end of the Offer Period, Bidder receives all Approvals (other than those referred to in Sections 8.6(c) and 8.6(d)):

 

(i)

that are necessary to permit this Offer to be lawfully made to, and accepted by, Rinker Securityholders; or

 

(ii)

that are required as a result of this Offer or the successful acquisition of Rinker Securities and are necessary for the continued operation of the business of the Rinker Group, or of the CEMEX Group, substantially on the same terms as the relevant business was conducted as at the date of this Bidder’s Statement,

in each case on an unconditional basis or on the basis of conditions that impose only non-material requirements incidental to the Approval, and, at the end of the Offer Period, all of those Approvals remain in full force and effect in all respects and are not subject to any notice or indication of intention to revoke, suspend, restrict, modify or not renew those Approvals.

(f) No regulatory actions

Between the Announcement Date and the end of the Offer Period:

 

(i)

there is not in effect any preliminary or final decision, order or decree issued by a Public Authority;

 

(ii)

no action or investigation is announced, commenced or threatened by any Public Authority; and

 

(iii)

no application is made to any Public Authority (other than by Bidder or any of its associates),

 

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in consequence of or in connection with this Offer (other than an application to, or a decision or order of, ASIC or Takeovers Panel for the purpose, or in exercise, of the powers and discretions conferred on it by the Corporations Act or SEC for the purpose, or in the exercise, of the powers and discretions conferred on it by the US Exchange Act) which restrains or prohibits or impedes, or threatens to restrain, prohibit or impede, the making of this Offer or the acquisition of Rinker Securities under this Offer or the completion of any transaction contemplated by this Bidder’s Statement, or seeks to require the divestiture by Bidder of any Rinker Securities, or the divestiture of any material assets of the Rinker Group or the CEMEX Group.

(g) No material adverse change

Between the Announcement Date and the end of the Offer Period, no event, change or condition occurs, is announced or becomes known to Bidder (whether or not it becomes public) where that event, change or condition has had, or could reasonably be expected to have, a material adverse effect on:

 

(i)

the business, assets, liabilities, financial or trading position, profitability or prospects of the Rinker Group, taken as a whole, since 31 March 2006; or

 

(ii)

the status or terms of arrangements entered into by the Rinker Group, or on the status or terms of any approvals, licences or permits from Public Authorities applicable to the Rinker Group,

except for events, changes and conditions publicly announced by Rinker or otherwise disclosed in public filings by Rinker or any of its subsidiaries prior to the Announcement Date where the relevant disclosure is not, and is not likely to be, incomplete, incorrect, untrue or misleading.

(h) No material mergers, acquisitions, disposals or new commitments

Between the Announcement Date and the end of the Offer Period, except for any proposed transaction publicly announced by Rinker before the Announcement Date, neither Rinker nor any subsidiary of Rinker:

 

(i)

consolidates with or merges with or into any other person (other than, in the case of a subsidiary of Rinker, a wholly-owned subsidiary of Rinker) or announces an intention to do so;

 

(ii)

acquires, offers to acquire or agrees to acquire one or more entities, businesses or assets (or any interest in one or more entities, businesses or assets) for an amount in aggregate greater than US$200 million, or announces an intention to do so;

 

(iii)

disposes, offers to dispose or agrees to dispose of one or more entities, businesses or assets (or any interest in one or more entities, businesses or assets) for an amount, or in respect of which the book value (as recorded in Rinker’s consolidated statement of financial position as at 31 March 2006) is, in aggregate, greater than US$200 million, or announces an intention to do so;

 

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(iv)

enters, offers to enter or agrees to enter into any transaction or becomes the subject of any obligation which would require the expenditure, the foregoing of revenue or may result in Rinker or any subsidiary of Rinker incurring any actual or contingent liability of an amount which is, in aggregate, more than US$200 million, or announces its intention to do so; or

 

(v)

enters, offers to enter or agrees to enter into, any agreement, joint venture or partnership which is for a term longer than two years, other than in the ordinary course of business, or announces its intention to do so,

and during that period the business of the Rinker Group is otherwise carried on in the ordinary and usual course of business.

(i) Change of control and other rights under certain agreements

No person has, or before the end of the Offer Period is granted, any right (whether conditional or not) under any agreement or arrangement which is material in the context of the business of the Rinker Group (which includes any agreement or arrangement the termination of which is likely to adversely affect the revenue or costs of the Rinker Group by more than US$200 million per annum, or the assets or liabilities of the Rinker Group by more than US$200 million), as a result of the Bidder acquiring Rinker Securities, to:

 

(i)

acquire, or require the disposal of, or require Rinker or a subsidiary of Rinker to offer to dispose of, any material asset of the Rinker Group; or

 

(ii)

terminate, or vary the terms or performance of, any material agreement or arrangement with Rinker or a subsidiary of Rinker,

other than rights for which a written enforceable, irrevocable and unconditional waiver or release has been obtained by Rinker and a copy provided to Bidder before the end of the Offer Period.

(j) Index out

During the period from the Announcement Date to the end of the Offer Period, the S&P/ASX 200 Index does not fall below 4,800 at any time on an ASX trading day.

(k) Equal access to information

During the period from the Announcement Date to the end of the Offer Period, Rinker promptly (and in any event within two business days) provides Bidder a copy of all information that is not generally available (within the meaning of the Corporations Act) relating to Rinker or any subsidiary of Rinker or any of their respective businesses or operations that has been or is provided by Rinker or any subsidiary of Rinker or any of their respective officers, employees, advisers or agents (collectively, Rinker Disclosures) to any person (other than Bidder or any other member of the CEMEX Group) for the purpose of, or in connection with, soliciting, encouraging or facilitating a proposal or offer by that person, or by any other person, under which:

 

(i)

any person (together with its associates) may acquire voting power of 10% or more in Rinker or any subsidiary of Rinker;

 

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(ii)

any person may acquire, directly or indirectly, any interest in all or a substantial part of the business or assets of the Rinker Group; or

 

(iii)

that person may otherwise acquire control of or merge or amalgamate with Rinker or any subsidiary of Rinker.

(l) Dividends

During the period from the Announcement Date to the end of the Offer Period, other than interim or final cash dividends, the payment of which does not result (or could not reasonably be expected to result) in Rinker declaring dividends in excess of 35% of its consolidated net profit for the financial year in respect of which the dividend is declared or paid, Rinker does not make or declare any distribution whether by way of dividend, capital reduction or otherwise and whether in cash or in specie.

(m) No Prescribed Occurrences

During the period from the date of this Bidder’s Statement to the end of the Offer Period, none of the following occurrences (being those listed in section 652C of the Corporations Act) happens:

 

(i)

Rinker converts all or any of its shares into a larger or smaller number of shares;

 

(ii)

Rinker or a subsidiary of Rinker resolves to reduce its share capital in any way;

 

(iii)

Rinker or a subsidiary of Rinker enters into a buy-back agreement or resolves to approve the terms of a buy-back agreement under section 257C(1) or 257D(1) of the Corporations Act;

 

(iv)

Rinker or a subsidiary of Rinker issues shares, or grants an option over its shares, or agrees to make such an issue or grant such an option;

 

(v)

Rinker or a subsidiary of Rinker issues, or agrees to issue, convertible notes;

 

(vi)

Rinker or a subsidiary of Rinker disposes, or agrees to dispose, of the whole, or a substantial part, of its business or property;

 

(vii)

Rinker or a subsidiary of Rinker charges, or agrees to charge, the whole, or a substantial part, of its business or property;

 

(viii)

Rinker or a subsidiary of Rinker resolves to be wound up;

 

(ix)

a liquidator or provisional liquidator of Rinker or of a subsidiary of Rinker is appointed;

 

(x)

a court makes an order for the winding up of Rinker or of a subsidiary of Rinker;

 

(xi)

an administrator of Rinker, or of a subsidiary of Rinker, is appointed under section 436A, 436B or 436C of the Corporations Act;

 

(xii)

Rinker or a subsidiary of Rinker executes a deed of company arrangement; or

 

(xiii)

a receiver, or a receiver and manager, is appointed in relation to the whole, or a substantial part, of the property of Rinker or of a subsidiary of Rinker.

 

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(n) No Prescribed Occurrences between the Announcement Date and date of Bidder’s Statement

During the period from the Announcement Date to the date that is the day before the date of this Bidder’s Statement, none of the occurrences listed in sub-paragraphs (i) to (xiii) of Section 8.6(m) happened.

8.7 Nature and operation of Defeating Conditions

(a) Nature of Defeating Conditions

 

(i)

The Defeating Conditions in Sections 8.6(b), 8.6(c) and 8.6(d) are conditions precedent to Bidder’s acquisition of any interest in Rinker Securities. Notwithstanding your acceptance of this Offer, unless and until these Defeating Conditions have been fulfilled or waived:

 

(A)

no contract for the sale of your Rinker Securities will come into force or be binding on you or Bidder;

 

(B)

Bidder will have no rights (conditional or otherwise) in relation to your Rinker Securities; and

 

(C)

you will be entitled to withdraw your acceptance of this Offer at any time prior to the fulfilment or waiver of those Defeating Conditions by following the procedures set out in Section 8.9.

 

(ii)

Each of the other Defeating Conditions is a condition subsequent to the formation of a binding contract upon your acceptance of this Offer. None of those Defeating Conditions prevents a contract to sell your Rinker Securities resulting from your acceptance of this Offer, but non-fulfilment of any of those Defeating Conditions at the end of the Offer Period will have the consequences set out in Section 8.7(f).

(b) Separate Defeating Conditions for benefit of Bidder

 

(i)

Section 8.6(c) and each other paragraph and each sub-paragraph of each other paragraph of Section 8.6 constitutes, and is to be construed as, a separate, several and distinct Defeating Condition. No Defeating Condition will be taken to limit the meaning or effect of any other Defeating Condition.

 

(ii)

Subject to the Corporations Act and to Section 8.7(a)(i), Bidder alone is entitled to the benefit of the Defeating Conditions and to rely on breach or non-fulfilment of, or to waive compliance with, any of those conditions.

(c) Fulfilment of Defeating Conditions

CEMEX and Bidder will each use all reasonable endeavours to ensure that the Defeating Conditions contained in Sections 8.6(b), 8.6(c), 8.6(d) and 8.6(e) are fulfilled promptly after the date of this Bidder’s Statement.

 

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(d) Waiver of Defeating Conditions

Subject to the Corporations Act and the US Exchange Act, Bidder may free this Offer and any contract resulting from your acceptance of this Offer from all or any of the Defeating Conditions generally or in relation to a specific occurrence by giving written notice, such notice to be disseminated in accordance with applicable law described in Section 7.2, to Rinker not less than the earlier of seven days or five US Business Days before the last day of the Offer Period.

(e) Notice on the status of the Defeating Conditions

The date for giving the notice on the status of the Defeating Conditions required by section 630(1) of the Corporations Act is 19 December 2006 (subject to variation in accordance with section 630(2) of the Corporations Act if the Offer Period is extended).

(f) Contract void if Defeating Conditions not fulfilled

Your acceptance of this Offer, and any contract resulting from your acceptance of this Offer, will be automatically void if:

 

(i)

at the end of the Offer Period, any of the Defeating Conditions is not fulfilled; and

 

(ii)

Bidder has not declared this Offer and any contract resulting from your acceptance of it free from that Defeating Condition in accordance with Section 8.7(d).

In that case, Bidder will promptly return by post to you at your address shown on the Share Acceptance Form or ADS Letter of Transmittal, or at the address for you last notified to Bidder by Rinker, any Share Acceptance Form or ADS Letter of Transmittal and any other documents sent with it by you.

8.8 Payment of consideration

(a) When you will generally be paid

Subject to this Section 8.8 and the Corporations Act, if you accept this Offer and the Defeating Conditions are fulfilled or waived, Bidder will pay you the consideration for your Rinker Securities under this Offer on or before the earlier of:

 

(i)

the day that is one month after the date of your acceptance or, if at the time of your acceptance this Offer is subject to a Defeating Condition, one month after any contract resulting from your acceptance of this Offer becomes, or is declared, unconditional; and

 

(ii)

the day that is 21 days after the end of the Offer Period.

No interest will be payable on the consideration for your Rinker Securities under this Offer.

(b) Payment where additional documents required

Where additional documents are required, either by the Share Acceptance Form, the ADS Letter of Transmittal or otherwise, to be given to Bidder with your acceptance to enable Bidder to become the holder of your Rinker Securities (such as a power of attorney):

 

(i)

if those documents are given to Bidder with your acceptance, Bidder will pay you the consideration for your Rinker Securities in accordance with Section 8.8(a);

 

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(ii)

if those documents are given to Bidder after your acceptance and before the end of the Offer Period, while this Offer is subject to a Defeating Condition, Bidder will pay you the consideration for your Rinker Securities by the earlier of:

 

(A)

one month after any contract resulting from your acceptance of this Offer becomes, or is declared, unconditional; and

 

(B)

21 days after the end of the Offer Period;

 

(iii)

if those documents are given to Bidder after your acceptance and before the end of the Offer Period, while this Offer is not subject to a Defeating Condition, Bidder will pay you the consideration for your Rinker Securities by the earlier of:

 

(A)

one month after Bidder is given those documents; and

 

(B)

21 days after the end of the Offer Period; and

 

(iv)

if those documents are given to Bidder after the end of the Offer Period, Bidder will pay you the consideration for your Rinker Securities within 21 days after those documents are given. However, if, at the time those documents are given to Bidder, the contract resulting from your acceptance of this Offer is still subject to a Defeating Condition in Section 8.6(m), Bidder will pay you the consideration for your Rinker Securities within 21 days after the contract becomes, or is declared, unconditional.

(c) Delivery of consideration

Subject to any currency election under paragraph (d), payment of any cash amount to which you are entitled will be made by cheque drawn in Australian dollars or US dollars (as applicable) in your favour. The cheque will be sent to you, at your risk, by ordinary mail (or, in the case of Rinker Securityholders with addresses outside Australia, by airmail) to your address shown on the Share Acceptance Form or the ADS Letter of Transmittal (as applicable), or the address for you last notified to Bidder by Rinker.

(d) Currency election

The consideration under this Offer is priced in US dollars. However, you have the right on accepting this Offer to elect either to receive payment in US dollars or to have the consideration under this Offer converted into, and then paid to you, in Australian dollars.

Provision for and instructions in respect of the currency election are contained in the Share Acceptance Form (for Rinker Shares) and the ADS Letter of Transmittal (for Rinker ADSs). In addition, to the extent you hold Rinker Shares in a CHESS Holding, the currency election can be made by instructing your Controlling Participants to make such an election on your behalf.

If you do not make a valid currency election, you will receive payment of consideration under this Offer in US dollars for your Rinker Securities except to the extent you are a Rinker Shareholder and your address, as recorded in Rinker’s register of members, is an Australian address in which case consideration under the Offer for your Rinker Shares will be converted into, and paid to you in, Australian dollars.

 

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You may only make one currency election for your Rinker Securities.

Conversion of US dollars to Australian dollars will be made on the following basis: the consideration under this Offer payable in US dollars to which you would otherwise be entitled will be converted from US dollars to Australian dollars at the exchange rate obtainable by the Australian Registry, in the case of Rinker Shares, or the US Depositary, in the case of Rinker ADSs, on the spot market in Sydney, in the case of the Australian Registry, and in New York, in the case of the US Depositary, at approximately noon (Sydney or New York time, as applicable) on the date consideration under this Offer is made available by Bidder to the Australian Registry or the US Depositary, as applicable (each a payment agent) for delivery in respect of the relevant Rinker Securities.

The actual amount of Australian dollars received as a result of a currency election will depend upon the spot exchange rate prevailing on the day funds are made available to the relevant payment agent by Bidder. You should be aware that the spot exchange rate which is prevailing on the date you make a currency election may be different from that prevailing on the day funds are made available to the relevant payment agent by Bidder. In all cases, fluctuations in the spot exchange rate are at the risk of Rinker Securityholders who are to receive payment of consideration under this Offer in Australian dollars. Bidder shall have no responsibility with respect to the payment of consideration under this Offer other than to make payment in accordance with this paragraph and Section 8.8 generally.

(e) Rights

If Bidder becomes entitled to any Rights as a result of your acceptance of this Offer, it may require you to give to Bidder all documents necessary to vest title to those Rights in Bidder, or otherwise to give Bidder the benefit or value of those Rights. If you do not do so, or if you have received or are entitled to receive (or any previous holder of your Rinker Securities has received or is entitled to receive) the benefit of those Rights, Bidder will be entitled to deduct the amount (or an amount equal to the value, as reasonably assessed by Bidder including by reference to US dollar to Australian dollar exchange rates prevailing at the time) of those Rights from any consideration otherwise payable to you under this Offer. If Bidder does not, or cannot, make such a deduction, you must pay that amount to Bidder.

(f) Payment restrictions under Australian law and US law

If, at the time of acceptance of this Offer, any authority or clearance of a Public Authority is required for you to receive any consideration under this Offer or you are resident in or a resident of a place to which, or you are a person to whom:

 

(i)

the Banking (Foreign Exchange) Regulations 1959 (Cth);

 

(ii)

Part 4 of the Charter of the United Nations Act 1945 (Cth);

 

(iii)

the Charter of the United Nations (Terrorism and Dealing with Assets) Regulations 2002 (Cth);

 

(iv)

the Charter of the United Nations (Sanctions – Afghanistan) Regulations 2001 (Cth);

 

(v)

the Iraq (Reconstruction and Repeal of Sanctions) Regulations 2003 (Cth);

 

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(vi)

the Charter of the United Nations (Sanctions – Liberia) Regulations 2002;

 

(vii)

OFAC Specially Designated National and Blocked Persons List, as updated;

 

(viii)

US Asset Control Regulations 31 CFR, Subtitle B, Chapter 7; or

 

(ix)

any other law of Australia or the United States that would make it unlawful for Bidder to provide consideration for your Rinker Securities, applies then acceptance of this Offer will not create or transfer to you any right (contractual or contingent) to receive the consideration specified in this Offer unless and until all requisite authorities or clearances have been obtained by Bidder. See Section 7.12 for information as to whether this restriction applies to you.

 

(g)

Withholding of consideration by Bidder

If any amount (the withholding amount) is required, under any Australian law or US law or by any Public Authority, to be:

 

(i)

withheld from any consideration otherwise payable to you under this Offer and paid to a Public Authority; or

 

(ii)

retained by Bidder out of any consideration otherwise payable to you under this Offer,

the payment or retention by Bidder of the withholding amount (as applicable) will constitute full discharge of Bidder’s obligation to pay the consideration to you to the extent of the withholding amount.

8.9 Withdrawal Rights

You may withdraw your acceptance of this Offer:

 

(a)

in the circumstances described in Section 8.7(a)(i); and

 

(b)

if a right accrues under section 650E of the Corporations Act (see Section 7.3); or

 

(c)

in the circumstances contemplated by Rule 14d-7 under, and Section 14(d)(5) of, the US Exchange Act, until such time as Bidder terminates these withdrawal rights in accordance with any exemptive relief granted by SEC.

You may only withdraw your acceptance of this Offer for all your Rinker Securities.

A withdrawal may not be rescinded. However, if you withdraw your acceptance of this Offer in accordance with this Section, you may accept this Offer again by following one of the procedures described in Section 8.3, as applicable, at any time prior to the end of the Offer Period.

All questions as to the form and validity (including, without limitation, time of receipt) of notices of withdrawal will be determined by Bidder, in the reasonable exercise of its discretion, the determination of which will be final and binding.

 

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(a) Withdrawal of Rinker Shares – Issuer Sponsored Holdings

If your Rinker Shares are held in an Issuer Sponsored Holding, to withdraw your acceptance of this Offer in respect of those Rinker Shares, you must send a notice to that effect signed by you (or on your behalf, in which case documentation proving that the person or persons signing the notice are authorised to do so must accompany the notice) to an address specified on the Share Acceptance Form so that it is received at the relevant address at any time during which your right to withdraw acceptance of this Offer subsists.

The notice of withdrawal must specify your name, your address and the number of (and Security Reference Number for the) Rinker Shares in an Issuer Sponsored Holding that were the subject of your acceptance of this Offer.

(b) Withdrawal of Rinker Shares – CHESS Holdings

If your Rinker Shares are held in a CHESS Holding, to withdraw your acceptance of this Offer in respect of those Rinker Shares, your Controlling Participant must transmit a valid originating message to ASTC specifying the Rinker Shares to be released from the sub-position, in accordance with Rule 14.16 of the ASTC Settlement Rules, at any time during which your right to withdraw acceptance of this Offer subsists.

(c) Withdrawal of Rinker ADSs

Withdrawals of Rinker ADSs deposited pursuant to this Offer must be effected by a notice of withdrawal which meets the requirements set out below. A notice of withdrawal shall be deemed to be timely upon receipt by the US Depositary at the place of deposit of the applicable Rinker ADSs (or ADS Notice of Guaranteed Delivery in respect thereof) within the time limits indicated above of a notice of withdrawal made by a method, including facsimile transmission, that provides the US Depositary with a written or printed copy and which specifies the name of the depositing Rinker ADSholder, the number of Rinker ADSs to be withdrawn and if ADRs have been tendered, the name of the registered holder, if different from that of the person who tendered the Rinker ADSs evidenced by such ADRs. The withdrawal of the Rinker ADSs from this Offer will take effect upon actual receipt by the US Depositary of the properly completed notice of withdrawal.

Withdrawals of certificated Rinker ADSs

The relevant Rinker ADSholder will have the right to obtain physical possession of the ADRs representing the Rinker ADSs so withdrawn if the notice of withdrawal received by the US Depositary also meets the following requirements:

 

•

it must be signed by or on behalf of the person who signed the ADS Letter of Transmittal accompanying (or ADS Notice of Guaranteed Delivery in respect of) the Rinker ADSs which are to be withdrawn; and

 

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•

it must specify the serial number shown on each ADR representing the applicable Rinker ADSs to be withdrawn. Any signature in a notice of withdrawal must be guaranteed by an Eligible Institution in the same manner as in an ADS Letter of Transmittal (as described in the instructions set out therein), except in the case of Rinker ADSs deposited for the account of an Eligible Institution.

Withdrawal by book-entry transfer

Alternatively, if Rinker ADSs have been deposited pursuant to the procedures for book-entry transfer in the United States, as set out in Section 8.3(d), the applicable account at the DTC will be credited with the Rinker ADSs so withdrawn if the notice of withdrawal received by the US Depository also meets the following requirements:

 

•

it must be signed by or on behalf of the person who signed the ADS Letter of Transmittal accompanying (or ADS Notice of Guaranteed Delivery in respect of) the Rinker ADSs evidenced by the ADRs which are to be withdrawn; and

 

•

it must specify the name and number of the account at the DTC to be credited with the withdrawn ADSs and otherwise comply with the DTC procedures. Any signature in a notice of withdrawal must be guaranteed by an Eligible Institution in the same manner as in an ADS Letter of Transmittal (as described in the instructions set out therein), except in the case of Rinker ADSs evidenced by the ADRs deposited for the account of an Eligible Institution.

8.10 Offerees

(a) Registered holders

Bidder is making an offer in the form of this Offer to:

 

(i)

each person registered as the holder of Rinker Shares in the register of members of Rinker and each person registered as the holder of Rinker ADSs in the ADR Register maintained by JPMorgan, in its capacity as the depositary of Rinker’s ADR program, as at the Register Date;

 

(ii)

each person who, during the period from the Register Date to the end of the Offer Period, becomes registered or entitled to be registered (whether or not they are registered or entitled to be registered as the holder of other Rinker Securities) as the holder of Rinker Securities that are on issue at the Register Date; and

 

(iii)

each person who, during the period from the Register Date to the end of the Offer Period, becomes registered or entitled to be registered (whether or not they are registered or entitled to be registered as the holder of other Rinker Securities) as the holder of Rinker ADSs issued after the Register Date which represent beneficial interests in Rinker Shares that are on issue at the Register Date.

 

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(b) Transferees

If at any time during the Offer Period another person is able to give good title to some or all your Rinker Securities, and that person has not already accepted an offer in the form of this Offer for those Rinker Securities, then that person may accept as if an offer in the form of this Offer had been made to them in respect of those Rinker Securities.

(c) Trustees and nominees

If at any time during the Offer Period and before you accept this Offer your Rinker Shares or your Rinker ADSs consist of two or more separate parcels within the meaning of section 653B of the Corporations Act (for example, because you hold your Rinker Shares or your Rinker ADSs as trustee or nominee for, or otherwise on account of, several distinct beneficial owners), then you may accept as if a separate offer in the form of this Offer had been made in relation to each of those parcels (including any parcel you hold in your own right) and may make a currency election in respect of each parcel. Acceptance (including any currency election) for any parcel of Rinker Securities (including any parcel consisting of two or more parcels) is ineffective unless:

(i) you give Bidder notice stating that the Rinker Securities consist of a separate parcel, such notice being:

 

(A)

in the case of Rinker Shares not in a CHESS Holding, in writing;

 

(B)

in the case of Rinker Shares in a CHESS Holding, in an electronic from approved by the ASTC Settlement Rules for the purposes of Part 6.8 of the Corporations Act;

 

(C)

in the case of Rinker ADSs in certificated form, on the ADS Letter of Transmittal (or the ADS Notice of Guaranteed Delivery); and

 

(D)

in the case of Rinker ADSs in book-entry form, in an electronic form approved by DTC as part of the Agent’s Message; and

(ii) your acceptance specifies the number of Rinker Shares in the parcel.

If, for this purpose, you require additional copies of this Bidder’s Statement and the Share Acceptance Form or the ADS Letter of Transmittal, please call the CEMEX Offer Information Line to request those additional copies.

8.11 Variation and withdrawal of this Offer

(a) Variation

Bidder may vary this Offer in accordance with the Corporations Act and the US Exchange Act.

If Bidder varies the consideration for this Offer, declares it to be free of all or any conditions or waives an event which would cause the breach or non-fulfilment of any condition, Bidder will notify holders of such variation, declaration or waiver in accordance with the procedures described below, will provide any additional information required by applicable laws and will extend this Offer to the extent required by Rules 14d-4, 14d-6 and 14e-1 under

 

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the US Exchange Act. If, prior to the end of the Offer Period, Bidder should decide to vary the consideration being offered in this Offer (such change in the consideration being offered will be applicable to all holders whose Rinker Securities are accepted for payment pursuant to this Offer), or introduce or vary any dealer’s soliciting fee, and if this Offer is scheduled to expire at any time earlier than the period ending on the tenth US Business Day from and including the date that such notice is first so published, sent or given to holders of such Securities, this Offer will be extended at least until the expiration of such 10 US Business Day period to the extent required by US law. If there is a material change in the information in this Bidder’s Statement, including Bidder declaring this Offer free from all conditions, and if at the time such material change this Offer is scheduled to expire at any time earlier than the period ending on the fifth US Business Day from and including the date that such declaration is so made, this Offer will be extended at least until the expiration of such five US Business Day period to the extent required by US law.

Any extension, withdrawal, waiver or variation of this Offer will be followed as promptly as practicable by a public announcement. Under the Corporations Act, a variation of this Offer is effected by serving on Rinker and lodging with ASIC and (as a general rule) sending to all holders of Rinker Securities to whom this Offer was made a notice which will set out the terms of the variation and particulars of any resulting modifications to this Bidder’s Statement. Any waiver or satisfaction of the conditions of this Offer is effected by giving written notice to Rinker and ASX. Any withdrawal of this Offer by Bidder will be effected in the manner specified by ASIC as part of the consent from ASIC which is necessary to effect that withdrawal.

(b) Withdrawal

This Offer may be withdrawn with the written consent of ASIC, which consent may be subject to conditions. If so, Bidder will give notice of the withdrawal to ASX and to Rinker and will comply with any other conditions imposed by ASIC.

8.12 Costs and stamp duty

Bidder will pay all costs and expenses of the preparation and circulation of this Offer and any Australian or US security transfer taxes (including stamp duty) payable on the transfer of any Rinker Securities to Bidder under this Offer.

8.13 Governing law

This Offer and any contract resulting from your acceptance of this Offer are governed by the laws in force in New South Wales, Australia.

 

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Section 9

Definitions, interpretation and approval

9.1 Definitions

In this Bidder’s Statement and in the Share Acceptance Form, the ADS Letter of Transmittal and the ADS Notice of Guaranteed Delivery, unless the context requires otherwise:

ADR means American depositary receipts which evidence Rinker ADSs.

ADR Register means the register maintained by JPMorgan, in its capacity as the depositary of Rinker’s ADR program, to record the ownership of Rinker ADSs.

ADS Letter of Transmittal means the letter of transmittal for your Rinker ADSs enclosed with this Bidder’s Statement or, as the context requires, any replacement or substitute letter provided by or on behalf of Bidder.

ADS Notice of Guaranteed Delivery means the notice of guaranteed delivery for your Rinker ADSs enclosed with this Bidder’s Statement or, as the context requires, any replacement or substitute notice of guaranteed delivery provided by or on behalf of Bidder.

Agent’s Message has the meaning given in Section 8.3(d).

Acquisition Facility has the meaning given in Section 4.3.

Acquisition Facility Mandated Lead Arrangers has the meaning given in Section 4.3.

Acquisition Facility Underwriters has the meaning given in Section 4.3.

Announcement Date means 27 October 2006.

Antitrust Division means the Antitrust Division of the United States Department of Justice.

Approval means:

 

(a)

a consent, authority, licence, approval, order, ruling, waiver or exemption which is required by law or by a Public Authority; or

 

(b)

in relation to anything which will be fully or partly prohibited or restricted by law if a Public Authority intervenes or acts in any way within a specified period after lodgement, filing, registration or notification, the expiry or termination of that period without intervention or action.

ASIC means the Australian Securities and Investments Commission.

ASTC means ASX Settlement and Transfer Corporation Pty Ltd (ABN 49 008 504 532).

ASTC Settlement Rules means the operating rules of the settlement facility provided by ASTC.

ASX means Australian Stock Exchange Limited (ABN 98 008 624 691) or, as the context requires, the financial market operated by it.

Australian Registry means Computershare Investor Services Pty Limited (ABN 48 078 297 277).

BBVA means Banco Bilbao Vizcaya Argentaria, S.A.

Bid Period means the period between the date on which a copy of this Bidder’s Statement was sent to Rinker and the end of the Offer Period (both inclusive).

 

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Section 9

Definitions, interpretation and approval

Bidder means CEMEX Australia Pty Ltd (ACN 122 401 405), an indirect wholly-owned subsidiary of CEMEX.

Bidder’s Statement means this document, being the statement of Bidder under Part 6.5 of the Corporations Act relating to the Offer.

Bridge Facility has the meaning given in Section 4.3.

Bridge Facility Lender has the meaning given in Section 4.3.

Business Day means a day on which banks are generally open for business in Sydney, Australia (other than a Saturday or a Sunday).

CEMEX means CEMEX, Sociedad Anónima Bursátil de Capital Variable.

CEMEX España means CEMEX España, S.A., a wholly-owned subsidiary of CEMEX.

CEMEX Group means CEMEX and its Related Entities as at the date of this Bidder’s Statement.

CEMEX México means CEMEX México, S.A. de C.V.

CEMEX Netherlands means New Sunworld Holding B.V.

CEMEX Offer Information Line means the information line operated on behalf of CEMEX, which can be contacted by telephoning the numbers listed on the inside back cover of this Bidder’s Statement.

CGT means capital gains tax.

CHESS means the Clearing House Electronic Subregister System, which provides for the electronic transfer, settlement and registration of securities in Australia.

CHESS Holding means a holding of Rinker Shares on the CHESS subregister of Rinker.

CHESS Subregister has the meaning given in the ASTC Settlement Rules.

Citigroup means Citigroup Global Markets Australia Pty Limited.

Citigroup Group means Citigroup and its Related Entities.

Commitment Letter has the meaning given in Section 4.4.

Controlling Participant has the meaning given in the ASTC Settlement Rules. Usually your Controlling Participant is a person, such as a broker, with whom you have a sponsorship agreement (within the meaning of the ASTC Settlement Rules).

Corporations Act means the Corporations Act 2001 (Cth).

CSR means CSR Limited (ABN 90 000 001 276).

CSR Group means CSR and its Related Entities.

Defeating Condition means each condition set out in Section 8.6. DTC means The Depository Trust Company.

Eligible Institution has the meaning given in Section 8.3(d).

 

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Section 9

Definitions, interpretation and approval

Encumbrance means an interest or power (whether existing or agreed to be granted or created):

 

(a)

reserved in or over any interest in any property, including any retention of title; or

 

(b)

created or otherwise arising in or over any interest in any property under a bill of sale, mortgage, charge, lien, pledge, hypothecation, trust or power,

and any other restriction on the use of or exercise of a right over property, or on the registration of an interest in or dealing with (including a transfer of) property.

ETM means Empresas Tolteca de México, S.A. de C.V.

Existing Committed Facilities has the meaning given in Section 4.3.

FATA means the Foreign Acquisitions and Takeovers Act 1975 (Cth).

FIRB means the Foreign Investment Review Board.

FTC means the United States Federal Trade Commission.

Georgeson means Georgeson Shareholder Communications Australia Pty Ltd (ABN 19 092 812 470).

GST means the goods and services tax imposed under the A New Tax System (Goods and Services Tax) Act 1999 (Cth) and the related imposition acts of the Commonwealth of Australia.

Holder Identification Number means the number used to identify a Rinker Shareholder on the CHESS subregister of Rinker.

HSR Act means the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976.

HSR Filing has the meaning given in Section 7.6.

Issuer Sponsored Holding means a holding of Rinker Shares on the Issuer Sponsored Subregister of Rinker.

Issuer Sponsored Subregister has the meaning given in the ASTC Settlement Rules.

JPMorgan means JPMorgan Chase Bank, N.A.

JPMorgan Australia means J.P. Morgan Australia Limited (ABN 29 769 181 534).

JPMorgan Group means JPMorgan Australia and its Related Entities.

Loan Facilities means the Acquisition Facility, the Newly Committed Facility, the Bridge Facility and the Existing Committed Facilities, as those terms are defined in Section 4.3.

NASD means the National Association of Securities Dealers, Inc.

NASDAQ means the National Association of Securities Dealers Automated Quotations System operated by The Nasdaq Stock Market, Inc.

Newly Committed Facility has the meaning given in Section 4.3.

Newly Committed Facility Lender has the meaning given in Section 4.3.

NYSE means the New York Stock Exchange, Inc. or, as the context requires, the financial market operated by it.

 

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Section 9

Definitions, interpretation and approval

Offer, CEMEX’s Offer or CEMEX Offer means, as the context requires, the offer for Rinker Securities contained in Section 8, or the off-market takeover bid constituted by that offer and each other offer by Bidder for Rinker Securities in the form of that offer, including in each case as varied in accordance with the Corporations Act.

Offer Amount has the meaning given in Section 4.1.

Offer Period means the period during which the Offer will remain open for acceptance in accordance with Section 8.2.

Payment Agent has the meaning given in Section 8.8(d). PFIC means a passive foreign investment company. Prescribed Occurrence means an event set out in Section 8.6(m).

Public Authority means any government or any governmental, semi-governmental, statutory or judicial entity or authority, or any minister, department, office or delegate of any government, whether in Australia, the United States or elsewhere. It also includes any self regulatory organisation established under statute and any stock exchange.

Register Date means 6 November 2006, being the date set by Bidder under section 633(2) of the Corporations Act.

Related Entity, in relation to an entity, means an entity which is a related body corporate of that entity under section 50 of the Corporations Act.

Reserve Bank Mid-Point Rate means a representative mid-point exchange rate for conversion of US dollars to Australian dollars determined by the Reserve Bank of Australia on the basis of quotations in the interbank foreign exchange market at 4.00pm Eastern Australian time on the day concerned.

Rights means all accretions, rights and benefits of whatever kind attaching to or arising from the Rinker Securities directly or indirectly at or after the date of this Bidder’s Statement (including all dividends and all rights to receive them and rights to receive or subscribe for shares, notes, bonds, options or other securities or entitlements declared, paid or issued by Rinker or any subsidiary of Rinker).

Rinker means Rinker Group Limited (ABN 53 003 433 118).

Rinker ADS means an American depositary share issued by JPMorgan, in its

capacity as the depositary of Rinker’s ADR program, representing beneficial interests in five Rinker Shares.

Rinker ADSholder means a person registered as the holder of Rinker ADSs in the ADR register maintained by JPMorgan, in its capacity as the depositary of Rinker’s ADR program.

Rinker Board means the board of directors of Rinker.

Rinker Disclosures has the meaning given in Section 8.6(k).

Rinker Group means Rinker and its Related Entities as at the date of this Bidder’s Statement.

Rinker Securities means Rinker ADSs and Rinker Shares.

Rinker Securityholder means a Rinker ADSholder or Rinker Shareholder.

 

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Section 9

Definitions, interpretation and approval

Rinker Shareholder means a person registered in the register of members of Rinker as a holder of Rinker Shares.

Rinker Shares means ordinary shares in Rinker.

SEC means the United States Securities and Exchange Commission.

Securityholder Reference Number means the number allocated by Rinker to identify a Rinker Shareholder on the Issuer Sponsored Subregister of Rinker.

Share Acceptance Form means the share transfer and acceptance form for your Rinker Shares enclosed with this Bidder’s Statement or, as the context requires, any replacement or substitute form provided by or on behalf of Bidder.

Takeover Transferee Holding has the meaning given in the ASTC Settlement Rules, being the CHESS Holding to which Rinker Shares are to be transferred pursuant to acceptances of the Offer.

Term Facility has the meaning given in Section 4.6.

Treasurer means the Treasurer of the Commonwealth of Australia.

US$1.2 billion Existing Committed Facility has the meaning given in Section 4.3.

US$0.7 billion Existing Committed Facility has the meaning given in Section 4.3.

US Business Day means any day other than a Saturday, Sunday or US federal holiday, and shall consist from the time period from 12.01am to 12.00 midnight US Eastern time.

US Depositary means Computershare Trust Company, N.A.

US Exchange Act means the United States Securities and Exchange Act of 1934.

US Federal Reserve Board means the Board of Governors of the United States Federal Reserve System.

US Securities Act means the United States Securities Act of 1933.

US Securityholder has the meaning given in Section 6.2.

US Tax Code means the United States Internal Revenue Code of 1986.

VWAP means volume weighted average price.

Withholding Amount has the meaning given in Section 8.8(g).

your Rinker ADSs means, subject to Section 8.10:

 

(a)

the Rinker ADSs in respect of which you are registered or entitled to be registered as a holder in the ADR Register at the Register Date, and in respect of which no other person becomes registered or entitled to be registered as a holder before you accept the Offer; and

 

(b)

any other Rinker ADSs to which you are able to give good title at the time you accept the Offer that:

 

(i)

are on issue at the Register Date; or

 

(ii)

were issued after the Register Date and which represent beneficial interests in Rinker Shares that are on issue at the Register Date.

 

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Section 9

Definitions, interpretation and approval

your Rinker Securities means your Rinker ADSs (if any) and your Rinker Shares (if any).

your Rinker Shares means, subject to Section 8.10:

 

(a)

the Rinker Shares in respect of which you are registered or entitled to be registered as a holder in the register of members of Rinker at the Register Date, and in respect of which no other person becomes registered or entitled to be registered as a holder before you accept the Offer; and

 

(b)

any other Rinker Shares to which you are able to give good title at the time you accept the Offer that are on issue at the Register Date.

9.2 Interpretation

In this Bidder’s Statement and in the Share Acceptance Form and the ADS Letter of Transmittal, unless the context requires otherwise.

 

(a)

Headings are for convenience only and do not affect interpretation.

 

(b)

The singular includes the plural and conversely.

 

(c)

A reference to a Section or annexure is to a Section of, or annexure to, this Bidder’s Statement.

 

(d)

A gender includes all genders.

 

(e)

Where a word or phrase is defined, its other grammatical forms have a corresponding meaning.

 

(f)

A reference to a person, corporation, trust, partnership, unincorporated body or association or other entity includes any of them.

 

(g)

A reference to a person includes a reference to the person’s executors, administrators, successors, substitutes (including persons taking by novation) and assigns.

 

(h)

A reference to any legislation or to any provision of any legislation includes any modification or re-enactment of it, any legislative provision substituted for it and all regulations and statutory instruments issued under it.

 

(i)

A reference to any instrument or document includes any variation or replacement of it.

 

(j)

A term not specifically defined in this Bidder’s Statement has the meaning given to it in the Corporations Act (being, if any special meaning is given for the purposes of Chapter 6 or 6A of the Corporations Act or a provision of those chapters, that special meaning).

 

(k)

A reference to time is a reference to Sydney, Australia time.

 

(l)

Mentioning anything after includes, including, for example, or similar expressions, does not limit what else might be included.

 

(m)

A reference to A$ is a reference to the lawful currency of Australia, a reference to € is to the lawful currency of certain member states of the European Union, a reference to Ps is to the lawful currency of México and a reference to $ or US$ is a reference to the lawful currency of the United States of America.

 

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Section 9

Definitions, interpretation and approval

 

(n)

A reference to Australia is a reference to the Commonwealth of Australia, a reference to México is to the United Mexican States, a reference to Spain is to the Kingdom of Spain and a reference to United States or US is a reference to the United States of America.

 

(o)

A reference to you is a reference to a person to whom the Offer under Section 8 is (or is deemed to be) made.

9.3 Approval of Bidder’s Statement

This Bidder’s Statement has been approved by a resolution passed by the directors of Bidder.

Dated 30 October 2006.

Signed on behalf of CEMEX Australia Pty Ltd:

Ramiro G. Villarreal

Director

 

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Annexure A

Material announcements

1. Material ASX announcements in relation to Rinker since 31 March 2006

 

Date Lodged		Description
30-Oct-2006		Director’s Statement re Takeover
30-Oct-2006		Intention to make a takeover offer for Rinker Group Limited
27-Oct-2006		Wall Street Journal Article
26-Oct-2006		Daily Share Buy-Back Notice1
24-Oct-2006		Form 484 – Change to company details
19-Oct-2006		Change of Director’s Interest Notice x 3 – John Arthur, John Ingram and John Morschel
17-Oct-2006		Change of Director’s Interest Notice – Marshall Criser
05-Oct-2006		Ceasing to become a substantial shareholder – Barclays Global Investors Australia Limited
03-Oct-2006		Form 484 – Change to company details
27-Sep-2006		Presentation by Rinker CEO to NYSSA Conference
22-Sep-2006		Change of Director’s Interest Notice – John Ingram
22-Sep-2006		Presentations to analysts – Miami, US, 21 September 2006
21-Sep-2006		Change of Director’s Interest Notice x 3 – John Arthur, John Ingram and John Morschel
19-Sep-2006		CEO to present at NYSSA conference on 26 September 2006
19-Sep-2006		Change of Director’s Interest Notice – Marshall Criser
11-Sep-2006		Form 484 – Change to company details
23-Aug-2006		Change of Director’s Interest Notice x 3 – John Arthur, John Ingram and John Morschel
23-Aug-2006		On-Market Buy-Back
21-Aug-2006		Presentation to Institutional Investors
18-Aug-2006		Change in substantial holding – Perpetual Limited and subsidiaries
17-Aug-2006		Change of Director’s Interest Notice – Marshall Criser
24-Jul-2006		Change of Director’s Interest Notice – John Ingram
24-Jul-2006		Change of Director’s Interest Notice – John Arthur, John Ingram and John Morschel
21-Jul-2006		Amendment of Constitution
19-Jul-2006		Change of Director’s Interest Notice – Marshall Criser
18-Jul-2006		Confirmation of meeting outcomes – AGM held on 18 July 2006

1.

Previous Daily Share Buy-Back Notices have not been included.

 

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Annexure A

Material announcements

 

Date Lodged		Description
18-Jul-2006		AGM Address to Shareholders
18-Jul-2006		1st Quarter Trading Update – (three months ended 30 June 2006)
17-Jul-2006		Appendix 3C– On-Market Buy-Back
13-Jul-2006		ABM: Rinker Proposed Return of Capital
10-Jul-2006		Ceasing to be a substantial holder – the AXA Group
06-Jul-2006		Release of trading update for the first quarter ended 30 June 2006
04-Jul-2006		Change in substantial holding – Perpetual Limited
28-Jun-2006		Becoming a substantial holder – the AXA Group
27-Jun-2006		Change in substantial holding – Capital Group Companies, Inc
22-Jun-2006		Change of Director’s Interest Notice x 3 – John Arthur, John Ingram and John Morschel
19-Jun-2006		Change of Director’s Interest Notice – Marshall Criser
16-Jun-2006		Notice of AGM to be held in Sydney on 18 July 2006
07-Jun-2006		ATO issues Class Ruling on Rinker proposed return of capital
06-Jun-2006		Change of Director’s Interest Notice – Marshall Criser
30-May-2006		Change of Director’s Interest Notice – David Clarke
30-May-2006		Initial Director’s Interest Notice – Jack Thompson
30-May-2006		New Director of Rinker Board – Jack Thompson
26-May-2006		Appendix 3F: Final Share Buy-Back Notice
23-May-2006		US Annual Report 2006 on Form 20-F for Rinker Group Limited
23-May-2006		2006 Concise Annual Report
23-May-2006		2006 Full Financials
18-May-2006		Change of Director’s Interest Notice – John Arthur, Marshall Criser, John Ingram, John Morschel
11-May-2006		Presentation by CEO of results for the year ended 31 March 2006
11-May-2006		Preliminary Final Report for year ended 31 March 2006
28-Apr-2006		Notification of release of results for fiscal year ended 31 March 2006
06-Apr-2006		Release advising increase in annual profit expectations

 

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Annexure A

Material announcements

2. Material SEC announcements in relation to Rinker since 31 March 2006

 

Date Lodged		Description
27-Oct-2006		Schedule TO Tender offer statement by CEMEX
27-Oct-2006		Current report on Form 6-K containing release to ASX on 27 October 2006
06-Oct-2006		Current report on Form 6-K containing releases to ASX from 27 September 2006 to 5 October 2006
29-Sep-2006		Current report on Form 6-K containing releases to ASX from 14 to 27 September 2006
28-Sep-2006		Current report on Form 6-K containing releases to ASX on 27 September 2006
13-Sep-2006		Current report on Form 6-K containing releases to ASX from 25 August to 11 September 2006
25-Aug-2006		Current report on Form 6-K containing releases to ASX from 17 to 24 August 2006
25-Jul-2006		Current report on Form 6-K containing releases to ASX on 17, 19, 21 and 24 July 2006
20-Jul-2006		Current report on Form 6-K containing releases to ASX on 18 July 2006
20-Jul-2006		Current report on Form 6-K containing releases to ASX on 18 July 2006
11-Jul-2006		Current report on Form 6-K containing releases to ASX on 19 and 22 June and 6 July 2006
29-Jun-2006		Annual Report of on Form 11-K of Rinker Materials Corporation Profit Sharing 401(k) Plan
29-Jun-2006		Annual Report of on Form 11-K of Rinker Materials Corporation 401(k) Retirement Savings Plan
27-Jun-2006		Current report on Form 6-K containing releases to ASX on 16 June 2006
19-Jun-2006		Current report on Form 6-K containing releases to ASX on 16 June 2006
14-Jun-2006		Current report on Form 6-K containing releases to ASX on 6 and 7 June 2006
31-May-2006		Current report on Form 6-K containing releases to ASX from 18 to 30 May 2006
25-May-2006		Current report on Form 6-K (paper filing)
23-May-2006		Annual Report on Form 20-F for fiscal year ending 31 March 2006
12-May-2006		Current report on Form 6-K containing releases to ASX on May 11 2006
01-May-2006		Current report on Form 6-K containing releases to ASX on 28 April 2006
06-April-2006		Current report on Form 6-K containing releases to ASX 28 March and 6 April 2006

 

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Annexure B

Directors and executive officers

 

		The name, citizenship, business address and telephone number, principal occupation or employment and five-year employment history for each director (including alternate directors) and executive officer of CEMEX and each director of Bidder are set out below. Unless otherwise indicated, each person is a citizen of México with a principal business address at, and telephone number of, the principal executive offices of CEMEX listed in Section 1.2.
		None of Bidder, CEMEX or, to the knowledge of Bidder and CEMEX, any of the persons listed below has, during the past five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanours) or been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future of, or prohibiting activities subject to, US federal or state securities laws, or a finding of any violation of such laws.   Executive Officers of CEMEX
		Lorenzo H. Zambrano, Chairman and Chief Executive Officer		Joined CEMEX in 1968. During his career with CEMEX, Mr Zambrano has been involved in all operational aspects of CEMEX’s business. He held several positions in CEMEX prior to his appointment as director of operations in 1981. In 1985, Mr Zambrano was appointed chief executive officer, and in 1995 he was elected chairman of the board of directors. Mr Zambrano is a graduate of Instituto Tecnologico y de Estudios Superiores de Monterrey, A.C., or ITESM, with a degree in mechanical engineering and administration and holds an M.B.A. from Stanford University. Mr Zambrano has been a member of the CEMEX board of directors since 1979 and chairman of the board of directors since 1995. He is a member of the board of directors of IBM, the Citigroup International Advisory Board and the International Advisory Board of the Allianz Companies. He is also a member of the board of directors of Fomento Economico Mexicano, S.A. de C.V., Empresas ICA, S.A. de C.V., Alfa, S.A. de C.V., Grupo Financiero Banamex, S.A. de C.V., Vitro, S.A. and Grupo Televisa, S.A. Mr Zambrano is chairman of the board of directors of Consejo de Ensenanza e Investigacion Superior, A.C., which manages ITESM. Until July 2005, Mr Zambrano participated in the Chairman’s Council of Daimler Chrysler AG and until January 2006, Mr Zambrano was a member of the Stanford University’s Graduate School of Business Advisory Council. In addition, he is member of the board of directors of Museo de Arte Contemporaneo de Monterrey A.C. (MARCO), Conservacion Internacional, and the Americas Society, Inc.

 

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Annexure B

Directors and executive officers

 

		Hector Medina, Executive Vice President of Planning and Finance		Joined CEMEX in 1988. He has held several positions in CEMEX, including director of strategic planning from 1991 to 1994, president of CEMEX México from 1994 to 1996, and has served as executive vice president of planning and finance since 1996. He is a graduate of ITESM with a degree in chemical engineering and administration. He also received a Master of Science degree in management studies from the management Center of the University of Bradford in England and a Masters of Science diploma in Operations Research from the Escuela de Organizacion Industrial in Spain in 1975. Among the positions he previously held are those of Project Director at Grupo Protexa, S.A. de C.V., Administrative Director at Grupo Xesa, S.A. de C.V., Commercial Director at Direcplan, S.A. and Industrial Relations Sub-Director at Hylsa, S.A. de C.V. In March 2006, Mr Medina was appointed chairman of the board of Universidad Regimontana, a private university located in Monterrey, México. Mr Medina is a member of the board of directors of Cementos Chihuahua, Compania Minera Autlan, Mexifrutas, S.A. de C.V. Axtel S.A. de C.V. Chocota Productos del Mar, S.A. de C.V. and member of the “consejo de vigilancia” of Ensenanza e Investigacion Superior A.C. and ITESM. Mr Medina is also a member of the Advisory Board of Nacional Monte de Piedad.
		Armando J. García Segovia, Director and Executive Vice President of Development		Initially joined CEMEX in 1975 and rejoined CEMEX in 1985. He has served as director of operational and strategic planning from 1985 to 1988, director of operations from 1988 to 1991, director of corporate services and affiliate companies from 1991 to 1994, director of development from 1994 to 1996, general director of development from 1996 to 2000, and executive vice president of development since 2000. He is a graduate of ITESM with a degree in mechanical engineering and administration and holds an M.B.A. from the University of Texas. He was employed at Cydsa, S.A. from 1979 to 1981 and at Conek, S.A. de C.V. from 1981 to 1985. Mr Garcia has been a member of CEMEX’s board of directors since 1983. He also serves as a member of the board of directors of Materiales Industriales de Chihuahua, S.A. de C.V., Calhidra y Mortero de Chihuahua, S.A. de C.V., Grupo Cementos de Chihuahua, S.A. de C.V., Construcentro de Chihuahua, S.A. de C.V., Control Administrativo Mexicano, S.A. de C.V., Compania Industrial de Parras, S.A. de C.V., Fabrica La Estrella, S.A. de C.V., Prendas Textiles, S.A. de C.V., Telas de Parras, S.A. de C.V., Canacem, Confederacion Patronal de la Republica Mexicana, Centro Patronal de Nuevo León, and Instituto Mexicano del Cemento y del Concreto. He is a member of the board and former chairman of Centro de Estudios del Sector Privado para el Desarrollo Sostenible, and member of the board of the World Environmental Center. He is also founder and chairman of the board of Comenzar de Nuevo, A.C.

 

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Annexure B

Directors and executive officers

 

		Victor Romo, Executive Vice President of Administration		Joined CEMEX in 1985 and has served as director of administration of CEMEX España from 1992 to 1994, general director of administration and finance of CEMEX España from 1994 to 1996, president of CEMEX Venezuela from 1996 to 1998, president of the South American and Caribbean region from 1998 to May 2003, and executive vice president of administration since May 2003. He is a graduate in public accounting and holds a master’s degree in administration and finance from ITESM. Previously, he worked for Grupo Industrial Alfa, S.A. de C.V. from 1979 to 1985.
		Francisco Garza, President of CEMEX North America Region and Trading		Joined CEMEX in 1988 and has served as vice president of trading From 1988 to 1992, and president of CEMEX USA from 1992 to 1994, president of CEMEX Venezuela and Cemento Bayano from 1994 to 1996, and president of CEMEX México from 1996 to 1998. In 1998, he was appointed president of the North American region and trading. He is a graduate in business administration from ITESM and holds an M.B.A. from the Johnson School of Management at Cornell University.   Mr Garza is adviser of the following boards: Control Administrativo Mexicano, S.A. de C.V., Grupo Aeroportuario del Sureste, S.A. de C.V., Empresas ICA, S.A. de C.V., Cámara Nacional del Cemento (CANACEM), Universidad de Monterrey, Universidad Regiomontana, EGADE (Escuela de Graduados en Administración y Dirección de Empresas), Ciudad de los Niños. He is also vice president of CAINTRA N.L. and regional adviser for Banco de México.
		Fernando González, President of the European Region		Joined CEMEX in 1989 and has served as vice president – human resources from 1992 to 1994, vice president – strategic planning From 1994 to 1998, president of CEMEX Venezuela from 1998 to 2000, president of CEMEX Asia from 2000 to May 2003, and president of the South American and Caribbean region from May 2003 to February 2005. In March 2005, he was appointed president of the expanded European Region, including the United Kingdom, France, Germany, the Rest of Europe (other than Spain and Italy), and Israel. He is a graduate in business administration and holds a master’s degree in administration from ITESM. Previously, he worked for Grupo Industrial Alfa, S.A. de C.V. from 1976 to 1989.   Mr González’s primary business address is Coldharbour Lane, Thorpe, Egham, Surrey TW20 8TD, United Kingdom.

 

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Annexure B

Directors and executive officers

 

		José Luis Sáenz de Miera, President of the Southern Europe, Middle East, Africa and Asia Region		Joined CEMEX España in 1993 as general manager of administration and finance, and in 1994 he was appointed president of CEMEX España. Mr Saenz de Miera has served as president of the Europe, Africa and Asia region from October 1998 to February 2005. Since 1 March 2005, Mr Saenz de Miera has been responsible for the Iberian Peninsula, Italy, Africa, and Asia. He studied economic sciences in Universidad Complutense de Madrid and is a certified public accountant from Instituto de Censores Jurados de Cuentas in Spain. Previously, he was employed from 1973 to 1993 at KPMG Peat Marwick, since 1982 as partner and between 1988 and 1993 as deputy senior partner. Mr Saenz de Miera is a citizen of Spain.   Mr Sáenz de Miera’s primary business address is Hernandez De Tejada # 1, 28027 Madrid, España.
		Juan Romero, President of CEMEX South America and the Caribbean		Joined CEMEX in 1989 and has occupied several senior management positions, including commercial director for CEMEX España, president of CEMEX, Colombia, commercial director for CEMEX México, and president of CEMEX México. In March 2005, Mr Romero became president of the South America and Caribbean Regions and México. Mr Romero graduated from Universidad de Comillas in Spain, where he studied Law and Economics and Enterprise Sciences. Previously, Mr Romero worked for Cementos Sanson and Cementos Portland Morata de Jalon. Mr Romero is a citizen of Spain.
		Rodrigo Treviño, Chief Financial Officer		Joined CEMEX in 1997 and has served as chief financial officer since then. He holds both bachelor and master of science degrees in industrial engineering from Stanford University. Prior to joining CEMEX, he served as the country corporate officer for Citicorp/Citibank Chile from 1995 to 1996, and prior to that, he worked at Citibank, N.A. from 1979 to 1994.
		Ramiro G. Villarreal, General Counsel		Joined CEMEX in 1987 and has served as general counsel since then, and also has served as secretary of the board of directors since 1995. He is a graduate of the Universidad Autonoma de Nuevo León with a degree in law. He also received a Master of Science Degree in finance from the University of Wisconsin. Prior to joining CEMEX, he served as assistant general director of Grupo Financiero Banpais from 1985 to 1987. Also, he is a member of the Board of Directors of Grupo Cementos Chihuahua, S.A. de C.V., Grupo Acosta Verde, S.A. de C.V., and he is the Secretary of the Board of Directors of ITESM and member of the Board of Directors of Universidad Regiomontana A.C.

 

CEMEX Bidder’s Statement    105

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Table of Contents

Annexure B

Directors and executive officers

 

		Directors of CEMEX
		Lorenzo H. Zambrano, Chairman and Chief Executive Officer		See entry under “Executive Officers of CEMEX”.
		Lorenzo Milmo Zambrano, Director		Director since 1977. He is also general director of Inmobiliaria Ermiza, S.A. de C.V.   Mr Zambrano’s primary business address is Vasconcelos # 210 Ote, 11 Piso, Torre Santander, Residencial San Agustin, Garza Garcia, Nuevo León, 66260 México.
		Armando J. García Segovia, Director and Executive Vice President of Development		See entry under “Executive Officers of CEMEX”.
		Rodolfo García Muriel, Director		Director since 1985. Since 1994, he has served as chairman of the board of directors of Compania Industrial de Parras, S.A. de C.V. In addition, he has served as the chief executive officer of Parras Cone de México, S.A. de C.V. He is a member of the board of directors of Parras Williamson, S.A. de C.V., Telas de Parras, S.A. de C.V., Synkro, S.A. de C.V., IUSA-GE, S. de R.L., Industrias Unidas, S.A., Apolo Operadora de Sociedades de Inversion, S.A. de C.V., and Cambridge Lee Industries, Inc. Mr Garcia Muriel is also vice president of Camara Nacional de la Industria Textil.   Mr Garcia Muriel’s primary business address is Paseo De Las Palmas # 731, 7° Piso, Desp. 701, Lomas De, Chapultepec 11000 México, D.F.
		Rogelio Zambrano Lozano, Director		Director since 1987. He is also a member of the advisory board of Grupo Financiero Banamex, S.A. de C.V. Zona Norte, director of Carza, S.A. de C.V. and Parque Plaza Sesamo, S.A. de C.V., and a member of the board of directors of Hospital San Jose.
				Mr Zambrano’s primary business address is Av. Vasconcelos # 799 Pte, San Pedro Garza Garcia, Nuevo León, 66230 México.

 

106    CEMEX Bidder’s Statement

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Table of Contents

Annexure B

Directors and executive officers

 

		Roberto Zambrano Villarreal, Director		Director since 1987 and president of the Audit Committee since 2002. He is also a member of the board of directors of CEMEX México. He is chairman of the board of directors of Desarrollo Integrado, S.A. de C.V., Administracion Ficap, S.A. de C.V., Aero Zano, S.A. de C.V., Ciudad Villamonte, S.A. de C.V., Focos, S.A. de C.V., C & I Capital, S.A. de C.V., Industrias Diza, S.A. de C.V., Inmobiliaria Sanni, S.A. de C.V., Inmuebles Trevisa, S.A. de C.V., Servicios Tecnicos Hidraulicos, S.A. de C.V., Mantenimiento Integrado, S.A. de C.V., Pilatus PC-12 Center de México, S.A. de C.V., and Pronatura, A.C. He is a member of the board of directors of S.L.I. de México, S.A. de C.V., Compania de Vidrio Industrial, S.A. de C.V., Comision de Cooperacion Ecologica Fronteriza (COCEF) and Banco de Desarrollo America del Norte (BDAN).   Mr Villarreal’s primary business address is Blvd. Diaz Ordaz # 200, Col. Santa Maria, Monterrey, Nuevo León, 64650 México.
		Bernardo Quintana Isaac, Director		Director since 1990. Since 1994, he has also served as chief executive officer and chairman of the board of directors of Empresas ICA Sociedad Controladora, S.A. de C.V. He is also a member of the board of directors of Telefonos de México, S.A. de C.V., Grupo Financiero Banamex, S.A. de C.V., Grupo Carso, S.A. de C.V., and Grupo Maseca, S.A. de C.V. He is also a member of Consejo Mexicano de Hombres de Negocios, Fundacion UNAM and, Fundacion ICA. He is a founding associate of Fundacion Letras Mexicanas and is currently president of Patronato UNAM.   Mr Isaac’s primary business address is Minera # 145, Edifico Central, 20 Piso, Col. Escandon, 11800 México, D.F.
		Dionisio Garza Medina, Director		Director since 1995. Since 1990, he has served as chairman of the board and chief executive officer of Alfa, S.A. de C.V. He is a member of the board of directors of Vitro, S.A., Cydsa, S.A., and ING México. He is also chairman of the executive board of the Universidad de Monterrey and a member of Consejo Mexicano de Hombres de Negocios, the advisory committee of the David Rockefeller Center for Latin American Studies of Harvard University, the board of Harvard Business School, and the advisory committee of the New York Stock Exchange.   Mr Medina’s primary business address is Av. Gomez Marin # 1111 Sur, Col. Carrizalejo, San Pedro Garza Garcia, Nuevo León, 66254 México.

 

CEMEX Bidder’s Statement    107

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Table of Contents

Annexure B

Directors and executive officers

 

		Alfonso Romo Garza, Director		Director since 1995. Since 1985, he as served as chairman of the board and chief executive officer of Savia, S.A. de C.V. and member of the board of Nacional de Drogas, S.A. de C.V., Grupo Maseca, S.A. de C.V., and Grupo Comercial Chedraui, S.A. de C.V. He is an external adviser of the World Bank Board for Latin America and the Caribbean, and a member of the board of The Donald Danforth Plant Science Center and Synthetic Genomics.   Mr Garza primary business address is Av. Roble # 565, Valle Del Campestre, San Pedro, Garza Garcia, Nuevo León, 66265 México.
		Mauricio Zambrano Villarreal, Director		Director since 2001. Mr Zambrano Villarreal served as an alternate member of the board of directors from 1995 to 2001. Since 1975, he has served as general vice-president of Desarrollo Integrado, S.A. de C.V. He is also chairman of the board of directors of Empresas Falcon, S.A. de C.V. and Trek Associates, Inc., secretary of the board of directors of Administracion Ficap, S.A. de C.V., Aero Zano, S.A. de C.V., Ciudad Villamonte, S.A. de C.V., Focos, S.A. de C.V., Compania de Vidrio Industrial, S.A. de C.V., C & I Capital, S.A. de C.V., Industrias Diza, S.A. de C.V., Inmuebles Trevisa, S.A. de C.V., and Servicios Tecnicos Hidraulicos, S.A. de C.V., and a member of the board of directors of Invercap, S.A. de C.V.   Mr Villarreal’s primary business address is Blvd. Diaz Ordaz # 200, Col Santa Maria, Monterrey, Nuevo León, 64650 México.
		Tomás Brittingham Longoria, Director		Director since 2002. Previously served as an alternate member of the board of directors from 1987 until 2002. Since 1983, he has served as chief executive officer of Laredo Autos, S.A. de C.V.   Mr Longoria’s primary business address is Reforma # 4944, Col. Lagos, Nuevo Laredo, Tamaulipas, 88290 México.
		José Manuel Rincón Gallardo, Director		Director since 2003. He is also the board’s “financial expert” and a member of the Audit Committee. He is president of the board of directors of Sonoco de México, S.A. de C.V., member of the board of directors and audit committee of Grupo Financiero Banamex, S.A. de C.V., and Grupo Herdez, S.A. de C.V., and member of the board of directors of Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V., Grupo Aeroportuario del Pacifico, S.A. de C.V., Grupo Cuervo, S.A. de C.V., Laboratorio Sanfer-Hormona, and Alexander Forbes México. Mr Rincón Gallardo is a member of Pro-Dignidad, A.C., Instituto Mexicano de Contadores Publicos, A.C., and Instituto Mexicano de Ejecutivos de Finanzas, A.C. Mr Rincón Gallardo was managing partner of KPMG México, and was a member of the board of directors of KPMG United States and KPMG International.   Mr Gallardo’s primary business address is Av. Las Palmas # 555, 10 Piso, Desp. 103, Col. Lomas De Chapultepec, 11000 México D.F.

 

108    CEMEX Bidder’s Statement

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Table of Contents

Annexure B

Directors and executive officers

 

		Tomás Milmo Santos, Director		Director since 2006 (prior to being director was alternate director since 2001). Since 1994, he has served as chief executive officer and board member, and since 2003, president of the board of directors of Axtel, S.A. de C.V., a telecommunications company that operates in the local, long distance and data transfer market. He is also a member of the board of directors of Coparmex, CEMEX México, HSBC México, and ITESM. Mr Milmo Santos holds a degree in economics from Stanford University.   Mr Santos’s primary business address is Blvd. Diaz Ordaz # 333, Col. Unidad San Pedro, San Pedro Garza Garcia, Nuevo León, 66215 México.
		Eduardo Brittingham Sumner, Alternate Director		Alternate member of the board of directors since 2002. Previously served as a regular member of the board of directors from 1967 until 2002. He is also general director of Laredo Autos, S.A. de C.V., Consorcio Industrial de Exportacion, S.A. de C.V., and an alternate member of the board of directors of Vitro, S.A.   Mr Sumner’s primary business address is Reforma # 4944, Col. Lagos, Nuevo Laredo, Tamaulipas, 88290 México.
		Jorge García Segovia, Alternate Director		Alternate director since 1985. He is also a member of the board of directors of Compania Industrial de Parras, S.A. de C.V.   Mr Segovia’s primary business address is Jose Benitez # 1900, Col. Obispado, Monterrey, Nuevo León, 64060 México.
		Luis Santos de la Garza, Alternate Director		Board examiner since 1989 and alternate director from 1987 to 1988. He was a Senator of México for the State of Nuevo León from 1997 to 2000. He was a founding partner of the Bufete de Abogados Santos-Elizondo-Cantu-Rivera-Gonzalez, De la Garza-Mendoza, S.C.   His primary business address is Av. Lazaro Cardenas # 2400 Desp. B-33, San Pedro Garza Garcia, Nuevo León, 66250 México.
		Fernando Ruiz Arredondo, Alternate Director		Mr Ruiz was alternate board examiner since 1981.
		Directors of Bidder
		Hector Medina		See “Executive Officers of CEMEX”.
		Ramiro G. Villarreal		See “Executive Officers of CEMEX”.

 

CEMEX Bidder’s Statement    109

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Table of Contents

Annexure B

Directors and executive officers

 

		Stephen Walker		Mr Walker was appointed as an independent director of Bidder, resident in Australia, with his appointment taking effect from Bidder’s incorporation. He is the current Chairman of British American Tobacco Australasia Holdings Limited, a position which he has held since October 2004 and has been a member of the board of this company or its predecessors since 1989. Mr Walker is currently a director of New City Australia Funds Management Limited and is also employed as a consultant to Allens Arthur Robinson, the Australian legal adviser to CEMEX. In the past five years, Mr Walker has served as an independent director of HIH Claims Support Limited and was also the chairman of that company’s audit committee from 2002 until July 2005.   Mr Walker is a citizen of Australia with a principal business address at Level 4, 126 Phillip Street, Sydney NSW 2000, Australia and a principal telephone number at that location of +61 2 9230 4000.

 

110    CEMEX Bidder’s Statement

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Table of Contents

Corporate directory

 

CEMEX		Bidder
CEMEX, S.A.B. de C.V.		CEMEX Australia Pty Ltd
Av. Ricardo Margain Zozaya #325		Level 4
Colonia Valle del Campestre		126 Phillip Street
Garza Garcia, N.L. 66265		Sydney NSW 2000
México		Australia
Lead Financial Adviser to CEMEX
Citigroup Global Markets Australia Pty Limited
2 Park Street
Sydney NSW 2000
Australia
Co-Financial Adviser to CEMEX
J.P. Morgan Australia Limited
Level 32, Grosvenor Place
225 George Street
Sydney NSW 2000
Australia
Australian Legal Adviser to CEMEX
Allens Arthur Robinson
Level 28, 126 Phillip Street
Sydney NSW 2000
Australia
US Legal Adviser to CEMEX
Cravath, Swaine & Moore LLP
825 Eighth Avenue
New York, NY 10019
United States of America

Australian Registry for the Offer

Computershare Investor Services Pty Limited

 

Deliveries		Post
Yarra Falls		GPO Box 2237
452 Johnston Street		Melbourne Vic 3001
Abbotsford Vic 3067		Australia
Australia

US Depositary for the Offer

Computershare Trust Company, N.A.

 

Deliveries		Post
250 Royall Street		PO Box 43011
Canton, MA 02021		Providence, RI 02940-3011
United States of America		United States of America

 

US Information Agent

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York NY 10022

United States of America

CEMEX Offer Information Line

 

Within Australia:		1300 721 344 (local call)
Within US:		(866) 244 1296 (for retail investors) or (212) 750 5833 (for banks and brokers)
Elsewhere:		+61 3 9415 4344

Please note that, to the extent required by the Corporations Act, calls to these numbers will be recorded.

Designed by walterwakefield.com.au

 

CEMEX Bidder’s Statement    111

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Table of Contents

Exhibit (a)(1)(B)

 

 

CEMEX Australia Pty Ltd ACN 122 401 405 Computershare Please return completed form to: Computershare Investor Services Pty Limited GPO Box 2237 Melbourne Victoria 8060 Australia Enquiries (within Australia) 1300 721 344 (within the US) (866) 244 1296 (elsewhere) 61 3 9415 4344 Facsimile 61 3 9473 2500 web.queries@computershare.com.au www.computershare.com

Use a black pen. Print in CAPITAL letters inside the grey areas. ABC 123 Where a choice is required, mark the box with an ‘X’

Share Transfer and Acceptance Form - Cash Offer

This is an important document and requires your immediate attention. If you are in doubt about how to deal with it, please consult your financial, legal or other professional advisor.

Securityholder details Subregister Your holding in Rinker Group Limited Cash consideration payable to you at US$13.00 per share Use this form to accept CEMEX Australia Pty Ltd (Bidder) offer for all your ordinary shares in Rinker Group Limited B Consideration

The consideration applicable under the terms of this offer is US$13.00 per Rinker Share. What CEMEX Australia Pty Ltd is offering to buy CEMEX Australia Pty Ltd is offering to buy all your Rinker Shares, on the terms set out in the Bidder’s Statement. What you will receive if you accept the Offer If you accept the Offer you will, subject to the satisfaction of the conditions of the Offer, receive US$13.00 for each of your Rinker Shares. Currency election (please select one option) I/We elect to receive payment of consideration under the Offer in US dollars OR I/We elect to have payment of consideration under the Offer converted into, and then paid to me/us in, Australian dollars (See instructions overleaf for information concerning the currency election.) To be completed by Securityholder

You will be deemed to have accepted the Offer in respect of all your Rinker Shares if you sign and return this form. If you hold your Rinker Shares in a CHESS Holding (see “subregister” above), to accept the Offer you can either: Instruct your Controlling Participant directly - normally your stockbroker or Authorise CEMEX Australia Pty Ltd to contact your Controlling Participant on your behalf, which you can do by signing and returning this form.

By signing and returning this form you will be deemed to have authorised CEMEX Australia Pty Ltd to contact your Controlling Participant directly via the CHESS system. Contact details Please provide your contact details in case we need to speak to you about this form. Name of contact person Contact person’s daytime telephone number Sign here - this section must be signed before we can process this form.

I/We accept the Offer made by CEMEX Australia Pty Ltd in respect of all my/our ordinary shares in Rinker Group Limited I/we hold and I/we agree to be bound by the terms and conditions of the Offer (including the instructions as to acceptance of the Offer on the back of this form) and transfer all of my/our Rinker Shares to CEMEX Australia Pty Ltd for the above consideration. Individual or Securityholder 1 Individual or Securityholder 2 Individual or Securityholder 3 Sole Director and Sole Company Secretary Director Director/Company Secretary

The directors reserve the right to make amendments to this form where appropriate. Please refer to the lodgement instructions overleaf. See back of form for completion guidelines Rl N 1 TKAC 032237_00KRZH

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How to complete this form Acceptance of the takeover offer Registration Details The Rinker Shares are currently registered in the name(s) printed on this form. Your consideration will be issued in the name(s) as it appears on the Rinker register of members.

If you have already sold all your Rinker Shares shown overleaf, do not keep or return this form. Please send this form to the broker who sold them for you. Consideration The cash consideration payable under the takeover offer is US$13.00 per share. Please place an “X” against one of the boxes to indicate how you wish to receive payment of consideration under the Offer. If you elect to have the consideration converted into Australian dollars, conversion will be at the exchange rate obtainable by the Australian Registry on the spot market in Sydney at approximately noon on the date consideration under the Offer is made available by CEMEX Australia Pty Ltd to the Australian Registry for your Rinker Shares. If you do not make a valid currency election, you will receive payment of consideration under the Offer in US dollars except if your address, as recorded in the Rinker register of members, is an Australian address, in which case consideration under the Offer will be converted into, and paid to you in, Australian dollars.

How to accept the Offer If your Rinker Shares are held in an Issuer Sponsored Holding, simply complete and return this form to the Australian Registry so that it is received by no later than 7:00pm (Sydney time) on 27 December 2006, unless extended.

If your Rinker Shares are in a CHESS Holding, you may contact your Controlling Participant directly (normally your stockbroker) with instructions to accept the Offer. If you do this, you will need to sign and return this form to your Controlling Participant. If you want CEMEX Australia Pty Ltd to contact your Controlling Participant on your behalf via the CHESS system, sign and return this form to the Australian Registry so that it is received no later than 7:00pm (Sydney time) on 27 December 2006 unless extended.

If you sign and return this form to the Australian Registry either in respect of an Issuer Sponsored Holding or so that contact may be made with your Controlling Participant on your behalf, you warrant to CEMEX Australia Pty Ltd (and authorise CEMEX Australia Pty Ltd to warrant on your behalf) that you have full legal and beneficial ownership of your Rinker Shares and that CEMEX Australia Pty Ltd will acquire them free from all Encumbrances. Neither CEMEX Australia Pty Ltd nor Computershare Investor Services Pty Limited (‘CIS’) will be responsible for any delays incurred by this process. You should allow sufficient time for the preferred party to initiate the acceptance of the Offer on your behalf.

Contact details Enter the name of a contact person and telephone number. These details will only be used in the event that the Australian Registry has a query regarding this form. Signature(s) You must sign the form as follows in the space provided: Joint holding: where the holding is in more than one name all of the securityholders must sign. Power of Attorney: to sign under power of attorney, you must have already lodged this document with the Australian Registry. Alternatively, attach a certified copy of the power of attorney to this form when you return it.

Deceased Estate: all executors must sign and, if not already noted by the Australian Registry, a certified copy of probate or letters of administration must accompany this form. Companies: this form must be signed by either 2 directors or a director and a company secretary. Alternatively, where the company has a sole director and, pursuant to the Corporations Act, there is no company secretary, or where the sole director is also the sole company secretary, that director may sign alone. Delete titles as applicable. Lodgement of Share Transfer and Acceptance Form

This form must be received at the Melbourne office of CIS by no later than 7:00pm (Sydney time) on 27 December 2006, unless extended. Return this form in the provided envelope or to: Postal Address Computershare Investor Services Pty Limited GPO Box 2237 MELBOURNE VIC 8060 AUSTRALIA OR Hand Delivery Computershare Investor Services Pty Limited Yarra Falls 452 Johnston Street ABBOTSFORD VIC 3067 Privacy Statement

Personal information is collected on this form by CIS, as registrar for securities issuers (“the issuer”), for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. Your personal information may be disclosed to our related bodies corporate, to external service companies such as print or mail service providers, or as otherwise required or permitted by law. If you would like details of your personal information held by CIS, or you would like to correct information that is inaccurate, incorrect or out of date, please contact CIS. In accordance with the Corporations Act 2001, you may be sent material (including marketing material) approved by the issuer in addition to general corporate communications. You may elect not to receive marketing material by contacting CIS. You can contact CIS using the details provided on the front of this form or E-mail privacy@computershare.com.au If you have any enquiries concerning the Offer please contact CEMEX Offer Information Line on telephone 1300 721 344 (within Australia), (866) 244 1296 (within the US) or +61 3 9415 4344 (elsewhere).

For legal reasons, all calls to these numbers will be recorded. Please note this form may not be used to change your address. Please return the completed form in the envelope provided or to the address opposite: Computershare Investor Services Pty Limited GPO Box 2237 Melbourne Victoria 8060 Australia

Exhibit (a)(1)(C)

ADS LETTER OF TRANSMITTAL

TO TENDER AMERICAN DEPOSITARY SHARES

EVIDENCED BY AMERICAN DEPOSITARY RECEIPTS

of

RINKER GROUP LIMITED

Pursuant to the Bidder’s Statement dated October 30, 2006

by

CEMEX Australia Pty Ltd

an indirect wholly-owned subsidiary of

CEMEX, S.A.B. de C.V.

 

The Offer will expire at 7 pm (Sydney time) on 27 December 2006 / 3 am (New York time) on 27 December 2006, unless the Offer is extended or the Offer is withdrawn.

THE US DEPOSITARY FOR THE OFFER IS:

Computershare Trust Company, N.A.

 

BY MAIL: Computershare Trust Company, N.A. CEMEX Voluntary Offer P.O. Box 43011 Providence, RI 02940-3011		BY OVERNIGHT DELIVERY: Computershare Trust Company, N.A. CEMEX Voluntary Offer 250 Royall Street Canton, MA 02021

Retail Investors Call Toll Free: (866) 244-1296

THE US INFORMATION AGENT FOR THE OFFER IS:

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, NY 10022

Institutional Investors, Banks and Brokers Call Collect: (212) 750-5833

DELIVERY OF THIS ADS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE US DEPOSITARY. THIS ADS LETTER OF TRANSMITTAL IS ONLY FOR USE IN ACCEPTING THE OFFER TO PURCHASE RINKER ADSs (AS DEFINED BELOW). RINKER SHARES (AS DEFINED BELOW) CANNOT BE TENDERED BY MEANS OF THIS ADS LETTER OF TRANSMITTAL. IF YOU HOLD RINKER SHARES AND WISH TO ACCEPT THE OFFER, YOU SHOULD USE THE BLUE SHARE ACCEPTANCE FORM.

 

DESCRIPTION OF RINKER ADSs TENDERED
Name(s) and Address(es) of Rinker ADSholder(s) (Please fill in, if blank, exactly as name(s) appear(s) on ADR certificate(s), if applicable)		Rinker ADR(s) Tendered (Attach additional list if necessary)
		ADR Certificate Number(s)*		Total Number of Rinker ADSs Represented by ADR(s)*
		Total Number of Rinker ADS(s) Tendered**
*  Need not be completed for book-entry transfers. **  Pursuant to the Offer, if the Rinker ADSholder elects to tender, all Rinker ADSs that the holder owns must be tendered. See Section 8.3(a) of the Bidder’s Statement. ¨  CHECK HERE IF ADR CERTIFICATE(S) HAVE BEEN LOST, DESTROYED OR STOLEN. SEE INSTRUCTION 12.          Number of Rinker ADSs represented by lost, stolen or destroyed ADRs:

 

 

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Please read this entire document and the instructions accompanying this document carefully before completing this ADS Letter of Transmittal. You must sign this ADS Letter of Transmittal in the appropriate space below unless an Agent’s Message (as defined in the Bidder’s Statement) is utilized.

You have received this ADS Letter of Transmittal in connection with the Offer by CEMEX Australia Pty Ltd (Bidder), a proprietary company organized under the laws of Victoria, Australia and an indirect wholly-owned subsidiary of CEMEX, S.A.B. de C.V. (CEMEX), to acquire all outstanding ordinary shares of Rinker (Rinker Shares), and all outstanding American depositary shares (Rinker ADSs) which each represent an ownership interest in five (5) Rinker Shares and are evidenced by American depositary receipts (ADRs), upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), as described in the Bidder’s Statement, dated October 30, 2006.

This ADS Letter of Transmittal is to be used either if the ADRs evidencing Rinker ADSs are to be forwarded herewith or, unless an Agent’s Message is utilized, delivery of ADSs is to be made by book-entry transfer to the US Depositary’s account at The Depository Trust Company (DTC) pursuant to the procedures for book-entry transfer set forth in Section 8.3(d) of the Bidder’s Statement. Delivery of this ADS Letter of Transmittal to DTC does not constitute delivery to Computershare Trust Company, N.A. (US Depositary).

In the event of an inconsistency between the terms and procedures in this ADS Letter of Transmittal and the Bidder’s Statement, the terms and procedures in the Bidder’s Statement shall govern.

If a Rinker ADSholder (as defined in the Bidder’s Statement) wishes to tender into the Offer and ADRs representing such ADSs or any other required documents cannot be delivered to the US Depositary or the procedures for book-entry transfer cannot be completed, in each case, before the end of the Offer Period, such holder’s acceptance of the Offer may nevertheless be effected by following the procedures for guaranteed delivery as described in Section 8.3(d) of the Bidder’s Statement.

When to complete this ADS Letter of Transmittal. In order to effectively tender Rinker ADSs pursuant to the Offer, this ADS Letter of Transmittal must be properly delivered to the US Depositary prior to the end of the Offer Period (as defined in the Bidder’s Statement, Section 9.1).

How to complete this ADS Letter of Transmittal. After carefully reading this entire document and all of the Instructions below, Rinker ADSholders should:

 

•

Indicate in the table on page 1 the total number of Rinker ADSs that they own and wish to tender. Check any applicable boxes and provide any required information.

 

•

Check any applicable boxes on page 3 and, if a box is checked, provide any required information.

 

•

Make the currency election by checking one of the two boxes on page 8.

 

•

Provide special payment and/or special delivery instructions, if necessary, in the space provided on page 8.

 

•

After carefully reviewing the entire ADS Letter of Transmittal, including the Instructions, sign this ADS Letter of Transmittal in the appropriate space provided below on page 7, unless an Agent’s Message is utilized. Also, if necessary, procure any required signature guarantee, in the spaces provided on page 7.

 

•

Complete the Substitute Form W-9 on page 13.

 

•

Properly submit this ADS Letter of Transmittal with all required information to the US Depositary as instructed.

Questions and requests for assistance regarding the appropriate method for tendering your Rinker ADSs may be directed by institutional investors, banks and brokers to Innisfree M&A Incorporated, the US Information Agent, and by retail investors to Computershare Trust Company, N.A., the US Depositary, at the appropriate telephone number or address set forth on the last page of this ADS Letter of Transmittal.

 

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¨		CHECK HERE IF ANY OR ALL TENDERED RINKER ADSs ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE US DEPOSITARY’S ACCOUNT AT DTC AND COMPLETE THE FOLLOWING (ONLY DTC PARTICIPANTS MAY DELIVER ADSs BY BOOK-ENTRY TRANSFER):
		Name of Tendering Institution:
		DTC Participant Number:
		Transaction Code Number:

 

¨		CHECK HERE IF ANY OR ALL TENDERED RINKER ADSs ARE BEING DELIVERED PURSUANT TO AN ADS NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE US DEPOSITARY AND COMPLETE THE FOLLOWING:
		Name(s) of Registered Holder(s):
		Date of Execution of ADS Notice of Guaranteed Delivery:
		Name of Institution that Guaranteed Delivery:

 

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NOTE: SIGNATURES MUST BE PROVIDED ON PAGES 7 (THIS ADS LETTER OF TRANSMITTAL)

AND 13 (SUBSTITUTE FORM W-9) BELOW.

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.

Ladies and Gentlemen:

The undersigned hereby instructs the US Depositary to accept the Offer on behalf of the undersigned with respect to the above-described Rinker ADSs (which shall be deemed to include, without limitation, the Rinker Shares represented thereby), upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment).

The undersigned hereby acknowledges that delivery of this ADS Letter of Transmittal, ADRs evidencing tendered Rinker ADSs, or any other required documents, or book-entry transfer of ADSs, to the US Depositary in connection herewith, will (without any further action by the US Depositary) constitute acceptance, subject to the withdrawal rights described in Section 8.9 of the Bidder’s Statement, by the undersigned with respect to such ADSs, upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment).

Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), and effective upon the end of the Offer Period, and if the undersigned has not validly withdrawn his or her acceptance, the undersigned hereby:

(a) sells, assigns and transfers all right, title and interest in and to the above-described ADSs and, to the extent paid after the settlement of the Offer, any and all cash dividends, distributions, rights, other ADSs or other securities issued or issuable in respect to such ADSs (collectively, Distributions); and

(b) irrevocably constitutes and appoints the US Depositary as the true and lawful agent and attorney-in-fact of the undersigned with respect to such ADSs and any Distributions, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) with respect to such ADSs, (i) to deliver the ADRs evidencing such ADSs and any Distributions or, if tender is by book-entry transfer, accept transfer of such ADSs and any Distributions on the account books maintained at DTC, together, in any such case, with all accompanying evidences of transfer and authenticity to, or upon the order of, Bidder, (ii) to surrender such ADSs to the depositary for Rinker’s ADR program and to instruct the depositary for Rinker’s ADR program to deliver the Rinker Shares underlying such ADSs and (iii) to receive all benefits and otherwise exercise all rights of beneficial ownership of such ADSs (and any Distributions).

The undersigned agrees that Bidder may instruct the US Depositary to take the actions specified in clauses (b)(i) and (ii) from the immediately preceding paragraph prior to acceptance by Bidder of those ADSs tendered in the Offer. Bidder shall not have the rights specified in clause (b)(iii) from the immediately preceding paragraph until it has irrevocably accepted those ADSs tendered in the Offer. Upon acceptance by Bidder of tendered ADSs in the Offer, subject to the withdrawal rights described in Section 8.9 of the Bidder’s Statement, the undersigned shall have no further rights with respect to those ADSs, except that the undersigned shall have the right to receive from Bidder the consideration in accordance with the Offer.

Subject to the fulfillment, or waiver prior to the end of the Offer Period, of all the Defeating Conditions defined in the Bidder’s Statement, the undersigned hereby irrevocably appoints Bidder and each of its directors and nominees severally as the attorney-in-fact and proxy of the undersigned to exercise all powers and rights that the undersigned has as the registered holder of Rinker ADSs, including:

(i) attending any meeting of Rinker, and voting at any meeting of Rinker’s security holders, proposing or seconding any motion at any such meeting, and demanding a poll for any vote at any such meeting;

(ii) requisitioning the convening of any general meeting of Rinker and convening a general meeting pursuant to any such requisition; and

(iii) signing any form, notice, instrument or other document (including any proxy appointment) relating to the tendered Rinker ADSs.

 

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Such appointment specified in the immediately preceding paragraph will terminate on the earlier of the withdrawal of your acceptance of the Offer or the end of the Offer Period or, if all Defeating Conditions of the Offer have been fulfilled or waived, the registration of Bidder as the holder of your Rinker ADSs. This power of attorney and this proxy are irrevocable and are granted in consideration of the acceptance for payment of such ADSs upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment). Such acceptance for payment shall, without further action, revoke any prior powers of attorney and proxies granted by the undersigned at any time with respect to such ADSs (and any Distributions), and no subsequent powers of attorney, proxies, consents or revocations may be given by the undersigned with respect thereto (and, if given, will not be deemed effective).

The undersigned hereby agrees that in exercising the powers and rights conferred by the power of attorney in Section 8.5(d) of the Bidder’s Statement, each attorney may act in the interest of Bidder as the intended registered holder and beneficial owner of the tendered Rinker ADSs and the underlying Rinker Shares.

Except as contemplated by Section 8.5 of the Bidder’s Statement, and while the appointment in that section continues and is in effect, the undersigned hereby agrees not to attend or vote in person or by proxy, attorney or corporate representative at any meeting of Rinker, or to exercise or purport to exercise (in person or by proxy, attorney, or corporate representative or otherwise) any of the powers conferred by the power of attorney in Section 8.5(d) of the Bidder’s Statement.

The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the beneficial ownership of the Rinker ADSs (and any Distributions) tendered hereby and that, when the same are accepted for payment by Bidder, Bidder will acquire good, marketable and unencumbered title thereto (including any Distributions), free and clear of all liens, restrictions, charges and encumbrances, and the same will not be subject to any adverse claims.

The undersigned shall, upon request, execute and deliver any additional documents deemed by the US Depositary or Bidder to be necessary or desirable to complete the sale, assignment and transfer of the Rinker ADSs (and any Distributions) tendered hereby.

Except as provided in the Bidder’s Statement, this tender is irrevocable. In addition, all authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, personal representatives, trustees in bankruptcy, successors and assigns of the undersigned.

The undersigned understands that acceptance of the Offer pursuant to the procedures described herein and the instructions hereto will, upon acceptance by Bidder, constitute a binding agreement between the undersigned and Bidder upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment). Without limiting the foregoing, if the consideration paid in the Offer is amended, the consideration paid to the undersigned will be the amended consideration notwithstanding the fact that a different consideration has been stated in the Bidder’s Statement. The undersigned recognizes that under certain circumstances set forth in the Bidder’s Statement, Bidder may not be required to accept for payment any of the Rinker ADSs tendered hereby.

If acceptance has been made with respect to Rinker ADSs, then a separate acceptance with respect to the Rinker Shares represented by such Rinker ADSs may not be made.

In the event that the box entitled “Special Payment Instructions” is not completed, the undersigned hereby instructs the US Depositary to (a) issue a check for the consideration for the Rinker ADSs tendered and accepted for payment to the undersigned and/or (b)(i) for Rinker ADSs not accepted for payment, in the case of Rinker ADSs held in certificated form, to issue or return any ADRs in the name(s) of the undersigned or (b)(ii) for Rinker ADSs not accepted for payment, in the case of Rinker ADSs held in book-entry form, to credit the

 

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account at DTC of the undersigned. In the event that the box entitled “Special Payment Instructions” is completed, the undersigned hereby instructs the US Depositary to (a) issue a check for the consideration for the Rinker ADSs tendered and accepted for payment to the person(s) so indicated and/or (b)(i) for Rinker ADSs not accepted for payment, in the case of Rinker ADSs held in certificated form, issue or return any ADRs in the name(s) of the person(s) so indicated or (b)(ii) for ADSs not accepted for payment, in the case of Rinker ADSs held in book-entry form, credit the account at DTC of the person(s) so indicated.

In the event that the box entitled “Special Delivery Instructions” is not completed, the undersigned hereby instructs the US Depositary to mail (a) a check for the consideration for the Rinker ADSs tendered and accepted for payment to the undersigned and/or (b) for Rinker ADSs not accepted for payment, in the case of Rinker ADSs held in certificated form, any ADRs (and accompanying documents, as appropriate) to the undersigned at the address(es) shown below the undersigned’s signature(s). In the event that the box entitled “Special Delivery Instructions” is completed, the undersigned hereby instructs the US Depositary to mail (a) a check for the consideration for the Rinker ADSs tendered and accepted for payment to the person(s) so indicated and/or (b) any ADRs for Rinker ADSs held in certificated form not accepted for payment (and accompanying documents, as appropriate) to the person(s) so indicated.

In the event that no valid currency election is made on page 8, consideration for the Rinker ADSs will be distributed in US dollars. Consideration for your Rinker ADSs will be paid, net of any expenses incurred, to tendering holders of Rinker ADSs in accordance with the timing of payment set forth in the Bidder’s Statement after a properly submitted ADS Letter of Transmittal with all necessary attachments is received by the US Depositary.

Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), this ADS Letter of Transmittal shall not be considered complete and valid, and payment of the consideration under the Offer shall not be made, until the ADRs evidencing tendered Rinker ADSs or, in the case of a book-entry transfer, Book-Entry Confirmation (as defined below), in respect to which the Offer is being accepted and any other required documents have been received by the US Depositary at one of its addresses set forth on the first and last pages of this ADS Letter of Transmittal. Bidder will determine in its sole discretion all questions as to the form of documents, including any notice of withdrawal and the validity, eligibility (including time of receipt) and acceptance of tendered Rinker ADSs. Bidder’s determination will be final and binding on all parties.

The terms and conditions of the Offer contained in the Bidder’s Statement, as may be supplemented or amended, shall be deemed to be incorporated in, and form part of, this ADS Letter of Transmittal, which shall be read and construed accordingly. In the event of any inconsistency between the terms and procedures in this ADS Letter of Transmittal and the Bidder’s Statement, the terms and procedures in the Bidder’s Statement shall govern.

 

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IMPORTANT—SIGNATURE SECTION RINKER ADSHOLDERS SIGN HERE (PLEASE ALSO COMPLETE SUBSTITUTE FORM W-9 INCLUDED HEREIN)

Sign Here:

Sign Here:

(Signature(s) of Owner(s))   Dated:                                 , 2006   Must be signed by registered holder(s) exactly as name(s) appear(s) on the ADRs evidencing the Rinker ADSs (if applicable) or by person(s) to whom ADRs surrendered have been assigned and transferred, as evidenced by endorsement, stock powers and other documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5.

Name(s):

Capacity (Full Title):

Address (including Zip Code):

Telephone Number (including Area Code):

Taxpayer Identification or Social Security Number:

 

GUARANTEE OF SIGNATURE(S) (See Instructions 1 and 5) FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE BELOW

Authorized Signature(s):

Name:

Name of Firm:

Address (including Zip Code):

Telephone Number (including Area Code):

Dated:                     , 2006

 

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SPECIAL PAYMENT INSTRUCTIONS (See Instructions 1, 5, 6 and 7)   To be completed ONLY if (1) the check for the consideration with respect to the Rinker ADSs purchased is to be issued in the name of someone other than the undersigned on page 7, (2) ADRs for Rinker ADSs not accepted for payment are to be issued in the name of someone other than the undersigned on page 7 or (3) Rinker ADSs tendered hereby and delivered by book-entry transfer that are not accepted for payment are to be returned by credit to an account maintained at DTC other than the account indicated above on page 3.   Issue: ¨ Payment    ¨ Certificate(s) to   Name:                                                                                                    (Please Print)   Address (including Zip Code):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 (Taxpayer Identification or Social Security Number)   ¨       Credit unpurchased Rinker ADSs delivered by book-entry transfer to DTC participant number set forth below:                                                                                                                                                                                                                                       (Account Number)				SPECIAL DELIVERY INSTRUCTIONS (See Instructions 1, 5, 6, and 7)   To be completed ONLY if the check for the consideration for Rinker ADSs purchased or ADRs evidencing Rinker ADSs which are not purchased are to be mailed to someone other than the undersigned, or to the undersigned at an address other than shown above on page 7.   Mail: ¨ Payment    ¨ Certificate(s) to   Name:                                                                                                    (Please Print)   Address (including Zip Code):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 (Taxpayer Identification or Social Security Number)

 

CURRENCY ELECTION (see Instruction 13) (please select one option)
¨       The undersigned hereby elects to receive payment of consideration under the Offer in US dollars.		OR		¨       The undersigned hereby elects to have payment of consideration under the Offer converted into, and then paid in, Australian dollars.

 

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INSTRUCTIONS

Forming Part of the Terms and Conditions of the Offer

1. Guarantee of Signatures. No signature guarantee is required on this ADS Letter of Transmittal if (a) this ADS Letter of Transmittal is signed by the registered holder(s) (which, for purposes of this section, includes any participant in DTC’s system whose name appears on a security position listing as the owner of the Rinker ADSs) of Rinker ADSs tendered herewith, unless such registered holder(s) has completed either the box entitled “Special Payment Instructions” or the box entitled “Special Delivery Instructions” on this ADS Letter of Transmittal or (b) such Rinker ADSs are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association, Inc., including the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program and the Stock Exchange Medallion Program (each, an Eligible Institution). In all other cases, all signatures on this ADS Letter of Transmittal must be guaranteed by an Eligible Institution. See Instructions 5 and 7.

2. Requirements of Tender. This ADS Letter of Transmittal is to be completed by holders of Rinker ADSs either if ADRs evidencing Rinker ADSs are to be forwarded herewith or, unless an Agent’s Message is utilized, if tenders are to be made pursuant to the procedure for tender by book-entry transfer as described in Section 8.3(d) of the Bidder’s Statement. ADRs evidencing tendered Rinker ADSs, this ADS Letter of Transmittal properly completed and duly executed (with any required signature guarantees) and, in the case of a book-entry transfer, an Agent’s Message, confirmation of a book-entry transfer into the US Depositary’s account at DTC of Rinker ADSs delivered by book-entry transfer (Book-Entry Confirmation), and/or any other documents required by this ADS Letter of Transmittal, must be received by the US Depositary at one of its addresses set forth on the first and last pages of this ADS Letter of Transmittal prior to the end of the Offer Period. If ADRs are forwarded to the US Depositary in multiple deliveries, a properly completed and duly executed ADS Letter of Transmittal must accompany each such delivery.

The term Agent’s Message means a message, transmitted by DTC to, and received by, the US Depositary and forming a part of the Book-Entry Confirmation, which states that DTC has received an express acknowledgment from the participant in the DTC’s systems tendering an interest in the Rinker ADSs, that such participant has received and agrees to be bound by the terms of this ADS Letter of Transmittal and that Bidder may enforce such agreement against the participant.

Rinker ADSholders who own ADRs, representing Rinker ADSs, that cannot be delivered to the US Depositary, or who are unable to deliver any other required documents to the US Depositary, or who cannot complete the procedures for book-entry transfer, in each case, before the end of the Offer Period, may tender their Rinker ADSs into the Offer by properly completing and duly executing an ADS Notice of Guaranteed Delivery pursuant to the procedures for guaranteed delivery as described in Section 8.3(d) of the Bidder’s Statement. Pursuant to the procedures for guaranteed delivery, (1) such tender must be made by or through an Eligible Institution, (2) a properly completed and duly executed ADS Notice of Guaranteed Delivery, in the form provided by Bidder, must be received by the US Depositary prior to the end of the Offer Period and (3) within three New York Stock Exchange trading days after the date of the receipt of the ADS Notice of Guaranteed Delivery by the US Depositary, the following must be received by the US Depositary: (i) in the case of Rinker ADSs held in certificated form, the ADRs evidencing such Rinker ADSs, in proper form for transfer, together with a properly completed and duly executed ADS Letter of Transmittal (with any required signature guarantees) and any other documents required by this ADS Letter of Transmittal, or (ii) in the case of Rinker ADSs held in book-entry form, confirmation of a book-entry transfer of such Rinker ADSs to the account of the US Depositary at DTC, together with (x) a properly completed and duly executed ADS Letter of Transmittal (with any required signature guarantees) or an Agent’s Message and (y) any other documents required by the ADS Letter of Transmittal.

The method of delivery of this ADS Letter of Transmittal, ADRs evidencing Rinker ADSs and any other required documents, including delivery through DTC, is at the sole option and risk of the tendering

 

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holder of Rinker ADSs, and delivery will be deemed valid and complete only when actually received by the US Depositary (including, in the case of book-entry transfer, by Book-Entry Confirmation). If delivery is by mail, registered mail with return receipt requested along with proper insurance is recommended. In all cases, sufficient time should be allowed to ensure timely delivery before the end of the Offer Period.

No alternative, conditional or contingent tenders will be accepted. All tendering holders of Rinker ADSs, by execution of this ADS Letter of Transmittal, waive any right to receive any notice of the acceptance of their Rinker ADSs for payment.

All questions as to the form and validity (including time of receipt) and acceptance for payment of any tender of Rinker ADSs will be determined by Bidder, in its sole discretion, which determination shall be final and binding. Bidder reserves the absolute right to reject any or all tenders of Rinker ADSs if Bidder determines such Rinker ADSs are not in proper form or the acceptance for payment of or payment for which may, in the opinion of Bidder’s counsel, be unlawful. Bidder also reserves the absolute right to waive any defect or irregularity in any tender of Rinker ADSs. None of Bidder, Rinker, the US Depositary, the US Information Agent or any other person or party will be under any duty to give notification of any defect or irregularity in any tender or incur any liability for failure to give any such notification.

3. Inadequate Space. If the space provided herein is inadequate, the certificate numbers of the ADRs (if applicable), the total number of Rinker ADSs evidenced by such ADRs, and any other required information should be listed on a separate schedule attached hereto and separately signed on each page thereof in the same manner as this ADS Letter of Transmittal is signed.

4. No Partial Tenders. Pursuant to the terms of the Offer, Bidder is offering to purchase all of your Rinker ADSs. Thus, partial tenders are not permitted. All Rinker ADSs delivered to the US Depositary will be deemed to have been tendered into the Offer. Any attempt to tender less than 100% of Rinker ADSs owned by any Rinker ADSholder will be deemed to be a tender of all Rinker ADSs owned by that Rinker ADSholder. For more information, see Sections 8.3(a) and 8.5(a) of the Bidder’s Statement.

5. Signatures on ADS Letter of Transmittal, Stock Powers and Endorsements. If this ADS Letter of Transmittal is signed by the registered holder(s) of the Rinker ADSs tendered hereby, the signature(s) must correspond to the name(s) as written on the face of the ADRs without alteration.

If any of the Rinker ADSs evidenced by ADRs tendered hereby are held of record jointly by two or more owners, each owner must sign this ADS Letter of Transmittal.

If any of the tendered Rinker ADSs are registered in different names on several ADRs, it will be necessary to complete, sign and submit as many separate ADS Letters of Transmittal as there are different registrations of ADRs.

If this ADS Letter of Transmittal or any certificates or stock powers are signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and submit proper evidence satisfactory to Bidder of the authority of such person to so act.

If this ADS Letter of Transmittal is signed by the registered holder(s) of the Rinker ADSs listed and transmitted hereby, no endorsements of ADRs or separate stock powers are required unless payment is to be made for ADRs or Rinker ADSs not accepted for payment are to be issued in the name of a person other than the registered holder(s). Signatures on any such ADRs or stock powers must be guaranteed by an Eligible Institution.

If this ADS Letter of Transmittal is signed by a person other than the registered holder(s) of the ADRs listed and transmitted hereby, the ADRs must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on the ADRs. Signature(s) on any such ADRs or stock powers must be guaranteed by an Eligible Institution.

 

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6. Stock Transfer Taxes. If payment of the consideration is to be made to, or if ADRs representing Rinker ADSs not accepted for payment are to be issued in the name of, any person other than the registered holder(s), or if tendered ADRs are registered in the name of any person other than the person(s) signing this ADS Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s) or such other person) payable on account of the transfer to such other person will be deducted from the consideration paid for such tendered Rinker ADSs unless evidence satisfactory to Bidder of the payment of such taxes, or exemption therefrom, is submitted.

Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the ADRs transmitted hereby.

7. Special Payment and Delivery Instructions. If a check is to be issued in the name of, and/or ADRs representing Rinker ADSs not accepted for payment are to be issued or returned to, a person other than the person(s) signing this ADS Letter of Transmittal or if a check and/or such ADRs are to be returned to a person other than the person(s) signing this ADS Letter of Transmittal or to an address other than that shown in this ADS Letter of Transmittal, the appropriate boxes on this ADS Letter of Transmittal must be completed. Rinker ADSholders who hold their Rinker ADSs through DTC may request that Rinker ADSs not accepted for payment be credited to an account maintained at DTC as designated under “Special Payment Instructions.” If no such instructions are given, such Rinker ADSs not accepted for payment will be returned by crediting such holder’s account at DTC.

8. Substitute Form W-9. Under US Federal income tax law, a non-exempt holder of Rinker ADSs that is a US citizen or resident alien is required to provide the US Depositary with such holder’s correct Taxpayer Identification Number (TIN) (e.g., social security number or employer identification number) on the Substitute Form W-9 included herewith. If Rinker ADSs are registered in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. Failure to provide the information on the form may subject the surrendering holder to a $50 penalty and to backup withholding (at the appropriate rate, currently 28%) on the payment of any cash.

The tendering Rinker ADSholder must check the box in Part 3 of the Substitute Form W-9 if a TIN has not been issued and the holder has applied for a number or intends to apply for a number in the near future. If a TIN has been applied for and the US Depositary is not provided with a TIN before payment is made, the US Depositary will backup withhold (at the appropriate rate, currently 28%) on all payments to such surrendering holders of any consideration due for their former Rinker ADSs. Please review the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional details on what TIN to give the US Depositary.

Certain Rinker ADSholders (including, for example, corporations and certain foreign individuals) are exempt from backup withholding requirements. Exempt holders should indicate their exempt status on the Substitute Form W-9. In order for a foreign individual to qualify as an exempt recipient, such individual must submit a statement on Internal Revenue Service Form W-8BEN, signed under penalties of perjury, attesting to such individual’s exempt status. Rinker ADSholders are urged to consult their own tax advisors to determine whether they are exempt from these backup withholding and reporting requirements.

If backup withholding applies, the US Depositary is required to withhold up to 28% of any payments to be made to the Rinker ADSholder. Backup withholding is not an additional US Federal income tax. Rather, the US Federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained by filing a tax return with the Internal Revenue Service. The US Depositary cannot refund amounts withheld by reason of backup withholding.

 

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9. Rinker Shareholders. Rinker Shares cannot be tendered by means of this ADS Letter of Transmittal (which is exclusively for use in respect of Rinker ADSs). If you hold Rinker Shares, you should use the blue Share Acceptance Form for tendering such Rinker Shares into the Offer by following the instructions set forth therein. To obtain a copy of the blue Share Acceptance Form, contact the US Information Agent (for institutional investors, banks and brokers) or US Depositary (for retail investors) at the appropriate address or telephone number set forth on the last page of this ADS Letter of Transmittal.

10. Requests for Assistance or Additional Copies. Questions and requests for assistance or additional copies of the Bidder’s Statement, this ADS Letter of Transmittal, the ADS Notice of Guaranteed Delivery and the Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 may be directed to the US Information Agent (for institutional investors, banks and brokers) or US Depositary (for retail investors) at the appropriate address or telephone number set forth on the last page of this ADS Letter of Transmittal.

11. Waiver of Conditions. The conditions of the Offer may be waived by Bidder at the times and in the manner described in Section 8.7(d) of the Bidder’s Statement.

12. Lost, Destroyed or Stolen Certificates. If any ADR(s) representing Rinker ADS(s) has been lost, destroyed or stolen, the holder of such Rinker ADR(s) should, in addition to checking the box on page 3 of this ADS Letter of Transmittal, promptly notify JPMORGAN CHASE BANK, N.A., the depositary for the Rinker ADR program. The holder of the Rinker ADS will then be instructed as to the steps that must be taken in order to replace the ADR(s). This ADS Letter of Transmittal and any other required documents cannot be processed until the procedures for replacing lost, destroyed or stolen certificates have been followed.

13. Currency Election. Check one of the boxes on page 8 to indicate the currency in which you wish to receive payment of consideration under the Offer. If a Rinker ADSholder elects to have the consideration converted into Australian dollars, conversion will be at the exchange rate obtainable by the US Depositary on the spot market in New York at noon on the date consideration under the Offer is made available by Bidder to the US Depositary for its Rinker ADSs. If no currency election is made, a Rinker ADSholder will receive payment of consideration under the Offer in US dollars.

IMPORTANT:

This ADS Letter of Transmittal (with any required signature guarantees) together with ADRs evidencing tendered Rinker ADSs or, in the case of a book-entry transfer, an Agent’s Message, or Book-Entry Confirmation, and any other required documents, must be received by the US Depositary, in any case, no later than 7 pm (Sydney time) on 27 December 2006 / 3 am (New York time) on 27 December 2006, unless the Offer is extended or is withdrawn.

 

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SUBSTITUTE FORM W-9 Department of the Treasury Internal Revenue Service		Part 1—PLEASE PROVIDE YOUR NAME AND TIN IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW		Name   Social Security Number(s) OR Taxpayer Identification Number(s)
		Part 2—Certification—Under penalties of perjury, I certify that: (1) thenumber shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me) and   (2) Iam not subject to backup withholding because (a) I am exempt from backup withholding or (b) I have not been notified by the Internal Revenue Service (the “IRS”) that I am subject to backup withholding as a result of a failure to report all interest or dividends or (c) the IRS has notified me that I am no longer subject to backup withholding.
Payer’s Request for Taxpayer Identification Number (TIN)		Certification instructions—You must cross out item (2) in Part 2 above if you have been notified by the IRS that you are subject to backup withholding because of under-reporting interest or dividends on your tax returns. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS stating that you are no longer subject to backup withholding, do not cross out such item (2). If you are exempt from backup withholding, check the box in Part 4 above.		Part 3— Awaiting TIN    ¨   Part 4— Exempt TIN    ¨
SIGNATURE				DATE

 

NOTE:

FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN BACKUP WITHHOLDING OF 28% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INFORMATION.

 

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9

 

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER   I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver such an application in the near future. I understand that if I do not provide a taxpayer identification number to the US Depositary, 28% of all reportable payments made to me will be withheld, but will be refunded if I provide a certified taxpayer identification number within 60 days.   Signature                                                                                                                                                    Date                                                 , 2006

 

13

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GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

Guidelines for Determining the Proper Identification Number for the Payee (You) to Give the Payer.—Social Security numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the payer. All “Section” references are to the Internal Revenue Code of 1986, as amended. “IRS” is the Internal Revenue Service.

 

For this type or account:		Give the TAXPAYER IDENTIFICATION NUMBER of—				For this type or account:		Give the TAXPAYER IDENTIFICATION NUMBER of—
1.   Individual		The Individual				6.   A valid trust, estate or pension trust		The legal entity(4)
2.   Two or more individuals (joint account)		The actual owner of the account or, if combined funds, the first individual on the account(1)				7.   Corporate or LLC electing corporate status on IRS Form 8832		The corporation
3.   Custodian account of a minor (Uniform Gift to Minors Act)		The minor(2)				8.   Association, club, religious, charitable, educational, or other tax-exempt organization account		The organization
4.   a. The usual revocable savings trust account (grantor is also trustee)		The grantor-trustee(1)				9.   Partnership or multi-member LLC		The partnership
b. So-called trust account that is not a legal or valid trust under state law		The actual owner(1)				10.   A broker or registered nominee		The broker or nominee
5.   Sole proprietorship		The owner(3)				11.   Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments		The public entity

 

(1)	List first and circle the name of the person whose number you furnish. If only one person on a joint account has a Social Security number, that person’s number must be furnished.

(2)	Circle the minor’s name and furnish the minor’s Social Security number.

(3)	You must show your individual name, but you may also enter your business or “doing business as” name. You may use either your Social Security number or your employer identification number (if you have one).

(4)	List first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)

Note:    If no name is circled when there is more than one name, the number will be considered to be that of the first name listed.

 

14

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GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

(continued)

 

Obtaining a Number

If you do not have a taxpayer identification number, obtain Form SS-5, Application for a Social Security Card, at the local Social Security Administration office, or Form SS-4, Application for Employer Identification Number, by calling 1(800)TAX-FORM, and apply for a number.

Payees Exempt from Backup Withholding

Payees specifically exempted from withholding include:

 

•

An organization exempt from tax under section 501(a) or an individual retirement account (IRA), or a custodial account under Section 403(b)(7), if the account satisfies the requirements of Section 401(f)(2).

 

•

The United States or a state thereof, the District of Columbia, a possession of the United States, or a political subdivision or wholly owned agency or instrumentality of any one or more of the foregoing.

 

•

An international organization or any agency or instrumentality thereof.

 

•

A foreign government and any political subdivision, agency or instrumentality thereof.

Payees that may be exempt from backup withholding include:

 

•

A corporation.

 

•

A financial institution.

 

•

A dealer in securities or commodities required to register in the United States, the District of Columbia, or a possession of the United States.

 

•

A real estate investment trust.

 

•

A common trust fund operated by a bank under Section 584(a).

 

•

A trust exempt from tax under Section 664 as described in Section 4947.

 

•

An entity registered at all times during the tax year under the Investment Company Act of 1940.

 

•

A middleman known in the investment community as a nominee or custodian.

 

•

A futures commission merchant registered with the Commodity Futures Trading Commission.

 

•

A foreign central bank of issue.

Payments of dividends and patronage dividends generally exempt from backup withholding include:

 

•

Payments to nonresident aliens subject to withholding under Section 1441.

 

•

Payments to partnerships not engaged in a trade or business in the United States and that have at least one nonresident alien partner.

 

•

Payments of patronage dividends not paid in money.

 

•

Payments made by certain foreign organizations.

 

•

Section 404(k) payments made by an ESOP.

 

•

Payments made to a nominee.

 

Payments of interest generally exempt from backup withholding include:

 

•

Payments of interest on obligations issued by individuals.

 

•

Note: You may be subject to backup withholding if this interest is $600 or more and is paid in due course of the payer’s trade or business and you have not provided your correct taxpayer identification number to the payer.

 

•

Payments of tax-exempt interest (including exempt-interest dividends under Section 852).

 

•

Payments described in Section 6049(b)(5) to nonresident aliens.

 

•

Payments on tax-free covenant bonds under Section 1451.

 

•

Payments made by certain foreign organizations.

 

•

Mortgage interest paid to you.

Certain payments, other than payments of interest, dividends, and patronage dividends, that are not subject to information reporting are also not subject to backup withholding. For details, see sections 6041, 6041A, 6042, 6044, 6045, 6049, 6050A and 6050N and the regulations under those sections. Exempt payees described above must file Form W-9 or a substitute Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE “EXEMPT” ON THE FORM, AND RETURN TO THE PAYER. ALSO SIGN AND DATE THE FORM. IF YOU ARE A NONRESIDENT ALIEN OR A FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH A PAYER A COMPLETED APPLICABLE INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).

Privacy Act Notice.—Section 6109 requires you to provide your correct taxpayer identification number to payers, who must report the payments to the IRS. The IRS uses the number for identification purposes and may also provide this information to various government agencies for tax enforcement or litigation purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 28% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply.

Penalties

(1) Failure to Furnish Taxpayer Identification Number.—If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.

(2) Failure to Report Certain Dividend and Interest Payments.—If you fail to include any portion of an includable payment for interest dividends or patronage dividends in gross income and such failure is due to negligence, a penalty of 20% is imposed on any portion of an underpayment attributable to the failure.

(3) Civil Penalty for False Information With Respect to Withholding.—If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty.

(4) Criminal Penalty for Falsifying Information.—Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX ADVISOR OR THE INTERNAL REVENUE SERVICE.

 

15

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THE US DEPOSITARY FOR THE OFFER IS:

Computershare Trust Company, N.A.

 

BY MAIL:   Computershare Trust Company, N.A. CEMEX Voluntary Offer P.O. Box 43011 Providence, RI 02940-3011		BY OVERNIGHT DELIVERY:   Computershare Trust Company, N.A. CEMEX Voluntary Offer 250 Royall Street Canton, MA 02021

Retail Investors and All Others Call Toll Free: (866) 244-1296

THE US INFORMATION AGENT FOR THE OFFER IS:

Innisfree M&A Incorporated

501 Madison Avenue, 20th Floor

New York, NY 10022

Institutional Investors, Banks and Brokers Call Collect: (212) 750-5833

Questions and requests for assistance may be directed by institutional investors, banks and brokers to the US Information Agent, and by retail investors to the US Depositary, at the appropriate telephone number or address set forth above. Additional copies of the Bidder’s Statement, this ADS Letter of Transmittal, ADS Notice of Guaranteed Delivery and other related materials may also be obtained from the US Information Agent, and will be furnished promptly at Bidder’s expense. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer.

 

16

Exhibit (a)(1)(D)

ADS NOTICE OF GUARANTEED DELIVERY

TO TENDER AMERICAN DEPOSITARY SHARES

EVIDENCED BY AMERICAN DEPOSITARY RECEIPTS

of

RINKER GROUP LIMITED

Pursuant to the Bidder’s Statement

dated October 30, 2006

by

CEMEX Australia Pty Ltd

an indirect wholly-owned subsidiary of

CEMEX, S.A.B. de C.V.

 

The Offer will expire at 7 pm (Sydney time) on 27 December 2006 / 3 am (New York time) on 27 December 2006, unless the Offer is extended or the Offer is withdrawn.

THE US DEPOSITARY FOR THE OFFER IS:

Computershare Trust Company, N.A.

 

BY MAIL: Computershare Trust Company, N.A. CEMEX Voluntary Offer P.O. Box 43011 Providence, RI 02940-3011		BY OVERNIGHT DELIVERY: Computershare Trust Company, N.A. CEMEX Voluntary Offer 250 Royall Street Canton, MA 02021

BY FACSIMILE TRANSMISSION: (FOR ELIGIBLE INSTITUTIONS ONLY) (617) 360-6810

RECEIPT OF FACSIMILE MAY BE CONFIRMED ONLY BY TELEPHONE AT THE FOLLOWING NUMBER: (781) 575-2332

DELIVERY OF THIS ADS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OR FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE DELIVERY TO THE US DEPOSITARY.

THIS ADS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON AN ADS LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION (AS DEFINED BELOW) UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE ADS LETTER OF TRANSMITTAL.

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Subject to the withdrawal rights described in Section 8.9 of the Bidder’s Statement, this ADS Notice of Guaranteed Delivery, or a form substantially equivalent hereto, may be used to accept the offer by CEMEX Australia Pty Ltd (Bidder), a proprietary company organized under the laws of Victoria, Australia and an indirect wholly-owned subsidiary of CEMEX, S.A.B. de C.V. (CEMEX), to acquire all outstanding ordinary shares of Rinker (Rinker Shares), and all outstanding American depositary shares (Rinker ADSs) which each represent an ownership interest in five (5) Rinker Shares and are evidenced by American depositary receipts (ADRs), upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), as described in the Bidder’s Statement, if:

1. ADRs evidencing Rinker ADSs are not immediately available;

2. The procedures for book-entry transfer cannot be completed prior to the end of the Offer Period (as defined in the Bidder’s Statement); or

3. Time will not permit the required documents to be received by Computershare Trust Company, N.A. (the US Depositary) prior to the end of the Offer Period.

This form may be delivered by hand, transmitted via facsimile, or mailed to the US Depositary and must include a guarantee by an Eligible Institution.

In the case of ADSs held through The Depository Trust Company (DTC), this ADS Notice of Guaranteed Delivery must be sent to the US Depositary by a participant in DTC’s system via the book-entry confirmation system.

Bidder intends to enforce all rights that it may have under applicable law against any Eligible Institution that completes this form and fails to deliver the applicable ADSs by the deadline indicated above.

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Ladies and Gentlemen:

The undersigned hereby tenders to Bidder, a proprietary company organized under the laws of Victoria, Australia and an indirect wholly-owned subsidiary of CEMEX, upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), as described in the Bidder’s Statement, dated October 30, 2006, receipt of which is hereby acknowledged, the number of Rinker ADSs indicated below (which number shall be all ADSs owned by the undersigned, as required by the terms of the Offer) pursuant to the procedures for guaranteed delivery as described in Section 8.3(d) of the Bidder’s Statement.

 

Signature(s):				Address(es) (Including Zip Code):
Name(s) of Record Holders:
(Please Type or Print)
Number of ADSs*:				¨        Check if ADSs will be tendered by book-entry transfer.
				Account Number:
ADR No(s). (if available/applicable):
Dated:

* Pursuant to the Offer, if the Rinker ADSholder (as defined in the Bidder’s Statement) elects to tender, all Rinker ADSs that the ADSholder owns must be tendered. See Section 8.3(a) of the Bidder’s Statement.

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THE GUARANTEE SET FORTH BELOW MUST BE COMPLETED

GUARANTEE

(Not to be used for signature guarantee)

The undersigned, a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association, Inc., including the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program and the Stock Exchange Medallion Program (each, an Eligible Institution), hereby guarantees to deliver the ADRs evidencing the Rinker ADSs tendered hereby, in proper form for transfer, or deliver the Rinker ADSs by book-entry transfer to the US Depositary’s account at DTC, together with the ADS Letter of Transmittal properly completed and duly executed (with any required signature guarantees) or, in the case of book-entry transfer, an Agent’s Message (as defined in the ADS Letter of Transmittal), and any other required documents within three New York Stock Exchange trading days after the date hereof.

 

Name of Firm:				Authorized Signature:
Address (Including ZIP Code):				Name:
				(Please Type or Print)
				Title:
				Dated:
Area Code and Tel No.:

Note: Do not send ADRs evidencing Rinker ADSs with this ADS Notice of Guaranteed Delivery. ADRs evidencing Rinker ADSs should be sent with your ADS Letter of Transmittal.

Exhibit (a)(1)(E)

OFFER TO PURCHASE FOR CASH

outstanding ordinary shares and

American depositary shares of

RINKER GROUP LIMITED

on the basis of

US$13.00 for each ordinary share

US$65.00 for each American depositary share

by

CEMEX Australia Pty Ltd

an indirect wholly-owned subsidiary of

CEMEX, S.A.B. de C.V.

 

The Offer will expire at 7 pm (Sydney time) on 27 December 2006, 3 am (New York time) on 27 December 2006, unless the Offer is extended or the Offer is withdrawn.

14 November 2006

To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:

We have been engaged by CEMEX Australia Pty Ltd (Bidder), a proprietary company organized under the laws of Victoria, Australia and an indirect wholly-owned subsidiary of CEMEX, S.A.B. de C.V. (CEMEX), to act as Lead Financial Adviser to CEMEX in connection with Bidder’s offer (the Offer) to acquire all outstanding ordinary shares of Rinker (Rinker Shares), and all outstanding American depositary shares which each represent an ownership interest in five (5) Rinker Shares (Rinker ADSs and together with the Rinker Shares, Rinker Securities) and are evidenced by American depositary receipts (ADRs), upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), as described in the Bidder’s Statement, dated 30 October 2006 (the Bidder’s Statement), the related ADS Letter of Transmittal and ADS Notice of Guaranteed Delivery. Capitalized terms used but not defined in this letter which are defined in the Bidder’s Statement shall have the meanings given to them in the Bidder’s Statement.

The Offer is subject to a number of conditions. In summary, they include requirements that:

1. Bidder obtains relevant interests in at least 90% of Rinker Shares;

2. CEMEX obtains its own shareholders’ approval;

3. all regulatory approvals are obtained and no adverse regulatory actions occur, including no objections under Australian foreign investment laws or US antitrust (competition) laws;

4. no material adverse change occurs in the Rinker Group;

5. no mergers or material acquisitions, disposals or new commitments are undertaken by the Rinker Group;

6. no material change of control rights exist;

7. the S&P/ASX 200 Index does not fall below 4,800;

8. CEMEX is granted equal access in certain circumstances to information about the Rinker Group;

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9. no distributions are made by Rinker other than cash dividends declared and paid in the ordinary course; and

10. no Prescribed Occurrences occur.

A more detailed discussion of the conditions to the consummation of the Offer can be found in Section 8.6 of the Bidder’s Statement, “Offer terms”.

For your information and for forwarding to those of your clients for whom you hold Rinker ADSs registered in your name or in the name of your nominee, we are enclosing the following documents:

1. Bidder’s Statement dated 30 October 2006;

2. ADS Letter of Transmittal to be used by Rinker ADSholders in accepting the Offer

3. ADS Notice of Guaranteed Delivery to be used to accept the Offer if certificates representing the ADSs are not immediately available or the ADSholder is not able to deliver the certificates and all other required documents to the Depositary before the Offer expires.

4. A Letter to Clients which may be sent to your clients for whose account you hold Rinker ADSs in your name or in the name of a nominee, with space provided for obtaining such client’s instructions and election with regard to the Offer.

5. Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9 included in the ADS Letter of Transmittal.

6. Return envelope addressed to Computershare Trust Company, N.A., as US Depositary.

Your prompt action is requested. We urge you to contact your clients as promptly as possible. Please note that the Offer will expire at 7 pm (Sydney time) on 27 December 2006, 3 am (New York time) on 27 December 2006, unless the Offer is extended or the Offer is withdrawn.

To accept the Offer, Rinker ADSholders must either: (i) complete and sign the yellow ADS Letter of Transmittal in accordance with the instructions on it and (A) return it, together with the ADRs evidencing their Rinker ADSs and any other documents required by the ADS Letter of Transmittal, in the enclosed envelope (where applicable) or to an address on the ADS Letter of Transmittal, or (B) tender their Rinker ADSs pursuant to the procedures for book-entry transfer set out in Section 8.3(d) of the Bidder’s Statement; or (ii) contact their broker or other nominee, and instruct them to accept the Offer for them. If any Rinker ADSs are registered in the name of a broker or other nominee, Rinker ADSholders must contact such nominee to accept the Offer. If the ADRs evidencing Rinker ADSs are not immediately available, or Rinker ADSholders cannot comply with the procedures for book-entry transfer set out in Section 8.3(d) of the Bidder’s Statement before the end of the Offer Period, they may tender their Rinker ADSs by following the procedures for guaranteed delivery set out in Section 8.3(d) of the Bidder’s Statement.

Subject to the Corporations Act 2001 (Cth) and the terms and conditions of the Offer (including without limitation the conditions referred to in Section 8 of the Bidder’s Statement, “Offer terms”), Bidder will pay the consideration for Rinker ADSs validly deposited under the Offer and not properly withdrawn, on or before the earlier of: (i) the day that is one month after the later of the date of the Rinker ADSholder’s acceptance or, if at the time of the Rinker ADSholder’s acceptance the Offer is subject to a Defeating Condition, one month after any contract resulting from the Rinker ADSholder’s acceptance of the Offer becomes, or is declared, unconditional and (ii) the day that is 21 days after the end of the Offer Period. In any case, payment of the consideration under the Offer shall not be made, until the ADRs evidencing tendered Rinker ADSs or, in the case of a book-entry transfer, book-entry confirmation, in respect to which the Offer is being accepted and any other required documents have been received by the US Depositary at one of its addresses set forth on the first and last pages of the ADS Letter of Transmittal. Bidder will determine in its sole discretion all questions as to the form of documents, including any notice of withdrawal and the validity, eligibility (including time of receipt) and acceptance of tendered Rinker ADSs. Bidder’s determination will be final and binding on all parties. Under no circumstances will interest be paid on the Offer price for tendered Rinker Securities, whether or not this Offer is extended.

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Please note that pursuant to the terms of the Offer, if a Rinker ADSholder elects to tender, all Rinker ADSs that the holder owns must be tendered.

Bidder will not pay any fees or commissions to any broker or dealer or other person (other than the Lead Financial Adviser and the Co-Financial Advisor as described in Section 7.16 of the Bidder’s Statement) in connection with the solicitation of tenders of ADSs pursuant to the Offer. Bidder will, however, upon request, reimburse you for customary mailing and handling expenses incurred by you in forwarding the enclosed Offer materials to your customers. Bidder will pay or cause to be paid any Australian or US security transfer taxes payable on the transfer of Rinker Securities to it, except as otherwise provided in the Offer.

Questions and requests for additional copies of the enclosed material may be directed to the US Information Agent at its address and telephone numbers set forth in the enclosed Bidder’s Statement.

 

Very truly yours,

Citigroup Global Markets Inc.

Nothing contained herein or in the enclosed documents shall render you or any other person the agent of Bidder, the US Depositary, the US Information Agent, the Lead Financial Advisor or any affiliate thereof or authorize you or any other person to give any information or make any representation on behalf of any of them with respect to the Offer other than the documents enclosed and the statements contained therein.

Exhibit (a)(1)(F)

OFFER TO PURCHASE FOR CASH

outstanding ordinary shares and

American depositary shares of

RINKER GROUP LIMITED

on the basis of

US$13.00 for each ordinary share

US$65.00 for each American depositary share

by

CEMEX Australia Pty Ltd

an indirect wholly-owned subsidiary of

CEMEX, S.A.B. de C.V.

 

The Offer will expire at 7 pm (Sydney time) on 27 December 2006, 3 am (New York time) on 27 December 2006, unless the Offer is extended or the Offer is withdrawn.

November 2006

To Our Clients:

Enclosed for your consideration is the Bidder’s Statement, dated 30 October 2006, by CEMEX Australia Pty Ltd (Bidder), a proprietary company organized under the laws of Victoria, Australia and an indirect wholly-owned subsidiary of CEMEX, S.A.B. de C.V. (CEMEX), the related ADS Letter of Transmittal and ADS Notice of Guaranteed Delivery relating to the Offer by Bidder to acquire all outstanding ordinary shares of Rinker (Rinker Shares), and all outstanding American depositary shares, which each represent an ownership interest in five (5) Rinker Shares (Rinker ADSs and together with the Rinker Shares, Rinker Securities), and are evidenced by American depositary receipts (ADRs), upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment). You should carefully read these documents in full prior to making any decision to accept the Offer or otherwise deal with your Rinker Securities. Capitalized terms used but not defined in this letter which are defined in the Bidder’s Statement shall have the meanings given to them in the Bidder’s Statement.

We (or our nominees) are the holder of record of Rinker ADSs held by us for your account. A tender of such Rinker ADSs can be made only by us as the holder of record and pursuant to your instructions. The ADS Letter of Transmittal is furnished to you for your information only and cannot be used to tender Rinker ADSs held by us for your account.

We request instructions as to whether you wish to tender all of the Rinker ADSs held by us for your account pursuant to the terms and conditions set forth in the Offer.

Your attention is directed to the following:

1. The Offer is being made for all issued and outstanding Rinker Securities.

2. You can only accept the Offer for all your Rinker Securities.

3. The Offer will expire at 7 pm (Sydney time) on 27 December 2006, 3 am (New York time) on 27 December 2006, unless the Offer is extended or the Offer is withdrawn.

4. The Offer is subject to a number of conditions. In summary, they include requirements that:

(a) Bidder obtains relevant interests in at least 90% of Rinker Shares;

(b) CEMEX obtains its own shareholders’ approval;

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(c) all regulatory approvals are obtained and no adverse regulatory actions occur, including no objections under Australian foreign investment laws or US antitrust (competition) laws;

(d) no material adverse change occurs in the Rinker Group;

(e) no mergers or material acquisitions, disposals or new commitments are undertaken by the Rinker Group;

(f) no material change of control rights exist;

(g) the S&P/ASX 200 Index does not fall below 4,800;

(h) CEMEX is granted equal access in certain circumstances to information about the Rinker Group;

(i) no distributions are made by Rinker other than cash dividends declared and paid in the ordinary course; and

(j) no Prescribed Occurrences occur.

A more detailed discussion of the conditions to the consummation of the Offer can be found in Section 8.6 of the Bidder’s Statement, “Offer terms”.

5. Subject to the Corporations Act 2001 (Cth) and the terms and conditions of the Offer (including without limitation the conditions referred to in Section 8 of the Bidder’s Statement, “Offer terms”), Bidder will pay the consideration for Rinker ADSs validly deposited under the Offer and not properly withdrawn, on or before the earlier of: (i) the day that is one month after the later of the date of your acceptance or, if at the time of your acceptance the Offer is subject to a Defeating Condition, one month after any contract resulting from your acceptance of the Offer becomes, or is declared, unconditional and (ii) the day that is 21 days after the end of the Offer Period.

6. In any case, payment of the consideration under the Offer shall not be made, until the ADRs evidencing tendered Rinker ADSs or, in the case of a book-entry transfer, book-entry confirmation, in respect to which the Offer is being accepted and any other required documents have been received by the US Depositary at one of its addresses set forth on the first and last pages of the ADS Letter of Transmittal. Bidder will determine in its sole discretion all questions as to the form of documents, including any notice of withdrawal and the validity, eligibility (including time of receipt) and acceptance of tendered Rinker ADSs. Bidder’s determination will be final and binding on all parties.

7. If you tender your ADSs you will not be obligated to pay brokerage fees or commissions to the US Depositary or the US Information Agent.

8. The consideration payable for the Rinker ADSs under the Offer will be reduced by applicable withholding taxes.

9. Under no circumstances will interest be paid on the Offer price for tendered Rinker Securities, whether or not the Offer is extended.

If you wish to have us tender all the Rinker ADSs held by us for your account, please so instruct us by completing, executing, detaching and returning to us the instruction form on the detachable part hereof. An envelope to return your instructions to us is enclosed. If you authorize the tender of your Rinker ADSs, all such Rinker ADSs will be tendered. Your instructions should be forwarded to us in ample time to permit us to submit a tender on your behalf prior to the end of the Offer Period.

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INSTRUCTIONS WITH RESPECT TO THE

OFFER TO PURCHASE FOR CASH

outstanding ordinary shares and

American depositary shares of

RINKER GROUP LIMITED

on the basis of

US$13.00 for each ordinary share

US$65.00 for each American depositary share

by

CEMEX Australia Pty Ltd

an indirect wholly-owned subsidiary of

CEMEX, S.A.B. de C.V.

The undersigned acknowledge(s) receipt of your letter, the Bidder’s Statement dated 30 October 2006 and the related ADS Letter of Transmittal and ADS Notice of Guaranteed Delivery relating to the Offer by CEMEX Australia Pty Ltd (Bidder), a proprietary company organized under the laws of Victoria, Australia and an indirect wholly-owned subsidiary of CEMEX, S.A.B. de C.V., to acquire all outstanding ordinary shares of Rinker (Rinker Shares), and all outstanding American depositary shares (Rinker ADSs) which each represent an ownership interest in five (5) Rinker Shares and are evidenced by American depositary receipts (ADRs). Capitalized terms used but not defined in this letter which are defined in the Bidder’s Statement shall have the meanings given to them in the Bidder’s Statement.

This will instruct and direct you to tender all Rinker ADSs held by you for the account of the undersigned, on the terms and subject to the conditions set forth in the Offer documents furnished to the undersigned.

 

Signature

Number of Rinker ADSs held*

Account Number

Name

Address

Area Code and Telephone Number

Taxpayer Identification or Social Security Number

Dated:

 

*	The Rinker ADSs to be tendered must be all your Rinker ADSs.

Exhibit (a)(5)(A)

This announcement is neither an offer to purchase nor a solicitation of an offer to sell Rinker Shares (as defined below) or Rinker ADSs (as defined below). The Offer is made solely by the Bidder’s Statement, dated October 30, 2006, the related Share Acceptance Form (as defined in the Bidder’s Statement) and the ADS Letter of Transmittal and any supplements thereto. Capitalized terms used, but not defined, in this announcement have the meanings given to those terms in the Bidder’s Statement, unless the context requires otherwise.

Notice of Offer to Purchase for Cash

All Outstanding Ordinary Shares

of

Rinker Group Limited

for

US$13.00 per Ordinary Share

and

All Outstanding American Depositary Shares

of

Rinker Group Limited

for

US$65.00 per American Depositary Share

by

CEMEX Australia Pty Ltd,

an indirect wholly-owned subsidiary of

CEMEX, S.A.B. de C.V.

CEMEX Australia Pty Ltd (“Bidder”), an indirect wholly-owned subsidiary of CEMEX, S.A.B. de C.V. (“CEMEX”), is offering to acquire all outstanding ordinary shares (“Rinker Shares”), for US$13.00 per share, and all outstanding American depositary shares (“Rinker ADSs”), which each represent a beneficial interest in five Rinker Shares, for US$65.00 per ADS, of Rinker Group Limited. The Offer is for cash (less any applicable withholding taxes and without interest). The terms of the Offer are set forth in the Bidder’s Statement, dated October 30, 2006, the related Share Acceptance Form and ADS Letter of Transmittal and any supplements thereto.

The Offer will remain open for acceptance until 7pm (Sydney time) on 27 December 2006 / 3am (New York time) on 27 December 2006 (the “Offer Period”), unless the Offer is extended or withdrawn. The Bidder may elect to extend the Offer, in accordance with the Corporations Act and the US Exchange Act, at any time and from time to time prior to the end of the Offer Period. The Offer may be extended by giving written notice of the extension to the US Depositary and by making a public announcement of the extension, as described in the Bidder’s Statement, and by following the procedures prescribed in section 650C of the Corporations Act. The Bidder does not currently intend to make a subsequent offering period available after the close of the Offer Period.

The Offer is subject to certain conditions (“Defeating Conditions”) that are described in the Bidder’s Statement. Pursuant to the terms of the Offer, as described in the Bidder’s Statement, if a Rinker ADSholder or a Rinker Shareholder (collectively, “Rinker Securityholders”) elects to tender, all Rinker Securities that the Rinker Securityholder owns must be tendered. Partial tenders are not permitted under the terms of the Offer.

Rinker Shareholders may accept the Offer to purchase their Rinker Shares by properly completing and returning the Share Acceptance Form to the Melbourne office of Computershare Investor Services Pty Limited (the “Australian Registry”) prior to the end of the Offer Period. If Rinker Shares are in a CHESS holding, Rinker Shareholders may contact their Controlling Participant directly (normally their stockbroker) with instructions to accept the Offer for them. Alternatively, such Rinker Shareholders can elect for Bidder to contact their Controlling Participant on their behalf via the CHESS system, by properly completing and returning the Share Acceptance Form to the Melbourne office of the Australian Registry prior to the end of the Offer Period.

Rinker ADSholders may accept the Offer to purchase their Rinker ADSs by (A) delivering to Computershare Trust Company, N.A. (the “US Depositary”), prior to the end of the Offer Period, a complete and signed ADS Letter of Transmittal in accordance with the instructions set forth therein and return it, together with the ADRs evidencing their Rinker ADSs and any other documents required by the ADS Letter of Transmittal, to the address set forth on the ADS Letter of Transmittal; or (B) tendering their Rinker ADSs pursuant to the procedures for book-entry transfer as described in Section 8.4(d) of the Bidder’s Statement; or (C) contacting their broker or other nominee and instruct them to accept the Offer on their behalf.

If any Rinker ADSs are registered in the name of a broker or other nominee, the Rinker ADSholder must contact such nominee to accept the Offer. If the ADRs evidencing Rinker ADSs are not immediately available, or if the Rinker ADSholder cannot comply with the procedures for book-entry transfer as described in the Bidder’s Statement, prior to the end of the Offer Period, the Rinker ADSholder may tender their Rinker ADSs by following the procedures for guaranteed delivery as described in the Bidder’s Statement.

Rinker Securityholders have certain rights to withdraw their acceptance under the terms of the Offer. Rinker Securityholders may only withdraw their acceptance of the Offer for all of their Rinker Securities. A withdrawal may not be rescinded. However, if a Rinker Securityholder elects to withdraw its acceptance of the Offer, the Rinker Securityholder may re-accept the Offer by following the procedures described in the Bidder’s Statement at any time prior to the end of the Offer Period. All questions as to the form and validity (including, without limitation, time of receipt) of notices of withdrawal will be determined by Bidder, in the reasonable exercise of its discretion, the determination of which will be final and binding. The procedures for withdrawal are set forth below:

 

•

Withdrawal of Rinker Shares—Issuer Sponsored Holdings: If Rinker Shares are held in an Issuer Sponsored Holding, Rinker Shareholder’s must send a signed notice, or a signed notice must be sent on their behalf, stating their intention to withdraw, to an address specified on the Share Acceptance Form so that the notice is received at the relevant address at any time during which the right to withdraw acceptance of the Offer subsists. The notice of withdrawal must specify the Rinker Shareholder’s name, address and the number of (and Security Reference Number for) the Rinker Shares in an Issuer Sponsored Holding that were the subject of the acceptance of the Offer.

 

•

Withdrawal of Rinker Shares—CHESS Holdings: If Rinker Shares are held in a CHESS Holding, the Rinker Shareholder’s Controlling Participant must transmit a valid originating message to ASTC specifying the Rinker Shares to be released from the sub-position, in accordance with Rule 14.16 of the ASTC Settlement Rules, at any time during which the Rinker Shareholder’s right to withdraw acceptance of the Offer subsists.

 

•

Withdrawal of Rinker ADSs: Withdrawals of Rinker ADSs deposited pursuant to the Offer must be effected by a valid notice of withdrawal. The notice of withdrawal shall be deemed timely if the US Depositary receives such notice at the place of deposit of the applicable Rinker ADSs (or ADS Notice of Guaranteed Delivery in respect thereof) at any time during which the Rinker ADSholder’s right to withdraw acceptance of the Offer subsists. The notice of withdrawal may be made by any method, including facsimile transmission, that provides the US Depositary with a written or printed copy and which specifies the name of the depositing Rinker ADSholder, the number of Rinker ADSs to be withdrawn and if ADRs have been tendered, the name of the registered holder, if different from that of the person who tendered the Rinker ADSs evidenced by such ADRs.

Pursuant to Rule 14d-7 under the US Exchange Act, a Rinker Securityholder who accepts the Offer has the right to withdraw that acceptance at any time after the acceptance and before the end of the Offer Period. Additionally, pursuant to section 14(d)(5) of the US Exchange Act, unless previously accepted for payment by Bidder pursuant to the Offer, Rinker Securityholders have the right to withdraw their acceptances after 60 days from the commencement of the Offer. Bidder has sought exemptive relief from Rule 14d-7 and section 14(d)(5) of the US Exchange Act from the SEC to permit these withdrawal rights to terminate upon the later of 20 US Business Days following the date of commencement of the Offer and the day on which the Offer becomes wholly unconditional (except for Prescribed Occurrences), subject to the Bidder giving at least five US Business Days’ notice of its intention to do so. In addition to those rights, Rinker Securityholders will have a statutory withdrawal right under section 650E of the Corporations Act if they have accepted the Offer and the Offer is varied in a way which delays payment by more than one month. Rinker Securityholders will be sent a notice of variation which describes this right, should it accrue.

If a Rinker Securityholder elects not to accept the Offer, that person will remain a Rinker Securityholder and will not receive the consideration offered by Bidder. If Bidder becomes entitled to acquire compulsorily the outstanding Rinker securities, as described in the Bidder’s Statement, it intends to do so. If Rinker securities are acquired compulsorily by Bidder, it will be on the same terms as the Offer. However, a non-tendering Rinker Securityholder whose securities are acquired compulsorily will receive payment later than the Rinker Securityholders who chose to accept the Offer. If Bidder does not become entitled to acquire compulsorily Rinker Securities, Rinker Securityholders who do not tender will remain Rinker Securityholders.

The receipt of cash for Rinker Shares and Rinker ADSs pursuant to the Offer will be a taxable transaction for Australian and US federal income tax purposes. See the Bidder’s Statement for a full discussion of tax consequences. Rinker Securityholders are urged to consult their own tax advisors for advice regarding the income tax consequences of the relevant transaction.

The information contained in this advertisement is a summary only. The information required to be disclosed by Rule 14d-6(d)(1) of the Securities Exchange Act of 1934, as amended, is contained in the Bidder’s Statement and related materials, including the Share Acceptance Form, the ADS Letter of Transmittal and the Notice of Guaranteed Delivery (collectively, the “Offer Documents”), all of which are incorporated herein by reference. The Offer Documents contain important information that Rinker Securityholders are urged to read in their entirety before making any decision with respect to the Offer. Questions regarding the Offer may be directed to the CEMEX Offer Information Line at the telephone numbers set forth below. Also, copies of the Offer Documents may be obtained at Bidder’s expense by calling the CEMEX Offer Information Line.

The US Information Agent for the Offer is:

501 Madison Avenue, 20th Floor

New York, New York 10022

The US Depositary for the Offer is:

Computershare Trust Company, N.A.

250 Royall Street

Canton, MA 02021

CEMEX Offer Information Line:

Within US: (866) 244-1296 (for retail investors) or

(212) 750-5833 (for institutional investors, banks and brokers)

Within Australia: 1300-721-344 (local call)

Elsewhere: +61-3-9415-4344

November 14, 2006

 

Exhibit (b)(1)(A)

PROJECT LEONARDO

COMMITMENT LETTER

 

To:		Cemex España, S.A. (the “Company”)
		Hernández de Tejada, 1
		28027 Madrid, Spain
Attn:		Hector Vela, Financing Director

26 October 2006

Dear Sirs,

Project Leonardo – Commitment Letter

We Citigroup Global Markets Limited and The Royal Bank of Scotland plc (the “Mandated Lead Arrangers”) and Citibank, N.A. and The Royal Bank of Scotland plc (or, in either case, an affiliate thereof, the “Underwriters”), confirm that we are committed to underwrite and arrange, on the terms and conditions set out in the term sheet agreed between ourselves and yourself, facilities (the “Facilities”) to finance the proposed acquisition by you, or a special purpose vehicle that will be a (direct or indirect) wholly-owned subsidiary of you (in accordance with the timetable set out in the term sheet) (“Bidco”), of the entire issued share capital of the target company identified by you to us as ‘Leonardo’ (“Target”).

We confirm that we have obtained full credit committee approval to provide the commitments set out in this letter and to commit to advance the funds described in the term sheet on the terms and conditions set out therein. This commitment is in support of the terms of your offer for the entire issued share capital of Target submitted on or about the date hereof (the “Offer”).

This commitment to arrange and underwrite the Facilities is subject to satisfaction of the following conditions:

 

(a)

documentary and other mechanical conditions precedent usual and customary for financings of this kind (including that the Company has sufficient funds available to it for the Offer) or otherwise mutually agreed to be appropriate for this transaction in a form and substance satisfactory to the agent in respect of the Facilities, in the form, to the extent applicable, agreed in respect of the Company’s existing acquisition finance loan facilities;

 

(b)	each of the representations and warranties as to written factual information, made by the Company in connection with this transaction being materially correct on the date such representations and warranties are made;

 

(c)

the preparation, execution and delivery of the facility agreement and related documentation (based on the terms set out in the term sheet and this letter) in form and substance satisfactory to the Company, the Mandated Lead Arrangers and Underwriters (acting reasonably) by no later than 45 days after the date of this letter or any later date agreed between the Company and each of the Mandated Lead Arrangers and Underwriters;

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(d)	the Company continuing to be a subsidiary of Cemex, S.A.B. de C.V.;

 

(e)	the Company and all other Obligors obtaining all necessary regulatory approvals in connection with the Facilities from any relevant authorities in any relevant jurisdictions; and

 

(f)

the Offer being announced on or before the date falling 60 days after the date of this letter and the prior approval by each of the Mandated Lead Arrangers of any material amendments to the last draft of the formal announcement confirming that BidCo has a firm intention to make an offer for the acquisition of all the issued share capital in Target seen by them.

Upon meeting the conditions above, the facilities will be available to you or your subsidiaries on a ‘certain funds’ basis as set out in the term sheet.

This letter is confidential and may only be disclosed to Target and its professional advisers for the purposes of considering the proposed acquisition of Target and as required by law. This letter is given for your benefit and does not confer any rights on any third party. In addition, no party may assign or otherwise transfer its rights under this letter.

This Letter is governed by and will be construed in accordance with English law.

Yours faithfully

 

KIM MCNAMARA For and on behalf of Citigroup Global Markets Limited as Mandated Lead Arranger		JANIN CAMPOS For and on behalf of The Royal Bank of Scotland plc as Mandated Lead Arranger
KIM MCNAMARA For and on behalf of Citibank, N.A. as Underwriter		JANIN CAMPOS For and on behalf of The Royal Bank of Scotland plc as Underwriter
We acknowledge and agree to the above:
HECTOR VELA For and on behalf of Cemex España, S.A.

 

 

2

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TERM SHEET

US$9,000,000,000 ACQUISITION LOAN FACILITIES FOR CEMEX ESPAÑA, S.A.

26 OCTOBER 2006

(as updated on 9 November, 2006 with the update being effective from 14 November, 2006)

PARTIES

 

Company/Borrower:		Cemex España, S.A. (or any affiliate thereof acceptable to the Company and the Mandated Lead Arrangers)
Material Subsidiaries:		A subsidiary of the Company which:   (a)    has total assets representing 5 per cent. or more of the total consolidated assets of the Cemex España Group; and/or   (b)    has revenues representing 5 per cent. or more of the consolidated turnover of the Cemex España Group,   in each case calculated on a consolidated basis and by reference to the most recent compliance certificate or the latest audited accounts, as the case may be, and any holding company of any such subsidiary (provided that members of the Target Group shall not qualify as Material Subsidiaries until the date falling 180 days after the date on which the Company takes control of the Target). A list of existing subsidiaries that will be Material Subsidiaries will be included at the date of signing of the Facilities Agreement.
Bidco:		A special purpose vehicle which (at the time of the first drawdown or within six months thereafter) is a wholly owned subsidiary of Cemex España, S.A.   For the avoidance of doubt, should the special purpose vehicle not be a subsidiary of Cemex España, S.A. within the timescale above, it shall be an Event of Default (unless such SPV has acceded as a Guarantor on terms satisfactory to the lenders (acting reasonably)).
Target:		The target company identified by the Company to the Mandated Lead Arrangers as ‘Leonardo’ and the “Target Group” means the Target and its subsidiaries.

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Underwriters/Mandated Lead Arrangers:		Citigroup Global Markets Limited and The Royal Bank of Scotland plc.
Lenders:		As selected by the Mandated Lead Arrangers in consultation with the Company.
Agent:		The Royal Bank of Scotland plc
Additional Obligors:		A mechanism will be included in the Agreement to enable, at the Company’s option, any wholly-owned subsidiary of the Company which has been approved by:   (a)    all the Lenders; or   (b)    the Majority Lenders (provided that the Company has granted a guarantee in respect of its obligations),   to accede as borrower.   A mechanism will be included in the Agreement to enable subsidiaries of the Company to accede as guarantors. The Company shall also have the right to request that any of its subsidiaries become guarantors.   “Obligor” means the Borrower and any Additional Obligor.
Cemex España Group:		The Company and each of its subsidiaries from time to time.
Facilities and Amounts:		There will be three multi-currency facilities:   Facility A: US$3,000 million 364 day revolving credit facility, with two term-out options of 180 days each (term-out fees as per Appendix 1).   Facility B: US$3,000 million 36 month term loan facility.   Facility C: US$3,000 million 60 month term loan facility.   The Company shall consult with the Mandated Lead Arrangers, should it seek to raise financing for the purpose of the Offer other than (i) the Facilities and (ii) other facilities in a maximum amount of US$3,800,000,000 as referred to in “Documentary Conditions Precedent” below.
Purpose:		The Acquisition is the acquisition of the shares in the Target by Bidco pursuant to an offer (the “Offer”) to acquire no less than 50.01% of the issued share capital of the Target.

 

2

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		Facilities A, B and C:   (a)    to finance the consideration payable for the shares in the Target under the Offer and paying the purchase price for the shares in the Target acquired under the compulsory acquisition procedures of the Australian companies law and the acquisition of any ADR’s in the US in accordance with the US securities laws and regulations;   (b)    (if required) to finance the consideration payable to holders of options to acquire shares in the Target pursuant to any proposal by it in respect of those options as required by Australian companies law;   (c)    to finance costs, fees, expenses (and taxes on them) and stamp duty incurred by any member of the Cemex España Group in relation to the Offer (but not, for the avoidance of doubt, including M&A advisory fees); and   (d)    (if required or if the Company deems it necessary) to finance or refinance the indebtedness (the “Existing Target Debt”) for borrowed monies of the Target and its subsidiaries existing at close of business on the date that the Offer is declared unconditional (the “Unconditional Date”), if relevant.
Commitment Date:		The date of the signing of the Mandate and Commitment Letter.
Term Out Option:		The Borrower may extend Facility A (at which point the loans thereunder shall be re-designated as a term loan) in whole or in part for:   (a)    a term of a further 180 days (the “First Term Out Option”); and   (b)    thereafter, a further 180 days (the “Second Term Out Option”),   after the Original Facility A Termination Date (as defined below).   For the avoidance of doubt, the First Term Out Option may be exercised without the Second Term Out Option being exercised.
Final Maturity Date:		Facility A: 364 days after the date of signing of the Facility Agreement (“Original Facility A Termination Date”), subject to the Term Out Option.   Facility B: 36 months after the date of signing of the Facilities Agreement.

 

3

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		Facility C: 60 months after the date of signing of the Facilities Agreement.
Availability Periods:		The period beginning on the signing date of the Facilities Agreement and ending on the earlier of: (i) 90 days after the date on which acceptances are held in respect of 90% of shares in the Target; (ii) 45 days after the offer closes where acceptances are not held in respect of 90% of shares in the Target; and (iii) the date falling 364 days after the signing date of the Facilities Agreement.
Certain Funds:		During the period commencing on the signing date of the Facilities Agreement and ending on the last day of the Availability Period (the “Certain Funds Period”):
		(i)     in relation to a loan under the Facilities to be made during such period and to be made solely for a purpose set out in paragraphs (a) and (b) of the definition of “Purpose” set out above (a “Certain Funds Utilisation”), the drawstop conditions in the Facilities Agreement will apply as if they referred only to   (1)    the Representations listed herein with references (a) to (d) and (n), provided that (i) in each case such representations shall relate only to the Company and its subsidiaries (including BidCo) but excluding any member of the Target Group (including in relation to procuring compliance) and (ii) the circumstances resulting in such breach would lead to a Material Adverse Effect (the “Certain Funds Representations”); and   (2)    the Events of Default listed herein with references: (a), (c) (in respect of the General Undertakings with references (e), (f), (l) and (n), the Purpose clause and the obligation that BidCo becomes a subsidiary within six months (or becomes a guarantor)), (d) (with regard to the Certain Fund Representations), (f), (g), (l) and (m) provided that in each case such Event of Default shall relate to the Company and its Subsidiaries (including BidCo) but excluding any member of the Target Group (including in relation to procuring compliance) (the “Certain Funds Events of Default”).

 

4

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		(ii)    the Finance Parties shall be restricted from exercising rights which would prevent or limit the making of a Certain Funds Utilisation.
Loans:		Each Loan will be at least US$25,000,000 and a multiple of US$10,000,000 or the undrawn balance of the relevant Facility, if less.   Drawings to be made pro-rata across each of the Facilities.   Any amount that is still undrawn at the end of the relevant Availability Period will be cancelled.
Currency:		The Facilities are multicurrency facilities (the base currency being US$), available for drawing in US$, EUR and such other currencies as are approved by all the Lenders.
Repayment:		Facility A: Subject to the Term Out Option, the Borrower must repay the outstanding amount in full on the Original Facility A Termination Date.   Facility B: The Borrower must repay the outstanding amount in full on the Final Maturity Date for Facility B.   Facility C: The Borrower must repay the outstanding amount in full on the Final Maturity Date for Facility C.
Voluntary Prepayment:		Loans may be prepaid after the last day of the Availability Period in whole or in part on 3 Business Days’ prior notice (but, if in part, by a minimum of US$25,000,000). Any prepayment shall be made with accrued interest on the amount prepaid and, subject to breakage costs, without premium or penalty.   Such prepayments will be applied at the Borrower’s election, between Facility A, Facility B and Facility C.
		Any amount prepaid may not be redrawn, other than an amount of Facility A that has been voluntarily prepaid.
		PRICING
Up-front Fee:		As set out in a Fee Letter.
Agency Fee:		As set out in a Fee Letter.
Ticking Fee:		A ticking Fee is payable on the unused and uncancelled amount of the applicable Facility at the rates per annum and during the periods set out below:

 

5

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		Period		First 60 days after the Commitment Date		Subsequent 3 months		Thereafter
		Rate		0 bps		5bps		7.5bps
		Accrued ticking fee is payable on the date of the first drawdown or the cancellation of the Facilities.
Commitment Fee:		30% of the relevant Applicable Margin on the unused and uncancelled amount of the applicable Facility for the applicable period from the date of the first drawdown of the Facilities (calculated on the basis of a year of 360 days and the number of days actually elapsed) until all Facilities are permanently repaid and/or cancelled.   Accrued commitment fee is payable on the last day of the relevant Availability Period and on the cancelled amount of any Facility at the time a full cancellation is effective.
Margin:		As set out in Appendix 1.
Interest Periods for Loans:		One, two, three or six months or any other period agreed between the Borrower and the Lenders.
Interest on Loans:		The aggregate of the applicable:
		(a)    Margin;
		(b)    LIBOR (set by reference to Reuters for the relevant currency or, if not available, on the basis of rates provided by agreed Reference Banks); and
		(c)    Mandatory Cost, if any.
Payment of Interest on Loans:		Interest is payable on the last day of each Interest Period (and, in the case of Interest Periods of longer than six months, on the dates falling at six-monthly intervals after the first day of the Interest Period).   Standard gross-up provisions to be included such that gross-up is only paid to qualifying lenders.
		OTHER TERMS
General Terms		The documentation shall, in general, follow the form of the Company’s 2004 acquisition finance syndicated loan facility, as amended (then “2004 Facility”).

 

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Prepayment and Cancellation:		(a)    Mandatory Prepayment   Until Facility A is repaid in full, Facility A is to be permanently reduced by an amount equal to the net proceeds of:   (i)     (to the extent the ratio of Net Borrowings to EBITDA is in excess of 2.5:1 or Facility A has not been repaid in full) any issue of shares for cash or cash equivalent proceeds by the Company, or the issue of any bonds, notes or other debt securities (excluding any “hybrid” issue to the extent such issue is accounted for as equity) by any member of the Cemex España Group on the capital markets but not, for the avoidance of doubt, including banks loans (“Fundraisings”); and   (ii)    the disposal of assets of members of the Target Group (provided that such proceeds may to be used prepay Existing Target Debt or Facility A).   (b)    Illegality   If it is or will be illegal for a Lender to perform its obligations under the Facilities Agreement a Lender may cancel its Commitment and/or require prepayment of its share of the Loans.
		(c)    Change of Control   If Cemex, S.A.B. de C.V. ceases to control the Company (directly or indirectly) and/or the Borrower, after it has gained control of the Target (directly or indirectly), ceases to control the Target:
		(1)    a Lender shall not be obliged to fund a Loan; and
		(2)    a Lender may by not less than 3 days’ notice cancel its Commitment and require repayment of all its share of the Loans.
		(d)    Increased Costs, Tax Gross Up and Tax Indemnity   The Company may cancel the Commitment of and prepay any Lender that makes a claim under these provisions.

 

7

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		(e)    Voluntary Cancellation   The Company may, on not less than 3 Business Days’ prior notice, cancel the whole or any part (being a minimum of US$25,000,000) of an Available Facility.
Representations:		Based on the 2004 Facility and customary for facilities of this nature (but subject to the Clean-Up Period during which the application of the representations to the Target Group will be restricted), including:
(Status)		(a)    It is a corporation, duly organised and validly existing under the laws and regulations of its jurisdiction of incorporation.   It has the power to own its assets and carry on its business as it is being conducted.
(Binding obligations)		(b)    The obligations expressed to be assumed by it in each Finance Document are, subject to any reservations which are specifically referred to in any Legal Opinion, legal, valid, binding and enforceable obligations.
(Non-conflict with other obligations)		(c)    The entry into and performance by it of, and the transactions contemplated by, the Finance Documents do not and will not conflict with:   (i)     any law or regulation applicable to it;   (ii)    its constitutional documents; or   (iii)  any agreement or instrument binding upon it or any of its assets.
(Power and authority)		(d)    It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Finance Documents to which it is a party and the transactions contemplated by those Finance Documents.
(Validity and admissibility in evidence)		(e)    All Authorisations (as defined in the 2004 Facility) required or desirable:   (i)     to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party; and   (ii)    to make the Finance Documents to which it is a party admissible in evidence in its jurisdiction of incorporation,   have been obtained or effected and are in full force and effect.

 

8

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(Governing law and enforcement)		(f)   (i)     The choice of English law as the governing law of the Finance Documents will be recognised and enforced in its jurisdiction of incorporation subject to any reservations which are specifically referred to in any legal opinion delivered as a condition precedent under the terms of the Facility Agreement.   (ii)    Any judgment obtained in England in relation to a Finance Document will be recognised and enforced in its jurisdiction of incorporation, subject to any reservations which are specifically referred to in any Legal Opinion.
(Deduction of Tax)		(g)    It is not required under the laws and regulations of its jurisdiction of incorporation to make any deduction for or on account of Tax from any payment it may make under any Finance Document to any Qualifying Lender.
(No filing or stamp taxes)		(h)    Under the laws and regulations of its jurisdiction of incorporation it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents.
(No default)		(i)   (i)     No Default or Event of Default is continuing or might reasonably be expected to result from the making of any Utilisation.   (ii)    No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or its Subsidiaries’) assets are subject which might have a Material Adverse Effect.

 

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(No misleading information)		(j)   (i)     Any written factual information provided by the Company for the purposes of the Information Memorandum was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated.   (ii)    All material written information (other than the Information Memorandum) supplied by any member of the Cemex España Group was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated and is not misleading in any material respect.
(Financial statements)		(k)   (i)     Its December 2005 audited financial statements (the “Original Financial Statements”) were prepared in accordance with GAAP consistently applied and are complete and accurate in all material respects.   (ii)    Its Original Financial Statements fairly represent its financial condition and operations during the relevant financial year.
(Pari passu ranking)		(l)     Its payment obligations under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law or regulation applying to companies generally.
(No proceedings pending or threatened)		(m)   No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which are likely to be adversely determined and which, if so determined, would be reasonably likely to have a Material Adverse Effect or purports to affect the legality, validity or enforceability of any of the obligations under the Finance Documents have been started or threatened against any Obligor or any Material Subsidiary.

 

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(Offer Documents Information)		(n)    Except as expressly permitted pursuant to the Facilities Agreement, the Offer Documents contain all the material terms of the Offer and the Offer Document reflects the terms of the press release or other relevant announcement in all material respects.
(No winding-up)		(o)    No legal proceedings or other procedures or steps have been taken or, to the Company’s knowledge after reasonable enquiry, are being threatened, in relation to the winding-up, dissolution, administration or reorganisation of any Obligor or Material Subsidiary (other than a solvent liquidation or reorganisation of any Material Subsidiary which is not an Obligor).
(Material Adverse Change)		(p)    There has been no material adverse change in the Company’s business, condition (financial or otherwise), operations, performance or assets taken as a whole (or the business, consolidated condition (financial or otherwise), operations, performance or the assets generally of the Cemex España Group taken as a whole) since its Original Financial Statements.   For the avoidance of doubt, “consolidation” of the Target into the Cemex España Group in itself will not be a Material Adverse Change.
(Environmental compliance and claims)		(q)    Each member of the Cemex España Group has performed and observed in all material respects all Environmental Law, Environmental Permits and all other material covenants, conditions, restrictions or agreements directly or indirectly concerned with any contamination, pollution or waste or the release or discharge of any toxic or hazardous substance in connection with any real property which is or was at any time owned, leased or occupied by any member of the Cemex España Group or on which any member of the Cemex España Group has conducted any activity where failure to do so might reasonably be expected to have a Material Adverse Effect.   No Environmental Claim has been commenced or (to the best of its knowledge and belief) is threatened against any member of the Cemex España Group where that claim would be reasonably likely, if determined against that member of the Cemex España Group to have a Material Adverse Effect.

 

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(No Immunity)		(r)     In any proceedings taken in its jurisdiction of incorporation in relation to this Agreement, it will not be entitled to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process.
(Private and commercial acts)		(s)    Its execution of the Finance Documents constitutes, and its exercise of its rights and performance of its obligations hereunder will constitute, private and commercial acts done and performed for private and commercial purposes.
		The following Representations will be repeated on an ongoing basis at customary times: (a) to (f), (i), (k) (but in respect of its latest consolidated financial statements instead of the Original Financial Statements) and (l) to (p).   (j) (i) shall be made on the date of the Information Memorandum and on the date of primary syndication.
Information Undertakings:		The Company shall supply each of the following:
		(a)    as soon as they become available, but in any event within 180 days of the end of its financial years its audited consolidated financial statements (provided that in the first financial year ending after the date on which the Company obtains control of Target the time period referred to above shall be 270 days further provided that if such audited consolidated financial statements have not been provided within 180 days of the end of that financial year then the Company shall also provide non-audited consolidated financial statements for that financial year no later than 180 days after the end of such year)
		(b)    as soon as they become available, but in any event within 90 days of the end of the first three quarters of each of its financial years its consolidated financial statements for that quarter
		(c)    with each set of consolidated financial statements, a compliance certificate
		(d)    all documents dispatched by the Company to its shareholders (or any class of them) or its creditors generally
		(e)    details of any litigation (including any environmental claim), arbitration or administrative proceedings which might, if adversely determined, have a Material Adverse Effect

 

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		(f)     notification of any adverse change in credit ratings of the Company
		(g)    such other information regarding the financial condition, business and operations of any member of the Cemex España Group as any Finance Party may reasonably request
		(h)    notification of default
		On the introduction of or any change in law, a change in the status of an Obligor or a proposed assignment or transfer by a Lender, each Obligor shall promptly upon the request of the Agent or any Lender supply such documentation and other evidence as is reasonably requested by the Agent (for itself and on behalf of any Lender) or any Lender (or prospective new Lender) in order for the Agent or such Lender (or prospective new Lender) to carry out and be satisfied with the results of all necessary “know your customer” or other checks in relation to the transactions contemplated in the Finance Documents.
		The Borrower may satisfy its obligations to deliver information to those Lenders who agree by posting such information onto an electronic website.
Financial Covenants:		The Borrower shall ensure that in respect of any Relevant Period:   (i)     from the date of signing of the Facilities Agreement, the ratio of Net Borrowings to Adjusted EBITDA calculated on a rolling basis shall be less than or equal to 3.50 to 1.00.   (ii)    the ratio of EBITDA to Finance Charges calculated on a rolling 12 month basis shall be greater than or equal to 3.00 to 1.00,   tested by reference to the Company’s consolidated accounts (as prepared in accordance with applicable GAAP at the time of signing). The Facilities agreement(s) will contain special provisions allowing for the re-defining of the financial covenants in the event of a change in applicable GAAP, within a reasonable time period and subject to good faith).   The Borrower shall ensure that at all times the Net Borrowings of its Subsidiaries does not exceed 15% of the consolidated total assets of the Borrower.

 

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		The definitions to be used in calculating the Financial Covenants and the Net Borrowing of its subsidiaries shall be based on the form of those used in the Company’s most recent existing syndicated facilities.
General Undertakings:		The following undertakings will be included in the Agreement in respect of each Obligor and, where applicable, in relation to the Cemex España Group (and the form of such undertakings shall be based on the form of those contained in the Company’s most recent existing syndicated facilities (in particular the 2004 Facility)):
		(a)    authorisations
		(b)    preservation of corporate existence
		(c)    preservation of properties
		(d)    compliance with laws and regulations
		(e)    negative pledge
		(f)     restriction on merger
		(g)    no change of business
		(h)    insurance
		(i)     environmental compliance
		(j)     environmental claims
		(k)    transactions with affiliates to be on arm’s length terms (except as set out in the funds flow required to be delivered as a documentary condition precedent)
		(l)     pari passu ranking
		(m)   restriction on new debt of Target Group: (except for inter-company transactions) to be limited to short term working capital facilities
		(n)    offer related covenants: See Appendix 2. Acquisition indemnity also to be included.
		(o)    payment restrictions affecting subsidiaries
		(p)    new subsidiaries to be notified, if Material Subsidiaries
		(q)    notarisation.

 

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Events of Default:		Each of the following will be included in the Agreement in respect of each Obligor and, if appropriate, any member of the Cemex España Group and/or Material Subsidiaries (and the form of such events of default shall be based on the form of those contained in the 2004 Facility):
		(a)    non-payment
		(b)    any financial covenant not satisfied
		(c)    failure to comply with any other obligations subject to agreed remedy periods if capable of remedy
		(d)    misrepresentation
		(e)    cross acceleration, subject to an agreed minimum amount
		(f)     insolvency
		(g)    insolvency proceedings
		(h)    expropriation or sequestration
		(i)     creditors’ process
		(j)     ownership by Company of other Obligors
		(k)    failure to comply with judgment
		(l)     unlawfulness
		(m)   repudiation
		(n)    (following the acquisition of Target) material adverse change
Clean-Up Period:		The Target Group has the benefit of a 180 day clean-up period after the Company takes control of the Target Group.
Majority Lenders:		51% of Total Commitments or if there are Loans outstanding, 51% of Loans.

 

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Assignments and Transfers by Lenders:		A Lender may assign any of its rights or transfer by novation any of its rights and obligations to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets, with notification to the Company.
Documentary Conditions Precedent:		Conditions precedent must be completed to the satisfaction of the Agent before the first utilisation and include those customary for transactions of this nature, including those relating to the Offer which include:
		(a)    copy of each acquisition document press release, bidder’s statement and a copy of the announcement that the Offer has become or has been declared unconditional;
		(b)    all regulatory clearance in respect of the Offer has been obtained (including FIRB approval);   (c)    evidence satisfactory to the bookrunners that funding (other than under the Facilities) of no less than US$3,800 million is committed and available for the purpose of the Offer to the Company or Cemex, S.A.B. de C.V. and a “funds flow” statement setting out how the Offer will be funded; and   (d) satisfaction (or waiver by the Agent) of the Offer CPs.
Offer CPs:		1.      The Treasurer of the Commonwealth of Australia either:   (a)    issues a notice stating that the Commonwealth Government does not object to Cemex, S.A.B. de C.V. or any direct of indirect subsidiary of it acquiring a substantial shareholding in Target; or   (b)    becomes, or is, precluded (by reason of lapse of time or otherwise) from making an order in respect of the acquisition of Target by such a person under the Foreign Acquisitions of Takeovers Act 1975 (Cth).   2.      the Company has obtained, on an unconditional basis, all necessary material authorisations in Australia (including industry bodies’ consent and ACCC approval) to enable the Offer to be made to and accepted by the holders of Target shares and that all such material authorisations, consents and approvals remain in full force and effect and have not become subject to any notice or indication of intention to be revoked, suspended, restricted,

 

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		modified or not renewed and that the Company has lodged all necessary documents with any relevant stock exchange.
		3.      The Company complying in all respects with the requirements of Chapter 6 (takeovers) of the Corporations Act 2001 (Cth).   4.      All other Australia regulatory and other approvals contemplated by the Offer or to which the offer is subject being obtained on terms and conditions satisfactory to the Agent.   5.      All US or other regulatory requirements with regard to the acquisition of any ADRs being obtained on terms and conditions satisfactory to the Agent (acting reasonably)
Other Conditions Precedent:		Conditions precedent for the first and each subsequent utilisation will include:
		(a)    accuracy of repeating representations; and
		(b)    no actual or potential default having occurred.
		During the Certain Funds Period, (a) shall only apply in respect of Certain Funds Representations and (b) shall only apply in respect of Certain Funds Events of Default.
Miscellaneous Provisions:		The Agreement will contain provisions relating to, among other things, default interest, market disruption, breakage costs, tax gross up and indemnities, increased costs, set-off and administration.
Costs and Expenses:		All costs and expenses (including legal fees) reasonably incurred by the Agent and the bookrunners in connection with the preparation, negotiation, printing, execution and syndication of the Agreement and any other document referred to in it shall be paid by the Company promptly on demand whether or not the Agreement is signed (subject to delivery of the relevant receipts, invoices or other documentary evidence).
Governing Law:		English.
Jurisdiction:		Courts of England.

 

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Appendix 1 - Pricing

Margin calculated on the basis of the ratio of Net Borrowings to Adjusted EBITDA as follows:

 

Ratio		Margin (basis points (“bps”) per annum)
		Facility A*		Facility B		Facility C
Greater than 3.0x		32.5		40.0		45.0
2.5x to 3.0x		27.5		32.5		37.5
2.0x to 2.5x		22.5		25.0		30.0
Less than 2.0x		15.0		20.0		25.0

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*

Following the exercise of the First Term Out Option, the Facility A Margin shall increase at each level by 5.0 bps per annum; in addition following the exercise of the Second Term Out Option, an additional up-front fee of 5.0 bps flat on the amount of the outstanding Facility A Loan shall be payable to the Lenders at the time of the exercise of the such option.

 

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Appendix 2 - Offer Undertaking

 

1.1

The Company shall ensure, and shall procure that Bidco shall ensure, that the announcement of its intention to acquire Target (the “Announcement”) and the document containing the terms of the Offer (the “Offer Document”) and any other documents relating to the Offer furnished to the Agent contain all the material terms and conditions of the Offer.

 

1.2	The Company shall ensure, and shall procure that Bidco shall ensure, that the Offer Document will correspond in all material respects to the terms and conditions of the Offer as contained in the Announcement.

 

1.3	The Company shall not, and shall procure that Bidco shall not, without the prior written consent of the two Mandated Lead Arrangers (not to be unreasonably withheld or delayed):

 

1.3.1

waive, amend, revise, withdraw, agree, declare or accept or treat as satisfied or decide not to enforce, in whole or in part, any condition of the Offer as to the level of acceptances from those entitled to accept the terms of the Offer, where to do so would result in such level being less than 50.01% of the total possible acceptances available; and

 

1.3.2

issue or allow to be issued on its behalf any press release or other publicity which refers to any Facility or any Finance Party unless the publicity is required by law or any stock exchange. In that case the Company shall notify the Mandated Lead Arrangers as soon as practicable upon becoming aware of the requirement, shall consult with the Mandated Lead Arrangers on the terms of the reference and shall have regard to any timely comments of the Mandated Lead Arrangers.

 

1.4	The Company shall comply with, the Corporations Act 2001 (Commonwealth of Australia) (the “Corporations Act”) and all other applicable laws in all respects material in the context of the Offer.

 

1.5

The Company shall keep the Mandated Lead Arrangers informed as to the status and progress of the Offer and, in particular, will from time to time and promptly upon request give to the Mandated Lead Arrangers details of the current level of acceptances of the Offer (to the extent permitted by the applicable laws of Australia and relevant regulations).

 

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1.6	The Company shall inform the Mandated Lead Arrangers in advance as to:

 

1.6.1

the terms and conditions of any assurance or undertaking proposed to be given by or on behalf of any member of the Cemex España Group (or, so far as the Company is aware, the Target or any of its Subsidiaries) to any person for the purpose of obtaining any authorisation necessary or desirable in connection with the Offer; and

 

1.6.2

any terms or conditions proposed in connection with any authorisation necessary or desirable in connection with the Offer.

 

1.7

If any member of the Group becomes aware (whether through notice from any Finance Party or otherwise) of a circumstance or event which is or could reasonably be construed to be covered by any condition of the Offer which, if not waived, would entitle Bidco (with the consent of any other party, if needed) to lapse the Offer, the Company shall promptly notify the Mandated Lead Arrangers.

 

1.8	If Bidco becomes entitled to initiate the compulsory acquisition procedures set out in Part 6A.1 of the Corporations Act in relation to the Target shares to which the Offer relates, the Company shall procure that Bidco:

 

1.8.1

shall initiate those procedures promptly (and in any event within 14 days after becoming entitled to do so); and

 

1.8.2

shall use all reasonable endeavours to acquire 100 per cent. of the shares to which the Offer relates within 7 weeks after initiating those procedures.

 

1.9	If Bidco is required by any holder of the Target’s shares to acquire that holder’s shares pursuant to the compulsory buy-out provisions of the Corporations Act, the Company shall procure that Bidco will promptly comply with the requirements of the Corporations Act in that respect.

 

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Exhibit (b)(1)(B)

Translation

FACILITY AGREEMENT AMONG:

I. BBVA BANCOMER, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO BBVA BANCOMER, HENCEFORTH REFERRED TO AS THE “BANK”, REPRESENTED HEREIN BY MR. CARLOS DAVID VELAZQUEZ THIERRY AND AGUSTIN DE LA GARZA VIDAURRI;

II. CEMEX, S.A.B. DE C.V., HENCEFORTH REFERRED TO AS THE “BORROWER”, REPRESENTED HEREIN BY AGUSTIN DE JESUS BLANCO GARZA.

III. WITH THE APPEARANCE OF CEMEX MEXICO, S.A. DE C.V. REPRESENTED HEREIN BY MR. AGUSTIN DE JESUS BLANCO GARZA AND EMPRESAS TOLTECA DE MEXICO, S.A. DE C.V., REPRESENTED HEREIN BY AGUSTIN DE JESUS BLANCO GARZA, HENCEFORTH JOINTLY REFERRED TO AS THE “GUARANTORS”,

In accordance with the following statements and clauses:

STATEMENTS

I. The “BANK” states, through its representatives:

1. That it is a company duly incorporated in accordance to Mexican law and authorized to operate as a full service bank, and thus has the necessary legal capacity for the execution of, and compliance to this Agreement.

2. That its representatives have the sufficient legal capacity, which has not been revoked nor modified in any way, to attend in its name and representation to the execution and enforcement of this Agreement.

II. The “BORROWER” states, through its representatives:

1. That it is a company legally incorporated in accordance to Mexican law, and that its representative has the necessary and sufficient legal capacity, which has not been restricted or in any way modified, to represent it herein.

2. That its corporate purpose contemplates the possibility of executing the type of transaction established herein, as accredited with its current by-laws, reason for which this Agreement does not violate any of the Borrower’s statutory provisions and its execution has been authorized by the competent statutory entities.

3. That on July 25, 2006 it provided the Bank the information and documentation which accurately reflects its financial, accounting, legal and in general, administrative situation. This information and documentation constituted the basis for the execution of this Agreement and the authorization of the credit, subject matter of the same, and which, on the signature date of this Agreement, has not undergone any significant amendment or substantial change.

4. That on the date of this deed, it is not on strike, nor does it have any knowledge of a call to strike, or that its workers or employees, or any workers’ union, intends to strike against the Borrower.

5. That there exist no pending obligations, nor to the extent of its knowledge, do any threats to file a claim or begin proceedings against the Borrower or any of its properties, before a court, government agency, nor before any arbiter. It is also unaware of any Adverse Material Event that may affect the legality, validity or enforceability of this Agreement.

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Translation

 

6. That it has executed call money bank deposit agreements with the Bank, in Pesos checking account number 0447899564 (hereinafter “Pesos Checking Account”) and in Dollars checking account number 0145905001 (hereinafter “Dollars Checking Account”), which the Borrower has with the Bank for the withdrawal and payment of the credit (hereinafter jointly referred to as the “Checking Accounts”).

III. The “GUARANTORS” state through their representatives:

1. That they are companies duly incorporated in accordance to Mexican law, and that their representatives have the necessary and sufficient legal capacity, which has not been restricted or in any way modified, to represent them herein.

2. That their respective corporate purposes contemplate the possibility of executing the type of transaction established herein, as accredited with their current by-laws, reason for which this Agreement does not violate any of the Guarantors’ statutory provisions and its execution has been authorized by the competent statutory entities.

3. In view of the corporate, financial, administrative and legal relations they hold with the Borrower, it is in their interest to appear herein, with the purpose of guaranteeing in the Bank’s favor, in the terms agreed to herein, the fulfillment of all the obligations arising on the Borrower’s behalf, in this Agreement.

The parties state jointly:

That they acknowledge the Capacity they exercise, just as they recognize the full force and validity of the stipulations, statements and definitions contained herein.

In view of the foregoing, the parties bind themselves to the stipulations of the following:

CLAUSES

FIRST CLAUSE:

DEFINITIONS The following terms capitalized in this Agreement will have the following meanings:

“Receivables Program Assets” means (a) all Receivables which are described as being transferred by the Borrower, another Seller or a Special Purpose Vehicle pursuant to the Receivables Documents, (b) all Receivables Related Assets with respect to such Receivables, and (c) all collections (including recoveries) and other proceeds of the assets described in the foregoing clauses.

“Receivables Related Assets” means with respect to any “Receivables” (i) any rights arising under the documentation governing or relating to such Receivables (including rights in respect of liens securing such Receivables), (ii) any proceeds of such Receivables, (iii) other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable.

“Adjusted Consolidated Net Tangible Assets” means the Borrower’s and its Subsidiaries consolidated assets as a whole, minus (a) depreciation, amortization and other applicable reserves, (b) outstanding liabilities ( excluding amortizations that become due in a less than one year term with respect to the long term debt) and (c) intangible assets, such as the excess of the book value (commercial credit or “goodwill”), commercial names, registries and brands, concessions, patents and other intangibles, pursuant to the GAAP in Mexico, calculated pursuant to the Borrower’s most recent available internal consolidated financial statements.

“Acquisition” means any merger, consolidation, acquisition or lease of assets, acquisition of securities or business combination or acquisition, or any two or more of such transactions, if upon the completion of such

 

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Translation

 

transaction, the Borrower or any Subsidiary thereof has acquired an interest in any Person who is deemed to be a Subsidiary under this Agreement and was not a Subsidiary prior thereto.

“Material Acquisition” any (a) acquisition of property or series of related acquisitions of property that constitutes assets comprising all or substantially all of an operating unit, division or line of business or (b) acquisition of or other investment in the Capital Stock of any Subsidiary or any Person which becomes a Subsidiary or is merged or consolidated with the Borrower or any of its Subsidiaries, in each case, which involves the payment of consideration by the Borrower and its Subsidiaries in excess of U.S.$25,000,000 (or the equivalent in other currencies).

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is subject to the common control of said Person. In virtue of this definition, “control” means the capacity to determine the administration and policy of said Person, directly or indirectly, whether through the custody of securities, with a right to vote, by contract or in any other form.

“Capital Lease” means, as to any Person, 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 Mexican GAAP and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with Mexican GAAP.

“Derivatives” means, with respect to any Person, any type of derivative transactions, including, with no limitation, equity forwards, capital hedges, cross-currency swaps, currency forwards, interest rate swaps and swap options or similar operations or combinations of the abovementioned operations, and all the obligations of said Person, direct or contingent, that guarantee the obligations of said Person with respect to the abovementioned transactions.

“Debt” of any Person means, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, promissory notes or other similar instruments, (iii) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (iv) all obligations of such Person as lessee under Capital Leases, (v) all Debt of others secured by a Lien on any asset of such Person, up to the value of such asset, as recorded in such Person’s most recent balance sheet, (vi) all obligations of such Person with respect to product invoices incurred in connection with export financing, and (vii) all obligations of such Person under repurchase agreements for the stock issued by such Person or another Person. For the avoidance of doubt, Debt does not include Derivatives. With respect to the Borrower and its subsidiaries, the aggregate amount of Debt outstanding shall be adjusted by the Value of Debt Currency Derivatives solely for the purposes of calculating the Consolidated Net Debt / EBITDA Ratio. If the Value of Debt Currency Derivatives is a positive mark-to-market valuation for the Borrower and its subsidiaries, then Debt shall decrease accordingly, and if the Value of Debt Currency Derivatives is a negative mark-to-market valuation for the Borrower and its subsidiaries, then Debt shall increase by the absolute value thereof.

“Consolidated Net Debt” means, at any date, the sum (without duplication) of (a) the principal amount of all Debt of the Borrower and its Subsidiaries at such date, plus (b) to the extent not included in Debt, the total unpaid amount of all financial transactions derived from equity swaps at such date or in accordance to any similar transaction, minus (c) all Temporary Investments of the Borrower and its Subsidiaries at such date. In order to calculate the Consolidated Net Debt, the transactions that are considered Debt in the terms of such definition will not be considered, if they are not registered as a liability by the Borrower and its Subsidiaries pursuant to effective GAAP on the signature date of this Agreement.

 

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Translation

 

“Relevant Debt” means the Borrower’s and/or one or more of its Subsidiaries’ debt, derived from one or more related or unrelated transactions, for a principal unpaid amount which exceeds USA$50’000,000.00, or its equivalent in other currencies.

“Asset Disposition” means, with respect to any asset, any sale, sale and lease back, lease, assignment, transmission or any other disposition thereof.

“Material Disposition” means any Disposition of property or series of related Dispositions of property that yields gross proceeds to the Borrower or any of its Subsidiaries in excess of U.S.$25,000,000 (or the equivalent in other currencies).

“Receivables Documents” means (a) a receivables purchase agreement, pooling and servicing agreement, credit agreement, agreements to acquire undivided interests or other agreement to transfer, or create a security interest in, Receivables Program Assets, in each case as amended, modified, supplemented or restated and in effect from time to time entered into by the Borrower, another Seller and/or a Special Purpose Vehicle, and (b) each other instrument, agreement and other document entered into by the Borrower, any other Seller or a Special Purpose Vehicle relating to the transactions contemplated by the items referred to in clause (a) above, in each case as amended, modified, supplemented or restated and in effect from time to time.

“Material Adverse Effect” means any circumstance, event or condition that has an adverse and significant effect on (a) the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower and its Subsidiaries taken as a whole, (b) the validity or enforceability of this Agreement or any of the Promissory Notes or the rights and remedies of BBVA Bancomer with respect to the same (c) the ability of the Borrower and/or the Guarantors to perform their Obligations under this Agreement, the Promissory Notes, or any other Credit Document, in the understanding that a Material Acquisition will not be considered a Material Adverse Effect.

“Responsible Officer” means, of any Person, the Chief Financial Officer, the Corporate Finance Director, the Corporate Treasury Director, the Finance and Financial Planning Manager, the Finance Manager or the Comptroller of such Person.

“Consolidated Fixed Charges” means, for any period, the sum (without duplication) of (a) Consolidated Interest Expense for such period and (b) to the extent not included in (a) above, payments during such period in respect of the financing costs of financial derivatives in the form of equity swaps.

“Consolidated Interests Expenses” means, for any period, the total of the brute expenses for interests of the Borrower and its consolidated Subsidiaries attributable to said period pursuant to Mexican GAAP.

“Line of Credit” means, on the date of this Agreement, the quantity authorized by the different empowered authorities in order that the Bank, or its subsidiaries or affiliates may individually hire credits with the Borrower and/or its Subsidiaries, whose joint amount be up to the amount of €1,000’000,000.00 (One billion Euros 00/100 legal Spanish currency) to be allocated by the Borrower and/or its Subsidiaries to perform a Material Acquisition.

“Withdrawal Notice” means the notice delivered by the Borrower, duly signed by a Responsible Officer of the Borrower in which the direct and/or indirect withdrawal amount and the date of withdrawal with at least three business days notice before the withdrawal date, are specified, thereby confirming and informing the Bank about the Material Acquisition. Said Withdrawal Notice will have to additionally include the name, corporate purpose of the company subject matter of this Material Acquisition.

The withdrawal date could be advanced if the Bank, pursuant to its capacity in that moment informs the Borrower such possibility, and the Borrower request it.

 

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Translation

 

“Withdrawal Request” means the request and the confirmation of the Borrower to the Bank for the upcoming direct and/or indirect withdrawal of a part of or the whole credit, before the Effectiveness Termination Date, signed by a Responsible Officer of the Borrower’s, in which it is specified that the Borrower has complied with the preceding conditions of the credit in order that it be withdrawn, and that the effects of the Credit once it has been withdrawn by the Borrower will not produce a cause of Early Maturity.

“Receivables Program Obligations” means (a) promissory notes, shares certificates, undivided interests, partnership interests or other interests representing the right to be paid a specified principal amount from the Receivables Program Assets and (b) related obligations of the Borrower, a Subsidiary of the Borrower or a Special Purpose Vehicle (including, without limitation, rights in respect of interest or yield hedging obligations, breach of warranty claims and expense reimbursement and indemnity provisions).

“Qualified Receivables Transaction” means any transaction or series of transactions that may be entered into by the Borrower or any Subsidiary pursuant to which the Borrower or any Subsidiary may sell, convey or otherwise transfer to a Special Purpose Vehicle (in the case of a transfer by the Borrower or any other Seller) and any other person (in the case of a transfer by a Special Purpose Vehicle), or may grant a security interest in, any Receivables Program Assets (whether now existing or arising in the future); provided that:

(a) no portion of the indebtedness or any other obligations (contingent or otherwise) of a Special Purpose Vehicle (i) is guaranteed by the Borrower or any other Seller or (ii) is recourse to or obligates the Borrower or any other Seller in any way such that the requirements for off balance sheet treatment under Financial Accounting Standards Bulletin 140 are not satisfied; and

(b) the Borrower and the other Sellers do not have any obligation to maintain or preserve the financial condition of a Special Purpose Vehicle or cause such entity to achieve certain levels of operating results.

“Debt Currency Derivatives” means transactions derived from the Borrower and its subsidiaries related to currency entered into for the purposes of hedging exposures under outstanding Debt of the Borrower and its subsidiaries, including but not limited to cross-currency swaps and currency forwards.

“Person” means an individual, partnership, corporation, business trust, joint stock company, limited liability company, trust, unincorporated association, joint venture or other business entity or governmental authority, whether or not having a separate legal Personality.

“GAAP” means the Generally Accepted Accounting Principles in Mexico on the signature date of this Agreement.

“Consolidated Leverage Ratio” means, at any time during the fiscal quarter, the ratio of (a) the Consolidated Net Debt at that time, to (b) the consolidated EBITDA for the last four quarters before such quarter, which will have to be calculated based on the most recent Consolidated Financial Statements of the Borrower and its Subsidiaries available at that date, pursuant to GAAP.

“Consolidated Net Debt / EBITDA Ratio” means, at any time during the fiscal quarter, the ratio of (a) Consolidated Net Debt for that moment to (b) EBITDA for the period of four consecutive fiscal quarters immediately preceding, which shall be calculated based on the most recently available consolidated financial statements of the Borrower and its Subsidiaries as of such date.

“Consolidated Fixed Charge Coverage Ratio” means, for any period of four consecutive fiscal quarters, the ratio of (a) EBITDA for such period, to (b) Consolidated Fixed Charges for such period, pursuant to GAAP.

“Subsidiary” means with respect to any Person, any corporation, partnership, joint venture, limited liability company, trust, estate or other entity of which (or in which) more than 50% of (a) in the case of a

 

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corporation, the issued and outstanding capital stock with voting rights, (b) in the case of a limited liability company, partnership or joint venture, the interest in the capital or profits of such limited liability company, partnership or joint venture or (c) in the case of a trust or estate, the beneficial interest in such trust or estate, is at the time directly or indirectly owned or controlled by (X) such Person, (Y) such Person and one or more of its other Subsidiaries or (Z) one or more of such Person’s other Subsidiaries. For purposes of determining whether a trust formed in connection with a Qualified Receivables Transaction is a Subsidiary, promissory notes, bonds, shares certificates, trustee certificates, trust certificates, undivided interests, partnership interests or other interests or certificates of the type described in clause (a) of the definition of Receivables Program Obligations shall be counted as beneficial interests in such trust.

“Acquiring Subsidiary” means any Subsidiary of the Borrower or any one of its Subsidiaries solely for the purpose of participating as the acquiring party in any Acquisition, and any Subsidiaries of such Acquiring Subsidiary acquired in such Acquisition.

“Acquired Subsidiary” means any Subsidiary acquired by the Borrower or any other Subsidiary after the date hereof in an Acquisition, and any Subsidiaries of such Acquired Subsidiary on the date of such Acquisition.

“Material Subsidiary” means, at any date, any Subsidiary of the Borrower (if any) (i) the assets of which, together with those of its Subsidiaries, on a consolidated basis, without duplication, constitute 5% or more of the consolidated assets of the Borrower and its Subsidiaries as of the end of the then most recently ended fiscal quarter for which quarterly financial statements have been prepared or (ii) the operating profit of which, together with that of its Subsidiaries, on a consolidated basis, without duplication, constitutes 5% or more of the consolidated operating profit of the Borrower and its Subsidiaries for the then most recently ended fiscal quarter for which quarterly financial statements have been prepared and (b) each Guarantor will be considered a “Material Subsidiary” for the purposes of this Agreement.

“EBITDA” means, for any period, the sum for the Borrower and its Subsidiaries, determined on a consolidated basis of (a) operating income (utilidad de operación), (b) cash interest income and (c) depreciation and amortization expense, in each case determined in accordance with Mexican GAAP consistently applied for such period. For the purposes of calculating EBITDA for any period of four consecutive fiscal quarters (each, a “Reference Period”) pursuant to any determination of the Consolidated Net Debt / EBITDA Ratio (but not Consolidated Fixed Charge Coverage Ratio), (i) if at any time during such Reference Period the Borrowers or any of its Subsidiaries shall have made any Material Disposition, the EBITDA for such Reference Period shall be reduced by an amount equal to the EBITDA (if positive) attributable to the property that is the subject of such Material Disposition for such Reference Period (but when the Material Disposition is by way of a lease, income received by the Borrower or any of its Subsidiaries under such lease shall be included in EBITDA and (ii) if at any time during such Reference Period the Borrower or any of its Subsidiaries shall have made any Material Acquisition, EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto (including the incurrence or assumption of any Debt) as if such Material Acquisition had occurred on the first day of such Reference Period. Additionally, if since the beginning of such Reference Period any Person that subsequently shall have become a Subsidiary or was merged or consolidated with the Borrower or any of its Subsidiaries as a result of a Material Acquisition occurring during such Reference Period shall have made any Disposition or Acquisition of property that would have required an adjustment pursuant to clause (i) or (ii) above if made by the Borrower or any of its Subsidiaries during such Reference Period, EBITDA for such period shall be calculated after giving pro forma effect thereto as if such Disposition or Acquisition had occurred on the first day of such Reference Period.

“Value of Debt Currency Derivatives” means, on any given date, the aggregate mark-to-market value of Debt Currency Derivatives, expressed as a positive number (if, on a mark-to-market basis, such aggregate amount reflects a net amount owed to the Borrower and its subsidiaries) or as a negative number (if, on a mark-to-market basis, such aggregate amount reflects a net amount owed by the Borrower and its subsidiaries).

 

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“Special Purpose Vehicle” means a trust, partnership or other special purpose person established by the Borrower and/or its Subsidiaries to implement a Qualified Receivables Transaction.

“Seller” means the Borrower and any Subsidiary or other affiliate of the Borrower (other than a Subsidiary or affiliate that is a Special Purpose Vehicle) which is a party to a Receivables Document.

AMOUNT.

SECOND. The Bank establishes a credit for the Borrower in the form of a Simple Takeout Facility Credit, for the maximum amount of USA$1,200’000,000.00 (One billion two hundred million American Dollars 00/100 legal currency of the United States of America) or its equivalent in pesos, considering the exchange rate required to settle obligations in foreign currency by the Official Federal Gazette (Diario Oficial de la Federación) on the day to which corresponds the date of the respective asset disposition (hereinafter the “Credit”) unless the authorities empowered to do so expressly authorize an increase in the Line of Credit.

In order to determine the available balance of the Credit for the withdrawals in a non-dollar currency, these withdrawals will be valued and registered as a balance withdrawn in dollars at the effective official exchange rate on the day of the withdrawal.

The Line of Credit is independent of the diverse lines of credit that the Bank and/or its Subsidiaries or affiliates have authorized in favor of the Borrower and/or its Subsidiaries.

“Pesos”, means the legal currency in Mexico.

“Dollars”, means the legal currency of the United States of America.

The resources will be supplied, in accordance to the availability of the Bank’s Treasury and subject to the legal provisions that regulate the Bank’s activity, or the activity of any of the franchises the Bank has established abroad, or if applicable, of some correspondent Bank with which the Bank has established a line of credit.

The principal amount of the Credit to which the immediately preceding paragraph makes reference, does not comprise ordinary, nor default interests, fees, additional charges and other expenses the Borrower must cover in favor of the Bank in accordance to this Agreement.

The Borrower will make use of the Credit in the form, terms and under the conditions agreed upon herein.

The credit is granted in accordance to the provisions of the General Law of Credit Instruments and Operations (Ley General de Títulos y Operaciones de Crédito), in the form of a Simple Credit take out facility and of that which the Twentieth clause establishes.

PURPOSE.

THIRD. The Borrower agrees to allocate the amount of the Credit precisely to complement the necessary resources to undertake a Significant Acquisition (the “Purpose”).

EFFECTIVENESS.

FOURTH. The period of effectiveness of this Agreement ends on September 28, 2007 (hereinafter “Effectiveness Termination Date”).

The parties will be able to agree upon the extension of the Effectiveness Termination Date, as well as, if applicable, the amendment to certain conditions established herein, which will have to be effected by means of the Borrower’s written request, with 110 days notice before the Effectiveness Termination Date, to which the Bank must respond within 20 days following the reception of said request, stating whether it agrees or disagrees to the request.

 

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Notwithstanding this Agreement’s termination, it will continue to produce all its legal effects, until the Borrower has completely paid all the quantities in its name.

CREDIT WITHDRAWALS.

FIFTH. During the effectiveness of this Agreement the Borrower may totally or partially withdraw from the Credit:

i) directly, which means, through the withdrawal of the resources, subject matter of the Credit, which the Bank makes to the Pesos Checking Account or to the Dollar Checking Account, which the Borrower maintains open with the Bank for the withdrawal and payment of the Credit (hereinafter jointly referred to as “Checking Accounts”).

and/or

ii) indirectly, through guarantee granting mechanisms, which may include without limitation, among others, the establishment of a banking guarantee issued through the documents or instruments which the law determines for such effects and which may be used by the Borrower to guarantee the Significant Acquisition, or to get a hold of money market resources in which the Bank, or any of its affiliates or Subsidiaries, would be able to receive an order from the Borrower to guide the necessary actions in order to obtain said resources. The purpose of these resources will have to complement a Significant Acquisition.

In any case, the direct or indirect withdrawals of the Credit are subject to the following:

(i) That there exists on behalf of the Borrower no fact or motive that may be considered default of its obligations established herein.

(ii) That the Borrower presents the Bank with a letter of request, (Withdrawal Request) which will have to be underwritten by the Borrower or the attorney(s)-in-fact with sufficient legal capacity of the Borrower. Said Withdrawal Notification will have to be delivered to the Bank at least 3 (three) business days before the date of withdrawal, in the understanding that this date could be advanced if the Bank, in accordance to its capacity in that moment, informed the Borrower of such possibility and the Borrower were thus to request it.

(iii) That the Guarantee constituted in the terms agreed upon in the Fifteenth Clause herein, continues in effect during the term of this Agreement and until the Borrower has not paid the Bank the principal, interests, and other additional charges of the Credit and/or if applicable, the banking guarantee issued is no longer valid.

(iv) That the Borrower has an available positive balance in the Credit, subject matter of this Agreement, in the understanding that to determine whether there exists an available balance, the parties agree that the result obtained from the sum of the principal balances on behalf of the Borrower, along with the sum of the banking guarantees issued in favor of the Borrower under the Credit subject matter of this Agreement, must not exceed the amount of USA$1,200’000,000.00 (One billion two hundred million American Dollars 00/100), in the understanding that the principal balances of the peso withdrawals and the banking guarantees also issued in pesos will be determined with the exchange rate agreed upon in the first paragraph of the Second Clause herein.

(v) That the Borrower has paid the Bank the respective fees, as the parties have agreed-upon pursuant to the Ninth Clause of this Agreement.

(vi) If applicable, that the documents necessary to the implementation of the direct or indirect withdrawals be executed.

 

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For each occasion in which the Borrower intends to withdraw directly a part of or the whole Credit, the Borrower will have to establish the Payment Date for said withdrawal (hereinafter “Payment Date”), in the understanding that in no case will it be superior to the Effectiveness Termination Date of the Agreement.

The Payment Date for each withdrawal thus agreed-upon will appear in the respective and corresponding promissory notes (hereinafter the “Promissory Notes”) which the Borrower will underwrite in favor of the Bank for each withdrawal.

For each occasion in which the Borrower intends to withdraw indirectly a part or the whole of the Credit through a Guarantee, the Borrower will establish the effectiveness date for the guarantee (hereinafter “Guarantee Maturity Date”) in the understanding that in no case will it be superior to the Effectiveness Termination Date.

The underwritten Promissory Notes and/or deeds will have to, if applicable, have the characteristics designated by article 170 of the General Law of Credit Instruments and Transactions (Ley General de Títulos y Operaciones de Crédito), of the applicable laws and of this Agreement.

Every one of the direct and/or indirect provisions established in this Agreement will diminish the Amount available of the Credit and will not be withdrawn again, nor installed again when their effectiveness has terminated and/or they have been paid to and/or canceled by the Bank.

By virtue of the foregoing paragraph, only for those indirect withdrawals necessary to induce or establish a direct withdrawal will the combination of both provisions be considered only one direct withdrawal.

PAYMENT OF THE PRINCIPAL.

SIXTH. During the effectiveness period of this Agreement, the Borrower agrees to pay in favor of the Bank the quantities withdrawn, making the payments to the Bank for the principal, on each corresponding Payment Date, as established in the Promissory Note(s) with which the applicable provision has been documented.

In case of any principal Payment Date were on a non-Business Day, the payment will be effected on the following business day.

ORDINARY INTERESTS.

SEVENTH. The Borrower agrees to pay the Bank, during the effectiveness period of this Agreement, ordinary interests on the unpaid balance of the Credit if direct withdrawals were effected, which will be calculated for withdrawals in Pesos, at an annual rate equivalent to the TIIE Rate (as defined below) plus the Applicable Margin (as defined below), and for the withdrawals in Dollars, at an annual rate equivalent to the Libor Rate (as defined below) plus the Applicable Margin.

The interest rates determined in accordance to what is set forth in the foregoing paragraph, will appear in the Promissory Notes as long as the Borrower documents said withdrawals from the Credit.

The interests will accrue as of the date of partial or total withdrawal of the Credit and will have to be paid to the Bank on each Interest Payment Date (as defined below).

In the assumption that a Payment Date were not a Business Day (as defined below), said payment will be made on the immediately following Business Day, with the corresponding interest recalculation.

By virtue of this Agreement:

“Business Day” means,

 

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(i) for Peso withdrawals, every day except Saturday, Sunday and holidays, on which the headquarter offices of Mexico’s credit institutions are open to the public for the execution of banking transactions, for peso withdrawals.

(ii) for Dollar withdrawals, Business day will be every day except Saturdays, Sundays or holidays, and on which the headquarter offices of Mexico’s credit institutions, of New York City, United States of America, are open to the public for the execution of banking transactions.

“Interest Payment Date” means, the last day of each Interest Period.

“Applicable Margin” means the Margin that applies for each one of the direct withdrawals in accordance to the following periods, in the understanding that the maturity date of said periods will not be able to exceed the Effectiveness Termination Date:

i) Beginning on the date on which the first Credit withdrawal was made, until the first 90 days counted as of said date, the Applicable Margin over the unpaid balance of the Credit for this first period will be 0.175 percentage points if the withdrawal is made in Pesos and 0.20 percentage points if it is made in Dollars.

ii) As of the 91^st day, until the 180^th day, calculated as of the date on which the first Credit Withdrawal was made, or of any subsequent withdrawal were made in this period, the Applicable Margin over the unpaid balance of the Credit for this second period will be 0.225 percentage points if the withdrawal was or is made in Pesos and 0.25 percentage points if it was or is made in Dollars.

iii) As of the 181^st day, until the 270^th day, calculated as of the date on which the first Credit withdrawal was made, or of any subsequent withdrawal were made in this period, the Applicable Margin over the unpaid balance of the Credit for this third period will be 0.35 percentage points if the withdrawal was or is made in Pesos, and 0.30 percentage points if the withdrawal was or is made in Dollars.

iv) As of the 271^st day, until the 365^th day, calculated as of the date on which the first Credit withdrawal was made, or of any subsequent withdrawal were made in this period, the Applicable Margin over the unpaid balance of the Credit for this fourth period will be 0.40 percentage points if the withdrawal was or is made in Pesos, and 0.35 percentage points if the withdrawal was or is made in Dollars.

“Interest Period” means, each period of a calendar month which is considered the basis for the calculation of interests generated by the unpaid balance of the Credit, with the knowledge that (i) the first Interest Period will begin on date of the first withdrawal or of the applicable withdrawal and will end precisely on the last day of the respective withdrawal’s corresponding month (ii) the subsequent Interest Periods will begin on the day after the last day of the immediately preceding Interest Period and will end on the last day of the same month, and (iii) any Interest Period effective on the Effectiveness Termination Date will end on precisely such date.

“TIE Rate” means, the interbank equilibrium interest rate on a 28 day term, or in case the end of such term falls on a non-business day, of 26, 27 or 29 days, determined by the Bank of Mexico and published in the Official Federal Gazette (Diario Oficial de la Federación), the Business Day immediately preceding the beginning date of each Interest Period.

“Substitute Interest Rate of the TIIE Rate”. For the case in which any of each of the Interest Periods in which interests accrued were not to be calculated with the Bank of Mexico’s determination of the TIIE Rate, the interest rate that substitutes such TIIE Rate will be applied to this Agreement, which the Bank of Mexico itself made known, the same percentage points applied as a margin for the TIIE Rate, which are designated above and the same calculation system.

In case the Bank of Mexico does not make known the TIIE substitute interest rate, the CETES Rate will be applied to the Credit (as defined below) in addition to 1 one percentage point.

 

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By virtue of this Agreement, “CETES Rate” means the last annual interest yield rate equivalent to the discount rate of the Certificates of the Federal Treasury in a 28 day term, or, in case the end of such term were to fall on a non-business day, of 26, 27 or 29 days, in the primary position weekly made known by the Federal Government through the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público) through notices in the newspapers of major circulation in the country, being applicable to this Credit the last CETES Rate made known before the beginning of each Interest Period.

In case none of the aforementioned rates are published, the parties agree to the execution of an amendment agreement for this Agreement, with the purpose of establishing the interest rate applicable to the same. The foregoing, within a term no greater than 30 (thirty) calendar days notifies the Borrower of said circumstance.

“Libor Rate” (London Interbank Offered Rate), means the annual interest rate offered by the principle Banks in the interbank London market as the rate for Dollar deposits for a 30 day period, approximately at 11:00 (London, England time), that appears published 48 (forty eight) hours before the Beginning of each Interest Period in the page LIBOR 01 OF THE REUTERS INFORMATION SYSTEM, OR ALSO ON THE BTMM PAGE OF THE BLOOMBERG SYSTEM, both for the deposit in United States of America Dollars, or those to substitute, in case such pages were no longer published.

Said rate will be rounded to, if it were to be presented even in 1/100,000, or more than a percentage point, the 1/10,000 of the nearest percentage point. To this effect, five 1/100,000 of a point are considered nearer the 1/10,000 of the immediately superior percentage point.

In case the aforementioned rate is not published, the Bank and the Borrower agree to execute an amendment agreement to this Agreement, with the purpose of establishing the interest rate applicable to the same. The foregoing would be executed within a 30 (thirty) calendar day term, to the date on which the Bank notifies the Borrower of said circumstance.

If the parties do not reach an agreement with respect to the substitute rate applicable within the agreed upon, this will be considered cause for early maturity of this Agreement, in which case the Borrower will have to pay the Bank the unpaid Credit balance and its additional charges, on the date of said maturity, every time that on the contrary the unpaid balance accrues default interests pursuant to what was agreed-upon herein, taking as a basis the last ordinary applicable rate to the present Agreement.

To calculate the ordinary interests for each Interest Period, the annual applicable interest rate will be divided by 360 (THREE HUNDRED AND SIXTY) and the result will be multiplied by the number of calendar days that constitute the Interest Period at hand. The resulting rate will be multiplied by the unpaid balance of the Credit and the product will be the quantity that by virtue of interests the Borrower will have to pay the Bank on each Interest Payment Date.

DEFAULT INTERESTS.

EIGHTH. In case the Borrower does not pay punctually an amount it must cover in favor of the Bank in accordance to this Agreement, excepting interests, said amount will accrue default interests as of the date of its maturity until it is completely paid, interests that will accrue daily, that will be paid immediately and in accordance to an annual rate equal to the ordinary interests rate, plus 2 (two) percentage points.

To calculate default interests, the annual applicable default interest rate will be divided by 360 (THREE HUNDRED AND SIXTY) and the quotient will be applied to the unpaid and matured balances, thus resulting the default interest for each day, which the Borrower has agreed to pay in the terms of this Agreement.

FEES.

NINTH. “The Borrower”: Will pay the Bank the fees they agree-upon jointly.

 

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PLACE AND FORM OF PAYMENT.

TENTH. All the payments the Borrower must make in favor of the Bank under this Agreement, for capital, interests, fees and other legal consequences, it will effect on the agreed-upon dates, on business days and during business hours, with no need of a prior request and in accordance to the following:

For Peso withdrawals. The payments of the withdrawals will be effected through payments to the account of the Bank with KEY number 012580001030025009 on behalf of the settlement Account Banca Corporativa Monterrey of the Bank and can be made in any other place that the Bank notifies the Borrower with at least 10 (ten) days before the respective Payment Date.

For Dollar withdrawals. The Borrower will meet its payment obligation precisely through payments made to the Dollars Checking Account number 400-210568 (four zero zero dash two one zero five six eight) on behalf of BBVA Bancomer in JPMorgan Chase, located on 270 Park Avenue, 10017, New York, N.Y., United States of America in a sufficient amount for the Bank to receive the interests and the principal derived from the Credit, through said payments.

Notwithstanding the foregoing, the Borrower instructs the Bank expressly and irrevocably, in case of default of the payment obligations contained herein, charge to whichever of the Checking Accounts the Borrower has with the Bank for the withdrawal and payment of the Credit, the principal amount, ordinary interests and, if applicable, default interests, fees, expenses and other amortizations of the Credit.

The Bank will apply every one of the amounts it receives from the Borrower, in accordance to the following order: (i) collection and enforcement expenses if applicable; (ii) lawyers’ fees in the case of enforcement; (iii) default interests; (iv) ordinary interests and (v) capital.

EARLY PAYMENTS.

ELEVENTH. The Borrower will be able to pay before its maturity with no penalty, the total amount for each withdrawal, by delivering prior written notice with 5 (five) Business Days notice to the Bank, the amount will be at least USA$10’000,000.00 (Ten million Dollars 00/100 legal currency of the United States of America or multiples of USA$$1’000,000.00 (One million Dollars 00/100 legal currency of the United States of America and on the Interest Payment Date; the amount for the early payments will be first applied to the payment of generated unmatured interests, and lastly to the capital.

In the assumption that the early payment causes some cost for the funding breach to the Bank, this cost will be covered by the Borrower, on the same date on which said payment is effected.

AFFIRMATIVE COVENANTS

TWELFTH

The Borrower covenants that as long as any payable amount pursuant to this Agreement and the promissory notes remain unpaid, the Borrower, and if applicable, the Guarantors agree to the following:

a) Financial Statements and other reports: the Borrower and the Guarantors will deliver to the Bank:

(i) Deliver the Bank annual financial statements, consolidated for the Borrower [and individual for the Guarantors], audited by a public accountants firms, acceptable to the Bank within 150 (one hundred and fifty) calendar days for the Guarantors and 120 (one hundred and twenty) calendar days for the Borrower, following the end of its fiscal year. Said financial statements must have a certificate from a responsible officer of the Borrower’s, which states no default has occurred or continues to occur, nor that a cause of early maturity has occurred, or, if a default has occurred and continues to occur or a cause of early maturity occurs, a statement regarding its nature, as well as of the acts they have performed and intend to perform with respect to said default or cause of early maturity, and

(ii) Deliver to the Bank within 90 (ninety) calendar days following the end of each one of the first three trimesters of each fiscal year, the internal consolidated financial statements of the Borrower, which will include

 

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the general balance, statement of results, of changes in the financial situation and of the variations in the accountable corresponding capital. Said financial statements must have a certificate by a responsible officer of the Borrower, which states no default has occurred or continues to occur, nor that a cause of early maturity has occurred, or, if a default has occurred and continues to occur or a cause of early maturity occurs, a statement regarding its nature, as well as of the acts they have performed and intend to perform with respect to said default or cause of early maturity.

(iii) Simultaneously with the delivery by the Borrower of the financial information pursuant to with this Twelfth Clause, the Borrower will deliver to the Bank a certificate of consolidated leverage ratio and the consolidated fixed charge coverage ratio of a Responsible Officer that includes all the information and calculations necessary to determine the compliance by the Borrower of subsections (a) (i) and (ii) of the thirteenth clause herein.

(b) Default and litigation notice. The Borrower will deliver to the Bank:

 

(i)

As soon as possible, but in any case, within the 5 calendar days following any default or cause of early maturity, a statement from a Responsible Officer of the Borrower that designates the details of said default or cause of early maturity and the acts the Borrower has performed and intends to perform with respect to the same, and

 

(ii)

In a timely manner, a notice of any action or proceedings before any court, Governmental Authority or arbiter panel, which may affect the Borrower or any of its Subsidiaries with respect to any future responsibility or for any violation, of any law or regulation (including, with no limitation, Environmental Laws), in any case only if it had to or it were reasonable to wait for it to have to or be able to have in consequence an Adverse Material Effect.

(c) Compliance with contractual laws and obligations: The Borrower La will comply and will make every one of its Subsidiaries comply with all the requirements of applicable laws (including, in relation to licenses, concessions, certificates, permits, franchises, notices, registries and other necessary government authorizations to hold in ownership its assets or to perform its activities, antitrust and environmental laws and laws with respect to social security and pension funds), as well as all significant contractual obligations, except if from the default of the foregoing it were not reasonable to expect in consequence a Material Adverse Effect.

(d) Payment of Obligations: The Borrower will pay, and will make every one of its Subsidiaries pay, before falling in default, (i) all taxes, contributions, rights and government encumbrances that are determined, imposed or enforced and (ii) all the claims made pursuant to law, whose payment default, by operation of law, results in a Lien on its assets, in every case except if from the payment default it is not reasonable to expect in consequence a Material Adverse Effect; in the understanding, however, that neither the Borrower nor its Subsidiaries will be obligated to pay or force the payment of any taxes, encumbrances or claims that are challenged in good faith and through appropriate proceedings, and with respect to which adequate reserves are maintained, until any Lien that results therewith is established on its assets, and is enforceable with respect to third parties.

(e) Insurance maintenance: The Borrower will maintain and will make every one of its Subsidiaries maintains, insurance with well-known insurance companies, for the quantities and with the risk coverage that companies involved in similar business dealings and with the ownership of similar assets in the same areas in which the Borrower and its Subsidiaries operate, normally employ, in so far as said insurance are available in reasonable commercial terms.

(f) Business Leadership and Corporate Existence Conservation. The Borrower will to continue to dedicate itself to the same type of activities and business dealings to which it currently dedicates itself and will preserve and maintain and will make every one of its Material Subsidiaries preserve and maintain their legal existence, rights (be they statutory or legal), licenses, authorizations, permit,

 

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notice, registry and franchises considered material for its business dealings; in the understanding that neither the Borrower, nor its Material Subsidiaries i will be obligated to maintain their legal existence regarding a merger or consolidation performed pursuant to what is established by the Thirteenth Clause (c); and in the understanding, likewise, that neither the Borrower, nor its Material Subsidiaries will be obligated to preserve any right or franchise if the Borrower or any of its Material Subsidiaries to their best judgment, in good faith, determine it is commercially desirable not to preserve said right or franchise, and that from the loss of said right or franchise it is not reasonable to expect that it have in consequence a Material Adverse Effect.

(g) Books and registries: The Borrower will maintain and will make all its Material Subsidiaries maintain, adequate registry and accounts, in which complete and correct entries will be made of all the financial transactions and of the assets and of the business dealings of the Borrower and of every one of its Material Subsidiaries, which entries will be made pursuant to the GAAP in Mexico (with respect to the Borrower and its Material Mexican Subsidiaries) or with any of the applicable accounting principles (with respect to the foreign Material Subsidiaries of the Borrower).

(h) Asset Maintenance: The Borrower:

 

(i)

Will maintain and preserve and will make every one of its Subsidiaries maintains and preserves, all its assets used or that are useful to the performance of its activities in a good state and in normal conditions, except for the ordinary use and wear and tear and

 

(ii)

Will maintain, preserve, and protect its intellectual property rights and all the governmental authorizations or of third parties, franchises, licenses and permits that are material to its business dealings and the business dealings of its Subsidiaries in the understanding that neither subsection (i) above, nor this subsection (ii) will impede the Borrower or any of its Subsidiaries discontinue the operation and maintenance of any of its assets, or allow the maturity of certain authorizations, licenses or permits provided they are desirable in the performance of their business dealings and that from said discontinuance, individually or jointly, it not be reasonable to expect it have in consequence a Material Adverse Effect.

(i) Payment parí passu preference: The Borrower will perform all the necessary acts in order that the obligations of the Borrower and of the Guarantors pursuant to this Agreement, the Promissory Notes, and other documents related to the Credit, at all times constitute valid and enforceable obligations of the Borrower and of the Guarantors, with a payment preference at least at the same level with respect to all the remaining non-subordinated and unsecured debt of the Borrower and of each one of the Guarantors.

(j) Transactions with Affiliates: The Borrower will perform and will make every one of its Subsidiaries perform all the transactions with any of its Affiliates in reasonable market conditions, no less favorable for the Borrower or any of its Subsidiaries, as the case may be, than those it would obtain in a comparable transaction in commercial terms with a Person that were not its affiliate.

(k) Maintenance of government authorizations: The Borrower will maintain in full force and effect, all the authorizations of, and registries before, any governmental authority that are necessary pursuant to the applicable law for the performance of its activities (including, with no limit, environmental and antitrust laws), for the fulfillment of its obligations pursuant to this Agreement, and for the validity and enforceability of this Agreement, unless if from the default to maintain any of said authorizations or registry it would be unreasonable to expect an Adverse Material Effect would result.

(l) Inspection Rights: Upon the Bank’s justifiable request, with at least ten business days notice, allow in writing the Bank’s designated representatives to inspect the accounting registries and/or the properties of the Borrower and of the Guarantors and interview with their respective functionaries and external auditors, during business hours and days. The expenses related with said inspection will

 

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have to be covered by the Bank, in the understanding that in case of default of any of the obligations herein, any expense related with the inspection will be paid for by the Borrower and the Guarantors.

(m) Ratification before a notary public. Ratify before a notary public the signatures which underwrite this Agreement.

NEGATIVE COVENANTS.

THIRTEENTH

Up until the total payment of the principal, interests and other additional charges of the Credit, the Borrower will have to comply with the following negative covenants, unless the Bank agrees in writing to something different:

(a) Financial Limitations: The Borrower with the financial information of its Affiliates and Subsidiaries will have to comply during the effectiveness period of the Agreement with the following financial indicators which will me measured in quarterly form, according to what is established in the financial statements prepared in accordance to GAAP:

 

(i)

The Borrower will not allow the Consolidated Leverage Ratio to exceed 3.5 to 1.

 

(ii)

The Borrower will not allow the Consolidated Fixed Charge Coverage Ratio to be, at any moment, less than 2.5 to 1 for any period of four consecutive trimesters.

 

(iii)

On the date on which the Borrower delivers to the Bank the information to which the Eleventh clause, subsection (a) of this Agreement makes reference, the Borrower will deliver the Bank a signed certificate by a Responsible Officer that contains all the information and calculations necessary to determine the Borrower’s adherence to the provisions contained in subsections (a) (i) and (ii).

(b) Liens: The Borrower will not constitute, assume, nor will allow any Lien to exist on any of its assets and will prevent its Subsidiaries from constituting, assuming or allowing any Lien to exist on any their respective assets, be they currently in their ownership or be they acquired after that date, unless the following liens are involved (“Permitted Liens”):

 

(i)

Liens or deposits derived from any fiscal, work, or social security obligation, or created by operation of law, provided they were challenged in good faith through the corresponding proceedings and with respect to which reservations or any other provisions necessary were created according to GAAP in Mexico.

 

(ii)

Liens created as a consequence of legal easements or other similar legal encumbrances on the assets of the Borrower or its Subsidiaries, provided they were challenged in good faith through the corresponding proceedings and with respect to which reservations or any other provisions necessary were created according to GAAP in Mexico.

 

(iii)

Liens or seizures that result from any court decision and judicial order of any court, except that such court decision not be declared inadmissible or its effects were suspended through another judicial order within the sixty days following its date.

 

(iv)

Actual Liens already in existence.

 

(v)

Liens on assets that the Borrower or any of the Subsidiaries acquire in the future, which already exist before the acquisition date of such assets (unless such liens were created exclusively because of such acquisition), as well as Liens created with the purpose of guaranteeing the total or partial payment of the acquisition price or the debt incurred or assumed to acquire said assets, in the understanding that (A) said Liens will be limited to the acquired assets or, if the documents that originate said Lien require it, to whichever other assets that constitute improvements or assets acquired for the specific use with the acquired assets (in case of company acquisition, the Borrower or any of the Subsidiaries will be able to constitute liens over shares, corporate shares, or similar deeds which represent the corporate capital of the acquired companies or of those which, directly or indirectly, effect the acquisition) and (B) in

 

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any case, said Liens can be created within the 9 following months, in the case of assets, their date of purchase, and in the case of improvements, to the date of their termination.

 

(vi)

Liens which renew, extend, or substitute any of the permitted Liens mentioned in paragraph (v) above, provided the amount of the guaranteed debt for said Liens does not increase or the term of the same does not reduce itself, and said Liens do not extend to different assets.

 

(vii)

Liens on representative shares on the Borrower’s corporate capital or any of its Subsidiaries’ created exclusively as a result of the transmission to a trust or other legal vehicle (including a company or other Legal Entity specifically constituted to have the ownership of said shares; in the understanding that said shares can be disposed of by the Borrower) whose net worth consists of said shares and whose purpose is not to guarantee the Borrower’s or any of its Subsidiaries’ debt (unless said guarantees are allowed by some other Permitted Lien).

 

(viii)

Liens on securities that guarantee repo-transactions and repurchase obligations of said securities.

 

(ix)

Liens on any Receivables Program Assets that are sold or assigned pursuant to a Qualified Receivables Transaction.

 

(x)

Additionally to the permitted liens pursuant to subsection (i) and (ix) above, liens to guarantee the Borrower’s or any of its Subsidiaries’ Debt (in a consolidated manner), provided however the value of the assets that guarantee said Debt does not exceed 5% of the Adjusted Consolidated Net Tangible Assets.

Likewise, the Borrower will be able to constitute different Permitted Liens to guarantee any Debt, provided however it guarantee in the same way its obligations pursuant to this Agreement, the Promissory Notes, and other documents related to the Credit, to the Bank’s satisfaction, during the same time as said Debt remains guaranteed.

(c) Consolidations and Mergers. The Borrower will not be able, in one or more related transactions, (x) consolidate or merge (as an acquiring or surviving company) with any other Person, nor (y) directly or indirectly transfer, deliver, sell, lease or in any other form dispose of all or of a substantial amount of all its goods or assets in favor of any Person, except, with respect to any of the transactions described in subsections (x) and (y) above, immediately after said transaction becomes legally enforceable:

 

1.

The Person that results or is constituted on account of said consolidation or merger, in case it is not the Borrower or any of its Material Subsidiaries, or the Persons it may acquire through transference, delivery, sale, lease or any other legal figure, all or a substantial amount of all the goods or assets in favor of the Borrower or of said Material Subsidiary (said Peron, a beneficiary) (a) is an incorporated company and validly in existence in accordance to the laws of the jurisdiction in which it is incorporated, which, in case of a beneficiary of the Borrower’s, it will e, Mexico, the United States, Canada, France, Belgium, Germany, Italy, Luxemburg, Holland, Portugal, Spain, Switzerland or the United Kingdom, or any political subdivision of the same (b) that in case it is a beneficiary of the Borrower’s, expressly assumes in accordance to a written agreement satisfactory in form and in content for the Bank, the obligations of the Borrower in accordance to this Agreement and the other credit documents (c) that in case it is a beneficiary of any guarantor, expressly assumes, in accordance to a written agreement satisfactory in form and in content for the Bank, the fulfillment of all the obligations of said guarantor in accordance to this Agreement and the other credit documents.

 

2.

In case of any of said transactions in which the Borrower or any guarantor participates, the beneficiary of any of them, as the case may be, expressly agrees to indemnify the Bank with respect to any contribution, government encumbrance imposed on the Bank as a consequence of said transaction, with respect to payments in accordance to the credit documents.

 

3.

Immediately after said transaction becomes legally enforceable, including, by virtue of this paragraph (3), the substitution of the Borrower by its beneficiary or any Subsidiary by its beneficiary and the treatment of any incurred Debt or Lien as a result of said transaction by the Borrower of any

 

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beneficiary of the Borrower, or by any Subsidiary of the Borrower, or any beneficiary of said Subsidiary, as though it had been incurred at the time of said transaction, no default or cause for early maturity has occurred or continues to occur.

 

4.

The Borrower had delivered to the Bank a certificate from an officer and a legal opinion each of which signals that said consolidation, merger, delivery, sale, transference or lease, as well as that the agreements of said transaction, meet with the applicable provisions of this clause and that all the conditions contemplated in this Agreement regarding said transaction are met. The Borrower will make its Material Subsidiaries meet with the provisions established in this paragraph(c)

(d) Asset Disposition: The Borrower will not be able to sell, lease, nor in any way dispose of its assets (including shares of the corporate capital of any subsidiary), except for provisions of (1) inventory, accounts receivable related to the business dealings and surplus assets to the needs of the business dealings of the Borrower or of any subsidiary that are sold in the ordinary course of business, (2) Assets that are not used, that cannot be used or that cannot be maintained for their use with respect to cement transactions and other related transactions, and (3) Other assets, provided however the product of said assets is retained by the Borrower or said subsidiary, as the case may be, and as quickly as possible following said disposition (but in any case within the 180 calendar days following said disposition),said product be applied to (a) incurred expenses regarding the goods, plants, and instruments used in the cement industry or related industries, (b) the payment of the Borrower’s or any of its Subsidiaries’ Debt, be it guaranteed or not, or (c) investments in companies involved in the dement industry or in related industries. The Borrower will make its Material Subsidiaries comply with the provisions established in this paragraph (d)

(e) Change in the nature of the business dealings: The Borrower will not be able to perform, nor will it allow any of its Material Subsidiaries to perform, any substantial changes in the line of business and nature of its principal activities, as they appear on the date of this Agreement.

CAUSES OF EARLY MATURITY

FOURTEENTH

The Bank will be able to anticipate the maturity of the term for the payment of the unpaid balance of the credits and additional charges (the Borrower and Guarantors thus agreeing to, if applicable, the payment of the total unpaid amount of the credits and their additional charges), through the written statement delivered to the Borrower and Guarantors, in whichever of the following cases (each of said events, a “Cause of early maturity”), with no need of a lawsuit, resolution or judicial proceeding and other notification of any nature, to which the Borrower and the Guarantors expressly waive:

 

A)

Payment Default. If the Borrower (i) does not execute on their maturity any payment of principal in accordance to this Agreement, or (ii) does not perform any payment of interests or of any amount payable in accordance to this Agreement within the 3 business days following the date on which the payments ought to have been effected.

 

B)

Statements. If any statement made by the Borrower herein or in any other credit document, or by any guarantor, contained in any certificate, document or financial statement provided in accordance to this Agreement or with any other credit document, if applicable, is found to be incorrect in any important aspect, on the date on which it was made, if said error were not corrected within a 30 calendar day period as of (i) The date on which the Finance Director of the Borrower or of any of said Guarantors, as the case may be, knows of said error, or (ii) that the Bank has notified in writing the Borrower said error, or whatever happens first.

 

C)

Specific Defaults. If the Borrower or any of the Guarantors, as the case may be, no longer complies with any of its obligations established in the Twelfth and Thirteenth Clause.

 

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D)

Other Defaults. If the Borrower or any Guarantor, as the case may be, no longer complies with any obligation established in this Agreement (different from those mentioned in subsections A) and C) above), and said default remains without being cured during a 30 calendar day period beginning on (1) the date on which the director of Finance of the Borrower knows of said default or (2) the date on which the Bank delivers to the Borrower a written notification regarding said default.

 

E)

Default of other agreements. If the Borrower or any of its Subsidiaries no longer pays the principal at its maturity, of any Relevant Date and if said Default or cause of default in consequence leads to the early maturity of the principal of said Material Debt.

 

F)

Voluntary Insolvency. If the Borrower or any of its Material Subsidiaries were to begin a voluntary proceeding with the purpose of reaching its dissolution, liquidation, commercial insolvency or other motions regarding itself to its debts in accordance to a law or proceeding in bankruptcy, insolvency, commercial insolvency or any law or similar present or future proceeding, or looks to appoint a fiduciary, receiver, liquidator, custodian or any other officer of similar nature regarding itself or any substantial part of its asserts, or agrees to any of said motions or proceedings, the appointment of any of said functionaries in an involuntary case or in any other proceeding initiated against it, or has to perform a generalized assignment of its assets in its creditor’s favor, or finds itself in generalized default in the payment of its due debts, or takes any corporate action to authorize any of the foregoing.

 

G)

Involuntary Insolvency. If any involuntary proceeding were to begin against the Borrower or any of its Material Subsidiaries with the purpose of reaching its liquidation, commercial insolvency, be that in relation to the Borrower or to said Material Subsidiary or its debts in accordance to a bankruptcy, insolvency, commercial insolvency law, or any other similar present or future law or proceeding, or the appointment of a fiduciary, receiver, liquidator, custodian or any other officer of similar nature regarding the Borrower or said Material Subsidiary or any substantial part of its assets and said involuntary proceeding were to continue for a 60 consecutive day period without being favorably resolved for the Borrower or the Material Subsidiaries; or an order or court decision is issued against the Borrower or any of its Material Subsidiaries in accordance to any bankruptcy, commercial insolvency, insolvency law or any other law of similar present or future nature.

 

H)

Court Decisions. If any court decision(s) is passed that allow no motion with respect to the payment of the money in a total amount that exceeds US50’000,000.00 or its equivalent in other currencies, against the Borrower and one or more of its Subsidiaries and said court decision(s) is not invalid, wholly guaranteed or obeyed within the 30 calendar days following the date on which they were passed.

 

I)

Parí passu. If the obligations of the Borrower and of any of the Guarantors in accordance to this Agreement and the Promissory Notes were no longer to have preference in payment at least at the same level as the other unsubordinated and unsecured debts of the Borrower and the Guarantors.

 

J)

Validity of the Agreement. If the Borrower or any of the Guarantors challenge the validity or enforceability of this Agreement or of any of the credit documents.

 

K)

Government Authorizations. If any concession, authorization, license, agreement, or government permit or of another nature that is necessary or that will be necessary in the future in accordance to any request by the applicable law for the signature, delivery or compliance by the Borrower or by any of the Guarantors of this Agreement or any credit document, or in order that this Agreement or ant credit document be valid and enforceable, it is not obtained, cancelled or modified, or no longer has validity or is modified in such a way as to have an adverse effect on the legal motions and on the rights of the Bank.

 

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L)

Expropriation. If any government authority (i) nationalizes, takes possession, intervenes or in any form expropriates, all or a substantial part of the assets of the Borrower or any of the Guarantors or the corporate capital of the Borrower, or of any of the Borrowers, of any Material Subsidiary of the Borrower or of the Guarantors, or of any of the Subsidiaries of the Borrower (in this case, if an Adverse Material Effect could be reasonably expected) or (ii) performs any act that does not allow the Borrower or any of the Guarantors to meet their obligations in accordance to the credit documents.

 

M)

Change of Control. If the property (Beneficial Ownership) in accordance with the meaning given said term in Rule 13D-3 (Rule 13D-3) published by the Securities and Exchange Commission in the United States of America in accordance to the Securities Exchange Act of 1934, of the 20% or more of the shares with a right to vote in circulation of the Borrower or any of the Guarantors is acquired by any Person or group (in the terms of Rule 13D or 14D of the Securities Exchange Act of 1934); in the understanding that; if said acquisition were effected, directly or indirectly, by Mr. Lorenzo H. Zambrano or by any of the members of his immediate family, the same will not be considered a cause of early maturity.

 

N)

Granting of Relevant Role: If the Borrower does not grant the Bank, or if applicable any of its Subsidiaries and/or affiliates, an order to lead directly the structuring, implementation and enforcement of the transaction(s) required to refinance the Credit stipulated in this Agreement.

 

In this case, The Borrower will have a term to liquidate the whole Credit and its additional charges of up to 60 days beginning on the date on which such order is granted, that will in no case exceed the Effectiveness Termination Date. The Borrower will have to pay a commission to be determine by the parties pursuant Clause 9 herein.

In case any of the causes for early maturity established in paragraphs F and G of this Clause were to occur in relation to the Borrower or any of its Guarantors, the unpaid balance of the credits (jointly with the accrued and unpaid interests) and all other obligations of the Borrower and the Guarantors in accordance to this Agreement will be immediately considered mature and payable with no need for claim, lawsuit or protest of any other notification of any nature, all that is waived expressly by the Borrower and the Guarantors and with no need of notification or other action by the Bank.

The bank will have to deliver a default notification to the Borrower and the Guarantors in case any of the causes for early maturity early in paragraphs A, B, C or D of the fourteenth clause immediately occurs.

GUARANTEE

FIFTEENTH. In guarantee of the exact and timely payment of all and every one of the amounts that on the basis of principal amount, interests and other additional charges the Borrower owes the Bank in accordance to the Credit and to the Promissory Notes that document it, as well as in guarantee of the exact and timely payment of all and every one of the obligations that are assigned to the Borrower pursuant to this deed, Cemex México S.A. de C.V. and Empresas Tolteca de México S.A. de C.V., agree jointly and severally with the Borrower, and become plain paying Guarantors in favor of the Bank (the “Guarantee”) and they agree to present their guarantee with respect to all and every one of the Promissory Notes that document the Credit.

The Guarantors expressly accept that each and every one of the obligations contained herein, at the Borrower’s cost, are existent and valid pursuant to law, for which reason the Guarantors agree to pay in favor of the Bank the quantities derived for such obligations, with no need of greater procedure whatsoever and without being able to present any objection whatsoever for the payment that as Guarantors they will have to make in the Bank’s favor.

 

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The Guarantors expressly accept in this act personal, primary and joint liability, if applicable, contained in articles 2814, 2815 and 2837 of the Federal Civil Code (Código Civil Federal) and any related articles of the different states of Mexico, effective on the signature date of this Agreement.

The Guarantee, subject matter of this Agreement, will subsist until the Bank has received the payment of all that it is owed on account of the obligations assumed by the Borrower in this Agreement, as well as its additional charges and legal consequences, even if:

 

1.	An extension or stand-by is granted the Borrower without the Guarantor’s consent;

 

2.	The Bank exempts the Borrower from payment and/or the Credit payment obligation is subject to new liens or conditions;

 

3.	The Guarantors cannot be substituted in the Borrower’s rights or privileges, because of error, fault or negligence on the Borrower’s part;

 

4.

Once the Debt derived from the Credit becomes enforceable, the Guarantors request the Bank file in court within a month following the default of such obligations, and the Bank does not exercise its rights within the stated term, or if once the trial has begun, the Bank, with no grounded cause, were to fail to file for more than three months.

As a consequence of the Guarantee subsistence agreement conferred above, the Guarantors waive the content of articles 2845, 2846, 2847 and 2849 of the Federal Civil Code (Código Civil Federal) and its related articles in the other states of Mexico.

EXPENSES.

SIXTEENTH. All the justifiable and reasonable expenses, as well as, if applicable, the Notary Public fees derived from this credit transaction, will have to be covered by the Borrower.

In case the Borrower, in a term of 10 (ten) days, beginning as of the signature date of this Agreement, has not made the payment for the expenses, fees, and rights originated herein, expressly and irrevocably authorizes the Bank to charge on its Checking Account the corresponding quantity(ies), in the understanding that if they do not have sufficient funds in said Checking Account, the Bank will pay of its own resources the applicable quantity(ies), the Borrower agreeing to compensate the Bank for these quantities, in a term of ten days, beginning on the date of the payment made by the Bank, agreeing, additionally, to pay the default interests agreed-upon herein, for each day in default of these payments.

TAXES.

SEVENTEENTH. The Borrower will pay the Bank the entire principal, interest, and other payable sums in accordance to this Agreement, free, exempt and with no deductions, encumbrance or any other fiscal responsibility that presently or in the future will burden, payable in any jurisdiction in Mexico.

AUTHORIZATION.

EIGHTEENTH. The Borrower ratifies the authorization granted the Bank previously, expressly and irrevocably in a separate document, in order that it request from the National or Foreign Credit Information Company(ies) that it considers necessary, all the information regarding its credit history. Likewise the Bank is authorized to perform periodic revisions and provide information on the credit histories to said company(ies) that it considers necessary, in the terms of the Credit Information Company Regulating Law. Said authorization will be effective at least during the effectiveness of the Credit or as long as a legal relationship exists with the Bank. The Borrower manifested it is fully familiar with the nature, reach and its consequences of the information that will be requested in periodic form for its financial and credit analysis.

CREDIT ASSIGNMENT.

 

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NINETEENTH. This Agreement will become legally enforceable once it has been underwritten by the Borrower and the Bank and will later bind and benefit the Borrower and the Bank and their respective successors and assignees as the case may be, the Borrower will not be able to assign its rights and obligations in accordance to this Agreement, nor interest in the same without the previous consent in writing by the Bank. The Bank will be able to transmit, assign, negotiate this Credit and the Promissory Notes with which they are documented and with respect to such assignment, to the assignee will correspond against the Borrower the same rights and benefits it would have if it were the Bank in this Agreement, provided however it has the previous consent of the Borrower, which will not be denied nor delayed unreasonably within a 30-thirty calendar day term beginning as of the date of the notification in which the intention to perform the assignment is stated.

RESTRICTION AND EARLY TERMINATION.

TWENTIETH. In the terms of Article 294 of the General Law of Credit Instruments and Operations (Ley General de Títulos y Operaciones de Crédito), it is expressly agreed that the Bank reserves the right to terminate this Agreement exclusively in case the Borrower is in default of the obligations contained in the Twelfth and Thirteenth Clauses herein. The termination will be effected by means of a written notice delivered by the Bank to the Borrower, provided however it reasonably explains its motive.

COST INCREASE.

TWENTYFIRST. If due to the publication or reform of applicable laws or regulations, or to their interpretation by any governmental authority in charge of the interpretation or application of said laws or regulations, were to impose, modify or consider applicable any tax or limitation with respect to assets, deposits or loans of the Bank or to any other form of fund acquisition by the Bank, to grant and maintain the credit or the reduction of the principal sum or the interests the Bank ought to receive with respect to said Credit, the Borrower will pay the Bank immediately, upon the Bank’s request, the additional quantities necessary to compensate the bank for said duly justified cost increase or income reduction. The Borrower agrees that the Bank will have the right to receive the compensation mentioned in this paragraph, if the Bank becomes subject of si, or if it pays, any withheld tax on account of the principal or the interests that the Bank must pay to obtain funds to give or maintain the credit.

Following these assumptions, the Bank will notify the Borrower that one of the events that grant the Bank the right to receive additional quantities has occurred. The Bank’s certification by a duly authorized legal representative, in which appear the quantity for which the costs have increased or the principal as been reduced as a consequence of the occurrence of any of the designated events, will be conclusive with respect to said quantity, except for an error in its calculation.

Said additional payment will have to be effected by the Borrower within THIRTY days following the notification. In case the payment of said costs were not effected, default interests agreed-upon herein will be incurred on the mentioned costs, which will be calculated as of the date designated in the notification, until it is paid in full.

COURT DECISION.

TWENTYSECOND. This Agreement, in the case of Dollar withdrawals, is an international transaction in which the Dollar specification and the payment in the city of New York, N.Y., United States of America, are essential and, the Dollars will be considered the new applicable currency for all cases. The Borrower’s payment obligations with respect to the Credit and to the Promissory Note(s) that document the withdrawal of the Credit, will only be considered fulfilled when the quantities paid in foreign currencies or in another location, whether it be in accordance to court decision or in any other way, upon their conversion to Dollars and their transfer to the city of New York, pursuant to ordinary banking procedure, cover the Dollar quantity in said city of New York owed pursuant to this Agreement. If to obtain the court decision from any court, whether it be for the payment of any sum or in the enforcement of any court decision previously obtained, it becomes necessary to convert to another currency (the “Other Currency”), whatever payable sum in Dollars in accordance to this Agreement, the exchange rate that will be used will be the one with which the payment must be effected, pursuant to the court decision. The Borrower’s obligations with respect to any sum expressed in Dollars, which the Borrower

 

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owes the Bank pursuant to this Agreement, will not fulfilled, notwithstanding any court decision expressed in an Other Currency, for more than the amount in Dollars that the Bank may acquire through habitual banking procedure, on the nearest Business Day following the Bank’s reception of any payable sum pursuant to said court decision in an Other Currency; and the Borrower agrees, as an independent obligation and notwithstanding any court decision in an Other Currency, that if the Dollar sum purchased in said form is inferior to the originally owed sum in Dollars, will indemnify the Bank for said loss, and the Bank agree that if the Dollar sum purchased in such manner exceeds that originally owed the Bank, the Bank will remit the surplus to the Borrower.

ADDRESSES.

TWENTYTHIRD. The parties designate as address for the enforcement of this Agreement, the following:

The Bank: Ave. Vasconcelos 101 Ote. Col. Residencial San Agustín, San Pedro Garza García Nuevo León

The Borrower: Av. Ricardo Margaín Zozaya 325 Col. Valle del Campestre Código Postal 66265 San Pedro Garza García, Nuevo León

The Guarantors: Av. Constitución 444 Poniente Código Postal 64000 Monterrey, Nuevo León.

The Borrower will have to inform the Bank of the change in Address, with at least 10 (ten) business days notice. In case it were not to do so, all the notices, notifications, and other judicial or extra-judicial proceedings made in the address indicated by the same, in this clause, will become legally enforceable.

EXECUTORY DOCUMENT.

TWENTYFOURTH. This Agreement, jointly with the account statement certified by the Bank’s Accountant, will be an executory document, pursuant to what is established in Article 68 of the Credit Institutions Law (Ley de Instituciones de Crédito).

LAWS AND COURTS.

TWENTYFIFTH. This Agreement is governed pursuant to the laws of the United Mexican States, especially by what is established in the Credit Institutions Law (Ley de Instituciones de Crédito), the General Law of Credit Instruments and Operations (Ley General de Títulos y Operaciones de Crédito), and its Supplementary Laws.

Likewise for everything in relation to the interpretation, enforcement, ,and compliance of this Agreement, the parties subject themselves to the jurisdiction of the Courts of the City of Monterrey, Nuevo León, waiving expressly to the jurisdiction of their present or future address.

In witness whereof, this Agreement is signed three times in the city of Monterrey, Nuevo León on the October 24, 2006.

 

“THE BANK” BBVA BANCOMER, S.A. INSTITUCIÓN DE BANCA MÚLTIPLE GRUPO FINANCIERO BBVA BANCOMER Represented by:				“THE BORROWER” CEMEX, S.A.B. DE C.V. Represented by:
CARLOS DAVID VELAZQUEZ THIERRY				AGUSTIN DE JESUS BLANCO GARZA
AGUSTIN DE LA GARZA VIDAURRI

 

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“THE GUARANTOR” CEMEX MEXICO S.A. DE C.V. Represented by:				“THE GUARANTOR” EMPRESAS TOLTECAS DE MEXICO S.A. DE C.V. Represented by:
AGUSTIN DE JESUS BLANCO GARZA				AGUSTIN DE JESUS BLANCO GARZA

 

23

Exhibit (b)(1)(c)

CONFIDENTIAL

October 25, 2006

US$1.5 Billion Senior Bridge Facility

US$1.5 Billion Senior Term Facility

Commitment Letter

New Sunward Holding B.V.

Amsteldijk 166

1079LH Amsterdam

The Netherlands

CEMEX, S.A.B. de C.V. Ricardo Margain Zozaya 325

Col. Valle del Campestre

66265 San Pedro Garza García N.L

Mexico

 

Attention:		C.P. Humberto Lozano Vargas
		Director of Corporate Financing

Ladies and Gentlemen:

New Sunward Holding B.V. (the “Borrower”), a company formed under the laws of The Netherlands and an indirect wholly-owned subsidiary of CEMEX, S.A.B. de C.V. (“Parent”, and together with the Borrower, “you”), a company formed under the laws of the United Mexican States (“Mexico”), has advised J.P. Morgan Securities Inc. (“JPMorgan”) and JPMorgan Chase Bank, N.A. (“JPMorgan Chase Bank”; and together with JPMorgan, “we” or “us”, or the “Commitment Parties”) that you are proposing to acquire (collectively, the “Transaction”), through a public offer conducted by a special purpose wholly-owned subsidiary of the Borrower organized to consummate the Transaction (the “Offer”; and the related documents, the “Offer Documents”) all of the issued and outstanding share capital of the company identified by you to us as “Leonardo” (the “Target”), an Australian company, and that, to finance a portion of the purchase price of the Transaction, the Borrower wishes to obtain a US$1.5 billion senior bridge facility (the “Bridge Facility”), which Bridge Facility is expected to be refinanced through the proceeds of the issuance of perpetual securities of a subsidiary of Parent in a placement issued in reliance on Rule 144A and Regulation S under the U.S. Securities Act of 1933, as amended, as further described in the Engagement Letter dated as of the date hereof between JPMorgan and Parent (the “Engagement Letter”; and such financing, together with any alternative financing referred to in the next sentence, the “Takeout Financing”). It is understood that, if the parties agree that the perpetual securities cannot be issued in the manner described in the Engagement Letter, Parent or one of its affiliates will issue US$1.5 billion aggregate amount of senior notes in the capital markets, as further described in an additional Engagement Letter dated as of the date hereof between JPMorgan and Parent (together with the Engagement Letter referred to above, the “Engagement Letters”), or a US$1.5 billion senior term loan facility of the Borrower (the “Term Facility”; and together with the Bridge Facility, the “Facilities”).

 

Commitment Letter

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JPMorgan is pleased to advise you that it is willing to act as the sole lead arranger and sole bookrunner for the Facilities, and JPMorgan Chase Bank is pleased to advise you of its commitment, fully credit-approved and binding, to provide (i) the entire amount of the Bridge Facility and (ii) the entire amount of the Term Facility, in each case on and subject to the terms and conditions set forth or referred to herein. This Commitment Letter and the Summaries of Terms and Conditions attached as Exhibits A and B hereto (the “Term Sheets”) set forth the principal terms and conditions on and subject to which JPMorgan Chase Bank is willing to make available each of the Facilities.

It is agreed that JPMorgan will act as the sole lead arranger and sole bookrunner in respect of the Facilities (in such capacities, the “Lead Arranger”), and that JPMorgan Chase Bank will act as the sole administrative agent in respect of the Facilities. You agree that no other agents, co-agents or arrangers will be appointed, no other titles will be awarded and no compensation (other than that expressly contemplated by the Term Sheets and Fee Letter referred to below) will be paid in connection with the Facilities unless you and we shall so agree.

We may, in our discretion, syndicate the Bridge Facility, and we intend to syndicate the Term Facility (if any), in each case to a group of lenders (together with JPMorgan Chase Bank for either Facility, the “Lenders”) identified by us in consultation with you. You agree actively to assist us in completing any such syndication satisfactory to us. Such assistance shall include (a) your using commercially reasonable efforts to ensure that the syndication efforts benefit materially from Parent’s, the Borrower’s and your other affiliates’ existing banking relationships, (b) direct contact between your senior management and advisors and the proposed Lenders, (c) assistance from you in the preparation of Confidential Information Memoranda and other marketing materials to be used in connection with the syndication and (d) the hosting, with us and your senior management, of one or more meetings of prospective Lenders.

JPMorgan, in its capacity as Lead Arranger, will manage, in consultation with you, all aspects of the syndication, including decisions as to the selection of institutions to be approached and when they will be approached, when their commitments will be accepted, which institutions will participate, the allocation of the commitments among the Lenders and the amount and distribution of fees among the Lenders. In its capacity as Lead Arranger, JPMorgan will have no responsibility other than to arrange the syndication as set forth herein and in no event shall be subject to any fiduciary or other implied duties. To assist us in our syndication efforts, you agree promptly to prepare and provide to us reasonably available information with respect to Parent, the Borrower and the Target and their subsidiaries (and we acknowledge that such information in respect of the Target and its subsidiaries may be limited to publicly available information for so long as Target is unwilling to provide you non-public information), the Transaction and the other transactions contemplated hereby, including all financial information and projections (the “Projections”), as we may reasonably request in connection with the arrangement and syndication of the Facilities. At our reasonable request, you agree to assist in the preparation of a version of the information package and presentation consisting exclusively of information and documentation that is either publicly available or not material with respect to Parent, the Borrower, the Target, their respective material affiliates and any of their respective securities for purposes of United States federal and state securities laws. You hereby represent and covenant that (a) all information other than the Projections (the “Information”) that has been or will be made available to us by you or any of your representatives is or will be, when furnished, complete and correct in all material respects and does not or will not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made and (b) the Projections that have been or will be

 

Commitment Letter

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made available to us by you or any of your representatives have been or will be prepared in good faith based upon assumptions believed to be reasonable at the time of preparation thereof, it being recognized by us that such Projections are not to be viewed as facts and that actual results during the period or periods covered by any such Projections may differ significantly from the projected results, and that no assurance can be given that the projected results will be realized. You understand that in arranging and syndicating the Facilities we may use and rely on the Information and Projections without independent verification thereof.

As consideration for the commitments and agreements of the Commitment Parties hereunder, you agree to cause to be paid the nonrefundable fees described in the Fee Letter dated the date hereof and delivered herewith (the “Fee Letter”).

Each Commitment Party’s commitments and agreements hereunder are subject to:

(a) in the case of the Term Facility, such Commitment Party’s satisfaction that after the execution of this Commitment Letter and during the syndication of the Term Facility there shall be no competing offering, placement or arrangement of any debt securities (other than any competing proposed Takeout Financing, and any other financing facilities at the Parent and/or Cemex España, S.A. being arranged to finance the Transaction) or bank financing by or on behalf of Parent, the Borrower or any of their respective subsidiaries;

(b) the Engagement Letters shall each be in full force and effect, and the parties shall be in compliance with their obligations thereunder;

(c) the parties thereto shall have executed and delivered a credit agreement and other related documentation by not later than 45 days after the signing of this Commitment Letter (such credit agreement date, the “Credit Agreement Effective Date”), and the closing of the Acquisition and the funding of the Bridge Facility on or before the earlier of (i) the first anniversary of the launch of the Offer and (ii) the 364^th day after the Credit Agreement Effective Date; and

(d) the other conditions set forth or referred to in the Term Sheets.

You agree, jointly and severally, (a) to indemnify and hold harmless the Commitment Parties, their affiliates and their respective directors, employees, advisors, and agents (each, an “indemnified person”) from and against any and all losses, claims, damages and liabilities to which any such indemnified person may become subject arising out of or in connection with this Commitment Letter, the Facilities, the use of the proceeds thereof, the Transaction or any related transaction or any claim, litigation, investigation or proceeding relating to any of the foregoing, regardless of whether any indemnified person is a party thereto, and to reimburse each indemnified person upon demand for any legal or other expenses incurred in connection with investigating or defending any of the foregoing, provided that the foregoing indemnity will not, as to any indemnified person, apply to losses, claims, damages, liabilities or related expenses to the extent they are found by a final, non-appealable judgment of a court to arise from the willful misconduct or gross negligence of such indemnified person, and (b) to reimburse each Commitment Party and its affiliates on demand for all reasonable out-of-pocket expenses (including due diligence expenses, syndication expenses, consultant’s fees and expenses, travel expenses, and reasonable and documented fees, charges and disbursements of counsel) incurred in connection with the Facilities and any related documentation (including this Commitment Letter and the definitive financing documentation) or the administration, amendment, modification or waiver thereof. No indemnified person shall be liable for any damages arising from the use by others of Information or other materials obtained through electronic, telecommunications or other information transmission systems or for any special, indirect, consequential or punitive damages in connection with the Facilities except to the extent any such damages are found by a final, non-appealable judgment of a court to arise from the gross negligence or willful misconduct of such indemnified person.

 

Commitment Letter

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You acknowledge that each Commitment Party and its affiliates (the term “Commitment Party” as used below in this paragraph being understood to include such affiliates) may be providing debt financing, equity capital or other services (including financial advisory services) to other companies in respect of which you may have conflicting interests regarding the transactions described herein and otherwise. No Commitment Party will use confidential information obtained from you by virtue of the transactions contemplated hereby or its other relationships with you in connection with the performance by such Commitment Party of services for other companies, and no Commitment Party will furnish any such information to other companies. You also acknowledge that no Commitment Party has any obligation to use in connection with the transactions contemplated hereby, or to furnish to you, confidential information obtained from other companies. You further acknowledge that JPMorgan is a full service securities firm and JPMorgan may from time to time effect transactions, for its own or its affiliates’ account or the account of customers, and hold positions in loans, securities or options on loans or securities of the Borrower and its affiliates and of other companies that may be the subject of the transactions contemplated by this Commitment Letter.

Each Commitment Party may employ the services of its affiliates in providing certain services hereunder and, in connection with the provision of such services, may exchange with such affiliates information concerning you and the other companies that may be the subject of the transactions contemplated by this Commitment Letter (it being understood that any such affiliate shall be bound by the confidentiality obligations herein with respect to such information), and, to the extent so employed, such affiliates shall be entitled to the benefits afforded such Commitment Party hereunder.

This Commitment Letter shall not be assignable by either of you or us without the prior written consent of each Commitment Party (in the case of an assignment by either of you) or by you (in the case of an assignment by either Commitment Party) (and any purported assignment without such consent shall be null and void), is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto and the indemnified persons. This Commitment Letter may not be amended or waived except by an instrument in writing signed by each of the parties hereto. This Commitment Letter may be executed in any number of counterparts, each of which shall be an original, and all of which, when taken together, shall constitute one agreement. Delivery of an executed signature page of this Commitment Letter by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. This Commitment Letter, the Fee Letter and the Engagement Letters are the only agreements that have been entered into among us with respect to the Facilities and set forth the entire understanding of the parties with respect thereto.

This Commitment Letter is delivered to you on the understanding that neither this Commitment Letter, the Term Sheets or the Fee Letter nor any of their terms or substance shall be disclosed, directly or indirectly, to any other person (including, without limitation, other potential providers or arrangers of financing) except (a) to your officers, agents and advisors who are directly involved in the consideration of this matter, (b) to any governmental authority to the extent necessary or desirable in connection with the Offer or (c) as may be compelled in a judicial or administrative proceeding or as otherwise required by law or regulation (in which case you agree to inform us promptly thereof), provided, that the foregoing restrictions shall cease to apply (except in respect of the Fee Letter and its terms and substance) after this Commitment Letter has been accepted by you.

Each of the Commitment Parties hereby notifies you that, pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (the “Patriot Act”), it is required to obtain, verify and record

 

Commitment Letter

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information that identifies the Borrower and each Guarantor (as defined in the Term Sheets), which information includes names and addresses and other information that will allow such Lender to identify the Borrower and each Guarantor (as defined in the Term Sheets) in accordance with the Patriot Act.

The compensation, reimbursement, indemnification and confidentiality provisions contained herein and in the Fee Letter and any other provision herein or therein which by its terms expressly survives the termination of this Commitment Letter shall remain in full force and effect regardless of whether definitive financing documentation shall be executed and delivered and notwithstanding the termination of this Commitment Letter or the commitments hereunder, it being understood that all other provisions contained herein or therein shall terminate upon execution of definitive financing documentation.

This Commitment Letter shall be governed by, and construed in accordance with, the laws of the State of New York. Each of the parties hereto hereby submits to the jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in New York City and to the courts of its own corporate domicile in respect of actions brought against it as a defendant for purposes of all legal proceedings arising out of or relating to this Commitment Letter or the transactions contemplated hereby. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court, any claim that any such proceeding brought in such a court has been brought in an inconvenient forum, any right to which it may be entitled on account of place of residence or domicile, and the right to have a trial by jury. All payments under this Commitment Letter and the Fee Letter shall be paid in U.S. Dollars to the relevant payee in New York City, without setoff or counterclaim and free and clear of any withholding or other taxes imposed by any relevant jurisdiction.

If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms hereof and of the Term Sheets and the Fee Letter by returning to us executed counterparts hereof and of the Fee Letter not later than 5:00 p.m., New York City time, on October 31, 2006. This offer will automatically expire at such time if we have not received such executed counterparts in accordance with the preceding sentence.

 

Commitment Letter

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We are pleased to have been given the opportunity to assist you in connection with this important financing.

 

 

Accepted and agreed to as of the date first above written:
NEW SUNWARD HOLDING B.V.
By:
Name:
Title:
CEMEX, S.A.B. DE C.V.
By:
Name:
Title:

 

Term Sheet - Bridge Facility

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EXHIBIT A

NEW SUNWARD HOLDING B.V.

$1.5 BILLION SENIOR BRIDGE FACILITY

Summary of Terms and Conditions¹

 

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1.		PARTIES
		Borrower:		New Sunward Holding B.V. (the “Borrower”).
		Guarantors:		CEMEX, S.A.B. de C.V. (“Parent”), Cemex México, S.A. de C.V. and Empresas Toltecas de México, S.A. de C.V. (collectively, including Parent, the “Guarantors”; the Borrower and the Guarantors, collectively, the “Loan Parties”). The Bridge Facility Documentation (as defined below) will include provisions for substitution of Guarantors substantially similar to those contained in the 2005 Facilities Agreement (as defined below).
		Sole Lead Arranger and Sole Bookrunner:		J.P. Morgan Securities Inc. (in such capacity, the “Arranger”).
		Administrative Agent:		JPMorgan Chase Bank, N.A. (“JPMorgan Chase Bank” and, in such capacity, the “Administrative Agent”).
		Lenders:		JPMorgan Chase Bank and, if the Arranger and JPMorgan Chase Bank determine to assign a portion of the Facility, such other banks, financial institutions and other entities that thereby become lenders under the Facility (collectively, the “Lenders”).
2.		BRIDGE FACILITY
		Type:		Senior bridge loan facility (the “Bridge Facility”; and the loans thereunder, the “Bridge Loans”) to be due and payable on the Maturity Date (as defined below) and expected to be refinanced through a Takeout Financing.
		Availability:		The Bridge Loans shall be made in a single drawing during the period beginning on the Effective Date and ending on the day prior to the Maturity Date (the “Availability Period”).
		Purpose:		The proceeds of the Bridge Loans shall be used solely to finance a portion of the Transaction.

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1	Capitalized terms used but not defined herein are used as defined in the Commitment Letter to which this Summary of Terms and Conditions is attached.

 

Term Sheet - Bridge Facility

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3.		CERTAIN PAYMENT PROVISIONS
		Interest Periods and Rates:		The Bridge Loans will have interest periods of 1 or 3 months, as elected by the Borrower (or such other period as may be agreed with the Administrative Agent), and will bear interest at a rate per annum equal to the sum of (i) LIBOR (as defined below) plus (ii) a margin equal to 0.30%.   Overdue amounts shall bear interest at 2% above the rate otherwise applicable thereto (or, in the case of amounts other than principal of any Bridge Loan, 2% above the higher of (i) the prime rate announced by the Administrative Agent from time to time and (ii) 0.50% plus the US Federal Funds rate in effect from time to time).   As used above, “LIBOR” means the rate (adjusted for any statutory reserve requirements for eurocurrency liabilities) for eurodollar deposits in the London interbank market for a period of one or three months (or such other agreed period, as applicable) are quoted on the Dow Jones Market Service screen.
		Optional Prepayments:		Bridge Loans may be prepaid by the Borrower in minimum amounts to be agreed upon. Optional prepayments of the Bridge Loans may not be reborrowed.
		Mandatory Prepayments:		The Bridge Loans will be prepaid (or if the Bridge Loans have not then been borrowed the commitments under the Bridge Facility shall be reduced) with 100% of the net proceeds of any Takeout Financing.
		Maturity:		The Bridge Loans shall become due and payable on or before the date that is the earlier of (i) the first anniversary of the launch of the Offer and (ii) the 364th day after the Effective Date (as defined below) (the “Maturity Date”).
4.		CONDITIONS
				The Bridge Facility shall become effective (the “Effective Date”) on the date on which each party thereto shall have executed and delivered a satisfactory credit agreement and any other related documentation (the “Bridge Facility Documentation”), which shall occur (if at all) within 30 days after the date of the Commitment Letter. The Bridge Facility shall be available for borrowing on a single day during the Availability Period upon the satisfaction of the conditions set forth in the Commitment Letter and in Exhibit C (the date upon which all such conditions precedent shall be satisfied, the “Funding Date”).

 

Term Sheet – Bridge Facility

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5.		CERTAIN DOCUMENTATION MATTERS
				The Bridge Facility Documentation shall contain representations, warranties, covenants and events of default (in each case, applicable to Parent and its subsidiaries, including the Borrower and the Target, but in the case of Target including only the Target’s material subsidiaries) substantially consistent with those contained in the US$700 million Facilities Agreement dated as of June 27, 2005 among the Borrower, the Guarantors, the lenders and Joint Bookrunners party thereto and Citibank, N.A., as Agent (as amended, the “2005 Facilities Agreement”). Certain of the foregoing, as they apply to Target and its material subsidiaries, shall be subject to a clean-up period of 180 days following the closing of the Transaction.
		Representations and Warranties:		Substantially similar to those contained in the 2005 Facilities Agreement.
		Affirmative Covenants:		Substantially similar to those contained in the 2005 Facilities Agreement.
		Negative Covenants:		Substantially similar to those contained in the 2005 Facilities Agreement, including without limitation (with such defined terms to be used as defined in the 2005 Facilities Agreement): (i) the Consolidated Net Debt / EBITDA Ratio not to exceed 3.5 to 1 (provided that the covenant in this clause (i) shall apply only from and after the fiscal quarter ending December 31, 2007, and shall be applied as amended in a manner consistent with our discussions with you regarding the treatment of proposed perpetual securities prior to the date hereof), (ii) the Consolidated Fixed Charge Coverage Ratio not to be less than 2.5 to 1 and (iii) the ratio of Total Borrowings of the Borrower to Total Net Worth of Cemex Spain not to exceed 0.35 to 1. However, the definition of “Restricted Subsidiary” will be expanded, in the case of “Clauses restricting Subsidiary distributions”, to include all subsidiaries of Parent (including Cemex Spain and its subsidiaries), and shall apply without limitation to any financing entered into in connection with the Transaction.
		Events of Default:		Substantially similar to those contained in the 2005 Facilities Agreement.
		Voting:		Amendments and waivers with respect to the Bridge Facility Documentation shall require the approval of Lenders holding more than 50% of the aggregate amount of the Bridge Loans or commitments, except that the consent of each Lender shall be required with respect to (i) reductions in the amount or extensions of the scheduled date of any amortization or final maturity of any Bridge Loan, (ii) reductions in the rate of interest or any fee or extensions of any due date thereof, (iii) increases in the amount or extensions of the expiry date of any Lender’s commitment, (iv) reductions of any of the voting percentages and (v) releases of all or substantially all of the Guarantors.

 

Term Sheet – Bridge Facility

3

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		Assignments and Participations:		The Lenders shall be permitted to assign or grant participations in all or a portion of their Bridge Loans on terms substantially similar to those set forth in the 2005 Facilities Agreement. The Administrative Agent shall receive a processing and recordation fee of $3,500 in connection with all assignments. Pledges of Bridge Loans in accordance with applicable law shall be permitted without restriction in accordance with the 2005 Facilities Agreement.
		Yield Protection:		The Bridge Facility Documentation shall contain customary provisions (a) protecting the Lenders against increased costs or loss of yield resulting from changes in reserve, tax, capital adequacy and other requirements of law and from the imposition of or changes in withholding or other taxes and (b) indemnifying the Lenders for “breakage costs” incurred in connection with, among other things, any prepayment of a Bridge Loan on a day other than the last day of an interest period with respect thereto.
		Expenses and Indemnification:		The Borrower shall pay (a) all reasonable out-of-pocket expenses of the Administrative Agent and the Arranger associated with the syndication of the Bridge Facility and the preparation, execution, delivery and administration of the Bridge Facility Documentation and any amendment or waiver with respect thereto (including the reasonable fees, disbursements and other charges of counsel) and (b) all reasonable out-of-pocket expenses of the Administrative Agent and the Lenders (including the fees, disbursements and other charges of counsel) in connection with the enforcement of the Bridge Facility Documentation. All expenses will be reimbursed or paid only when such expenses are duly documented.
				The Administrative Agent, the Arranger and the Lenders (and their affiliates and their respective officers, directors, employees, advisors and agents) will have no liability for, and will be indemnified and held harmless against, any losses, claims, damages, liabilities or expenses incurred in respect of the financing contemplated hereby or the use or the proposed use of proceeds thereof, except to the extent they are found by a final, non-appealable judgment of a court to arise from the gross negligence or willful misconduct of the relevant indemnified person.
		Taxes and Similar Amounts:		The Borrower will pay additional amounts such that all amounts due under the Bridge Facility (including, without limitation, fees and interest) will be in full amount specified, free of applicable withholdings, levies, duties, imposts or deduction of whatever nature (with customary exceptions to be negotiated).

 

Term Sheet – Bridge Facility

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		Judgment Currency:		U.S. Dollars.
		Governing Law and Forum:		State of New York. The Loan Parties and the Lenders will submit to the jurisdiction of the federal and state courts of the State of New York located in the Borough of Manhattan and will waive any claim of immunity, including sovereign immunity.
		Counsel to the Administrative Agent and the Arranger:		Davis Polk & Wardwell as to matters of New York law, and one additional firm in each relevant jurisdiction (including Mexico, The Netherlands and Australia).

 

Term Sheet – Bridge Facility

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EXHIBIT B

NEW SUNWARD HOLDING B.V.

$1.5 BILLION SENIOR TERM FACILITY

Summary of Terms and Conditions²

 

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6.		PARTIES
		Borrower:		New Sunward Holding B.V. (the “Borrower”).
		Guarantors:		CEMEX, S.A.B. de C.V. (“Parent”), Cemex México, S.A. de C.V. and Empresas Toltecas de México, S.A. de C.V. (collectively, including Parent, the “Guarantors”; the Borrower and the Guarantors, collectively, the “Loan Parties”). The Term Facility Documentation (as defined below) will include provisions for substitution of Guarantors substantially similar to those contained in the 2005 Facilities Agreement (as defined below).
		Sole Lead Arranger and Sole Bookrunner:		J.P. Morgan Securities Inc. (in such capacity, the “Arranger”).
		Administrative Agent:		JPMorgan Chase Bank, N.A. (“JPMorgan Chase Bank” and, in such capacity, the “Administrative Agent”).
		Lenders:		A syndicate of banks, financial institutions and other entities, including JPMorgan Chase Bank, arranged by the Arranger (collectively, the “Lenders”).
7.		TERM FACILITY
		Type and Amount:		Senior term loan facility (the “Term Facility”; the loans thereunder collectively, the “Term Loans”) divided into three separate tranches (each, a “Tranche”), as follows:   1.      One Year Tranche: a one-year tranche with no amortization and a final maturity on the first anniversary of the Funding Date (as defined below);   2.      Three Year Tranche: a three-year tranche with no amortization and a final maturity on the third anniversary of the Funding Date; and   3.      Five Year Tranche: a five-year tranche with four consecutive equal semi-annual payments, beginning with an amortization payment in the 37th month after the Funding Date, and a final maturity on the fifth anniversary of the Funding Date.

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2	Capitalized terms used but not defined herein are used as defined in the Commitment Letter to which this Summary of Terms and Conditions is attached.

 

Term Sheet – Certain Conditions

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		Availability:		The Term Loans shall be made in a single drawing at any time after the “Funding Date” as defined in the Term Sheet for the Bridge Facility, and not later than the “Maturity Date” as defined therein.
		Purpose:		The proceeds of the Term Loans shall be used solely to refinance principal amounts of Bridge Loans under the Bridge Facility simultaneously with the borrowing of the Term Loans, provided that if the Arranger and Borrower shall agree that the Term Facility shall be funded upon the closing of the Offer and the Bridge Facility commitments canceled, the proceeds of the Term Loans may be used to finance the purchase price of the Offer.
8.		CERTAIN PAYMENT PROVISIONS
		Interest Periods and Rates:		The Term Loans will have interest periods of 1, 2, 3 or 6 months, as elected by the Borrower, and will bear interest at a rate per annum equal to the sum of (a) LIBOR (as defined below) plus (b) a margin equal to:   (i)     in the case of the One Year Tranche, 0.375%;   (ii)    in the case of the Three Year Tranche, 0.45%; and   (iii)  in the case of the Five Year Tranche, 0.55%.   Overdue amounts shall bear interest at 2% above the rate otherwise applicable thereto (or, in the case of amounts other than principal of any Term Loan, 2% above the higher of (i) the prime rate announced by the Administrative Agent from time to time and (ii) 0.50% plus the US Federal Funds rate in effect from time to time).   As used above, “LIBOR” means the rate (adjusted for any statutory reserve requirements for eurocurrency liabilities) for eurodollar deposits in the London interbank market for a period of one or three months (as applicable) are quoted on the Dow Jones Market Service screen.
		Undrawn Commitment Fee:		In addition to the fees set forth in the Fee Letter, the Borrower shall pay a fee on the daily undrawn amount of the Term Facility to accrue for each day from the Effective Date until the Funding Date (as defined below) or the commitments are otherwise terminated at a rate per annum equal to 0.15%, provided that no such fee shall be paid during any period in which the Bridge Facility commitments are in effect or any Bridge Loans are outstanding.

 

Term Sheet – Certain Conditions

 

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		Optional Prepayments:		Term Loans may be prepaid by the Borrower in minimum amounts to be agreed upon. Optional prepayments of the Term Loans shall be applied first to the shortest Tranche and, in the case of the Five Year Tranche, to remaining installment payments pro rata. Optional prepayments of the Term Loans may not be reborrowed.
		Maturity:		Amounts of Term Loans under each Tranche not theretofore paid shall be paid on the maturity date described above for such Tranche.
9.		CONDITIONS
				The Term Facility shall become effective (the “Effective Date”) on the date on which each party thereto shall have executed and delivered a satisfactory credit agreement and any other related documentation (the “Term Facility Documentation”), and shall be available for borrowing on a single day during the Availability Period upon the satisfaction of the conditions set forth in the Commitment Letter and in Exhibit C (the date upon which all such conditions precedent shall be satisfied, the “Funding Date”).
10.		CERTAIN DOCUMENTATION MATTERS
				The Term Facility Documentation shall contain representations, warranties, covenants and events of default (in each case, applicable to Parent and its subsidiaries, including the Borrower and the Target, but in the case of Target including only the Target’s material subsidiaries) substantially consistent with those contained in the US$700 million Facilities Agreement dated as of June 27, 2005 among the Borrower, the Guarantors, the lenders and Joint Bookrunners party thereto and Citibank, N.A., as Agent (as amended, the “2005 Facilities Agreement”). Certain of the foregoing, as they apply to Target and its subsidiaries, shall be subject to a clean-up period of 180 days following the closing of the Transaction.
		Representations and Warranties:		Substantially similar to those contained in the 2005 Facilities Agreement.
		Affirmative Covenants:		Substantially similar to those contained in the 2005 Facilities Agreement.
		Negative Covenants:		Substantially similar to those contained in the 2005 Facilities Agreement, including without limitation (with such defined terms to be used as defined in the 2005 Facilities Agreement): (i) the Consolidated Net Debt / EBITDA Ratio not to exceed 3.5 to 1 (provided that the covenant in this clause (i) shall apply

 

Term Sheet – Certain Conditions

 

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				only from and after the fiscal quarter ending December 31, 2007, and shall be applied as amended in a manner consistent with our discussions with you regarding the treatment of proposed perpetual securities prior to the date hereof), (ii) the Consolidated Fixed Charge Coverage Ratio not to be less than 2.5 to 1 and (iii) the ratio of Total Borrowings of the Borrower to Total Net Worth of Cemex Spain not to exceed 0.35 to 1. However, the definition of “Restricted Subsidiary” will be expanded, in the case of “Clauses restricting Subsidiary distributions”, to include all subsidiaries of Parent (including Cemex Spain and its subsidiaries), and shall apply without limitation to any financing entered into in connection with the Transaction.
		Events of Default:		Substantially similar to those contained in the 2005 Facilities Agreement.
		Voting:		Amendments and waivers with respect to the Term Facility Documentation shall require the approval of Lenders holding more than 50% of the aggregate amount of the Term Loans, except that the consent of each Lender shall be required with respect to (i) reductions in the amount or extensions of the scheduled date of any amortization or final maturity of any Term Loan, (ii) reductions in the rate of interest or any fee or extensions of any due date thereof, (iii) increases in the amount or extensions of the expiry date of any Lender’s commitment, (iv) reductions of any of the voting percentages and (v) releases of all or substantially all of the Guarantors.
		Assignments and Participations:		The Lenders shall be permitted to assign or grant participations in all or a portion of their Term Loans on terms substantially similar to those set forth in the 2005 Facilities Agreement. The Administrative Agent shall receive a processing and recordation fee of $3,500 in connection with all assignments. Pledges of Term Loans in accordance with applicable law shall be permitted without restriction in accordance with the 2005 Facilities Agreement.
		Yield Protection:		The Term Facility Documentation shall contain customary provisions (a) protecting the Lenders against increased costs or loss of yield resulting from changes in reserve, tax, capital adequacy and other requirements of law and from the imposition of or changes in withholding or other taxes and (b) indemnifying the Lenders for “breakage costs” incurred in connection with, among other things, any prepayment of a Eurodollar Loan (as defined in Annex I) on a day other than the last day of an interest period with respect thereto.
		Expenses and Indemnification:		The Borrower shall pay (a) all reasonable out-of-pocket expenses of the Administrative Agent and the Arranger associated with the syndication of the Term Facility and the

 

Term Sheet – Certain Conditions

 

4

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				preparation, execution, delivery and administration of the Term Facility Documentation and any amendment or waiver with respect thereto (including the reasonable fees, disbursements and other charges of counsel) and (b) all reasonable out-of-pocket expenses of the Administrative Agent and the Lenders (including the fees, disbursements and other charges of counsel) in connection with the enforcement of the Term Facility Documentation. All expenses will be reimbursed or paid only when such expenses are duly documented.
				The Administrative Agent, the Arranger and the Lenders (and their affiliates and their respective officers, directors, employees, advisors and agents) will have no liability for, and will be indemnified and held harmless against, any losses, claims, damages, liabilities or expenses incurred in respect of the financing contemplated hereby or the use or the proposed use of proceeds thereof, except to the extent they are found by a final, non-appealable judgment of a court to arise from the gross negligence or willful misconduct of the relevant indemnified person.
		Taxes and Similar Amounts:		The Borrower will pay additional amounts such that all amounts due under the Term Facility (including, without limitation, fees and interest) will be in full amount specified, free of applicable withholdings, levies, duties, imposts or deduction of whatever nature (with customary exceptions to be negotiated).
		Judgment Currency:		U.S. Dollars.
		Governing Law and Forum:		State of New York. The Loan Parties and the Lenders will submit to the jurisdiction of the federal and state courts of the State of New York located in the Borough of Manhattan and will waive any claim of immunity, including sovereign immunity.
		Counsel to the Administrative Agent and the Arranger:		Davis Polk & Wardwell as to matters of New York law, and one additional firm in each relevant jurisdiction (including Mexico, The Netherlands and Australia).

 

Term Sheet – Certain Conditions

5

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EXHIBIT C

NEW SUNWARD HOLDING B.V.

CERTAIN CONDITIONS

The availability of each Facility and the occurrence of the Funding Date thereunder, in addition to the conditions set forth in the Commitment Letter and Exhibits A and B, shall be subject to the satisfaction of the following conditions. Capitalized terms used but not defined herein have the meanings given in the Commitment Letter or Term Sheets.

 

(a)

In the case of each Facility, the “Effective Date” shall have occurred under such Facility.

 

(b)

In the case of the Bridge Facility (or, if the Bridge Facility is canceled and the Term Facility is to be funded at the closing of the Offer): (i) the Transaction shall be consummated on in accordance with applicable law concurrently with the borrowing of Bridge Loans and (ii) without limitation of the foregoing, the Offer shall be closing concurrently for the acceptance of more than 50% of the outstanding voting shares of Target.

 

(c)

In the case of each Facility, the Lenders, the Administrative Agent and the Arranger shall have received all fees and invoiced expenses required to be paid on or before the relevant Funding Date.

 

(d)

In the case of each Facility, all material government and third party approvals necessary in connection with the Transaction and the financing thereof shall have been obtained on reasonably satisfactory terms. There shall not exist any action, investigation, litigation or proceeding pending or threatened in any court or before any arbitrator or governmental authority that could reasonably be expected to have a material adverse effect on the Transaction including the financing thereof or any of the other transactions contemplated hereby.

 

(e)

In the case of the Bridge Facility (or, if the Bridge Facility is canceled and the Term Facility is to be funded at the closing of the Offer), all additional financings required by the Borrower (including amounts provided by Parent and its other subsidiaries) to consummate the Offer and the remainder of the Transaction shall have been obtained or be obtained simultaneously with the funding of the loans under the relevant Facility.

 

(f)

In the case of each Facility, the Administrative Agent shall have received such legal opinions (including opinions (i) from US, Netherlands and Mexican counsel to the Borrower, (ii) if agreed by opining counsel, delivered pursuant to the Offer Documents, accompanied by reliance letters in favor of the Lenders and (iii) from such additional special and local counsel as may be required by the Administrative Agent), certificates (including a chief financial officer’s solvency certificate), documents and other instruments as are customary for transactions of this type or as they may reasonably request, and all representations under the credit agreement and other relevant documentation shall be true and no default shall exist before or after giving effect to the financings and other elements of the Transaction, including compliance with the covenants on a pro forma basis immediately after giving effect to the foregoing.

 

Term Sheet – Certain Conditions

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November 9, 2006

J.P. Morgan Securities Inc.

JPMorgan Chase Bank, N.A.

Letter Agreement Commitment Letter

Reference is made to the Commitment Letter dated October 25, 2006 (the “Commitment Letter”), among J.P. Morgan Securities Inc., JPMorgan Chase Bank, N.A. (together, “JPMorgan”) and New Sunward Holding B.V. and CEMEX, S.A.B. DE C.V. (together, “Cemex”), the Summary of Terms and Conditions attached thereto as Exhibit A (the “Term Sheet”). Capitalized terms used but not defined herein have the meanings assigned to them in the Commitment Letter.

The parties hereto agree that the phrase “30 days” in Section 4 of the Term Sheet, entitled “Conditions”, is hereby deleted and replaced with the phrase “45 days”.

This letter agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

[signature pages follow]

---

 

Accepted and agreed to as of the date first above written:
J.P. MORGAN SECURITIES INC.
By:
Name:
Title:
JPMORGAN CHASE BANK, N.A.
By
Name:
Title:

[signature page to Letter Agreement Commitment Letter]

 

2

Exhibit (b)(1)(D)

CREDIT AGREEMENT

among

CEMEX, S.A. de C.V.,

as Borrower

and

CEMEX MÉXICO, S.A. de C.V.,

as Guarantor

and

EMPRESAS TOLTECA de MÉXICO, S.A. de C.V.,

as Guarantor

and

The Several Lenders Party Hereto,

as Lenders

and

BARCLAYS BANK PLC, NEW YORK BRANCH,

as Administrative Agent

and

BARCLAYS CAPITAL,

THE INVESTMENT BANKING DIVISION

OF BARCLAYS BANK PLC,

as Joint Lead Arranger and Joint Bookrunner

and

CITIGROUP GLOBAL MARKETS INC.,

as Documentation Agent, Joint Lead Arranger and Joint Bookrunner

US$1,200,000,000

Dated as of May 31, 2005

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TABLE OF CONTENTS

 

				Page
ARTICLE I DEFINITIONS				1
1.01		Certain Definitions		1
1.02		Other Definitional Provisions		18
1.03		Accounting Terms and Determinations		19
ARTICLE II THE LOAN FACILITIES				19
2.01		Revolving Loans		19
2.02		Interest		23
ARTICLE III TERMINATION AND REDUCTION OF COMMITMENTS; FEES, TAXES, PAYMENT PROVISIONS				24
3.01		Termination or Reduction of Commitments		24
3.02		Fees		25
3.03		Computation of Fees		25
3.04		Taxes		25
3.05		General Provisions as to Payments		28
3.06		Funding Losses		29
3.07		Basis for Determining Interest Rate Inadequate or Unfair		30
3.08		Capital Adequacy		30
3.09		Illegality		31
3.10		Requirements of Law		32
3.11		Substitute Lenders		33
3.12		Sharing of Payments, Etc.		33
ARTICLE IV CONDITIONS PRECEDENT				34
4.01		Conditions to Effectiveness		34
4.02		Conditions Precedent to Borrowings and Continuation or
		Conversion of the Loans		36
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BORROWER				36
5.01		Corporate Existence and Power		36
5.02		Power and Authority; Enforceable Obligations		36
5.03		Compliance with Law and Other Instruments		37
5.04		Consents/Approvals		37
5.05		Financial Information		37
5.06		Litigation		37
5.07		No Immunity		38
5.08		Governmental Regulations		38

 

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TABLE OF CONTENTS

Continued

 

5.09		Direct Obligations; Pari Passu; Liens		38
5.10		Subsidiaries		38
5.11		Ownership of Property		38
5.12		No Recordation Necessary		38
5.13		Taxes		39
5.14		Compliance with Laws		39
5.15		Absence of Default		39
5.16		Full Disclosure		40
5.17		Choice of Law; Submission to Jurisdiction and Waiver of Sovereign Immunity		40
5.18		Aggregate Exposure		40
5.19		Pension and Welfare Plans		40
5.20		Environmental Matters		40
5.21		Margin Regulations		41
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE GUARANTORS				42
6.01		Corporate Existence and Power		42
6.02		Power and Authority; Enforceable Obligations		42
6.03		Compliance with Law and Other Instruments		42
6.04		Consents/Approvals		43
6.05		Litigation; Material Adverse Effect		43
6.06		No Immunity		43
6.07		Governmental Regulations		43
6.08		Direct Obligations; Pari Passu		43
6.09		No Recordation Necessary		43
6.10		Choice of Law; Submission to Jurisdiction and
		Waiver of Sovereign Immunity		44
ARTICLE VII AFFIRMATIVE COVENANTS				44
7.01		Financial Reports and Other Information		44
7.02		Notice of Default and Litigation		45
7.03		Compliance with Laws and Contractual Obligations, Etc		45
7.04		Payment of Obligations		46
7.05		Maintenance of Insurance		46
7.06		Conduct of Business and Preservation of Corporate Existence		46
7.07		Books and Records		46
7.08		Maintenance of Properties, Etc.		46
7.09		Use of Proceeds		47
7.10		Aggregate Exposure		47
7.11		Pari Passu Ranking		47
7.12		Transactions with Affiliates		47
7.13		Maintenance of Governmental Approvals		47
7.14		Measurement Date		47
7.15		Inspection of Property		47

 

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TABLE OF CONTENTS

Continued

 

ARTICLE VIII NEGATIVE COVENANTS				48
8.01		Financial Conditions		48
8.02		Liens		48
8.03		Consolidations and Mergers		50
8.04		Sales of Assets, Etc		51
8.05		Change in Nature of Business		51
8.06		Margin Regulations		51
ARTICLE IX OBLIGATIONS OF GUARANTORS				51
9.01		The Guaranty		51
9.02		Nature of Liability		51
9.03		Unconditional Obligations		51
9.04		Independent Obligation		52
9.05		Waiver of Notices		52
9.06		Waiver of Defenses		53
9.07		Bankruptcy and Related Matters		54
9.08		No Subrogation		55
9.09		Right of Contribution		55
9.10		General Limitation on Guaranty		55
9.11		Covenants of the Guarantors		55
ARTICLE X EVENTS OF DEFAULT				56
10.01		Events of Default		56
10.02		Remedies		58
10.03		Notice of Default		58
10.04		Default Interest		58
ARTICLE XI THE ADMINISTRATIVE AGENT				59
11.01		Appointment and Authorization		59
11.02		Delegation of Duties		59
11.03		Liability of Administrative Agent		59
11.04		Reliance by Administrative Agent		60
11.05		Notice of Default		60
11.06		Credit Decision		60
11.07		Indemnification		61
11.08		Administrative Agent in Individual Capacity		61
11.09		Successor Administrative Agent		62
ARTICLE XII THE JOINT BOOKRUNNERS				62
12.01		The Joint Bookrunners		62
12.02		Liability of Joint Bookrunners		63
12.03		Joint Bookrunners in their respective Individual Capacities		63

 

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TABLE OF CONTENTS

Continued

 

12.04		Credit Decision		63
ARTICLE XIII MISCELLANEOUS				64
13.01		Notices		64
13.02		Amendments and Waivers		64
13.03		No Waiver; Cumulative Remedies		65
13.04		Payment of Expenses, Etc		65
13.05		Indemnification		66
13.06		Successors and Assigns		66
13.07		Right of Set-off		68
13.08		Confidentiality		68
13.09		Use of English Language		69
13.10		Governing Law		69
13.11		Submission to Jurisdiction		69
13.12		Appointment of Agent for Service of Process		70
13.13		Waiver of Sovereign Immunity		70
13.14		Judgment Currency		70
13.15		Counterparts		71
13.16		USA PATRIOT Act		71
13.17		Severability		71
13.18		Survival of Agreements and Representations		71

 

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TABLE OF CONTENTS

Continued

 

SCHEDULES
Schedule 1.01(a)		—		Commitments
Schedule 1.01(b)		—		Lending Offices
Schedule 1.01(c)		—		Notice Details
Schedule 5.06		—		Litigation
Schedule 5.10		—		Subsidiaries
Schedule 6.05		—		Litigation
Schedule 8.02(e)(i)		—		Liens
Schedule 8.02(e)(ii)		—		Liens

EXHIBITS

 

Exhibit A		—		Form of Note
Exhibit B		—		Notice of Borrowing
Exhibit C		—		Form of Notice of Extension/Conversion
Exhibit D		—		Form of Assignment and Assumption Agreement
Exhibit E		—		Form of Opinion of Special New York Counsel to the Borrower and the Guarantors
Exhibit F		—		Form of Opinion of Mexican Counsel to the Borrower and the Guarantors
Exhibit G		—		Mandatory Cost Formula

 

-v-

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CREDIT AGREEMENT

CREDIT AGREEMENT, dated as of May 31, 2005 among CEMEX, S.A. de C.V., a sociedad anonima de capital variable organized and existing pursuant to the laws of the United Mexican States (the “Borrower”), CEMEX MÉXICO, S.A. de C.V., a sociedad anonima de capital variable organized and existing pursuant to the laws of the United Mexican States, EMPRESAS TOLTECA DE MÉXICO, S.A. de C.V., a sociedad anonima de capital variable organized and existing pursuant to the laws of the United Mexican States (each a “Guarantor” and together, the “Guarantors”), the several Lenders party hereto, BARCLAYS BANK PLC, NEW YORK BRANCH, as Administrative Agent, BARCLAYS CAPITAL, THE INVESTMENT BANKING DIVISION OF BARCLAYS BANK PLC, as Joint Lead Arranger and Joint Bookrunner and CITIGROUP GLOBAL MARKETS INC., as Documentation Agent, Joint Lead Arranger and Joint Bookrunner.

RECITALS

WHEREAS, the Borrower entered into a term credit agreement, dated as of April 5, 2005 (the “Term Credit Agreement”), among the Borrower, the Guarantors, the several lenders party thereto, Barclays Bank PLC, as administrative agent, Barclays Capital, the Investment Banking Division of Barclays Bank PLC, as joint lead arranger and joint bookrunner and Citigroup Global Markets Inc., as documentation agent, joint lead arranger and joint bookrunner;

WHEREAS, the Borrower proposes to terminate the Term Credit Agreement and enter into a new five-year multi-currency revolving credit facility; and

WHEREAS, the Guarantors are willing to guaranty all of the Obligations of the Borrower.

NOW, THEREFORE, each of the Parties hereto hereby agrees as follows:

ARTICLE I

DEFINITIONS

1.01 Certain Definitions. As used in this Agreement, the following terms shall have the following meanings:

“Acquired Subsidiary” means any Subsidiary acquired by the Borrower or any other Subsidiary after the date hereof in an Acquisition, and any Subsidiaries of such Acquired Subsidiary on the date of such Acquisition.

 

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“Acquiring Subsidiary” means any Subsidiary of the Borrower or any one of its Subsidiaries solely for the purpose of participating as the acquiring party in any Acquisition, and any Subsidiaries of such Acquiring Subsidiary acquired in such Acquisition.

“Acquisition” means any merger, consolidation, acquisition or lease of assets, acquisition of securities or business combination or acquisition, or any two or more of such transactions, if upon the completion of such transaction or transactions, the Borrower or any Subsidiary thereof has acquired an interest in any Person who is deemed to be a Subsidiary under this Agreement and was not a Subsidiary prior thereto.

“Adjusted Consolidated Net Tangible Assets” means, with respect to any Person, the total assets of such Person and its Subsidiaries (less applicable depreciation, amortization and other valuation reserves), including any write-ups or restatements required under Mexican GAAP (other than with respect to items referred to in clause (ii) below), after deducting therefrom (i) all current liabilities of such Person and its Subsidiaries (excluding the current portion of long-term debt) and (ii) all goodwill, trade names, trademarks, licenses, concessions, patents, unamortized debt discount and expense and other intangibles, all as determined on a consolidated basis in accordance with Mexican GAAP.

“Administrative Agent” means Barclays Bank PLC, in its capacity as administrative agent for the Lenders, and its successors in such capacity.

“Administrative Agent’s Payment Office” means the Administrative Agent’s address for payments set forth on the signature pages hereof or such other address as the Administrative Agent may from time to time specify to the other Parties hereto pursuant to the terms of this Agreement.

“Affected Lender” has the meaning specified in Section 3.09(a).

“Affiliate” means, in relation to any Person, a Subsidiary of that Person or a Holding Company of that Person or any other Subsidiary of that Holding Company.

“Aggregate Committed Amount” means the aggregate amount of all of the Commitments.

“Aggregate Exposure” means the Dollar Amount of the aggregate principal amount of all Loans outstanding.

“Agreement” means this Credit Agreement, as the same may hereafter be amended, supplemented or otherwise modified from time to time.

“Applicable Margin” means, at any date, the applicable margin set forth below based upon the Borrower’s Consolidated Net Debt/EBITDA Ratio (it being understood that measurement of the Consolidated Net Debt/EBITDA Ratio as of the most recent Measurement Date is sufficient for this purpose):

 

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		Applicable Margin
Consolidated Net Debt/EBITDA Ratio		Base Rate Loans			LIBOR Loans			Euribor Loans
3.00 to 1 or greater		0.50	%		0.50	%		0.50	%
Less than 3.00 to 1, but greater than or equal to 2.50 to 1		0.45	%		0.45	%		0.45	%
Less than 2.50 to 1, but greater than or equal to 2.00 to 1		0.40	%		0.40	%		0.40	%
Less than 2.00 to 1		0.35	%		0.35	%		0.35	%

; provided, however, the initial Applicable margin shall be 0.50%.

“Assignee” has the meaning specified in Section 13.06(b).

“Assignment and Assumption Agreement” means an assignment and assumption agreement in substantially the form of Exhibit D.

“Available Commitments” means, as of any date, the Aggregate Committed Amount minus the Aggregate Exposure.

“Average Aggregate Committed Amount” means, for any Utilization Period, the sum of the Aggregate Committed Amount as of the end of each day during such Utilization Period, divided by the number of days in such Utilization Period.

“Average Outstanding Loans” means, for any Utilization Period, the sum of the aggregate principal amount of Loans outstanding under this Agreement as of the end of each day during such Utilization Period, divided by the number of days in such Utilization Period.

“Base Rate” means, for any day, the higher of (a) the Prime Rate or (b) the Federal Funds Rate plus 1/2% per annum, in each case as in effect for such day. Any change in the Prime Rate announced by the Reference Banks shall take effect at the opening of business on the day specified in the public announcement of such change.

“Base Rate Loan” means any Loan made or maintained at a rate of interest calculated with reference to the Base Rate.

“Bookrunners” or “Joint Bookrunners” means Barclays Capital, the Investment Banking Division of Barclays Bank PLC, and Citigroup Global Markets Inc., in their capacity as joint bookrunners hereunder, and each of their successors in such capacity.

“Borrower” has the meaning specified in the preamble hereto.

“Borrowing” means the aggregate amount of Loans hereunder to be made to the Borrower pursuant to Article II on a particular date by each of the Lenders.

“Borrowing Request” means a Notice of Borrowing.

 

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“Business Day” means any day other than a Saturday or Sunday or other day on which commercial banks in New York City are authorized or required by law to close and

(i) (in relation to any date for payment or lending or purchase of, or the determination of an interest rate or rate of exchange in relation to, Japanese Yen) a day on which the Tokyo interbank market is also open for dealings in Japanese Yen; or

(ii) (in relation to any date for payment or lending or purchase of, or the determination of an interest rate or rate of exchange in relation to, Sterling) a day on which the London interbank market is also open for dealings in Sterling; or

(iii) (in relation to any date for payment or lending or purchase of, or the determination of an interest rate or rate of exchange in relation to, Euro), any TARGET Day.

“Capital Lease” means, as to any Person, 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 Mexican GAAP and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with Mexican GAAP.

“Capital Stock” means any and all shares, interests, participations or other equivalents (however designed) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

“Commitment” means, with respect to each Lender, the aggregate principal Dollar Amount set forth opposite the name of such Lender in Schedule 1.01(a) or in any Assignment and Assumption Agreement, as such amount may be reduced or increased from time to time in accordance with the provisions hereof.

“Commitment Fee” has the meaning specified in Section 3.02.

“Commitment Percentage” means, with respect to each Lender, a fraction (expressed as a decimal) the numerator of which is the Commitment of such Lender at such time and the denominator of which is the Aggregate Committed Amount at such time. The initial Commitment Percentages are set out on Schedule 1.01(a).

“Commitment Period” means the period from and including the Effective Date to but excluding the earlier of (i) the Termination Date, or (ii) the date on which the Commitments terminate in accordance with the provisions of this Agreement.

“Confidential Information” means information that the Borrower or a Guarantor furnishes to the Administrative Agent, the Joint Bookrunners or any Lender in a writing

 

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designated as confidential, but does not include any such information that is or becomes generally available to the public or that is or becomes available to the Administrative Agent or the Joint Bookrunners or such Lender from a source other than the Borrower or a Guarantor that is not, to the best of the Administrative Agent’s, the Joint Bookrunners’ or such Lender’s knowledge, acting in violation of a confidentiality agreement with the Borrower or Guarantor or any other Person.

“Consolidated” refers to the consolidation of accounts in accordance with Mexican GAAP.

“Consolidated Fixed Charges” means, for any period, the sum (without duplication) of (a) Consolidated Interest Expense for such period and (b) to the extent not included in (a) above, payments during such period in respect of the financing costs of financial derivatives in the form of equity swaps.

“Consolidated Fixed Charge Coverage Ratio” means, for any period of four consecutive fiscal quarters, the ratio of (a) EBITDA for such period to (b) Consolidated Fixed Charges for such period.

“Consolidated Interest Expense” means, for any period, the total gross interest expense of the Borrower and its consolidated Subsidiaries allocable to such period in accordance with Mexican GAAP.

“Consolidated Net Debt” means, at any date, the sum (without duplication) of (a) the aggregate amount of all Debt of the Borrower and its Subsidiaries at such date, plus (b) to the extent not included in Debt, the aggregate amount of all derivative financing in the form of equity swaps outstanding at such date (save to the extent cash collateralized) minus (c) all Temporary Investments of the Borrower and its Subsidiaries at such date.

“Consolidated Net Debt / EBITDA Ratio” means, the ratio of (a) Consolidated Net Debt to (b) EBITDA for the period of four consecutive fiscal quarters immediately preceding, which shall be calculated based on the most recently available consolidated financial statements of the Borrower and its Subsidiaries as of such date.

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any indenture, mortgage, deed of trust, loan agreement or other agreement to which such Person is a party or by which it or any of its property or assets is bound.

“Credit Party” means any of the Borrower or the Guarantors.

“Debt” of any Person means, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (iv) all obligations of such Person as lessee under Capital Leases, (v) all Debt of others secured by a Lien on any asset of such Person, up to the value of such asset, as recorded in such Person’s most recent balance sheet, (vi) all

 

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obligations of such Person with respect to product invoices incurred in connection with export financing, and (vii) all obligations of such Person under repurchase agreements for the stock issued by such Person or another Person. For the avoidance of doubt, Debt does not include Derivatives. With respect to the Borrower and its subsidiaries, the aggregate amount of Debt outstanding shall be adjusted by the Value of Debt Currency Derivatives solely for the purposes of calculating the Consolidated Net Debt / EBITDA Ratio. If the Value of Debt Currency Derivatives is a positive mark-to-market valuation for the Borrower and its subsidiaries, then Debt shall decrease accordingly, and if the Value of Debt Currency Derivatives is a negative mark-to-market valuation for the Borrower and its subsidiaries, then Debt shall increase by the absolute value thereof.

“Debt Currency Derivatives” means derivatives of the Borrower and its subsidiaries related to currency entered into for the purposes of hedging exposures under outstanding Debt of the Borrower and its subsidiaries, including but not limited to cross-currency swaps and currency forwards.

“Default” means any condition, event or circumstance which, with the giving of notice or lapse of time or both, would, unless cured or waived, become an Event of Default.

“Defaulting Lender” has the meaning specified in Section 2.01(d).

“Derivatives” means any type of derivative obligations, including but not limited to equity forwards, capital hedges, cross-currency swaps, currency forwards, interest rate swaps and swaptions.

“Disbursement Date” means the date on which such Loan is made by the Lenders.

“Disposition” means, with respect to any property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof. The terms “Dispose” and “Disposed of” shall have correlative meanings.

“Dollar Amount” shall mean, at any time with respect to any Loan, (a) with respect to Dollars or an amount denominated in Dollars, such amount and (b) with respect to an amount of any Foreign Currency or an amount denominated in a Foreign Currency, the equivalent amount thereof in Dollars as determined by the Administrative Agent on the basis of the Spot Rate as of the most recent Revaluation Date for the purchase of Dollars with such Foreign Currency.

“Dollars”, “$” and “U.S.$” each means the lawful currency of the United States.

“EBITDA” means, for any period, the sum for the Borrower and its Subsidiaries, determined on a consolidated basis of (a) operating income (utilidad de operación), (b) cash interest income and (c) depreciation and amortization expense, in each case determined in accordance with Mexican GAAP consistently applied for such period. For the purposes of calculating EBITDA for any period of four consecutive fiscal quarters (each, a “Reference Period”) pursuant to any determination of the Consolidated Net Debt / EBITDA Ratio (but not Consolidated Fixed Charge Coverage Ratio), (i) if at any time

 

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during such Reference Period the Borrowers or any of its Subsidiaries shall have made any Material Disposition, the EBITDA for such Reference Period shall be reduced by an amount equal to the EBITDA (if positive) attributable to the property that is the subject of such Material Disposition for such Reference Period (but when the Material Disposition is by way of a lease, income received by the Borrower or any of its Subsidiaries under such lease shall be included in EBITDA and (ii) if at any time during such Reference Period the Borrower or any of its Subsidiaries shall have made any Material Acquisition, EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto (including the incurrence or assumption of any Debt) as if such Material Acquisition had occurred on the first day of such Reference Period. Additionally, if since the beginning of such Reference Period any Person that subsequently shall have become a Subsidiary or was merged or consolidated with the Borrower or any of its Subsidiaries as a result of a Material Acquisition occurring during such Reference Period shall have made any Disposition or Acquisition of property that would have required an adjustment pursuant to clause (i) or (ii) above if made by the Borrower or any of its Subsidiaries during such Reference Period, EBITDA for such period shall be calculated after giving pro forma effect thereto as if such Disposition or Acquisition had occurred on the first day of such Reference Period.

“Effective Date” has the meaning specified in Section 4.01.

“Environmental Action” means any audit procedure, action, suit, demand, demand letter, claim, notice of non-compliance or violation, notice of liability or potential liability, investigation, proceeding, consent order or consent agreement relating in any way to any Environmental Law, Environmental Permit or Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the environment, including (a) by any Governmental Authority for enforcement, cleanup, removal, response, remedial or other actions or damages and (b) by any Governmental Authority or any third party for damages, contribution, indemnification, cost recovery, compensation or injunctive relief.

“Environmental Law” means any federal, state, local or foreign statute, law, ordinance, rule, regulation, technical standard (norma técnica or norma oficial Mexicana), code, order, judgment, decree or judicial agency interpretation, policy or guidance relating to pollution or protection of the environment, health, safety or natural resources, including those relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials.

“Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto, as interpreted by the rules and regulations thereunder, all as the same may be in effect from time to time. References to sections of ERISA shall be construed also to refer to any successor sections.

 

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“ERISA Affiliate” means an entity, whether or not incorporated, that is under common control with the Borrower within the meaning of Section 4001(a)(14) of ERISA, or is a member of a group that includes the Borrower and that is treated as a single employer under Sections 414(b) or (c) of the Code.

“Euro” shall mean the single currency of Participating Member States.

“Euribor” means, in relation to any Loan in Euro:

 

(a)

the applicable Screen Rate; or

 

(b)

(if no Screen Rate is available for the currency or Interest Period of that Loan) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Administrative Agent at its request quoted by the Reference Banks to leading banks in the European interbank market,

as of approximately 11:00 a.m. (New York City time) on the Quotation Day for the offering of deposits in Euro and for a period comparable to the Interest Period for that Loan.

“Euribor Business Day” means any day other than a Saturday or Sunday or other day on which commercial banks in New York City are authorized or required by law to close that is also a TARGET Day.

“Euribor Loan” means any Loan made or maintained at a rate of interest calculated with reference to Euribor.

“Event of Default” has the meaning specified in Section 10.01.

“Federal Funds Rate” means, for any relevant day, the overnight Federal funds rate as published for such day in the Federal Reserve Statistical Release H.15 (519) or any successor publication, or, if such rate is not published for any day, the rate for such day will be the rate set forth in the daily statistical release designated as the Composite 3:30 p.m. Quotation for U.S. Government Securities, or any successor publication, published by the Federal Reserve Bank of New York (including any such successor, the “Composite 3:30 p.m. Quotation” for such day under the caption “Federal Funds Effective Rate”). If on any relevant day the appropriate rate for such previous day is not yet published in either H.15 (519) or the Composite 3:30 p.m. Quotations, the rate for such day will be the arithmetic mean as determined by the Administrative Agent of the rates for the last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on that day by each of three leading brokers of recognized standing of Federal funds transactions in New York City selected by the Administrative Agent.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve System of the United States.

“Fee Letter” means the fee letter entered into by the Borrower and the Lenders dated as of April 5, 2005.

 

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“Foreign Currency” means each of (a) Euros, (b) Japanese Yen and (c) Sterling.

“Foreign Financial Institution” means an institution registered as a foreign financial institution with the Ministry of Finance in the Mexican Banking and Financial Institutions, Pensions, Retirement and Foreign Investment Funds Registry for purposes of Article 195, Section I of the Mexican Income Tax Law.

“Funding Default” means a default by a Lender pursuant to Section 2.01(d).

“Funding Losses” has the meaning specified in Section 3.06.

“Governmental Authority” means any branch of power or government or any state, department or other political subdivision thereof, or any governmental body, agency, authority (including any central bank or taxing or environmental authority), any entity or instrumentality (including any court or tribunal) exercising executive, legislative, judicial, regulatory, administrative or investigative functions of or pertaining to government.

“Guarantor” has the meaning specified in the preamble hereto.

“Hazardous Materials” means (a) radioactive materials, asbestos-containing materials, polychlorinated biphenyls, radon gas and (b) any other chemicals, materials or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any applicable Environmental Law.

“Holding Company” means, in relation to a company or a corporation, any other company or corporation in respect of which it is a Subsidiary.

“Indemnified Party” has the meaning specified in Section 13.05.

“Interest Payment Date” means (i) with respect to any Base Rate Loan, the last day of each March, June, September and December, the date of repayment of such Loan and the Termination Date and (ii) with respect to any LIBOR Loan, and, if applicable, any Euribor Loan, the last day of each Interest Period for such Loan, the date of repayment of principal of such Loan and on the Termination Date. If an Interest Payment Date falls on a date that is not a Business Day, such Interest Payment Date shall be deemed to be the next succeeding Business Day, except that in the case of LIBOR Loans or, if applicable, Euribor Loans, where the next succeeding Business Day falls in the next succeeding calendar month, then on the immediately preceding Business Day.

“Interest Period” means, with respect to each Borrowing of LIBOR Loans, and, if applicable, Euribor Loans, the period (i) commencing (A) on the date of such Borrowing or conversion of Base Rate Loans into LIBOR Loans and, if applicable, Euribor Loans, or (B) in the case of the continuation of LIBOR Loans and, if applicable, Euribor Loans, for a further Interest Period, on the last day of the immediately preceding Interest Period and (ii) ending one, two, three or six months thereafter as stated by the Borrower in the applicable Notice of Borrowing or Notice of Continuation/Conversion; prdovided, however, that:

 

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(1) any Interest Period which would otherwise end on a day which is not a LIBOR Business Day or, if applicable, a Euribor Business Day, shall, subject to paragraph (3) below, be extended to the next succeeding LIBOR Business Day or, if applicable, the next succeeding Euribor Business Day, unless such LIBOR Business Day or, if applicable, Euribor Business Day, falls in another calendar month, in which case such Interest Period shall end on the immediately preceding LIBOR Business Day or, if applicable, Euribor Business Day;

(2) any Interest Period which begins on the last LIBOR Business Day or, if applicable, Euribor Business Day, of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to paragraph (3) below, end on the last LIBOR Business Day or, if applicable, Euribor Business Day, of a calendar month;

(3) any Interest Period which would otherwise end after the last day of the Commitment Period shall end on the last day of the Commitment Period; and

(4) any Interest Period which would otherwise end after the Termination Date shall end on the Termination Date.

“Japanese Yen” means the lawful currency of Japan.

“Joint Bookrunners Fees” has the meaning specified in Section 3.02(b).

“Lender” means each financial institution designated as such on the signature pages hereof, each Assignee which becomes a Lender pursuant to Section 13.06(b), each Substitute Lender and each of their respective successors or assigns.

“Lending Office” means, with respect to any Lender, (a) the office or offices of such Lender specified as its “Lending Office” or “Lending Offices” in Schedule 1.01(b) or (b) such other office or offices of such Lender as it may designate as its Lending Office by notice to the Borrower and the Administrative Agent.

“LIBOR” means, in relation to any Loan (other than a Loan denominated in Euros):

 

(a)

the applicable Screen Rate; or

 

(b)

(if no Screen Rate is available for the currency or Interest Period of that Loan) the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Administrative Agent at its request quoted by the Reference Banks to leading banks in the London interbank market,

as of approximately 11:00 a.m. (New York City time) on the Quotation Day for the offering of deposits in the currency of that Loan and for a period comparable to the Interest Period for that Loan.

 

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“LIBOR Business Day” means any Business Day on which commercial banks are open in London for the transaction of international business, including dealings in Dollar deposits in the international interbank markets.

“LIBOR Loan” means any Loan made or maintained at a rate of interest calculated with reference to LIBOR.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset. The Borrower or any Subsidiary of the Borrower shall be deemed to own, subject to a Lien, any asset that it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, Capital Lease or other title retention lease relating to such asset, or any account receivable transferred by it with recourse (including any such transfer subject to a holdback or similar arrangement that effectively imposes the risk of collectability on the transferor).

“Loans” has the meaning specified in Section 2.01(a) hereof.

“Mandatory Cost” means the percentage rate per annum calculated by the Administrative Agent in accordance with Exhibit G.

“Material Acquisition” any (a) acquisition of property or series of related acquisitions of property that constitutes assets comprising all or substantially all of an operating unit, division or line of business or (b) acquisition of or other investment in the Capital Stock of any Subsidiary or any Person which becomes a Subsidiary or is merged or consolidated with the Borrower or any of its Subsidiaries, in each case, which involves the payment of consideration by the Borrower and its Subsidiaries in excess of U.S.$25,000,000 (or the equivalent in other currencies).

“Material Adverse Effect” means a material adverse effect on (a) the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower and its Subsidiaries taken as a whole, (b) the validity or enforceability of this Agreement or any of the Notes or the rights and remedies of the Administrative Agent or any Lender under this Agreement or any of the Notes or (c) the ability of the Borrower and/or the Guarantors to perform their Obligations under this Agreement, the Notes, the Fee Letter, any Notice of Borrowings, any certificates, waivers, or any other agreement delivered pursuant to this Agreement.

“Material Debt” means Debt (other than the Loans) of the Borrower and/or one or more of its Subsidiaries, arising in one or more related or unrelated transactions, in an aggregate principal amount outstanding exceeding U.S.$50,000,000 (or the equivalent thereof in other currencies).

“Material Disposition” means any Disposition of property or series of related Dispositions of property that yields gross proceeds to the Borrower or any of its Subsidiaries in excess of U.S.$25,000,000 (or the equivalent in other currencies).

 

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“Material Subsidiary” means, at any date, (a) each Subsidiary of the Borrower (if any) (i) the assets of which, together with those of its Subsidiaries, on a consolidated basis, without duplication, constitute 5% or more of the consolidated assets of the Borrower and its Subsidiaries as of the end of the then most recently ended fiscal quarter for which quarterly financial statements have been prepared or (ii) the operating profit of which, together with that of its Subsidiaries, on a consolidated basis, without duplication, constitutes 5% or more of the consolidated operating profit of the Borrower and its Subsidiaries for the then most recently ended fiscal quarter for which quarterly financial statements have been prepared and (b) each Guarantor.

“Measurement Date” means any of the dates specified in Section 7.14.

“Mexican GAAP” means, generally accepted accounting principles in Mexico as in effect from time to time, except that for purposes of Section 8.01, Mexican GAAP shall be determined on the basis of such principles in effect on the date hereof and consistent with those used in the preparation of the most recent audited financial statements referred to in Section 7.01. In the event that any change in Mexican GAAP shall occur and such change results in a change in the method of calculation of financial covenants, standards or terms in this Agreement, then the Borrower and the Administrative Agent agree to enter into negotiations in order to amend such provisions of this Agreement so as to equitably reflect such change in Mexican GAAP with the desired result that the criteria for evaluating the Borrower’s financial condition shall be the same after such change as if such change had not been made. Until such time as such an amendment shall have been executed and delivered by the Borrower, the Administrative Agent and the Required Lenders, all financial covenants, standards and terms in this Agreement shall continue to be calculated or construed as if such change in Mexican GAAP had not occurred.

“Mexico” means the United Mexican States.

“Ministry of Finance” means the Ministry of Finance and Public Credit of Mexico.

“Notice of Borrowing” has the meaning specified in Section 2.01(c).

“Notice of Extension/Conversion” has the meaning specified in Section 2.01(e).

“Note” means a promissory note of the Borrower in substantially the form of Exhibit A, evidencing the obligation of the Borrower to repay the Loans made by a Lender.

“Obligations” means, (a) with respect to the Borrower, all of its indebtedness, obligations and liabilities to the Lenders, the Joint Bookrunners and the Administrative Agent now or in the future existing under or in connection with the Transaction Documents, whether direct or indirect, absolute or contingent, due or to become due, and (b) with respect to each Guarantor, all of its indebtedness, obligations and liabilities to the Lenders, the Joint Bookrunners and the Administrative Agent now or in the future existing under or in connection with the Transaction Documents, in each case whether direct or indirect, absolute or contingent, due or to become due.

 

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“Obligors” means the Borrower and each Guarantor.

“Other Taxes” means any present or future stamp or documentary taxes or any other excise or property taxes, charges, imposts, duties, fees, or similar levies which arise from any payment made hereunder or under the Notes or from the execution, delivery, registration, performance or enforcement of, or otherwise with respect to, this Agreement or any other Transaction Document and which are imposed, levied, collected or withheld by any Governmental Authority.

“Participant” has the meaning specified in Section 13.06(d).

“Participating Member State” means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.

“Pension Plan” means a “pension plan”, as such term is defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which any Credit Party or any of its ERISA Affiliates has any liability.

“Permitted Liens” has the meaning specified in Section 8.02.

“Person” means an individual, partnership, corporation, business trust, joint stock company, limited liability company, trust, unincorporated association, joint venture or other business entity or Governmental Authority, whether or not having a separate legal personality.

“Prime Rate” means the average of the rate of interest publicly announced by each of the Reference Banks from time to time as its Prime Rate in New York City, the Prime Rate to change as and when such designated rate changes. The Prime Rate is not intended to be the lowest rate of interest charged by the Administrative Agent or any Lender in connection with extensions of credit to debtors of any class, or generally.

“Process Agent” has the meaning specified in Section 13.12(a).

“Qualified Receivables Transaction” means any transaction or series of transactions that may be entered into by the Borrower or any Subsidiary pursuant to which the Borrower or any Subsidiary may sell, convey or otherwise transfer to a Special Purpose Vehicle (in the case of a transfer by the Borrower or any other Seller) and any other person (in the case of a transfer by a Special Purpose Vehicle), or may grant a security interest in, any Receivables Program Assets (whether now existing or arising in the future); provided that:

(a) no portion of the indebtedness or any other obligations (contingent or otherwise) of a Special Purpose Vehicle (i) is guaranteed by the Borrower or any other

 

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Seller or (ii) is recourse to or obligates the Borrower or any other Seller in any way such that the requirements for off balance sheet treatment under Financial Accounting Standards Bulletin 140 are not satisfied; and

(b) the Borrower and the other Sellers do not have any obligation to maintain or preserve the financial condition of a Special Purpose Vehicle or cause such entity to achieve certain levels of operating results.

“Quotation Day” means, in relation to any period in which an interest rate is to be determined:

(a) (if the currency is Sterling) the first day of that period;

(b) (if the currency is Euro) two TARGET Days before the first day of that period; or

(c) (for any other currency) two Business Days before the first day of that period.

“Receivables” means all rights of the Borrower or any other Seller to payments (whether constituting accounts, chattel paper, instruments, general intangibles or otherwise, and including the right to payment of any interest or finance charges), which rights are identified in the accounting records of the Borrower or such Seller as accounts receivable.

“Receivables Documents” means (a) a receivables purchase agreement, pooling and servicing agreement, credit agreement, agreements to acquire undivided interests or other agreement to transfer, or create a security interest in, Receivables Program Assets, in each case as amended, modified, supplemented or restated and in effect from time to time entered into by the Borrower, another Seller and/or a Special Purpose Vehicle, and (b) each other instrument, agreement and other document entered into by the Borrower, any other Seller or a Special Purpose Vehicle relating to the transactions contemplated by the items referred to in clause (a) above, in each case as amended, modified, supplemented or restated and in effect from time to time.

“Receivables Program Assets” means (a) all Receivables which are described as being transferred by the Borrower, another Seller or a Special Purpose Vehicle pursuant to the Receivables Documents, (b) all Receivables Related Assets in respect of such Receivables, and (c) all collections (including recoveries) and other proceeds of the assets described in the foregoing clauses.

“Receivables Program Obligations” means (a) notes, trust certificates, undivided interests, partnership interests or other interests representing the right to be paid a specified principal amount from the Receivables Program Assets and (b) related obligations of the Borrower, a Subsidiary of the Borrower or a Special Purpose Vehicle (including, without limitation, rights in respect of interest or yield hedging obligations, breach of warranty claims and expense reimbursement and indemnity provisions).

 

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“Receivables Related Assets” means with respect to any “Receivables” (i) any rights arising under the documentation governing or relating to such Receivables (including rights in respect of liens securing such Receivables), (ii) any proceeds of such Receivables, (iii) other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable.

“Reference Banks” means two banks in the London interbank market, initially Barclays Bank PLC, and Citibank, N.A..

“Regulation T, U, or X” means Regulation T, U, or X, respectively, of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

“Required Lenders” means, at any time, Lenders (other than Defaulting Lenders) whose Total Exposures, when aggregated, equal or exceed 50.01% of the Aggregate Committed Amount (or, if the Commitments shall have terminated, the Aggregate Exposure) minus the Total Exposure of any Defaulting Lender at such time.

“Requirement of Law” means, as to any Person, any law, ordinance, rule, regulation or requirement of any Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Responsible Officer” of any Person means the Chief Financial Officer, the Corporate Planning and Finance Director, the Finance Director or the Comptroller of such Person.

“Revaluation Date” means each of the following: (a) in connection with the making of any Loan, the Business Day which is the earliest of the date such Loan is made or the date the rate is set, as applicable; (b) in connection with any extension or conversion or continuation of an existing Loan, the Business Day that is the earlier of the date such Loan is extended, converted or continued, or the date the rate is set, as applicable, in connection with any extension, conversion or continuation; (c) the date of any reduction of the Aggregate Committed Amount; and (d) such additional dates as the Administrative Agent or the Required Lenders shall deem necessary.

“Screen Rate” means:

 

(a)

in relation to LIBOR, the British Bankers Association Interest Settlement Rate for the relevant currency and period; and

 

(b)

in relation to Euribor, the percentage rate per annum determined by the Banking Federation of the European Union for the relevant period,

displayed on the appropriate page of the Reuters screen. If the agreed page is replaced or service ceases to be available, the Administrative Agent may specify another page or service displaying the appropriate rate after consultation with the Borrower and the Lenders.

 

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“Seller” means the Borrower and any Subsidiary or other affiliate of the Borrower (other than a Subsidiary or affiliate that is a Special Purpose Vehicle) which is a party to a Receivables Document.

“Special Purpose Vehicle” means a trust, partnership or other special purpose person established by the Borrower and/or its Subsidiaries to implement a Qualified Receivables Transaction.

“Spot Rate” means, on any date, with respect to any Foreign Currency, the rate quoted by the Administrative Agent as the spot rate for the purchase by the Administrative Agent of such Foreign Currency with Dollars through its principal foreign exchange trading office at approximately 11:00 a.m. (New York City time) on the date two Business Days prior to the date as of which the foreign exchange computation is made.

“Sterling” means the lawful currency of the United Kingdom.

“Subsidiary” means with respect to any Person, any corporation, partnership, joint venture, limited liability company, trust, estate or other entity of which (or in which) more than 50% of (a) in the case of a corporation, the issued and outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency not in the control of such Person), (b) in the case of a limited liability company, partnership or joint venture, the interest in the capital or profits of such limited liability company, partnership or joint venture or (c) in the case of a trust or estate, the beneficial interest in such trust or estate, is at the time directly or indirectly owned or controlled by (X) such Person, (Y) such Person and one or more of its other Subsidiaries or (Z) one or more of such Person’s other Subsidiaries. For purposes of determining whether a trust formed in connection with a Qualified Receivables Transaction is a Subsidiary, notes, trust certificates, undivided interests, partnership interests or other interests of the type described in clause (a) of the definition of Receivables Program Obligations shall be counted as beneficial interests in such trust.

“Substitute Lender” means a commercial bank or other financial institution, acceptable to the Borrower, the Lenders and the Administrative Agent, each in its sole discretion, and approved by the Joint Bookrunners (including such a bank or financial institution that is already a Lender hereunder), which assumes all or a portion of the Commitment of a Lender pursuant to the terms of this Agreement.

“TARGET” means Trans-European Automated Real-time Gross Settlement Express Transfer payment system.

“TARGET Day” means any day on which TARGET is open for the settlement of payments in Euro.

 

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“Taxes” means any and all present or future income, stamp, sales or other taxes, levies, imposts, duties, deductions, fees, charges or withholdings, and all liabilities with respect thereto collected, withheld or assessed by any Governmental Authority, excluding, (a) in the case of each Lender the Administrative Agent, and any Tax Related Persons, such taxes (including income taxes or franchise taxes) as are imposed on or measured by its net income or capital by the jurisdiction (or any political subdivision thereof) under the laws of which it is organized or maintains a Lending Office or its principal office or performs its functions as Administrative Agent or as are imposed on such Lender or the Administrative Agent or any of their Tax Related Persons (as the case may be) as a result of a present or former connection between the Lender, the Administrative Agent, or such Tax Related Person and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Lender or such Administrative Agent having executed, delivered or performed its obligations or received a payment under, or enforced, the Transaction Documents) and (b) any taxes, levies, imposts, deductions, charges or withholdings to the extent imposed by reason of any Lender’s or Administrative Agent’s failure to (i) register as a Foreign Financial Institution with the Ministry of Finance and (ii) be a resident (or have a principal office which is a resident, if such Lender lends through a branch or agency) for tax purposes of a jurisdiction with which Mexico has in effect a treaty for the avoidance of double taxation (but only in respect of those taxes payable in excess of taxes that would have been payable had such Lender complied with those conditions).

“Tax Related Person” means any Person whose income is realized through, or determined by reference to, the Administrative Agent or a Lender[; provided that no Lender shall be deemed a Tax Related Person of the Administrative Agent, and the Administrative Agent shall not be deemed a Tax Related Person of any Lender].

“Temporary Investments” means, at any date, all amounts that would, in conformity with Mexican GAAP consistently applied, be set forth opposite the caption “cash and cash equivalent” (“efectivo y equivalentes de efectivo”) or “temporary investments” (“inversiones temporales”) on a consolidated balance sheet of the Borrower at such date.

“Term Credit Agreement” has the meaning specified in the recitals hereto.

“Termination Date” means the date which is the earliest of (a) the date five years following the Effective Date, or (b) if no Loans are outstanding, the date the Commitments are terminated in accordance with this Agreement.

“Total Exposure” means at any time, as to any Lender, the amount of its Commitment at such time, or, if the Commitments shall have terminated, its Total Outstandings at such time.

“Total Outstandings” means at any time, as to any Lender, the Dollar Amount of the sum of the aggregate outstanding principal amount of such Lender’s Loans.

 

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“Transaction Documents” means a collective reference to this Credit Agreement, the Notes, any Assignment and Assumption Agreement, the Fee Letter, and all other related agreements and documents issued or delivered hereunder or thereunder or pursuant hereto or thereto.

“United States” means the United States of America, including the States and the District of Columbia, but excluding its territories and possessions.

“Up-Front Fee” has the meaning specified in Section 3.02(c).

“Utilization” means, for any Utilization Period, the percentage obtained by dividing the Average Outstanding Loans by the Average Aggregate Committed Amount.

“Utilization Period” means each calendar quarter, except that the initial Utilization Period shall commence on the Effective Date and end on June 30, 2005, and the final Utilization Period shall end on the Termination Date.

“Value of Debt Currency Derivatives” means, on any given date, the aggregate mark-to-market value of Debt Currency Derivatives, expressed as a positive number (if, on a mark-to-market basis, such aggregate amount reflects a net amount owed to the Borrower and its subsidiaries) or as a negative number (if, on a mark-to-market basis, such aggregate amount reflects a net amount owed by the Borrower and its subsidiaries).

“Welfare Plan” means a “welfare plan”, as such term is defined in Section 3(1) of ERISA.

1.02 Other Definitional Provisions.

(a) The terms “including” and “include” are not limiting and mean “including but not limited to” and “include but are not limited to”.

(b) The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement, and Article, Section, paragraph, Schedule and Exhibit references are to this Agreement unless otherwise specified.

(c) The meanings given to terms defined herein are equally applicable to both the singular and plural forms of such terms.

(d) In this Agreement, in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”. Periods of days referred to in this Agreement shall be counted in calendar days unless Business Days, LIBOR Business Days, Euribor Business Days or TARGET Days are expressly prescribed.

(e) The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.

 

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1.03 Accounting Terms and Determinations. All accounting and financing terms not specifically defined herein shall be construed in accordance with Mexican GAAP.

ARTICLE II

THE LOAN FACILITIES

2.01 Revolving Loans.

(a) Commitment. During the Commitment Period, subject to the terms and conditions hereof, each Lender, severally and not jointly with any other Lender, agrees to make revolving credit loans in Dollars and/or in Foreign Currencies (as specified by the Borrower) (the “Loans”) to the Borrower from time to time in an aggregate principal Dollar Amount at any one time outstanding not to exceed such Lender’s Commitment; provided that (i) with regard to the Lenders collectively, the aggregate principal amount of Loans outstanding at any one time shall not exceed the Aggregate Committed Amount, and (ii) with regard to each Lender individually, the aggregate principal Dollar Amount of such Lender’s Commitment Percentage of all the Loans outstanding at any time shall not exceed the Commitment of such Lender. Loans may consist of Base Rate Loans, LIBOR Loans, Euribor Loans, or a combination thereof, as the Borrower may request, and may be repaid, prepaid and reborrowed in accordance with the provisions hereof; provided that (A) Loans denominated in Japanese Yen or Sterling shall consist solely of LIBOR Loans, subject to Section 3.07 and Section 3.09, (B) Loans denominated in Euro shall consist solely of Euribor Loans, subject to Section 3.07 and Section 3.09, and (C) if any Loan shall be made on the Effective Date or within three (3) Business Days thereafter such Loan may be a LIBOR Loan or Euribor Loan only if the Borrower delivers to the Administrative Agent a funding indemnity letter in form and substance satisfactory to the Administrative Agent.

(b) Loans and Borrowings. Each Loan shall be made as part of a Borrowing consisting of Loans made by the Lenders ratably in accordance with their Commitment Percentage. 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.

(c) Revolving Loan Borrowings.

(i) Requests for Borrowings. (A) To request a Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone, not later than 12:00 p.m., New York City time, (1) in the case of a request for a Base Rate Loan denominated in Dollars, on the Business Day prior to the day the Borrower designates therein as the Disbursement Date, and (2) in the case of a request for a LIBOR Loan or Euribor Loan, on the fourth LIBOR Business Day or Euribor Business Day, as applicable, prior to the Disbursement Date. Each such telephonic Borrowing request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the Administrative Agent of a written notice (the “Notice of Borrowing”) in the form attached as Exhibit B approved by the Administrative Agent and signed by a duly authorized

 

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representative of the Borrower. Each such telephonic request and written Notice of Borrowing shall specify the following information in compliance with this Section 2.01:

 

(1)

that a Loan is requested;

 

(2)

the requested Disbursement Date, which shall be a Business Day;

 

(3)

the currency and the aggregate principal amount to be borrowed; and

 

(4)

whether the Borrowing shall be composed of Base Rate Loans, LIBOR Loans, Euribor Loans, or a combination thereof, and if LIBOR Loans or Euribor Loans are requested, the Interest Period(s) therefor.

(B) If the Borrower shall fail to specify in any such Notice of Borrowing (i) an applicable Interest Period in the case of a LIBOR Loan or Euribor Loan, then such notice shall be deemed to be a request for an Interest Period of one (1) month, (ii) the type of Loan requested, then such notice shall be deemed to be a request for a LIBOR Loan hereunder, provided, however, that if the notice requests Euro, then such notice shall be deemed to be a request for a Euribor Loan hereunder, or (iii) the currency requested, then such notice shall be deemed to be a request for a Loan in Dollars.

(C) Not later than 1:00 p.m. New York City time on the Business Day on which the Notice of Borrowing is received, the Administrative Agent shall promptly advise each Lender of the details thereof and shall advise each Lender of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

(ii) Minimum Amounts. Each Loan shall be in a minimum aggregate principal Dollar Amount of $5,000,000, in the case of LIBOR Loans or Euribor Loans, or $1,000,000 (or the remaining Aggregate Committed Amount, if less), in the case of Base Rate Loans, and integral multiples of $1,000,000 in excess thereof.

(iii) Exchange Rate. For purposes of determining availability hereunder, the rate of exchange for any Foreign Currency shall be the Spot Rate.

(d) Funding of Borrowings. Each Lender shall make each Loan to be made by it hereunder on the Disbursement Date by wire transfer of immediately available funds by 1:00 p.m., New York City time, to the account held by the Administrative Agent for such purpose most recently designated by it by notice to the Lenders. The Administrative Agent will make such Loans available to the Borrower by promptly crediting on the same day the amounts so received, in like funds, to the account designated by the Borrower in the applicable Notice of Borrowing (the “Funding Account”). Unless the Administrative Agent shall have received notice from a Lender, prior to the time of any Borrowing, that

 

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such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may, but shall not be required to, assume that such Lender has made such share available on such date in accordance with Section 2.01(c) and may in its sole discretion, but shall not be required to, in reliance upon such assumption, make available to the Borrower a corresponding amount. If any Lender either does not make its share of the applicable Borrowing available to the Administrative Agent or delays in doing so past 4:00 p.m., New York City time, on the Disbursement Date (such Lender (until it makes such share available) hereinafter referred to as a “Defaulting Lender”), then the Administrative Agent shall immediately notify the Borrower of such default. If the Administrative Agent has, in its sole discretion, made available to the Borrower an amount corresponding to such Defaulting Lender’s share of the Borrowing, then the Defaulting Lender and the Borrower jointly and severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, on 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 the Defaulting Lender, the Federal Funds Rate; or

 

(ii)

in the case of the Borrower, the interest rate applicable to Base Rate Loans.

If, with respect to the immediately preceding sentence, the Borrower pays such amount to the Administrative Agent, then the Defaulting Lender shall indemnify and hold harmless the Borrower from and against such amount, and if such Defaulting Lender pays such amount to the Administrative Agent, then such amount shall constitute such Defaulting Lender’s Loan included in such Borrowing. If the Administrative Agent, in its discretion, does not make available to the Borrower an amount corresponding to the Defaulting Lender’s share of the Borrowing then (x) the Defaulting Lender shall indemnify and hold harmless the Borrower from and against such amount as well as any and all losses, liabilities (including liabilities for penalties), actions, suits, judgments, demands, costs, and expenses (including reasonable fees and disbursements for counsel including allocated cost of internal counsel) resulting from any failure on the part of the Defaulting Lender to provide, or from any delay in providing, the Administrative Agent with such Defaulting Lender’s pro rata share of the Borrowing, but no Lender shall be so liable for any such failure on the part of or caused by any other Lender or the Administrative Agent or the Borrower, and (y) such share of the applicable Borrowing that was not made available shall (until made available) be disregarded for purposes of calculating the Commitment Fee pursuant to Section 3.02 and in the event such share has not been disregarded for such purposes, any amount paid by the Borrower in respect of such share shall be reimbursed to the Borrower by the applicable Defaulting Lender with interest thereon at the Federal Funds Rate for each day from and including the date such share of the Commitment Fee was paid by the Borrower to but excluding the date of reimbursement by the Defaulting Lender. The Administrative Agent, upon notice by the Borrower that such reimbursement is due from the applicable Defaulting Lender, shall notify such Defaulting Lender of the amount of the reimbursement due, including interest thereon, and shall forward such amount to the Borrower upon receipt from the Defaulting Lender. The Administrative Agent shall not, however, be liable to the Borrower for any failure by any Defaulting Lender to reimburse the Borrower for any amounts in respect of such Commitment Fee.

 

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(e) Extension and Conversion. The Borrower shall have the option, on any Business Day, to extend existing Loans into a subsequent permissible Interest Period or to convert Loans denominated in Dollars into Loans of another interest rate type or to convert Loans in Foreign Currencies into Dollars or to convert Loans in Dollars into Foreign Currencies; provided, however, that (i) Loans in Foreign Currencies may be converted into Dollars and Loans in Dollars may be converted into Foreign Currencies only on the last day of the Interest Period applicable thereto, (ii) except as provided in Section 3.06, LIBOR Loans and Euribor Loans may be converted into Base Rate Loans only on the last day of the Interest Period applicable thereto unless the Borrower agrees to pay all Funding Losses, (iii) LIBOR Loans and Euribor Loans may be extended, and Base Rate Loans may be converted into LIBOR Loans or Euribor Loans, only if the conditions in Section 4.02 have been satisfied, (iv) Loans extended as, or converted into, LIBOR Loans or Euribor Loans shall be subject to the terms of the definition of “Interest Period” set forth in Section 1.01 and shall be in such minimum amounts as provided in Section 2.01(c)(ii), and (v) any request for extension or conversion of a LIBOR Loan or Euribor Loan that shall fail to specify an Interest Period shall be deemed to be a request for an Interest Period of one month. Each such extension or conversion shall be effected by the Borrower by giving a written notice (or telephone notice promptly confirmed in writing) (a “Notice of Extension/Conversion”) to the Administrative Agent prior to 10:00 a.m., New York City time, on the LIBOR Business Day of or the Euribor Business Day of, as applicable, in the case of the conversion of a LIBOR Loan or Euribor Loan into a Base Rate Loan, and on the third LIBOR Business Day prior to or the third Euribor Business Day prior to, as applicable, in the case of the extension of a LIBOR Loan as, or conversion of a Base Rate Loan into, a LIBOR Loan or the extension of a Euribor Loan as, or conversion of a Base Rate Loan into, a Euribor Loan, the date of the proposed extension or conversion, substantially in the form of Exhibit C hereto, specifying (A) the date of the proposed extension or conversion, (B) the Loans to be so extended or converted, (C) the types of Loans into which such Loans are to be converted, (D) if appropriate, the applicable Interest Periods with respect thereto, and (E) the currency of such Loans. Each Notice of Extension/Conversion shall be irrevocable and shall constitute a representation and warranty by the Borrower of the matters specified in Sections 4.02(a) through (d). So long as there is no Default or Event of Default, in the event the Borrower does not request extension or conversion of any LIBOR Loan or Euribor Loan in accordance with this Section, or any such conversion or extension is not required by this Section, then such LIBOR Loan or Euribor Loan shall be continued as a Base Rate Loan at the end of each Interest Period applicable thereto, until the Borrower selects an alternate Interest Period or converts such Loans to LIBOR Loans or Euribor Loans. It is hereby understood and agreed that such failure by the Borrower to request such extension or conversion resulting in the automatic conversion of a LIBOR Loan or a Euribor Loan into a Base Rate Loan shall also constitute a representation and warranty by the Borrower of the matters specified in Sections 4.02(a) through (d). In the event any LIBOR Loans or Euribor Loans are not permitted to be converted into another LIBOR Loan or Euribor Loan hereunder, such LIBOR Loans or Euribor Loans shall automatically be converted to Base Rate Loans at the end of the applicable Interest Period with respect thereto. The Administrative Agent shall give each Lender notice as promptly as practicable of any such proposed extension or conversion affecting any Loan.

 

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(f) Repayment. The principal amount of all Loans shall be due and payable in full on the Termination Date in the same currency denomination as the Loan was made or if different converted into and outstanding.

(g) Voluntary Prepayment. Loans may be repaid in whole or in part without premium or penalty in the same currency denomination as the Loan was made or if different converted into and outstanding; provided that (i) Loans may be prepaid only upon five (5) Business Days’ prior written notice to the Administrative Agent, (ii) prepayments of LIBOR Loans or Euribor Loans must be accompanied by payment of any Funding Losses under Section 3.06, and (iii) partial prepayments shall be in minimum principal Dollar Amounts of $10,000,000.

(h) Mandatory Prepayment. If on any date the Administrative Agent notifies the Borrower that the Aggregate Exposure (determined as of the most recent Revaluation Date) shall exceed 103% of the Aggregate Committed Amount, the Borrower shall as soon as practicable, but in any event no later than five Business Days after receipt of such notice, prepay the outstanding principal amount of any Loans owing by the Borrower in an aggregate amount sufficient to reduce such sum to an amount not to exceed 100% of the Aggregate Committed Amount on such date together with any interest accrued to the date of such prepayment on the aggregate principal amount of the Borrowing prepaid. The Administrative Agent shall give prompt notice of any prepayment required under this Section 2.01(h) to the Borrower, and shall provide prompt notice to the Borrower of any such notice of required prepayment the Administrative Agent receives from any Lender. Any such prepayment shall be allocated at the Lender’s discretion.

(i) Revolving Notes. Each Lender’s Commitment Percentage of the Loans shall be evidenced by a duly executed revolving note in favor of such Lender in the form of Exhibit A attached hereto.

(j) Maximum Number of LIBOR Loans and Euribor Loans. The Borrower will be limited to a maximum number of ten (10) LIBOR Loans and Euribor Loans outstanding at any time. For purposes hereof, LIBOR Loans and Euribor Loans with separate or different Interest Periods will be considered as separate LIBOR Loans, or, as applicable, Euribor Loans even if their Interest Periods expire on the same date.

2.02 Interest.

(a) Base Rate Loans. Each Base Rate Loan shall bear interest at a rate per annum equal to the Base Rate plus the Applicable Margin.

(b) LIBOR Loans. (i) Each LIBOR Loan (other than LIBOR Loans denominated in Sterling) shall bear interest at a rate per annum equal to LIBOR plus the Applicable Margin. (ii) Each LIBOR Loan denominated in Sterling shall bear interest at a rate per annum equal to LIBOR plus the Applicable Margin, plus Mandatory Costs, if any.

 

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(c) Euribor Loans. Each Euribor Loan shall bear interest at a rate per annum equal to Euribor plus the Applicable Margin, plus Mandatory Costs, if any.

(d) 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 applicable to Base Rate Loans as provided in Section 2.02(a).

(e) Payment of Interest. Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the Commitments; provided that (i) 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 (ii) in the event of any conversion of any LIBOR Loan or Euribor Loan prior to the end of the Interest Period therefore, accrued interest on such Loan shall be payable on the effective date of such conversion. Interest with respect to each Loan shall be paid in the currency in which such Loan is denominated.

(f) Computation. All interest hereunder shall be computed on the basis of a year of 360 days, except that (i) interest computed by reference to the Base Rate at times when the 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 (ii) where the interest is to accrue in respect of any amount denominated in Sterling, interest shall be computed on the basis of a year of 365 days, 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 Base Rate, LIBOR or Euribor shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

ARTICLE III

TERMINATION AND REDUCTION OF

COMMITMENTS; FEES, TAXES, PAYMENT PROVISIONS

3.01 Termination or Reduction of Commitments.

(a) Mandatory Termination. The Commitments shall terminate on the Termination Date.

(b) Voluntary Termination. Upon at least five Business Days’ notice to the Administrative Agent and the Joint Bookrunners, but no sooner than six months after the Effective Date, the Borrower may terminate the existing Commitments; provided, however, that the existing Commitments may not be terminated so long as (i) any Loan is outstanding or (ii) any interest, fee or expenses remain unpaid.

 

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3.02 Fees.

(a) Commitment Fee. The Borrower agrees to pay to the Administrative Agent, quarterly in arrears for each Utilization Period, for the account of the Lenders ratably in accordance with their Commitment Percentage a commitment fee (the “Commitment Fee”) (i) if the Utilization is greater than or equal to 50%, at the rate of 30% of the Applicable Margin per annum for the relevant Utilization Period on the average Available Commitments for the Utilization Period or (ii) if the Utilization is less than 50%, at the rate of 40% of the Applicable Margin per annum for the relevant Utilization Period on the average Available Commitments for the Utilization Period. The Commitment Fee shall accrue from the Effective Date to the Termination Date and shall be payable in arrears on the last day in each of March, June, September, and December and on the Termination Date provided that if any day is not a Business Day, then the Commitment Fee shall be payable on the next succeeding Business Day.

(b) Joint Bookrunners Fees. The Borrower will pay to the Joint Bookrunners, for the sole account of the Joint Bookrunners, the arrangement fees (the “Joint Bookrunners Fees”) and other fees in the amounts and at the times agreed to by the Joint Bookrunners and the Borrower in the Fee Letter.

(c) Up-Front Fee. The Borrower will pay to the Administrative Agent, for the account of the Lenders, an up-front fee (the “Up-front Fee”) as agreed to by the Borrower and the Joint Bookrunners.

3.03 Computation of Fees. All fees calculated on a per annum basis shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed.

3.04 Taxes.

(a) Any and all payments by the Borrower or a Guarantor, as the case may be, to any Lender, the Joint Bookrunners or the Administrative Agent under this Agreement and the other Transaction Documents shall be made free and clear of, and without deduction or withholding for or on account of, any Taxes. In addition, the Borrower shall promptly pay all Other Taxes.

(b) Except as otherwise provided in Section 3.04(c), the Borrower and the Guarantors jointly and severally agree to indemnify and hold harmless each Lender and the Administrative Agent for the full amount of Taxes or Other Taxes (without duplication) excluding in each case United States backup withholding Taxes imposed because of payee underreporting (including any Taxes or Other Taxes (without duplication) imposed by any jurisdiction on amounts payable under this Section 3.04) paid by or assessed against any Lender or the Administrative Agent in respect of any sum payable hereunder and any liability (including penalties, interest, additions to tax and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted, except to the extent that such penalties, interest, additions to tax or expenses are incurred solely as a result of any gross negligence or willful misconduct of such Lender or Administrative Agent, as the case may be. Payment under this indemnification shall be made within 30 days after the date any Lender or the Administrative Agent makes written demand therefor, setting forth in reasonable detail the basis and calculation of such amounts (such written demand shall be presumed correct, absent significant error).

 

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(c) If the Borrower or the Guarantors, as the case may be, shall be required by law to deduct or withhold any Taxes or Other Taxes from or in respect of any sum payable hereunder to any Lender or the Administrative Agent, then:

(i) the sum payable shall be increased as necessary so that after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section 3.04, but excluding in each case United States backup withholding Taxes imposed because of payee underreporting) such Lender or the Administrative Agent receives an amount equal to the sum it would have received had no such deductions or withholdings been made; provided, that, the Borrower shall not be required to increase any amounts payable to such Lender or the Administrative Agent to the extent such increased amounts would be in excess of the amounts that would have been payable to such Lender or the Administrative Agent had such Lender or Administrative Agent complied with the requirements of Section 3.04(f) or to the extent provided in Section 3.04(g);

(ii) the Borrower or the Guarantors, as the case may be, shall make such deductions and withholdings; and

(iii) the Borrower or the Guarantors, as the case may be, shall pay the full amount deducted or withheld to the relevant taxing authority or other authority in accordance with applicable law.

(d) Within 30 days after the date of any payment by the Borrower or the Guarantors, as the case may be, of Taxes or Other Taxes, the Borrower or the Guarantors, as the case may be, shall furnish to the Administrative Agent the original or a certified copy of a receipt evidencing payment thereof or other evidence of payment reasonably satisfactory to the Administrative Agent.

(e) If the Borrower or the Guarantors, as the case may be, is required to pay additional amounts to the Administrative Agent or any Lender pursuant to Section 3.04(c) other than amounts related to the withholding of Mexican tax at the rate applicable to interest payments received by foreign financial institutions registered with the Secretaría de Hacienda y Crédito Público as a Foreign Financial Institution for the purposes of Article 195, Section I of the Mexican Income Tax law, then the Administrative Agent or such Lender shall, upon reasonable request by the Borrower or the Guarantors, use reasonable efforts (consistent with legal and regulatory restrictions) to change the jurisdiction of its Lending Office, issuing office, or office for receipt of payments by the Borrower and Guarantors hereunder, as the case may be, so as to eliminate or reduce the obligation of the Borrower or the Guarantors, as the case may be, to pay any such additional amounts which may thereafter accrue or to indemnify the Administrative Agent or such Lender in the future, if such change in the reasonable judgment of the Administrative Agent or such Lender is not otherwise disadvantageous to such Lender.

 

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(f) Each Lender and the Administrative Agent shall, from time to time at the request of the Borrower or the Administrative Agent (as the case may be), promptly furnish to the Borrower and the Administrative Agent (as the case may be), such forms, documents or other information (which shall be accurate and complete) as may be reasonably required to establish any available exemption from, or reduction in the amount of, applicable Taxes; provided, however, that none of any Lender or the Administrative Agent shall be obliged to disclose information regarding its tax affairs or computations to the Borrower in connection with this paragraph (f), it being understood that the identity of any Person shall not be considered for these purposes as information regarding its tax affairs or computations. Each of the Borrower and the Administrative Agent shall be entitled to rely on the accuracy of any such forms, documents or other information furnished to it by any Person and shall have no obligation to make any additional payment or indemnify any Person for any Taxes, interest or penalties that would not have became payable by such Person had such documentation been accurate.

(g) In the case of an assignment, transfer, grant of a participation, designation of a new Lending Office [or Administrative Agent’s Payment Office or appointment of a successor Administrative Agent], the Borrower and Guarantors shall not be required to pay or increase any amounts, pursuant to this Section 3.04 following such event, in excess of the amounts the Borrower and Guarantors were required to pay or increase immediately prior to such an event, except to the extent such event occurs pursuant to Section 3.11 or to the extent of increases in such amounts resulting from a change in applicable law occurring after such event.

(h) If the Administrative Agent or any Lender receives a refund or credit in respect of Taxes or Other Taxes as to which it has been indemnified by the Borrower or a Guarantor, as the case may be, pursuant to Section 3.04(b) and such refund or credit is directly and clearly attributable to this Agreement, it shall notify the Borrower or such Guarantor, as the case may be, of the amount of such refund or credit and shall return to the Borrower or such Guarantor, as the case may be, such refund or the benefit of such credit; provided, however, that (A) the Administrative Agent or such Lender, as the case may be, shall not be obligated to make any effort to obtain such refund or credit or to provide the Borrower or the Guarantors with any information on or justification for the arrangement of its tax affairs or otherwise disclose to the Borrower, the Guarantors or any other Person any information that it considers to be proprietary or confidential, and (B) the Borrower or such Guarantor, as the case may be, upon the request of the Administrative Agent or such Lender, as the case may be, shall return the amount of such refund or the benefit of such credit to the Administrative Agent or such Lender, as the case may be, if the Administrative Agent or such Lender, as the case may be, is required to repay the amount of such refund or the benefit of such credit to the relevant authorities within six years of the date the Borrower or such Guarantor, as the case may be, is paid such amount by the Administrative Agent or such Lender, as the case may be.

 

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(i) The agreements in this Section 3.04 shall survive the termination of this Credit Agreement and the payment of the Borrower’s Obligations.

3.05 General Provisions as to Payments.

(a) All payments to be made by the Borrower or the Guarantors, as the case may be, shall be made without set-off, counterclaim or other defense. Except as otherwise expressly provided herein, all payments by the Borrower shall be made to the Administrative Agent for the account of the Lenders at the Administrative Agent’s Payment Office, and shall be made in Dollars and in immediately available funds, no later than 3:30 p.m. (New York City time) on the dates specified herein. The Administrative Agent will promptly distribute to each Lender its Commitment Percentage (or other applicable share as expressly provided herein) of each payment in like funds as received. Any payment received by the Administrative Agent later than 3:30 p.m. (New York City time) shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue until such following Business Day.

(b) Except and to the extent otherwise specifically provided herein, whenever any payment to be made hereunder is due on a day which is not a Business Day, the date for payment thereof shall be extended to the immediately following Business Day and, if interest is stated to be payable in respect thereof, interest shall continue to accrue to such immediately following Business Day.

(c) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Lenders hereunder that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may (but shall not be so required), in reliance upon such assumption, cause to be distributed to each Lender, as the case may be, on such due date an amount equal to the amount then due to such Lender. If and to the extent that the Borrower shall not have made such payment, each Lender shall repay to the Administrative Agent forthwith on demand such amount distributed to such Lender together with accrued interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Administrative Agent, at the Federal Funds Rate; provided, however, that if any amount remains unpaid by any Lender for more than five Business Days after the Administrative Agent has made a demand for such amount, such Lender shall, commencing on the day next following such fifth Business Day, pay interest to the Administrative Agent at a rate per annum equal to the Federal Funds Rate plus 1%, and, provided further, that if any such amount remains unpaid by any Lender for more than ten Business Days, such Lender shall, commencing on the day next following such tenth Business Day, pay interest to the Administrative Agent at a rate per annum equal to the Federal Funds Rate plus 2.00%.

(d) Currency of account.

(i) Subject to paragraphs (ii) through (v) below, Dollars are the currency of account and payment for any sum due from parties under any Transaction Document.

 

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(ii) A repayment of an Obligation or a part of an Obligation shall be made in the currency in which that Obligation is denominated on its due date.

(iii) Each payment of interest shall be made in the currency in which the sum in respect of which the interest is payable was denominated when that interest accrued.

(iv) Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

(v) Any amount expressed to be payable in a currency other than Dollars shall be paid in that other currency.

(e) Change of currency.

Unless otherwise prohibited by law or regulation, if more than one currency or currency unit are at the same time recognized by the central bank of any country as the lawful currency of that country, then:

 

(A)

any reference in the Transaction Documents to, and any Obligations arising under the Transaction Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country as agreed by the Administrative Agent and the Borrower; and

 

(B)

any translation from one currency or currency unit to another shall be at the official rate of exchange recognized by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Administrative Agent (acting reasonably).

If a change in any currency of a country occurs, this Agreement will, to the extent the Administrative Agent and the Borrower deem necessary, be amended to comply with any generally accepted conventions and market practice in the relevant interbank market and otherwise to reflect the change in currency.

3.06 Funding Losses. If the Borrower makes any payment of principal with respect to any LIBOR Loan or Euribor Loan on any day other than the last day of the Interest Period applicable thereto, or if the Borrower fails to borrow any LIBOR Loans or Euribor Loans after notice has been given to any Lender in accordance with Section 2.01 or to convert or continue a Loan as a LIBOR Loan or Euribor Loan after a Notice of Extension/Conversion has been delivered by the Borrower pursuant to Section 2.01(e), or if the Borrower fails to prepay any LIBOR Loans or Euribor Loans after notice has been given pursuant to Section 2.01, the Borrower shall reimburse each Lender within 15 days after demand for any resulting loss or expense incurred by it, including any loss incurred in obtaining, liquidating or reemploying deposits bearing interest by reference to LIBOR or Euribor from third parties (“Funding

 

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Losses”), provided such Lender shall have delivered to the Borrower a certificate setting forth in reasonable detail the computations for the amount of such loss or expense, which certificate shall be conclusive in the absence of manifest error.

3.07 Basis for Determining Interest Rate Inadequate or Unfair. If on or prior to the first day of any Interest Period for any LIBOR Loan or Euribor Loan:

(a) the Administrative Agent determines that by reason of circumstances affecting the London interbank market or the European interbank market, as the case may be, reasonably adequate means do not exist for ascertaining LIBOR or Euribor applicable to such Interest Period or that deposits in Dollars (in the applicable amounts) are not being offered in the London interbank market or the European interbank market, as the case may be, for such Interest Period, or

(b) the Required Lenders advise the Administrative Agent that LIBOR or Euribor as determined by the Administrative Agent will not adequately and fairly reflect the cost to any Lender of making or maintaining its Loan for such Interest Period,

(c) then the Administrative Agent shall forthwith give notice thereof to the Borrower and the Lenders. In the event of any such determination or advice, until the Administrative Agent shall have notified the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, any request by the Borrower for a Loan of the affected amount or Interest Period, or a conversion to or continuation of a Loan of the affected amount or Interest Period shall be deemed rescinded and such request shall instead be considered a request for a Base Rate Loan. Each determination by the Administrative Agent hereunder shall be conclusive absent manifest error.

3.08 Capital Adequacy.

If any Lender has determined, after the date hereof, that the adoption or the becoming effective of, or any change in, or any change by any Governmental Authority, central bank, or comparable agency charged with the interpretation or administration thereof in the interpretation or administration of, any applicable law, rule, or regulation regarding capital adequacy, or compliance by such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank, or comparable agency, has or would have the effect of increasing such Lender’s cost of maintaining its Commitment or making or maintaining any Loans or reducing the rate of return on such Lender’s capital or assets as a consequence of its commitments or obligations hereunder to a level below that which such Lender could have achieved but for such adoption, effectiveness, change, or compliance (taking into consideration such Lender’s policies with respect to capital adequacy), then, upon notice from such Lender to the Borrower, the Borrower shall be obligated to pay to such Lender such additional amount or amounts as will compensate such Lender for such increased cost or reduction in amount received. Each determination by any such Lender of amounts owing under this Section shall, absent manifest error, be conclusive and binding on the parties hereto. The relevant Lender will, upon request, provide a certificate in reasonable detail as to the amount of such increased cost or reduction in amount received and method of calculation.

 

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Upon any Lender’s making a claim for compensation under this Section 3.08, (i) such Lender shall use commercially reasonable efforts (consistent with legal and regulatory restrictions) to change the jurisdiction of its Lending Office or assign its rights and obligations hereunder to another of its offices, branches or affiliates so as to eliminate or reduce any such additional payment by the Borrower which may thereafter accrue, if such change is not otherwise disadvantageous to such Lender, and (ii) the Borrower may replace such Lender in accordance with Section 3.11.

3.09 Illegality.

(a) Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof occurring after the Effective Date shall make it unlawful for any Lender to make or maintain any Commitment or any Loan as contemplated by this Agreement, then such Lender, together with Lenders giving notice under Section 3.07, shall be an “Affected Lender” and by written notice to the Borrower and to the Administrative Agent:

(i) such Lender may declare that such Loans will not thereafter (for the duration of such unlawfulness or impossibility) be made by such Lender hereunder, whereupon, in the case of any request for a LIBOR Loan or a Euribor Loan, as to such Lender, such request shall only be deemed a request for a Base Rate Loan (unless it should also be illegal for the Affected Lender to provide a Base Rate Loan, in which case such Loan shall bear interest at a commensurate rate to be agreed upon by the Administrative Agent and the Affected Lender, and so long as no Event of Default shall have occurred and be continuing, the Borrower), unless such declaration shall be subsequently withdrawn;

(ii) such Lender may require that all outstanding LIBOR Loans and Euribor Loans, made by it be converted to Base Rate Loans, in which event all such LIBOR Loans and Euribor Loans shall be automatically converted to Base Rate Loans as of the effective date of such notice as provided in paragraph (b) below; and

(iii) if it is also illegal for the Affected Lender to make Base Rate Loans, such Lender may declare all amounts owed to them by the Borrower to the extent of such illegality to be due and payable; provided, however, the Borrower has the right, with the consent of the Administrative Agent to find an additional Lender to purchase the Affected Lenders’ rights and obligations.

In the event any Lender shall exercise its rights under (i) or (ii) above with respect to any Loans, all payments and prepayments of principal that would otherwise have been applied to repay the LIBOR Loans or the Euribor Loans that would have been made by such Lender or the converted LIBOR Loans or the converted Euribor Loans of such Lender shall instead be applied to repay the Base Rate Loans made by such Lender in lieu of, or resulting from the conversion, of such LIBOR Loans or Euribor Loans.

 

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(b) For purposes of this Section 3.09, a notice to the Borrower by any Lender shall be effective as to each such Loan, if lawful, on the last day of the Interest Period currently applicable to such Loan; in all other cases such notice shall be effective on the date of receipt by the Borrower.

3.10 Requirements of Law.

If, after the date hereof, the adoption of or any change in any Requirement of Law or in the interpretation or application thereof applicable to any Lender, or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority, in each case made subsequent to the Effective Date (or, if later, the date on which such Lender becomes a Lender):

(a) shall impose, modify, or hold applicable any reserve, special deposit, compulsory loan, or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans, or other extensions of credit by, or any other acquisition of funds by, any office of such Lender that is not otherwise included in the determination of LIBOR or Euribor hereunder; or

(b) shall impose on such Lender any other condition (excluding any tax of any kind whatsoever);

and the result of any of the foregoing is to increase the cost to such Lender, by an amount that such Lender reasonably deems to be material, of making, converting into, continuing, or maintaining LIBOR Loans or Euribor Loans or to reduce any amount receivable hereunder in respect thereof, then, in any such case, upon notice delivered to the Borrower from such Lender, through the Administrative Agent, in accordance herewith, the Borrower shall be obligated to promptly pay such Lender, upon its demand, any additional amounts necessary to compensate such Lender for such increased cost or reduced amount receivable; provided that, in any such case, the Borrower may elect to convert the LIBOR Loans and Euribor Loans made by such Lender hereunder to Base Rate Loans by giving the Administrative Agent at least one (1) Business Day’s notice of such election. If any Lender becomes entitled to claim any additional amounts pursuant to this Section, it shall provide notice thereof to the Borrower, promptly upon occurrence of such event, but in any case within three (3) days from the date of such event, through the Administrative Agent, certifying (x) that one of the events described in this paragraph (a) has occurred and describing in reasonable detail the nature of such event, (y) as to the increased cost or reduced amount resulting from such event and (z) as to the additional amount demanded by such Lender and a reasonably detailed explanation of the calculation thereof. Such a certificate as to any additional amounts payable pursuant to this subsection submitted by such Lender, through the Administrative Agent, to the Borrower shall be conclusive and binding on the parties hereto in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. If any Lender becomes aware of a proposed change in any Requirement of Law that would entitle it to claim any additional amounts pursuant to this Section it shall promptly, upon the Lender becoming aware of such event, provide notice to the Borrower through the Administrative Agent.

 

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3.11 Substitute Lenders. If any Lender has demanded compensation (or if the Borrower is required to increase amounts payable hereunder) pursuant to Sections 3.04, 3.08, or 3.10 or has exercised its rights pursuant to Section 3.09(a)(iii), and such Lender does not waive its right to future additional compensation pursuant to Sections 3.04, 3.08 or 3.10, the Borrower shall have the right (i) to replace such Lender with a Substitute Lender or Substitute Lenders that shall succeed to the rights of such Lender under this Agreement upon execution of an Assignment and Assumption Agreement and payment by the Borrower of the related processing fee of U.S.$3,500 to the Administrative Agent; or (ii) to remove such Lender, reduce the Commitments by the amount of the Commitment of such Lender, and adjust the Commitment Percentage of each Lender such that the percentage of each other Lender shall be increased to equal the percentage equivalent of a fraction. The numerator of which is the Commitment of such other Lender and the denominator of which is the Commitments of the Lenders minus the Commitments of the Lender who demanded payment pursuant to Sections 3.04, 3.08 or 3.10 or exercised its rights pursuant to Section 3.09(a)(iii); provided, however, that such Lender shall not be replaced or removed hereunder until such Lender has been repaid in full all amounts owed to it pursuant to this Agreement and the other Transaction Documents (including Sections 3.06 and 3.08) unless any such amount is being contested by the Borrower in good faith.

3.12 Sharing of Payments, Etc.

(a) If, other than as expressly provided elsewhere herein, any Lender shall obtain on account of the Obligations owing to it any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) in excess of its Commitment Percentage of payments on account of the Obligations obtained by all the Lenders (an “excess payment”), such Lender shall forthwith (i) notify the Administrative Agent of such fact, and (ii) purchase from the other Lenders such participations in such Obligations owing to them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender, such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender’s Commitment Percentage (according to the proportion of (A) the amount of such paying Lender’s required repayment to (B) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Administrative Agent will keep records (which shall be conclusive and binding in the absence of demonstrable error) of participations purchased pursuant to this Section 3.12 and will in each case notify the Lenders following any such purchases.

(b) If any Lender shall commence any action or proceeding in any court to enforce its rights hereunder after consultation with the other Lenders and, as a result thereof or in connection therewith, it shall receive any excess payment, then such Lender shall not be required to share any portion of such excess payment with any Lender which has the legal right to, but does not, join in any such action or proceeding or commence and diligently prosecute a separate action or proceeding to enforce its rights in another court.

 

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(c) The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 3.12 may exercise all its rights of set-off with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.

ARTICLE IV

CONDITIONS PRECEDENT

4.01 Conditions to Effectiveness. The obligations of the Lenders under this Agreement are subject to the satisfaction or waiver of the following conditions precedent (the date on which all such conditions precedent are satisfied or waived being the “Effective Date”):

(a) Agreement. The Administrative Agent shall have received counterparts of this Agreement duly executed by each party hereto and there shall have been delivered to the Administrative Agent for the account of each Lender a Note executed by the Borrower.

(b) Opinions of Borrower’s and each Guarantor’s Counsel. The Administrative Agent shall have received (i) the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, New York counsel to the Borrower and the Guarantors, in substantially the form of Exhibit E, and (ii) the opinion of Lic. Ramiro G. Villareal Morales, Mexican counsel to the Borrower, in substantially the form of Exhibit F.

(c) Opinion of Counsel to the Administrative Agent. The Administrative Agent shall have received (i) a favorable opinion of Ritch, Heather y Mueller, S.C., special Mexican counsel to the Administrative Agent and the Lenders, and (ii) the opinion of Sullivan & Cromwell LLP, New York counsel to the Lenders.

(d) Governmental Approvals. The Administrative Agent shall have received certified copies of any and all necessary approvals, authorizations, or consents of, or notices to, or registrations with any Governmental Authority required for the Borrower and each Guarantor to enter into, or perform its obligations under, the Transaction Documents.

(e) Organizational Documents of the Borrower and the Guarantors. The Administrative Agent shall have received certified copies of (i) the acta constitutiva and estatutos sociales in effect on the Effective Date of the Borrower and each Guarantor, (ii) the powers-of-attorney of each Person executing any Transaction Document on behalf of the Borrower and each Guarantor, together with specimen signatures of such Person and (iii) all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to the authorization for the execution, delivery and performance of each such Transaction Document and the transactions contemplated hereby and thereby. All certificates shall state that the resolutions or other information referred to in such certificates have not been amended, modified, revoked or rescinded as of the date of such certificates (which shall not be earlier than five Business Days before the Effective Date).

 

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(f) Agent for Service of Process. The Administrative Agent shall have received a power of attorney, notarized under Mexican law, granted by the Borrower and each Guarantor to the Process Agent in respect of the Transaction Documents together with evidence that the Process Agent has accepted its appointment as Process Agent pursuant to Section 13.12.

(g) Fees and Expenses. The Borrower shall have paid all fees and expenses owing to the Lenders, the Joint Bookrunners and the Administrative Agent to the extent of and payable on or before the Effective Date of the Agreement, and all other fees and expenses owing hereunder and under the Fee Letter to the extent due and payable on or before the Effective Date of the Agreement.

(h) No Default. No Default or Event of Default shall have occurred and be continuing either prior to or after giving effect to the transactions contemplated on the Effective Date, and the Borrower and each Guarantor shall have provided a certificate from a Responsible Officer of the Borrower to such effect to the Administrative Agent.

(i) Representations and Warranties. The representations and warranties of the Borrower and of each Guarantor contained in this Agreement and each other Transaction Document shall be true on and as of the Effective Date, and the Borrower and each Guarantor shall have provided a certificate to such effect to the Administrative Agent.

(j) No Material Adverse Effect. No Material Adverse Effect shall have occurred since December 31, 2004 and there shall have occurred no circumstance and/or event of a financial, political or economic nature in Mexico that has a reasonable likelihood of having a material adverse effect on the ability of the Borrower or the Guarantors to perform their obligations under this Agreement and the other Transaction Documents; for the avoidance of doubt, the fact that the Borrower has acquired the shares of RMC Group p.l.c. shall not itself be deemed to have been a Material Adverse Effect.

(k) Other Documents. The Administrative Agent shall have received such other certificates, powers of attorney and other documents and undertakings relating to the authority for, and the execution, delivery and validity of, the Transaction Documents, as may be reasonably requested by the Administrative Agent or any Lender through the Administrative Agent.

(l) Fees, Costs and Expenses under the Term Credit Agreement. The Borrower shall have paid all accrued and unpaid fees payable under the Term Credit Agreement to the extent due and payable on or before the Effective Date of this Agreement.

(m) Term Credit Agreement. The Term Credit Agreement shall have been cancelled or terminated in accordance with its respective terms; any promissory notes issued thereunder shall have been cancelled or returned to the Borrower; and all outstanding indebtedness for money borrowed under the Term Credit Agreement shall have been, or will be simultaneously with the Borrowings hereunder, repaid in full. The parties hereto agree that a Notice of Borrowing may be given under this Agreement simultaneously to repay all outstanding obligations under the Term Credit Agreement.

 

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4.02 Conditions Precedent to Borrowings and Continuation or Conversion of the Loans. The obligation of any Lender to make a Loan on the occasion of any Borrowing or to continue or convert any Loan is subject to the satisfaction of the following conditions:

(a) Notices. In the case of Borrowings, continuance or conversion of Loans, the Administrative Agent shall have received a Notice of Borrowing or a Notice of Extension/Conversion as required by Section 2.01(c) or 2.01(e), respectively;

(b) Availability. Immediately after such Borrowing or the continuation or conversion of any Loan, the Total Outstandings for such Lender shall not exceed the Commitment of such Lender;

(c) No Default. Immediately before and after giving effect to such Borrowing or the continuation or conversion of any Borrowing, no Default or Event of Default shall have occurred and be continuing and such Borrowing or continuation or conversion of any Loan will not cause or result in a Default or Event of Default; and

(d) Representations and Warranties. The representations and warranties of the Borrower contained in this Agreement and in each other Transaction Document and of each Guarantor contained in this Agreement shall be true and correct in all material respects on and as of the date of any Borrowing or continuation or conversion of any Loan.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE BORROWER

The Borrower represents and warrants that:

5.01 Corporate Existence and Power. .

(a) The Borrower is a corporation (sociedad anónima de capital variable) duly incorporated, validly existing and in good standing under the laws of Mexico and has all requisite corporate power and authority (including all governmental licenses, permits and other approvals except for such licenses, permits and approvals the absence of which will not have a Material Adverse Effect) to own its assets and carry on its business as now conducted and as proposed to be conducted.

(b) All of the outstanding stock of the Borrower has been validly issued and is fully paid and non-assessable.

5.02 Power and Authority; Enforceable Obligations.

(a) The execution, delivery and performance by the Borrower of each Transaction Document to which it is or will be a party, and the consummation of the transactions contemplated hereby and thereby, are within the Borrower’s corporate powers and have been duly authorized by all necessary corporate action pursuant to the estatutos sociales of the Borrower.

 

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(b) This Agreement and the other Transaction Documents to which the Borrower is a party have been duly executed and delivered by the Borrower and constitute the legal, valid and binding obligations of the Borrower enforceable in accordance with their respective terms, except as enforceability may be limited by applicable concurso mercantil, bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally or general equity principles.

5.03 Compliance with Law and Other Instruments. The execution, delivery of and performance under this Agreement and each of the other Transaction Documents to which the Borrower is a party and the consummation of the transactions herein or therein contemplated, and compliance with the terms and provisions hereof and thereof, do not and will not (a) conflict with, or result in a breach or violation of, or constitute a default under, or result in the creation or imposition of any Lien upon the assets of the Borrower pursuant to, any Contractual Obligation of the Borrower or (b) result in any violation of the estatutos sociales of the Borrower or any provision of any Requirement of Law applicable to the Borrower.

5.04 Consents/Approvals. No order, permission, consent, approval, license, authorization, registration or validation of, or notice to or filing with, or exemption by, any Governmental Authority or third party is required to authorize, or is required in connection with, the execution, delivery and performance by the Borrower of this Agreement and the other Transaction Documents to which the Borrower is a party or the taking of any action contemplated hereby or by any other Transaction Document.

5.05 Financial Information. The consolidated balance sheet of the Borrower and its Subsidiaries as at December 31, 2004, and the related consolidated statements of income and cash flows of the Borrower and its Subsidiaries for the fiscal year then ended, accompanied by an opinion of KPMG Cardenas Dosal, S.C., independent public accountants, and the consolidated balance sheet of the Borrower and its Subsidiaries as at March 31, 2005, and the related consolidated statements of income and cash flows of the Borrower and its Subsidiaries for the three months then ended, duly certified by the chief financial officer of the Borrower, copies of which have been furnished to each Lender, fairly present, subject, in the case of said balance sheet as at March 31, 2005, and said statements of income and cash flows for the three months then ended, to year-end audit adjustments, the consolidated financial condition of the Borrower and its Subsidiaries as at such dates and the consolidated results of the operations of the Borrower and its Subsidiaries for the periods ended on such dates, all in accordance with Mexican GAAP, consistently applied.

5.06 Litigation. Except as set forth in Schedule 5.06, there is no pending or threatened action, suit, investigation, litigation or proceeding, including any Environmental Action, affecting the Borrower or any of its Subsidiaries before any court, Governmental Authority or arbitrator that (a) would be reasonably likely to have a Material Adverse Effect or (b) purports to affect the legality, validity or enforceability of any Transaction Document or the consummation of the transactions contemplated thereby, and there has been no adverse change in the status, or financial effect on the Borrower or any of its Subsidiaries, of the litigation described in Schedule 5.06.

 

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5.07 No Immunity. The Borrower is subject to civil and commercial law with respect to its obligations under this Agreement and each other Transaction Document to which it is a party and the execution, delivery and performance of this Agreement or any such other Transaction Document by the Borrower constitute private and commercial acts rather than public or governmental acts. Under the laws of Mexico neither the Borrower nor any of its property has any immunity from jurisdiction of any court or any legal process (whether through service or notice, attachment prior to judgment or attachment in aid of execution).

5.08 Governmental Regulations. The Borrower is not, and is not controlled by, (a) an “investment company” within the meaning of the United States Investment Company Act of 1940, as amended or (b) a “holding company”, or of a “subsidiary company” of a “holding company”, or an “affiliate” of a “holding company” or of a “subsidiary” of a “holding company”, within the meaning of the Public Utility Holding Company Act of 1935, as amended.

5.09 Direct Obligations; Pari Passu; Liens.

(a)(i) This Agreement constitutes a direct, unconditional unsubordinated and unsecured obligation of the Borrower, and (ii) the Loans, when made, will constitute direct, unconditional unsubordinated and unsecured obligations of the Borrower.

(b) The obligations of the Borrower under this Agreement and the Loans rank and will rank in priority of payment at least pari passu with all other senior unsecured Debt of the Borrower.

(c) There are no Liens on the property of the Borrower or any of its Subsidiaries other than Permitted Liens.

5.10 Subsidiaries. As of March 31, 2005, all Material Subsidiaries of the Borrower are listed on Schedule 5.10, without giving effect to the acquisition of RMC Group p.l.c.

5.11 Ownership of Property. (a) Except as, in the aggregate, could not reasonably be expected to have a Material Adverse Effect, each of the Borrower and its Subsidiaries has title in fee simple to, or a valid leasehold interest in, all its real property, and good title to, or a valid leasehold interest in, all its other property, and none of such property is subject to any Lien except Permitted Liens and (b) each Credit Party maintains insurance as required by Section 7.05.

5.12 No Recordation Necessary.

(a) This Agreement and the Notes are in proper legal form under the law of Mexico for the enforcement thereof against the Borrower under the law of Mexico. To ensure the legality, validity, enforceability or admissibility in evidence of this Agreement and each other Transaction Document in Mexico, it is not necessary that this Agreement or any other Transaction Document be filed or recorded with any Governmental Authority

 

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in Mexico or that any stamp or similar tax be paid on or in respect of this Agreement or any other document to be furnished under this Agreement, unless such stamp or similar taxes have been paid by the Borrower; provided, however, that in the event any legal proceedings are brought in the courts of Mexico, an official Spanish translation of the documents required in such proceedings, including this Agreement, would have to be approved by the court after the defendant is given an opportunity to be heard with respect to the accuracy of the translation, and proceedings would thereafter be based upon the translated documents.

(b) It is not necessary (i) in order for the Administrative Agent or any Lender to enforce any rights or remedies under the Transaction Documents or (ii) solely by reason of the execution, delivery and performance of this Agreement by the Administrative Agent or any Lender, that the Administrative Agent or such Lender be licensed or qualified with any Mexican Governmental Authority or be entitled to carry on business in Mexico.

5.13 Taxes.

(a) Each Obligor has filed all material tax returns which are required to be filed by it and has paid all taxes due pursuant to such returns or pursuant to any material assessment received by the Borrower, except where the same may be contested in good faith by appropriate proceedings and as to which such Obligor maintains reserves to the extent it is required to do so by law or pursuant to Mexican GAAP. The charges, accruals and reserves on the books of each Obligor in respect of taxes or other governmental charges are, in the opinion of the Borrower, adequate.

(b) Except for tax imposed by way of withholding on interest, fees and commissions remitted from Mexico, there is no tax (other than taxes on, or measured by, income or profits), levy, impost, deduction, charge or withholding imposed, levied, charged, assessed or made by or in Mexico or any political subdivision or taxing authority thereof or therein either (i) on or by virtue of the execution or delivery of this Agreement or any of the other Transaction Documents or (ii) on any payment to be made by the Borrower pursuant to this Agreement or any of the other Transaction Documents. The Borrower and each Guarantor is permitted to pay any additional amounts payable pursuant to Section 3.04.

5.14 Compliance with Laws. The Borrower and its Subsidiaries are in compliance in all material respects with all applicable Requirements of Law (including with respect to the licenses, certificates, permits, franchises, and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, antitrust laws or Environmental Laws and the rules and regulations and laws with respect to social security, workers’ housing funds, and pension funds obligations), except where the failure to so comply would not have a Material Adverse Effect.

5.15 Absence of Default. No Default or Event of Default has occurred and is continuing.

 

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5.16 Full Disclosure. All information heretofore furnished by the Borrower to the Administrative Agent, the Joint Bookrunners or any Lender for purposes of or in connection with this Agreement or any transaction contemplated hereby (other than projections and other “forward-looking” information that have been prepared on a reasonable basis and in good faith by the Borrower) is, and all such information hereafter furnished by the Borrower to the Administrative Agent, the Joint Bookrunners or any Lender will be, true and accurate in all material respects on the date as of which such information is stated or certified and does not omit to state any material fact necessary in order to make the statements contained herein or therein, taken as a whole, not misleading. The Borrower has disclosed to the Lenders in writing any and all facts which may have a Material Adverse Effect.

5.17 Choice of Law; Submission to Jurisdiction and Waiver of Sovereign Immunity. In any action or proceeding involving the Borrower arising out of or relating to this Agreement in any Mexican court or tribunal, any Lender, the Joint Bookrunners and the Administrative Agent would be entitled to the recognition and effectiveness of the choice of law, submission to jurisdiction and waiver of sovereign immunity provisions of Sections 13.10, 13.11 and 13.13.

5.18 Aggregate Exposure. The Aggregate Exposure does not exceed the Aggregate Committed Amount.

5.19 Pension and Welfare Plans. During the consecutive twelve-month period prior to the date of the execution and delivery of this Agreement and prior to the date of any Borrowing hereunder, no steps have been taken to terminate any Pension Plan, and no contribution failure has occurred with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA. No condition exists or event or transaction has occurred with respect to any Pension Plan which would reasonably be expected to result in the incurrence by any Credit Party, any of its Subsidiaries, or any its ERISA Affiliates of any material liability (other than liabilities incurred in the ordinary course of maintaining the Pension Plan), fine or penalty. No Credit Party, nor any of its Subsidiaries, has any contingent liability with respect to any post-retirement benefit under a Welfare Plan which would reasonably be expected to have a Material Adverse Effect, other than liability for continuation coverage described in Part 6 of Title I of ERISA.

5.20 Environmental Matters.

Except as would not have or be reasonably expected to have a Material Adverse Effect:

(a) Each of the properties owned or leased by a Credit Party or any of its Subsidiaries (the “Real Properties”) and all operations at the Real Properties are in compliance with all applicable Environmental Laws, and there is no violation of any Environmental Law with respect to the Real Properties or the businesses operated by the Credit Parties or any of their Subsidiaries (the “Businesses”), and there are no conditions relating to the Businesses or Real Properties that would reasonably be expected to give rise to liability under any applicable Environmental Laws.

 

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(b) No Credit Party has received any written notice of, or inquiry from any Governmental Authority regarding, any violation, alleged violation, non-compliance or liability regarding Hazardous Materials or compliance with Environmental Laws with regard to any of the Real Properties or the Businesses, nor, to the knowledge of a Credit Party or any of its Subsidiaries, is any such notice being threatened.

(c) Hazardous Materials have not been transported or disposed of from the Real Properties, or generated, treated, stored or disposed of at, on or under any of the Real Properties or any other location, in each case by, or on behalf or with the permission of, a Credit Party or any of its Subsidiaries in a manner that would give rise to liability under any applicable Environmental Laws.

(d) No judicial proceeding or governmental or administrative action is pending or, to the knowledge of a Credit Party or any of its Subsidiaries, threatened, under any Environmental Law to which a Credit Party or any of its Subsidiaries is or will be named as a party, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding under any Environmental Law with respect to a Credit Party or any of its Subsidiaries, the Real Properties or the Businesses.

(e) There has been no release (including disposal) or to the Borrower’s knowledge, threat of release of Hazardous Materials at or from the Real Properties, or arising from or related to the operations of a Credit Party or any of its Subsidiaries in connection with the Real Properties or otherwise in connection with the Businesses where such release constituted a violation of, or would give rise to liability under, any applicable Environmental Laws.

(f) None of the Real Properties contains any Hazardous Materials at, on or under the Real Properties in amounts or concentrations that, if released, constitute a violation of, or could give rise to liability under, Environmental Laws.

(g) No Credit Party, nor any of its Subsidiaries, has assumed any liability of any Person (other than another Credit Party or one of its Subsidiaries) under any Environmental Law.

(h) This Section 5.20 constitutes the only representations and warranties of the Credit Parties with respect to any Environmental Law or Hazardous Substance.

5.21 Margin Regulations. No part of the proceeds of the Loans hereunder will be used, directly or indirectly, for the purpose of purchasing or carrying any “margin stock” within the meaning of Regulation U, or for the purpose of purchasing or carrying or trading in any securities. If requested by any Lender or the Administrative Agent, the Borrower will furnish to the Administrative Agent and each Lender a statement to the foregoing effect in conformity with the requirements of FR Form U-1 referred to in said Regulation U. No indebtedness being reduced or retired out of the proceeds of the Loans hereunder was or will be incurred for the purpose of purchasing or carrying any margin stock within the meaning of Regulation U or any “margin security” within the meaning of Regulation T. “Margin stock”

 

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within the meaning of Regulation U does not constitute more than 25% of the value of the consolidated assets of the Borrower and its Subsidiaries. Neither the execution and delivery hereof by the Borrower, nor the performance by it of any of the transactions contemplated by this Agreement (including the direct or indirect use of the proceeds of the Loans) will violate or result in a violation of the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or regulations issued pursuant thereto, or Regulation T, U, or X.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE GUARANTORS

Each of the Guarantors separately represents and warrants that:

6.01 Corporate Existence and Power.

(a) Such Guarantor is a corporation (sociedad anónima de capital variable) duly incorporated, validly existing and in good standing under the laws of Mexico and has all requisite corporate power and authority (including all governmental licenses, permits and other approvals except for such licenses, permits and approvals the absence of which will not have a Material Adverse Effect) to own its assets and carry on its business as now conducted and as proposed to be conducted.

(b) All of the outstanding stock of such Guarantor has been validly issued and is fully paid and non-accessible.

6.02 Power and Authority; Enforceable Obligations.

(a) The execution, delivery and performance by such Guarantor of each Transaction Document to which it is or will be a party, and the consummation of the transactions contemplated hereby and thereby, are within such Guarantor’s corporate powers and have been duly authorized by all necessary corporate action pursuant to the estatutos sociales of such Guarantor.

(b) This Agreement and the other Transaction Documents to which such Guarantor is a party have been duly executed and delivered by such Guarantor and constitute legal, valid and binding obligations of such Guarantor enforceable in accordance with their respective terms, except as enforceability may be limited by applicable concurso mercantil, bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally or general equity principals.

6.03 Compliance with Law and Other Instruments. The execution, delivery and performance of this Agreement and any of the other Transaction Documents to which such Guarantor is a party and the consummation of the transactions herein or therein contemplated, and compliance with the terms and provisions hereof and thereof, do not and will not (a) conflict with, or result in a breach or violation of, or constitute a default under, or result in the creation or imposition of any Lien upon the assets of such Guarantor pursuant to, any Contractual Obligation of such Guarantor or (b) result in any violation of the estatutos sociales of such Guarantor or any provision of any Requirement of Law applicable to such Guarantor.

 

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6.04 Consents/Approvals. No order, permission, consent, approval, license, authorization, registration or validation of, or notice to or filing with, or exemption by, any Governmental Authority or third party is required to authorize, or is required in connection with, the execution, delivery and performance by such Guarantor of this Agreement and the other Transaction Documents to which such Guarantor is a party or the taking of any action contemplated hereby or by any other Transaction Document.

6.05 Litigation; Material Adverse Effect. Except as set forth in Schedule 6.05, there is no pending or threatened action, suit, investigation, litigation or proceeding, including any Environmental Action, affecting the Borrower or any of its Subsidiaries before any court, Governmental Authority or arbitrator that (i) would be reasonably likely to have a Material Adverse Effect or (ii) purports to affect the legality, validity or enforceability of any Transaction Document or the consummation of the transactions contemplated thereby, and there has been no adverse change in the status, or financial effect on the Borrower or any of its Subsidiaries, of the litigation described in Schedule 6.05.

6.06 No Immunity. Such Guarantor is subject to civil and commercial law with respect to its obligations under this Agreement and each other Transaction Document to which it is a party and the execution, delivery and performance of this Agreement or any such other Transaction Document by such Guarantor constitute private and commercial acts rather than public or governmental acts. Under the laws of Mexico neither such Guarantor nor any of its property has any immunity from jurisdiction of any court or any legal process (whether through service or notice, attachment prior to judgment or attachment in aid of execution).

6.07 Governmental Regulations. Such Guarantor is not, and is not controlled by, (a) an “investment company” within the meaning of the United States Investment Company Act of 1940, as amended or (b) a “holding company”, or a “subsidiary company” of a “holding company”, or an “affiliate” of a “holding company” or of a “subsidiary” of a “holding company”, within the meaning of the Public Utility Holding Company Act of 1935, as amended.

6.08 Direct Obligations; Pari Passu.

(a) This Agreement constitutes a direct, unconditional unsubordinated and unsecured obligation of such Guarantor.

(b) The obligations of such Guarantor under this Agreement rank and will rank in priority of payment at least pari passu with all other senior unsecured Debt of such Guarantor.

6.09 No Recordation Necessary. This Agreement is in proper legal form under the law of Mexico for the enforcement thereof against such Guarantor under the law of Mexico. To ensure the legality, validity, enforceability or admissibility in evidence of this Agreement and each other Transaction Document in Mexico, it is not necessary that this Agreement or any other Transaction Document be filed or recorded with any Governmental Authority in Mexico or that any stamp or similar tax be paid on or in respect of this Agreement or any other document to be furnished under this Agreement unless such stamp or similar taxes have been paid by the Borrower or the Guarantors; provided, however, that in the event any legal proceedings are

 

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brought in the courts of Mexico, an official Spanish translation of the documents required in such proceedings, including this Agreement, would have to be approved by the court after the defendant is given an opportunity to be heard with respect to the accuracy of the translation, and proceedings would thereafter be based upon the translated documents.

6.10 Choice of Law; Submission to Jurisdiction and Waiver of Sovereign Immunity. In any action or proceeding involving such Guarantor arising out of or relating to this Agreement in any Mexican court or tribunal, the Lenders, the Joint Bookrunners and the Administrative Agent would be entitled to the recognition and effectiveness of the choice of law, submission to jurisdiction and waiver of sovereign immunity provisions of Sections 13.10, 13.11 and 13.13.

ARTICLE VII

AFFIRMATIVE COVENANTS

The Borrower covenants and agrees that for so long as any Obligation under this Agreement or any other Transaction Document remains unpaid or any Lender has any Commitment hereunder:

7.01 Financial Reports and Other Information. The Borrower will deliver to the Administrative Agent (with a copy for each Lender):

(a) as soon as available and in any event within 120 days after the end of each fiscal year of the Borrower, a copy of the annual audit report for such year for the Borrower and its Subsidiaries containing consolidated and consolidating balance sheets of the Borrower and its Subsidiaries, as of the end of such fiscal year and consolidated statements of income and cash flows of the Borrower and its Subsidiaries, for such fiscal year, in each case accompanied by an opinion acceptable to the Required Lenders by KPMG Cardenas Dosal, S.C. or other independent public accountants of recognized standing acceptable to the Required Lenders, together with (i) a certificate of such accounting firm to the Lenders stating that in the course of the regular audit of the business of the Borrower and its Subsidiaries, which audit was conducted by such accounting firm in accordance with Mexican GAAP, such accounting firm has obtained no knowledge that a Default or Event of Default has occurred and is continuing, or if, in the opinion of such accounting firm a Default or Event of Default has occurred and is continuing, a statement as to the nature thereof and (ii) a certificate of a Responsible Officer of the Borrower, stating that no Default or Event of Default has occurred and is continuing or, if a Default or Event of Default has occurred and is continuing, a statement as to the nature thereof and the action that the Borrower has taken and proposes to take with respect thereto; provided that in the event of any change in the Mexican GAAP used in the preparation of such financial statements, the Borrower shall also provide, for informational purposes only, a statement of reconciliation conforming such financial statements to Mexican GAAP consistent with those applied in the preparation of the financial statements referred to in Section 5.05 and provided further that all such documents will be prepared in English; and

 

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(b) as soon as available and in any event within 60 days after the end of each of the first three quarters of each fiscal year of the Borrower, consolidated balance sheets of the Borrower and its Subsidiaries, as of the end of such quarter and consolidated statements of income and cash flows of the Borrower and its Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, duly certified (subject to year-end audit adjustments) by any Responsible Officer of the Borrower as having been prepared in accordance with Mexican GAAP and together with a certificate of a Responsible Officer of the Borrower, as to compliance with the terms of this Agreement and stating that no Default or Event of Default has occurred and is continuing or, if a Default or Event of Default has occurred and is continuing, a statement as to the nature thereof and the action that the Borrower has taken and proposes to take with respect thereto; provided that in the event of any change in the Mexican GAAP used in the preparation of such financial statements, the Borrower shall also provide, for informational purposes only, a statement of reconciliation conforming such financial statements to Mexican GAAP consistent with those applied in the preparation of the financial statements referred to in Section 5.05 and provided further that all such documents will be prepared in English; and

(c) Together with the financials delivered pursuant to Section 7.01(b) with respect to the fiscal quarter ended June 30, 2005 only, a schedule of all Material Subsidiaries of the Borrower, after giving effect to the acquisition of RMC Group p.l.c.

7.02 Notice of Default and Litigation. The Borrower will furnish to the Administrative Agent (and the Administrative Agent will notify each Lender):

(a) as soon as practicable and in any event within five days after the occurrence of each Default or Event of Default continuing on the date of such statement, a statement of the chief financial officer of the Borrower setting forth details of such Default or Event of Default and the action that the Borrower has taken and proposes to take with respect thereto; and

(b) promptly after the commencement thereof, notice of all litigation, actions, investigations and proceedings before any court, Governmental Authority or arbitrator affecting the Borrower or any of its Subsidiaries of the type described in Section 5.06 or the receipt of written notice by the Borrower or any of its subsidiaries of potential liability or responsibility for violation, or alleged violation of any federal, state or local law, rule or regulation (including Environmental Laws) the violation of which could reasonably be expected to have a Material Adverse Effect.

7.03 Compliance with Laws and Contractual Obligations, Etc. The Borrower will comply, and cause each of its Subsidiaries to comply, in all material respects, with all applicable Requirements of Law (including with respect to the licenses, approvals, certificates, permits, franchises, notices, registrations and other governmental authorizations necessary to the ownership of its respective properties or to the conduct of its respective business, antitrust laws or Environmental Laws and laws with respect to social security and pension funds obligations) and all material Contractual Obligations, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect.

 

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7.04 Payment of Obligations. The Borrower will pay and discharge, and cause each of its Subsidiaries to pay and discharge, before the same shall become delinquent, (a) all taxes, assessments and governmental charges or levies assessed, charged or imposed upon it or upon its property and (b) all lawful claims that, if unpaid, might by law become a Lien upon its property, except where the failure to make such payments or effect such discharges could not reasonably be expected to have a Material Adverse Effect; provided, however, that neither the Borrower nor any of its Subsidiaries shall be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained, unless and until any Lien resulting therefrom attaches to its property and becomes enforceable against its other creditors.

7.05 Maintenance of Insurance. The Borrower will maintain, and cause each of its Subsidiaries to maintain, insurance with reputable insurance companies or associations in such amounts and covering such risks as is usually carried by companies of established reputation engaged in similar businesses and owning similar properties in the same general areas in which the Borrower or such Subsidiary operates.

7.06 Conduct of Business and Preservation of Corporate Existence. The Borrower will continue to engage in business of the same general type as now conducted by the Borrower and will preserve and maintain, and cause each of its Material Subsidiaries to preserve and maintain, its corporate existence, rights (charter and statutory), licenses, consents, permits, notices or approvals and franchises deemed material to its business; provided that neither the Borrower nor any of its Subsidiaries shall be required to maintain its corporate existence in connection with a merger or consolidation in compliance with Section 8.03; and provided, further that neither the Borrower nor any of its Subsidiaries shall be required to preserve any right or franchise if the Borrower or any such Subsidiary shall in its good faith judgment, determine that the preservation thereof is no longer in the best interests of the Borrower or such Subsidiary, as the case may be, and that the loss thereof could not reasonably be expected to have a Material Adverse Effect.

7.07 Books and Records. The Borrower will keep, and cause each of its Subsidiaries to keep, proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets and business of the Borrower and each such Subsidiary in accordance with Mexican GAAP, consistently applied.

7.08 Maintenance of Properties, Etc. The Borrower will:

(a) maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its properties that are used or useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted, and

(b) maintain, preserve and protect all intellectual property and all necessary governmental and third party approvals, franchises, licenses and permits, material to the business of the Borrower or its Subsidiaries, provided neither paragraph (a) nor this paragraph (b) shall prevent the Borrower or any of its Subsidiaries from discontinuing the operation and maintenance of any of its properties or allowing to lapse certain approvals,

 

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licenses or permits which discontinuance is desirable in the conduct of its business and which discontinuance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

7.09 Use of Proceeds. The Borrower will use the proceeds of all Loans made hereunder for general corporate purposes (including the repayment of existing indebtedness).

7.10 Aggregate Exposure. The Borrower will ensure that at no time shall the Aggregate Exposure of the Lenders exceed the Aggregate Committed Amount then in effect.

7.11 Pari Passu Ranking. The Borrower will ensure that at all times the Obligations of the Borrower and each of the Guarantors under the Transaction Documents constitute unconditional general obligations of such Obligor ranking in priority of payment at least pari passu with all other senior unsecured, unsubordinated Debt of such Obligor.

7.12 Transactions with Affiliates. The Borrower will conduct, and cause each of its Subsidiaries to conduct, all transactions otherwise permitted under this Agreement with any of its Affiliates on terms that are commercially reasonable and no less favorable to the Borrower or such Subsidiary than it would obtain in a comparable arm’s-length transaction with a Person not an Affiliate.

7.13 Maintenance of Governmental Approvals. The Borrower will maintain in full force and effect at all times all approvals of and filings with any Governmental Authority or third Party required under applicable law for the conduct of its business (including, without limitation, antitrust laws or Environmental Laws) and the performance of the Obligors’ obligations hereunder and under the other Transaction Documents by the Borrower and/or the Guarantors, as applicable, and for the validity or enforceability hereof and thereof, except where failure to maintain any such approvals or filings could not reasonably be expected to have a Material Adverse Effect.

7.14 Measurement Date. The Borrower shall provide to the Administrative Agent a certificate of a Responsible Officer detailing the latest twelve month total Consolidated Net Debt/EBITDA Ratio as soon as practicable, but in no event later than five Business Days after the consolidated financial statements of the Borrower and its Subsidiaries are delivered pursuant to Section 7.01 (each such date a “Measurement Date”).

7.15 Inspection of Property. At any reasonable time during normal business hours and from time to time with at least ten Business Days prior notice, or at any time if a Default or Event of Default shall have occurred and be continuing, permit the Administrative Agent or any of the Lenders or any agents or representatives thereof to examine and make abstracts from the records and books of account of, and visit the properties of, each of the Borrower or the Guarantors, and to discuss the affairs, finances and accounts of the Borrower or such Guarantor with any of its officers or directors and with its independent certified public accountants. All expenses associated with such inspection shall be borne by the inspecting Lenders; provided that if a Default or an Event of Default shall have occurred and be continuing, any expenses associated with such inspection shall be borne jointly and severally by the Borrower and the Guarantors.

 

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ARTICLE VIII

NEGATIVE COVENANTS

The Borrower covenants and agrees that for so long as any Obligation under this Agreement or any other Transaction Document remains unpaid or any Lender has any Commitment hereunder:

8.01 Financial Conditions.

(a) The Borrower shall not permit the Consolidated Net Debt / EBITDA Ratio at any time to exceed 3.5 to 1.

(b) The Borrower shall not permit the Consolidated Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters to be less than 2.5 to 1.

(c) Concurrently with the delivery by the Borrower of any financial statements pursuant to Section 7.01, the Borrower shall deliver to the Administrative Agent (with a copy to each Lender) a certificate from a Responsible Officer containing all information and calculations necessary for determining compliance by the Borrower with Sections 8.01 (a) and (b) above.

8.02 Liens. The Borrower shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any property or asset of the Borrower or any Subsidiary, whether now owned or held or hereafter acquired, other than the following Liens (“Permitted Liens”):

(a) Liens for taxes, assessments and other governmental charges the payment of which is being contested in good faith by appropriate proceedings promptly initiated and diligently conducted and for which adequate reserves or other appropriate provision, if any, as shall be required by Mexican GAAP shall have been made;

(b) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics and materialmen incurred in the ordinary course of business for sums not yet due or the payment of which is being contested in good faith by appropriate proceedings promptly initiated and diligently conducted and for which such reserves or other appropriate provision, if any, as shall be required by Mexican GAAP shall have been made;

(c) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security;

(d) any attachment or judgment Lien, unless the judgment it secures shall not, within 60 days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall not have been discharged within 60 days after the expiration of any such stay;

 

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(e) Liens existing on the date of this Agreement (other than liens with respect to the acquisition of RMC Group p.l.c.) that are described in Schedule 8.02(e)(i) hereto and liens existing as of March 31, 2005 (including liens with respect to the acquisition of RMC Group p.l.c.) that are described in Schedule 8.02(e)(ii) hereto;

(f) any Lien on property acquired by the Borrower after the date hereof that was existing on the date of acquisition of such property; provided that such Lien was not incurred in anticipation of such acquisition, and any Lien created to secure all or any part of the purchase price, or to secure Debt incurred or assumed to pay all or any part of the purchase price, of property acquired by the Borrower or any of its Subsidiaries after the date hereof; provided, further, that (A) any such Lien permitted pursuant to this clause (f) shall be confined solely to the item or items of property so acquired (including, in the case of any Acquisition of a corporation through the acquisition of 51% or more of the voting stock of such corporation, the stock and assets of any Acquired Subsidiary or Acquiring Subsidiary) and, if required by the terms of the instrument originally creating such Lien, other property which is an improvement to, or is acquired for specific use with, such acquired property; and (B) if applicable, any such Lien shall be created within nine months after, in the case of property, its acquisition, or, in the case of improvements, their completion;

(g) any Lien renewing, extending or refunding any Lien permitted by clause (f) above; provided that the principal amount of Debt secured by such Lien immediately prior thereto is not increased or the maturity thereof reduced and such Lien is not extended to other property;

(h) any Liens created on shares of capital stock of the Borrower or any of its Subsidiaries solely as a result of the deposit or transfer of such shares into a trust or a special purpose vehicle (including any entity with legal personality) of which such shares constitute the sole assets; provided that (A) any shares of Subsidiary stock held in such trust, corporation or entity could be sold by the Borrower; and (B) proceeds from the deposit or transfer of such shares into such trust, corporation or entity and from any transfer of or distributions in respect of the Borrower’s or any Subsidiary’s interest in such trust, corporation or entity are applied as provided under Section 8.04; and provided, further that such Liens may not secure Debt of the Borrower or any Subsidiary (unless permitted under another clause of this Section 8.02);

(i) any Liens on securities securing repurchase obligations in respect of such securities;

(j) any Liens in respect of any Receivables Program Assets which are or may be sold or transferred pursuant to a Qualified Receivables Transaction; and

(k) in addition to the Liens permitted by the foregoing clauses (a) through (j), Liens securing Debt of the Borrower and its Subsidiaries (taken as a whole) not in excess of 5% of the Adjusted Consolidated Net Tangible Assets of the Borrower and its Subsidiaries;

 

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unless, in each case, the Borrower has made or caused to be made effective provision whereby the Obligations hereunder are secured equally and ratably with, or prior to, the Debt secured by such Liens (other than Permitted Liens) for so long as such Debt is so secured.

8.03 Consolidations and Mergers. None of the Guarantors nor the Borrower shall, in one or more related transactions, (x) consolidate with or merge into any other Person or permit any other Person to merge into it or (y), directly or indirectly, transfer, convey, sell, lease or otherwise dispose of all or substantially all of its properties or assets to any Person, unless, with respect to any transaction described in clause (x) or (y), immediately after giving effect to such transaction:

(a) the Person formed by any such consolidation or merger, if it is not the Borrower or such Guarantor, or the Person that acquires by transfer, conveyance, sale, lease or other disposition all or substantially all of the properties and assets of the Borrower or such Guarantor (any such Person, a “Successor”) (i) shall be a corporation organized and validly existing under the laws of its place of incorporation, which in the case of a Successor to the Borrower shall be Mexico, the United States, Canada, France, Belgium, Germany, Italy, Luxembourg, the Netherlands, Portugal, Spain, Switzerland or the United Kingdom, or any political subdivision thereof, (ii) in the case of a Successor to the Borrower, shall expressly assume, pursuant to a written agreement in form and substance satisfactory to the Required Lenders, the Obligations of the Borrower pursuant to this Agreement and the performance of every covenant on part of the Borrower to be performed and observed and (iii) in the case of a Successor to any Guarantor, shall expressly assume, pursuant to a written agreement in form and substance satisfactory to the Required Lenders, the performance of every covenant of this Agreement on part of such Guarantor to be performed and observed;

(b) in the case of any such transaction involving the Borrower or any Guarantor, the Borrower or such Guarantor, or the Successor of any thereof, as the case may be, shall expressly agree to indemnify each Lender and the Administrative Agent against any tax, levy, assessment or governmental charge payable by withholding or deduction thereafter imposed on such Lender and/or the Administrative Agent solely as a consequence of such transaction with respect to payments under the Transaction Documents;

(c) immediately after giving effect to such transaction, including for purposes of this clause (c) the substitution of any Successor to the Borrower for the Borrower or the substitution of any Successor to a Guarantor for such Guarantor and treating any Debt or Lien incurred by the Borrower or any Successor to the Borrower, or by a Guarantor of the Borrower or any Successor to such Guarantor, as a result of such transactions as having been incurred at the time of such transaction, no Default or Event of Default shall have occurred and be continuing; and

(d) the Borrower shall have delivered to the Administrative Agent an officer’s certificate and an opinion of counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a written agreement is required in connection with such transaction, such written agreement comply with the relevant provisions of this Article VIII and that all conditions precedent provided for in this Agreement relating to such transaction have been complied with.

 

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8.04 Sales of Assets, Etc. The Borrower will not, and will not permit any of its Material Subsidiaries to, sell, lease or otherwise dispose of any of its assets (including the capital stock of any Subsidiary), other than (a) inventory, trade receivables and assets surplus to the needs of the business of the Borrower or any Subsidiary sold in the ordinary course of business and (b) assets not used, usable or held for use in connection with cement operations and related operations, unless the proceeds of the sale of such assets are retained by the Borrower or such Subsidiary, as the case may be, and, as promptly as practicable after such sale (but in any event within 180 days of such sale), the proceeds are applied to (i) expenditures for property, plant and equipment usable in the cement industry or related industries; (ii) the repayment of senior Debt of the Borrower or any of its Subsidiaries, whether secured or unsecured; or (iii) investments in companies engaged in the cement industry or related industries.

8.05 Change in Nature of Business. The Borrower shall not make, or permit any of its Material Subsidiaries to make, any material change in the nature of its business as carried on at the date hereof.

8.06 Margin Regulations. The Borrower shall not use any part of the proceeds of the Loans for any purpose which would result in any violation (whether by the Borrower, the Administrative Agent or the Lenders) of Regulation T, U or X of the Federal Reserve Board or to extend credit to others for any such purpose. The Borrower shall not engage in, or maintain as one of its important activities, the business of extending credit for the purpose of purchasing or carrying any margin stock (as defined in such regulations).

ARTICLE IX

OBLIGATIONS OF GUARANTORS

9.01 The Guaranty. Each of the Guarantors jointly and severally hereby unconditionally and irrevocably guarantees (as a primary obligor and not merely as surety) payment in full as provided herein of all Obligations payable by the Borrower to each Lender, the Administrative Agent and the Joint Bookrunners under this Agreement and the other Transaction Documents and the Fee Letter, as and when such amounts become payable (whether at stated maturity, by acceleration or otherwise).

9.02 Nature of Liability. The obligations of the Guarantors hereunder are guarantees of payment and shall remain in full force and effect until all Obligations of the Borrower have been validly, finally and irrevocably paid in full and all Commitments have been terminated, and shall not be affected in any way by the absence of any action to obtain such amounts from the Borrower or by any variation, extension, waiver, compromise or release of any or all Obligations from time to time therefor. Each Guarantor waives all requirements as to promptness, diligence, presentment, demand for payment, protest and notice of any kind with respect to this Agreement and the other Transaction Documents.

9.03 Unconditional Obligations. Notwithstanding any contrary principles under the laws of any jurisdiction other than the State of New York, the obligations of each of

 

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the Guarantors hereunder shall be unconditional, irrevocable and absolute and, without limiting the generality of the foregoing, shall not be impaired, terminated, released, discharged or otherwise affected by the following:

(a) the existence of any claim, set-off or other right which either of the Guarantors may have at any time against the Borrower, the Administrative Agent, any Lenders or any other Person, whether in connection with this transaction or with any unrelated transaction;

(b) any invalidity or unenforceability of this Agreement or any other Transaction Document relating to or against the Borrower or either of the Guarantors for any reason;

(c) any provision of applicable law or regulation purporting to prohibit the payment by the Borrower of any amount payable by the Borrower under this Agreement or any of the other Transaction Documents or the payment, observance, fulfillment or performance of any other Obligations;

(d) any change in the name, purposes, business, capital stock (including the ownership thereof) or constitution of the Borrower;

(e) any amendment, waiver or modification of any Transaction Document in accordance with the terms hereof and thereof; or

(f) any other act or omission to act or delay of any kind by the Borrower, the Administrative Agent, the Lenders or any other Person or any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge of or defense to either of the Guarantors’ obligations hereunder.

9.04 Independent Obligation. The obligations of each of the Guarantors hereunder are independent of the Borrower’s obligations under the Transaction Documents and of any guaranty or security that may be obtained for the Obligations. The Administrative Agent and the Lenders may neglect or forbear to enforce payment hereunder, under any Transaction Document or under any guaranty or security, without in any way affecting or impairing the liability of each Guarantor hereunder. The Administrative Agent or the Lenders shall not be obligated to exhaust recourse or take any other action against the Borrower or under any agreement to purchase or security which the Administrative Agent or the Lenders may hold before being entitled to payment from the Guarantors of the obligations hereunder or proceed against or have resort to any balance of any deposit account or credit on the books of the Administrative Agent or the Lenders in favor of the Borrower or each of the Guarantors. Without limiting the generality of the foregoing, the Administrative Agent or the Lenders shall have the right to bring suit directly against either of the Guarantors, either prior or subsequent to or concurrently with any lawsuit against, or without bringing suit against, the Borrower and/or the other Guarantor.

9.05 Waiver of Notices. Each of the Guarantors hereby waives notice of acceptance of this ARTICLE IX and notice of any liability to which it may apply, and waives presentment, demand for payment, protest, notice of dishonor or nonpayment of any such liability, suit or the taking of other action by the Administrative Agent or the Lenders against, and any other notice, to the Guarantors.

 

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9.06 Waiver of Defenses. To the extent permitted by New York law and notwithstanding any contrary principles under the laws of any other jurisdiction, each of the Guarantors hereby waives any and all defenses to which it may be entitled, whether at common law, in equity or by statute which limits the liability of, or exonerates, guarantors or which may conflict with the terms of this ARTICLE IX, including failure of consideration, breach of warranty, statute of frauds, merger or consolidation of the Borrower, statute of limitations, accord and satisfaction and usury. Without limiting the generality of the foregoing, each of the Guarantors consents that, without notice to such Guarantor and without the necessity for any additional endorsement or consent by such Guarantor, and without impairing or affecting in any way the liability of such Guarantor hereunder, the Administrative Agent and the Lenders may at any time and from time to time, upon or without any terms or conditions and in whole or in part, (a) change the manner, place or terms of payment of, and/or change or extend the time or payment of, renew or alter, any of the Obligations, any security therefor, or any liability incurred directly or indirectly in respect thereof, and this ARTICLE IX shall apply to the Obligations as so changed, extended, renewed or altered; (b) exercise or refrain from exercising any right against the Borrower or others (including the Guarantors) or otherwise act or refrain from acting, (c) settle or compromise any of the Obligations, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof to the payment of any such liability (whether due or not) of the Borrower to creditors of the Borrower other than the Administrative Agent and the Lenders and the Guarantors, (d) apply any sums by whomsoever paid or howsoever realized, other than payments of the Guarantors of the Obligations, to any liability or liabilities of the Borrower under the Transaction Documents or any instruments or agreements referred to herein or therein, to the Administrative Agent and the Lenders regardless of which of such liability or liabilities of the Borrower under the Transaction Documents or any instruments or agreements referred to herein or therein remain unpaid; (e) consent to or waive any breach of, or any act, omission or default under the Obligations or any of the instruments or agreements referred to in this Agreement and the other Transaction Documents, or otherwise amend, modify or supplement the Obligations or any of such instruments or agreements, including the Transaction Documents; and/or (f) request or accept other support of the Obligations or take and hold any security for the payment of the Obligations or the obligations of the Guarantors under this ARTICLE IX, or allow the release, impairment, surrender, exchange, substitution, compromise, settlement, rescission or subordination thereof. Furthermore, each of the Guarantors hereby waives to the extent permitted by law any right to which it may be entitled to under Articles 2830, 2836, 2842, 2845, 2846, 2848 and 2849 of the Mexican Federal Civil Code and related Articles contained in the Civil Codes of the States in Mexico. The Guarantors further expressly waive the benefits of order, excusión y division contained in Articles 2814, 2815, 2817, 2818, 2820, 2821, 2822, 2823, 2837, 2838, 2840, 2841 and other related Articles of the Mexican Federal Civil Code and related Articles contained in other Civil Codes of the States of Mexico. The Guarantors hereby represent that the terms of each such provision of each such civil code are known in form and substance to each such Guarantor.

 

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9.07 Bankruptcy and Related Matters.

(a) So long as any of the Obligations remain outstanding, each of the Guarantors shall not, without the prior written consent of the Administrative Agent (acting with the consent of the Required Lenders), commence or join with any other Person in commencing any bankruptcy, liquidation, reorganization, concurso mercantil or insolvency proceedings of, or against, the Borrower.

(b) If acceleration of the time for payment of any amount payable by the Borrower under this Agreement or the Notes is stayed upon the insolvency, bankruptcy, reorganization, concurso mercantil or any similar event of the Borrower or otherwise, all such amounts otherwise subject to acceleration under the terms of this Agreement shall nonetheless be payable by the Guarantors hereunder forthwith on demand by the Administrative Agent made at the request of the Lenders.

(c) The obligations of each of the Guarantors under this ARTICLE IX shall not be reduced, limited, impaired, discharged, deferred, suspended or terminated by any proceeding or action, voluntary or involuntary, involving the bankruptcy, insolvency, concurso mercantil, receivership, reorganization, marshalling of assets, assignment for the benefit of creditors, readjustment, liquidation or arrangement of the Borrower or similar proceedings or actions or by any defense which the Borrower may have by reason of the order, decree or decision of any court or administrative body resulting from any such proceeding or action. Without limiting the generality of the foregoing, the Guarantors’ liability shall extend to all amounts and obligations that constitute the Obligations and would be owed by the Borrower but for the fact that they are unenforceable or not allowable due to the existence of any such proceeding or action.

(d) Each of the Guarantors acknowledges and agrees that any interest on any portion of the Obligations which accrues after the commencement of any proceeding or action referred to above in Section 9.07(c) (or, if interest on any portion of the Obligations ceases to accrue by operation of law by reason of the commencement of said proceeding or action, such interest as would have accrued on such portion of the Obligations if said proceedings or actions had not been commenced) shall be included in the Obligations, it being the intention of the Guarantors, the Administrative Agent, and the Lenders that the Obligations which are to be guaranteed by the Guarantors pursuant to this ARTICLE IX shall be determined without regard to any rule of law or order which may relieve the Borrower of any portion of such Obligations. The Guarantors will take no action to prevent any trustee in bankruptcy, receiver, debtor in possession, assignee for the benefit of creditors or similar person from paying the Administrative Agent, or allowing the claim of the Administrative Agent, for the benefit of the Administrative Agent, and the Lenders, in respect of any such interest accruing after the date of which such proceeding is commenced, except to the extent any such interest shall already have been paid by the Guarantors.

(e) Notwithstanding anything to the contrary contained herein, if all or any portion of the Obligations are paid by or on behalf of the Borrower, the obligations of the Guarantors hereunder shall continue and remain in full force and effect or be reinstated, as

 

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the case may be, in the event that all or any part of such payment(s) are rescinded or recovered, directly or indirectly, from the Administrative Agent and/or the Lenders as a preference, preferential transfer, fraudulent transfer or otherwise, and any such payments which are so rescinded or recovered shall constitute Obligations for all purposes under this ARTICLE IX, to the extent permitted by applicable law.

9.08 No Subrogation. Notwithstanding any payment or payments made by any of the Guarantors hereunder or any set-off or application of funds of any of the Guarantors by the Administrative Agent or any Lender, no Guarantor shall be entitled to be subrogated to any of the rights of the Administrative Agent or any Lender against the Borrower or any other Guarantor or any collateral security or guarantee or right of offset held by the Administrative Agent or any Lender for the payment of the Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower or any other Guarantor in respect of payments made by such Guarantor hereunder, until all amounts owing to the Administrative Agent and the Lenders by the Borrower on account of the Obligations shall have been indefeasibly paid in full in cash. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Obligations shall not have been indefeasibly paid in full in cash, such amount shall be held by such Guarantor in trust for the Administrative Agent and the Lenders, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Administrative Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if required), to be applied against the Obligations, whether matured or unmatured, in such order as the Administrative Agent may determine.

9.09 Right of Contribution. Subject to Section 9.08, each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder who has not paid its proportionate share of such payment. The provisions of this Section 9.09 shall in no respect limit the obligations and liabilities of any Guarantor to the Administrative Agent, the Joint Bookrunners and the Lenders, and each Guarantor shall remain liable to the Administrative Agent, the Joint Bookrunners and the Lenders for the full amount guaranteed by such Guarantor hereunder.

9.10 General Limitation on Guaranty. In any action or proceeding involving any applicable corporate law, or any applicable bankruptcy, insolvency, reorganization, concurso mercantil or other law affecting the rights of creditors generally, if the obligations of any Guarantor under this Section 9.10 would otherwise, taking into account the provisions of Section 9.09, be held or determined to be void, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under Section 9.01, then, notwithstanding any other provision hereof to the contrary, the amount of such liability shall, without any further action by such Guarantor, any Lender, the Administrative Agent or any other Person, be automatically limited and reduced to the highest amount that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding.

9.11 Covenants of the Guarantors. Each Guarantor hereby covenants and agrees that, so long as any Obligations under this Agreement and any other Transaction Document remains unpaid or any Lender has any Commitment hereunder, it shall comply with the covenants contained or incorporated by reference in this Agreement to the extent applicable to it as a Subsidiary of the Borrower.

 

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ARTICLE X

EVENTS OF DEFAULT

10.01 Events of Default. The following specified events shall constitute “Events of Default” for the purposes of this Agreement:

(a) Payment Defaults. The Borrower shall (i) fail to pay any principal of any Loan when due in accordance with the terms hereof or (ii) fail to pay any interest on any Loan, any fee or any other amount payable under this Agreement or any Note within three Business Days after the same becomes due and payable; or

(b) Representation and Warranties. Any representation or warranty made by the Borrower herein or in any other Transaction Document or made by either Guarantor herein or which is contained in any certificate, document or financial or other statement furnished at any time under or in connection with this Agreement or any other Transaction Document, as applicable, shall prove to have been incorrect in any material respect on or as of the date made if such failure shall remain unremedied for 30 days after the earlier of the date on which (i) the chief financial officer of the Borrower or such Guarantor, as the case may be, becomes aware of such incorrectness or (ii) written notice thereof shall have been given to the Borrower by the Administrative Agent; or

(c) Specific Defaults. The Borrower or a Guarantor, as applicable, shall fail to perform or observe any term, covenant or agreement contained in Section 7.01, 7.02(a), 7.06 (with respect to the Borrower’s and each Guarantor’s existence only), 7.11 or 7.15 or ARTICLE VIII; or

(d) Other Defaults. The Borrower or a Guarantor, as applicable, shall fail to perform or observe any term, covenant or agreement contained in this Agreement, the Notes, the Fee Letter, any Notice of Borrowings, any certificates, waivers, or any other agreement delivered pursuant to this Agreement (other than as provided in paragraphs (a) and (c) above) and such failure shall continue unremedied for a period of 30 days after the earlier of the date on which (i) the chief financial officer of the Borrower becomes aware of such failure or (ii) written notice thereof shall have been given to the Borrower by the Administrative Agent at the request of any Lender; or

(e) Defaults under Other Agreements. The occurrence of a default or event of default under any indenture, agreement or instrument relating to any Material Debt of the Borrower or any of its Subsidiaries, and (unless any principal amount of such Material Debt is otherwise due and payable) such default or event of default results in the acceleration of the maturity of any principal amount of such Material Debt prior to the date on which it would otherwise become due and payable; or

(f) Voluntary Bankruptcy. The Borrower or any Material Subsidiary shall commence a voluntary case or other proceeding seeking liquidation, reorganization, concurso mercantil or other relief with respect to itself or its debts under any bankruptcy,

 

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insolvency, reorganization or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action to authorize any of the foregoing or the equivalent thereof under Mexican law (including the Ley de Concursos Mercantiles); or

(g) Involuntary Bankruptcy. An involuntary case or other proceeding shall be commenced against the Borrower or any Material Subsidiary seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency, concurso mercantil or other similar law now or hereafter in effect (including but not limited to the Ley de Concursos Mercantiles) or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 60 consecutive days; or an order for relief shall be entered against the Borrower or any Material Subsidiaries under any bankruptcy, insolvency suspensión de pagos or other similar law as now or hereafter in effect; or

(h) Monetary Judgment. A final judgment or judgments or order or orders not subject to further appeal for the payment of money in an aggregate amount in excess of U.S.$50,000,000 shall be rendered against the Borrower and/or any of its one or more Subsidiaries of the Borrower that are neither discharged nor bonded in full within 30 days thereafter; or

(i) Pari Passu. The Obligations of the Borrower under this Agreement or of any Guarantor under this Agreement shall fail to rank at least pari passu with all other senior unsecured Debt of the Borrower or such Guarantor, as the case may be; or

(j) Validity of Agreement. The Borrower shall contest the validity or enforceability of any Transaction Document or shall deny generally the liability of the Borrower under any Transaction Documents or either Guarantor shall contest the validity of or the enforceability of their guarantee hereunder or any obligation of either Guarantor under ARTICLE IX hereof shall not be (or is claimed by either Guarantor not to be) in full force and effect;

(k) Governmental Authority. Any governmental or other consent, license, approval, permit or authorization which is now or may in the future be necessary or appropriate under any applicable Requirement of Law for the execution, delivery, or performance by the Borrower or either Guarantor of any Transaction Document to which it is a party or to make such Transaction Document legal, valid, enforceable and admissible in evidence shall not be obtained or shall be withdrawn, revoked or modified or shall cease to be in full force and effect or shall be modified in any manner that would have an adverse effect on the rights or remedies of the Administrative Agent or the Lenders; or

 

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(l) Expropriation, Etc. Any Governmental Authority shall condemn, nationalize, seize or otherwise expropriate all or any substantial portion of the property of, or capital stock issued or owned by, the Borrower or either Guarantor or take any action that would prevent the Borrower or either Guarantor from performing its obligations under this Agreement, the Notes, the Fee Letter, any Notice of Borrowings, any certificates, waivers, or any other agreement delivered pursuant to this Agreement; or

(m) Moratorium; Availability of Foreign Exchange. A moratorium shall be agreed or declared in respect of any Debt of the Borrower or either Guarantor or any restriction or requirement not in effect on the date hereof shall be imposed, whether by legislative enactment, decree, regulation, order or otherwise, which limits the availability or the transfer of foreign exchange by the Borrower or either Guarantor for the purpose of performing any material obligation under this Agreement, the Notes, the Fee Letter, any Notice of Borrowings, any certificates, waivers, or any other agreement delivered pursuant to this Agreement; or

(n) Change of Ownership or Control. The beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended) of 20% or more in voting power of the outstanding voting stock of the Borrower or either Guarantor is acquired by any Person; provided that the acquisition of beneficial ownership of capital stock of the Borrower or either Guarantor by Lorenzo H. Zambrano or any member of his immediate family shall not constitute an Event of Default.

10.02 Remedies. If any Event of Default has occurred and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders:

terminate the Commitments and/or declare by notice to the Borrower the principal amount of all outstanding Loans to be forthwith due and payable, whereupon such principal amount, together with accrued interest thereon and any fees and all other Obligations accrued hereunder, shall become immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived; provided, however, that in the case of any Event of Default specified in Section 10.01(f) or (g), without notice or any other act by the Lenders, the Commitments shall be automatically terminated and the Loans (together with accrued interest thereon) and all other Obligations of the Borrower hereunder shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower;

10.03 Notice of Default. The Administrative Agent shall give notice to the Borrower of any event occurring under Section 10.01(a), (b), (c) or (d) promptly upon being requested to do so by any Lender and shall thereupon notify all the Lenders thereof.

10.04 Default Interest. In the event of default by the Borrower in the payment on the due date of any sum due under this Agreement, the Borrower shall pay interest on demand on such sum from the date of such default to the day of actual receipt of such sum by the Administrative Agent (as well after as before judgment) at the rate specified in Section 2.02(d).

 

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So long as the default continues, the default interest rate shall be recalculated on the same basis at intervals of such duration as the Administrative Agent may select, provided that the amount of unpaid interest at the above rate accruing during the preceding period (or such longer period as may be the shortest period permitted by applicable law for the capitalization of interest) shall be added to the amount in respect of which the Borrower is in default.

ARTICLE XI

THE ADMINISTRATIVE AGENT

11.01 Appointment and Authorization. Each Lender hereby irrevocably designates and appoints Barclays Bank PLC as the Administrative Agent of such Lender under this Agreement, and each Lender hereby irrevocably authorizes the Administrative Agent to take such action on its behalf under the provisions of this Agreement and each other Transaction Document and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement or any other Transaction Document, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Transaction Document, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Administrative Agent have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Transaction Document or otherwise exist against the Administrative Agent.

11.02 Delegation of Duties. The Administrative Agent may execute any of its duties under this Agreement or any other Transaction Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects with reasonable care.

11.03 Liability of Administrative Agent. Neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be (a) liable for any action taken or omitted to be taken by it or any such Person under or in connection with this Agreement or any other Transaction Document or the transactions contemplated hereby (except for its or such Person’s own gross negligence or willful misconduct), or (b) responsible in any manner to any of the Lenders for any recital, statement, representation or warranty made by the Borrower, the Guarantors or any officer thereof contained in this Agreement or in any other Transaction Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Transaction Document, or for the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Transaction Document, or for any failure of the Borrower, the Guarantors or any other party to any Transaction Document to perform its obligations hereunder or thereunder. Except as otherwise expressly stated herein, the Administrative Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Transaction Document, or to inspect the properties, books or records of the Borrower or the Guarantors.

 

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11.04 Reliance by Administrative Agent.

(a) The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or teletype message, statement, order or other document or telephone conversation believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Transaction Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of failing to take, taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Transaction Document in accordance with a request or consent of the Required Lenders (or when expressly required hereby, all the Lenders) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders.

(b) For purposes of determining compliance with the conditions specified in Section 4.01, each Lender that has executed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter sent by the Administrative Agent to such Lender for consent, approval, acceptance or satisfaction on or before the Effective Date.

11.05 Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default (except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of the Lenders) unless the Administrative Agent shall have received written notice from a Lender or the Borrower referring to this Agreement and describing such Default or Event of Default and stating that such notice is a “Notice of Default”. The Administrative Agent shall promptly notify the Lenders of its receipt of any such notice. The Administrative Agent shall take such action with respect to such Default or Event of Default as may be requested by the Required Lenders; provided, however, that unless and until the Administrative Agent has received any such request, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable or in the best interest of the Lenders.

11.06 Credit Decision. Each Lender expressly acknowledges that neither the Administrative Agent nor any of its Affiliates, officers, directors, employees, agents or attorneys-in-fact has made any representation or warranty to it, and that no act by the Administrative Agent hereafter taken, including any review of the affairs of the Borrower, the Guarantors, or any of their Affiliates, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender. Each Lender acknowledges to the Administrative Agent 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

 

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own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower, the Guarantors, and their Affiliates and all applicable Lender regulatory laws relating to the transactions contemplated hereby, and made its own 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 deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Transaction Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower or the Guarantors. Except for notices, reports and other documents expressly herein required to be furnished to the Lenders by the Administrative Agent, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Borrower or the Guarantors which may come into the possession of the Administrative Agent or any of its Affiliates, officers, directors, employees, agents or attorneys-in-fact.

11.07 Indemnification. Whether or not the transactions contemplated hereby are consummated, the Lenders agree to indemnify upon demand the Administrative Agent and its Affiliates, directors, officers, agents and employees (to the extent not reimbursed by the Borrower and without limiting the obligation of the Borrower to do so), ratably according to the respective amounts of their Commitment Percentages in effect on the date the cause for indemnification arose, from and against any and all claims, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including at any time following the payment of the Obligations or the Termination Date) be imposed on, incurred by or asserted against the Administrative Agent (or any of its Affiliates, directors, officers, agents and employees) in any way relating to or arising out of this Agreement or any other Transaction Document, or any documents contemplated by or referred to herein or the transactions contemplated hereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided, however, that no Lender shall be liable for the payment of any portion of such claims, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements to the extent it results from the gross negligence or willful misconduct of the Administrative Agent or its Affiliates, directors, officers, agents or employees. Without limitation of the foregoing, each Lender shall reimburse the Administrative Agent upon demand for its ratable share of any reasonable and documented costs or out-of-pocket expenses (including legal fees) incurred by the Administrative Agent in connection with the preparation, execution, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Transaction Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the Borrower.

11.08 Administrative Agent in Individual Capacity. Barclays Bank PLC may make loans to, issue letters of credit for the account of, accept deposits from and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with the Borrower, the Guarantors or any of their Affiliates as though Barclays Bank PLC were not the

 

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Administrative Agent hereunder and without notice to or consent of the Lenders. The Lenders acknowledge that, pursuant to such activities, Barclays Bank PLC or its Affiliates may receive information regarding the Borrower, the Guarantors and their Affiliates (including information that may be subject to confidentiality obligations in favor of the Borrower or the Guarantors) and acknowledge that the Administrative Agent shall be under no obligation to provide such information to them. With respect to the Obligations, Barclays Bank PLC shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not the Administrative Agent, and the terms “Lender” and “Lenders” include Barclays Bank PLC in its individual capacity.

11.09 Successor Administrative Agent. The Administrative Agent may, and at the request of the Required Lenders shall, resign as Administrative Agent upon 30 days’ notice to the Lenders and the Borrower. If the Administrative Agent resigns under this Agreement, the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders, which appointment shall be subject to the approval of the Borrower, such approval not to be unreasonably withheld (unless a Default or Event of Default shall have occurred and be continuing, in which case such approval shall not be required). If no successor agent is appointed prior to the effective date of the resignation of the Administrative Agent, the Administrative Agent may appoint, after consulting with the Lenders and the Borrower, a successor agent from among the Lenders. Upon the acceptance of its appointment as successor agent hereunder, such successor agent shall succeed to all the rights, powers and duties of the retiring Administrative Agent and the term “Administrative Agent” shall mean such successor agent effective upon its appointment, and the retiring Administrative Agent’s rights, powers and duties as Administrative Agent shall be terminated, without any other or further act on the part of such retiring Administrative Agent. After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this ARTICLE XI and Sections 13.04 and 13.05 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement. If no successor Administrative Agent has accepted the appointment as Administrative Agent by the date which is 30 days following a retiring Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective and either the Borrower or the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which shall be a commercial bank organized or licensed under the laws of the United States or of any State thereof and having a combined capital and surplus of at least U.S.$400,000,000.

ARTICLE XII

THE JOINT BOOKRUNNERS

12.01 The Joint Bookrunners. The Borrower hereby confirms the designation of Barclays Capital, the Investment Banking Division of Barclays Bank PLC, and Citigroup Global Markets Inc., as arrangers and Joint Bookrunners for this revolving credit facility. The Joint Bookrunners assume no responsibility or obligation hereunder for servicing, enforcement or collection of the Obligations, or any duties as agent for the Lenders. The title “Joint Bookrunner” or “Book-runner” implies no fiduciary responsibility on the part of the Joint Bookrunners to the Administrative Agent, or the Lenders and the use of either such title does not impose on the Joint Bookrunners any duties or obligations under this Agreement except as may be expressly set forth herein.

 

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12.02 Liability of Joint Bookrunners. Neither the Joint Bookrunners nor any of their respective officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be (a) liable for any action lawfully taken or omitted to be taken by them or any such Person under or in connection with this Agreement or any other Transaction Document (except for such Joint Bookrunner’s own gross negligence or willful misconduct), or (b) responsible in any manner to any Lender for any recital, statement, representation or warranty made by the Borrower or any officer thereof, contained in this Agreement or in any other Transaction Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Arrangers under or in connection with, this Agreement or any other Transaction Document or for the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Transaction Document or for any failure of the Borrower or any other party to any other Transaction Document to perform its obligations hereunder or thereunder. Except as otherwise expressly stated herein, the Joint Bookrunners shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Transaction Document, or to inspect the properties, books or records of the Borrower.

12.03 Joint Bookrunners in their respective Individual Capacities. Each of Barclays Capital, the Investment Banking Division of Barclays Bank PLC and its Affiliates, and Citigroup Global Markets Inc. and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrower or any of its Affiliates as though they were not the Joint Bookrunners hereunder.

12.04 Credit Decision. Each Lender expressly acknowledges that neither the Joint Bookrunners nor any of their respective Affiliates, officers, directors, employees, agents or attorneys-in-fact have made any representation or warranty to it, and that no act by the Joint Bookrunners hereafter taken, including any review of the affairs of the Borrower or the Guarantors, shall be deemed to constitute any representation or warranty by the Joint Bookrunners to any Lender. Each Lender acknowledges to the Joint Bookrunners that it has, independently and without reliance upon the Joint Bookrunners, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower or the Guarantors and their Affiliates and made its own decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Joint Bookrunners, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Transaction Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower or the Guarantors. The Joint Bookrunners shall not have any duty or responsibility to provide any Lender with any information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Borrower which may come into the possession of the Joint Bookrunners or any of their respective officers, directors, employees, agents, attorneys-in-fact or Affiliates.

 

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ARTICLE XIII

MISCELLANEOUS

13.01 Notices.

(a) Except as otherwise expressly provided herein, all notices, requests, demands or other communications to or upon any party hereunder shall be in writing (including facsimile transmission) and shall be sent by an overnight courier service, transmitted by facsimile or delivered by hand to such party: (i) in the case of the Borrower, the Guarantors, the Joint Bookrunners or the Administrative Agent, at its address or facsimile number set forth on Schedule 1.01(c) or at such other address or facsimile number as such party may designate by notice to the other parties hereto and (ii) in the case of any Lender, at its address or facsimile number set forth in Schedule 1.01(b) or at such other address or facsimile number as such Lender may designate by notice to the Borrower, the Joint Bookrunners and the Administrative Agent.

(b) Unless otherwise expressly provided for herein, each such notice, request, demand or other communication shall be effective (i) if sent by overnight courier service or delivered by hand, upon delivery, (ii) if given by facsimile, when transmitted to the facsimile number specified pursuant to paragraph (a) above and confirmation of receipt of a legible copy thereof is received, or (iii) if given by any other means, when delivered at the address specified pursuant to paragraph (a) above; provided, however, that notices to the Administrative Agent under ARTICLE II, III, IV or XI shall not be effective until received.

13.02 Amendments and Waivers. No amendment or waiver of any provision of this Agreement, and no consent to any departure by the Borrower or any Guarantor from the terms of this Agreement, shall in any event be effective unless the same shall be in writing, consented to by the Borrower or the applicable Guarantors, as the case may be, and acknowledged by the Administrative Agent (which shall be a purely ministerial action), and signed or consented to by the Required Lenders, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall:

(a)            (i) except as specifically provided herein, increase or decrease the Commitment of any Lender;

(ii) extend the maturity of any of the Obligations, extend the time of payment of interest thereon, or extend the Termination Date;

(iii) forgive any Obligation, reduce the principal amount of the Obligations, reduce the rate of interest thereon, reduce the amount or change the method of calculation of any Fee hereunder, or change the provisions of Section 3.05(a);

in each case without the consent of the Borrower and each Lender directly affected thereby;

(b)            (i) amend, modify or waive any provision of this Section 13.02;

 

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(ii)

change the percentage specified in the definition of Required Lenders or the number of Lenders which shall be required for the Lenders or any of them to take any action under this Agreement; or

 

(iii)

amend, modify or waive any provision of Section 4.01; or

 

(iv)

amend, modify or waive any provision of Section 13.06;

in each case without the consent of the Borrower and all the Lenders;

(c) amend, modify or waive any provision of ARTICLE XI without the written consent of the Administrative Agent; and

(d) amend, modify or waive any provision of ARTICLE XII without the consent of the Joint Bookrunners.

13.03 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Lender, any right, remedy, power or privilege hereunder or under any other Transaction Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or thereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law.

13.04 Payment of Expenses, Etc. The Borrower agrees to pay on demand

(a) all reasonable and documented out-of-pocket costs and expenses (including reasonable legal fees and disbursements of special Mexican and New York counsel to the Administrative Agent), syndication (including printing, distribution and bank meetings), travel, telephone and duplication expenses and other reasonable and documented costs and out of- pocket expenses in connection with the arrangement, documentation, negotiation and closing of the Transactions Documents, subject to the maximum amount set forth in a letter agreement between the Borrower and the Joint Bookrunners;

(b) all reasonable and documented out-of-pocket costs and expenses incurred by the Administrative Agent in connection with any amendment to, waiver of, or consent to any Transaction Document or the transactions contemplated hereby, including the reasonable fees and reasonable and documented out-of-pocket expenses of special Mexican and New York counsel to the Administrative Agent; and

(c) all reasonable and documented, out-of-pocket costs and expenses incurred by the Administrative Agent or any Lender in connection with the enforcement of and/or preservation of any rights under this Agreement or any other Transaction Document (whether through negotiations, legal proceedings or otherwise), including the reasonable fees and reasonable and documented out-of-pocket expenses of special Mexican and New York counsel to the Administrative Agent and such Lender.

 

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13.05 Indemnification. The Borrower agrees to indemnify and hold harmless the Joint Bookrunners, the Administrative Agent and each Lender and each of their Affiliates and their officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and against any and all claims, damages, losses, liabilities and expenses (including reasonable fees and expenses of counsel and the allocated cost of in-house counsel), but excluding taxes that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) (a) the Transaction Documents, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Loans or (b) or any Environmental Action relating in any way to the Borrower or any of its Subsidiaries, except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or willful misconduct. In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 13.05 applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by the Borrower, its directors, shareholders or creditors or an Indemnified Party or any other Person or any Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated hereby are consummated. The Borrower and each Guarantor also agrees not to assert any claim against the Joint Bookrunners, the Administrative Agent, any Lender, any of their Affiliates, or any of their respective directors, officers, employees, attorneys and agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the Transaction Documents, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Transaction Documents. Neither the Joint Bookrunner, the Administrative Agent, nor any Lender shall be deemed to have any fiduciary relationship with the Borrower or any Guarantor.

13.06 Successors and Assigns.

(a) The provisions of this Agreement shall be binding upon the Borrower, the Guarantors, their successors and assigns and shall inure to the benefit of the Joint Bookrunners, the Administrative Agent and the Lenders and their respective successors and assigns, except that the Borrower and the Guarantors may not assign or otherwise transfer any of their rights or obligations under this Agreement without the prior written consent of all Lenders except pursuant to the terms of this Agreement.

(b) Any Lender may at any time, and any Lender, if demanded by the Borrower pursuant to Section 2.01(d) or Section 3.09 upon at least five Business Days’ notice to such Lender and the Administrative Agent, shall, assign to one or more commercial banks either (i) registered as a Foreign Financial Institution and a resident (or having its principal office as a resident, if lending through a branch or agency) for tax purposes in a jurisdiction that is a party to an income tax treaty to avoid double taxation with Mexico on the date of such assignment, qualified to receive the benefits of said treaty or (ii) organized and existing under the laws of Mexico on the date of such assignment (each an “Assignee”) all, or a proportionate part of all, of its Commitment and its rights and obligations under this Agreement and the Notes, and such Assignee shall assume such rights and obligations, pursuant to an Assignment and Assumption Agreement executed by such Assignee and such transferor Lender, with (and subject to) the subscribed consent

 

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of the Borrower and the Administrative Agent (which consents shall not be unreasonably withheld or delayed, and if a Default or Event of Default has occurred and is continuing, the consent of the Borrower shall not be required); provided, however, that if an Assignee is an Affiliate of such transferor Lender, which Affiliate is registered as a Foreign Financial Institution and meets the tax residence and qualification requirements of clause (ii) above and, at the time of such assignment, the additional amounts payable with respect to Taxes to such Assignee will not exceed such amounts payable to the transferor Lender, no such consent shall be required; and provided further that, in the case of an assignment of only part of such rights and obligations, the Assignee shall acquire a Total Exposure of not less than U.S.$3,000,000 and integral multiples of U.S.$1,000,000 in excess thereof. Upon execution and delivery of an Assignment and Assumption Agreement and payment by the Assignee to the transferor Lender of an amount equal to the purchase price agreed between such transferor Lender and such Assignee, such Assignee shall be a Lender party to this Agreement and shall have all the rights and obligations of a Lender with a Commitment as set forth in such instrument of assumption (in addition to any Commitment previously held by it), and the transferor Lender shall be released from its obligations hereunder to a corresponding extent (except to the extent the same arose prior to the assignment), and no further consent or action by any party shall be required. Upon the consummation of any assignment pursuant to this paragraph (b), the transferor Lender, the Administrative Agent and the Borrower shall make appropriate arrangements so that a new Note is issued to the Assignee at the expense of the Assignee. In connection with any such assignment (other than a transfer by a Lender to one of its Affiliates), the transferor Lender (or in the case of Section 3.10, the Borrower), without prejudice to any claims the Borrower may have against any Defaulting Lender, shall pay to the Administrative Agent an administrative fee for processing such assignment in the amount of U.S.$3,500.

(c) Nothing herein shall prohibit any Lender from pledging or assigning any Note to any Federal Reserve Bank of the United States in accordance with applicable law and without compliance with the foregoing provisions of this Section 13.06; provided, however, that such pledge or assignment shall not release such Lender from its obligations hereunder.

(d) Any Lender may, without any consent of the Borrower, the Administrative Agent or any other third party at any time grant to one or more banks or other institutions (i) registered as a Foreign Financial Institution and (ii) resident (or having its principal office as a resident, if lending through a branch or agency) for tax purposes in a jurisdiction that is a party to an income tax treaty to avoid double taxation with Mexico on the date of such assignment and qualified to receive the benefits of said treaty and having (at the time such Lender or financial institution becomes a Participant) a withholding tax rate under such treaty applicable to payments hereunder no higher than that applicable to payments to such Lender (each a “Participant”) participating interests in its Commitment or any or all of its Loans. In the event of any such grant by a Lender of a participating interest to a Participant, whether or not upon notice to the Borrower and the Administrative Agent, such Lender shall remain responsible for the performance of its obligations hereunder, and the Borrower and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement pursuant to which any Lender may

 

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grant such a participating interest shall provide that such Lender shall retain the sole right and responsibility to enforce the obligations of the Borrower hereunder, including the right to approve any amendment, modification or waiver of any provision of this Agreement; provided, however, that such participation agreement may provide that such Lender will not agree to any modification, amendment or waiver of this Agreement extending the maturity of any Obligation in respect of which the participation was granted, or reducing the rate or extending the time for payment of interest thereon or reducing the principal thereof, or reducing the amount or basis of calculation of any fees to accrue in respect of the participation, without the consent of the Participant. The Borrower agrees that each Participant shall, to the extent provided in its participation agreement, be entitled to the benefits of Sections 3.04, 3.06 and 3.10 with respect to its participating interest as if it were a Lender named herein; provided, however, that the Borrower shall not be required to pay any greater amounts pursuant to such Sections than it would have been required to pay but for the sale to such Participant of such Participant’s participation interest. An assignment or other transfer which is not permitted by paragraph (b) or (c) above shall be given effect for purposes of this Agreement only to the extent of a participating interest granted in accordance with this paragraph (d).

(e) Any Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 13.06, disclose to the Assignee or Participant or proposed Assignee or Participant, any information relating to the Borrower furnished to such Lender by or on behalf of the Borrower; provided that, prior to any such disclosure, the Assignee or Participant or proposed Assignee or Participant shall agree to preserve the confidentiality of any Confidential Information relating to the Borrower received by it from such Lender.

13.07 Right of Set-off. In addition to any rights and remedies of the Lenders provided by law, each such Lender shall have the right, without prior notice to the Borrower or the Guarantors, any such notice being expressly waived by the Borrower and the Guarantors to the extent permitted by applicable law, upon any amount becoming due and payable by the Borrower or the Guarantors hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender, or any branch or agency thereof to or for the credit or the account of the Borrower or the Guarantors. Each Lender agrees promptly to notify the Borrower, or such Guarantor, as the case may be, and the Administrative Agent after any such set-off and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such set-off and application.

13.08 Confidentiality. Neither the Administrative Agent nor any Lender shall disclose any Confidential Information to any other Person without the prior written consent of the Borrower, other than (a) to the Administrative Agent’s, or such Lender’s Affiliates and their officers, directors, employees, agents and advisors and, as contemplated by Section 13.06(e), to actual or prospective Assignees and Participants, and then only on a confidential basis, (b) as required by any law, rule or regulation (including as may be required in connection with an audit by the Administrative Agent’s, or such Lender’s independent auditors, and as may be required by

 

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any self-regulating organizations) or as may be required by or necessary in connection with any judicial process and (c) as requested by any state, federal or foreign authority or examiner regulating banks or banking.

13.09 Use of English Language. All certificates, reports, notices and other documents and communications given or delivered pursuant to this Agreement shall be in the English language (other than the documents required to be provided pursuant to Section 4.01(e)(iii), Section 7.01 and Section 7.02 which shall be in the English language or in the Spanish language accompanied by an English translation or summary). Except in the case of the laws of, or official communications of, Mexico, the English language version of any such document shall control the meaning of the matters set forth therein.

13.10 GOVERNING LAW. THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.

13.11 Submission to Jurisdiction

(a) Each of the parties hereto hereby irrevocably and unconditionally submits to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court located in the Borough of Manhattan in New York City and any appellate court thereof for purposes of any suit, legal action or proceeding arising out of or relating to this Agreement, any other Transaction Document or the transactions contemplated hereby, and each of the parties hereto hereby irrevocably agrees that all claims in respect of such suit, action or proceeding may be heard and determined in such federal or New York State court and, with respect to the Borrower and the Guarantors, as well as in the competent court of their own corporate domicile.

(b) Each of the parties hereto hereby irrevocably waives, to the fullest extent it may effectively do so, any objection that it may now or hereafter have to the laying of venue of any such suit, action or proceeding in any such federal or New York State court and irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any such suit, action or proceeding.

(c) Each of the parties hereto irrevocably waives the right to object, with respect to such claim, suit, action or proceeding brought in any such court, that such court does not have jurisdiction over it.

(d) Each of the parties hereto agrees, to the fullest extent it may effectively do so under applicable law, that a final judgment in any suit, action or proceeding of the nature referred to in paragraph (a) above brought in any such court shall be conclusive and binding upon such party and may be enforced in other jurisdictions by suit on the judgment or in any manner provided by law.

(e) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING

 

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TO ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ACTIONS OF ANY ARRANGER, THE ADMINISTRATIVE AGENT OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

13.12 Appointment of Agent for Service of Process.

(a) The Borrower and each Guarantor hereby irrevocably appoints CT Corporation System, with an office on the date hereof at 111 Eighth Avenue, 13th Floor, New York, New York 10011, as its agent (the “Process Agent”) to receive on behalf of itself and its property, service of copies of the summons and complaint and any other process which may be served in any such action or proceeding brought in any New York State or federal court sitting in New York City. Such service may be made by delivering a copy of such process to the Borrower or any Guarantor, as the case may be, in care of the Process Agent at its address specified above, and the Borrower and each Guarantor, as the case may be, hereby authorizes and directs the Process Agent to accept such service on its behalf. The appointment of the Process Agent shall be irrevocable until the appointment of a successor Process Agent. The Borrower and each Guarantor, further agrees to promptly appoint a successor Process Agent in New York City prior to the termination for any reason of the appointment of the initial Process Agent.

(b) Nothing in Section 13.11 or in this Section 13.12 shall affect the right of any party hereto to serve process in any manner permitted by law or limit any right that any party hereto may have to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

13.13 Waiver of Sovereign Immunity. To the extent that the Borrower or a Guarantor has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, or otherwise) with respect to itself or its property, the Borrower or the Guarantor, as the case may be, hereby irrevocably waives such immunity in respect of its obligations hereunder to the extent permitted by applicable law. Without limiting the generality of the foregoing, the Borrower and each Guarantor agrees that the waivers set forth in this Section 13.13 shall have force and effect to the fullest extent permitted under the Foreign Sovereign Immunities Act of 1976 of the United States and are intended to be irrevocable for purposes of such Act.

13.14 Judgment Currency.

(a) All payments made under this Agreement and the other Transaction Documents shall be made in Dollars unless specified otherwise herein. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due from the Borrower in one currency (“Currency X”) into another currency (“Currency Y”), the parties hereto agree to the fullest extent that they may legally and effectively do so that the rate of exchange used shall be that at which in accordance with normal banking procedures (based on quotations from four major dealers in the relevant market) the Administrative Agent or each Lender, as the case may be, could purchase Currency X with Currency Y at or about 11:00 a.m. (New York City time) on the Business Day preceding that on which final judgment is given.

 

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(b) The Obligations in respect of any sum due to any Lender or the Administrative Agent hereunder or under any other Transaction Document shall, to the extent permitted by applicable law notwithstanding any judgment expressed in a currency other than the applicable Currency X, be discharged only to the extent that on the Business Day following receipt by such Lender or the Administrative Agent of any sum adjudged to be so due in Currency Y such Lender or the Administrative Agent may in accordance with normal banking procedures purchase Currency X with Currency Y. If the amount of Currency X so purchased is less than the sum originally due to such Lender or the Administrative Agent, the Borrower and each of the Guarantors agree, to the fullest extent it may legally do so, as a separate obligation and notwithstanding any such judgment, to indemnify such Lender or the Administrative Agent against such resulting loss.

13.15 Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile shall be effective as delivery of a manually executed counterpart of this Agreement.

13.16 USA PATRIOT Act. The Lenders, to the extent that they are subject to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), hereby notify the Borrower that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow the Lenders to identify the Borrower in accordance with the Act.

13.17 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction, and the remaining portion of such provision and all other remaining provisions hereof will be construed to render them enforceable to the fullest extent permitted by law.

13.18 Survival of Agreements and Representations.

(a) All representations and warranties made herein or in any other Transaction Document shall survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.

(b) The covenants and agreements contained in Sections 3.04, 3.05, 3.06, 3.07, 3.08, 13.04, 13.05, 13.08, 13.09, 13.11, 13.12 and 13.14, and the obligations of the Lenders under Section 11.07, shall survive the termination of the Commitments and the payment of all Obligations and, in the case of any Lender that may assign any interest in its Commitment or obligations hereunder, with respect to matters occurring before such assignment, shall survive the making of such assignment to the extent any claim arising thereunder relates to any period prior to such assignment, notwithstanding that such assigning Lender may cease to be a “Lender” hereunder.

 

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EXHIBIT G

TO CREDIT AGREEMENT

Mandatory Cost Formula

1. The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Bank of England and/or the Financial Services Authority (or, in either case, any other authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank.

2. For the purposes of this Exhibit G:

“Additional Cost Rate” has the meaning provided in paragraph 3 below;

“Eligible Liabilities” has the meaning provided from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England;

“Fees Rules” means the rules on periodic fees contained in the FSA Supervision Manual or such other law or regulation as may be in force from time to time in respect of the payment of fees for the acceptance of deposits;

“Fee Tariffs” means the fee tariffs specified in the Fees Rules under the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the Fees Rules but taking into account any applicable discount rate);

“Special Deposits” has the meaning given to it from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England; and

“Tariff Base” has the meaning given to it in, and will be calculated in accordance with, the Fees Rules.

3. On the first day of each Interest Period (or as soon as possible thereafter) the Administrative Agent shall calculate, as a percentage rate, a rate (the “Additional Cost Rate”) for each Lender, in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Administrative Agent as a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the relevant Loan) and will be expressed as a percentage rate per annum.

4. The Additional Cost Rate for any Lender lending from a Lending Office in a Participating Member State will be the percentage notified by that Lender to the Administrative Agent. This percentage will be certified by that Lender in its notice to the Administrative Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender’s participation in all Loans made from that Lending Office) of complying with the minimum reserve requirements of the European Central Bank in respect of loans made from that Lending Office.

 

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5. The Additional Cost Rate for any Lender lending from a Lending Office in the United Kingdom will be calculated by the Administrative Agent as follows:

in relation to a Loan denominated in Sterling:

 

AB+C(B –D) + E x 0.01		percent per annum
100 – (A+C)

in relation to a Loan in any currency other than Sterling:

 

E x 0.01		percent per annum
300

Where:

 

A

is the percentage of Eligible Liabilities (assuming these to be in excess of any stated minimum) which that Lender is from time to time required to maintain as an interest free cash ratio deposit with the Bank of England to comply with cash ratio requirements.

 

B

is the percentage rate of interest (excluding the Applicable Margin and the Mandatory Cost and, if the Loan is an Unpaid Sum, the additional rate of interest specified in paragraph (a) of Section 2.10 (Default Interest)) payable for the relevant Interest Period on the Loan.

 

C

is the percentage (if any) of Eligible Liabilities which that Lender is required from time to time to maintain as interest bearing Special Deposits with the Bank of England.

 

D

is the percentage rate per annum payable by the Bank of England to the Administrative Agent on interest bearing Special Deposits.

 

E

is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Administrative Agent as being the average of the most recent rates of charge supplied by the Reference Banks to the Administrative Agent pursuant to paragraph 7 below and expressed in pounds per £1,000,000.

6. In application of the above formula, A, B, C and D will be included in the formula as percentages (i.e. 5 per cent. will be included in the formula as 5 and not as 0.05). A negative result obtained by subtracting D from B shall be taken as zero. The resulting figures shall be rounded to four decimal places.

7. If requested by the Administrative Agent, each Reference Bank shall, as soon as practicable after publication by the Financial Services Authority, supply to the Administrative Agent, the rate of charge payable by that Reference Bank to the Financial Services Authority pursuant to the Fees Rules in respect of the relevant financial year of the Financial Services Authority (calculated for this purpose by that Reference Bank as being the average of the Fee Tariffs applicable to that Reference Bank for that financial year) and expressed in pounds per Sterling 1,000,000 of the Tariff Base of that Reference Bank.

 

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8. Each Lender shall supply any information required by the Administrative Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information on or prior to the date on which it becomes a Lender:

the jurisdiction of its Lending Office; and

any other information that the Administrative Agent may reasonably require for such purpose.

Each Lender shall promptly notify the Administrative Agent of any change to the information provided by it pursuant to this paragraph.

9. The percentages of each Lender for the purpose of A and C above and the rates of charge of each Reference Bank for the purpose of E above shall be determined by the Administrative Agent based upon the information supplied to it pursuant to paragraphs 7 and 8 above and on the assumption that, unless a Lender notifies the Administrative Agent to the contrary, each Lender’s obligations in relation to cash ratio deposits and Special Deposits are the same as those of a typical Lender from its jurisdiction of incorporation with a Lending Office in the same jurisdiction as its Lending Office.

10. The Administrative Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to assume that the information provided by any Lender or Reference Bank pursuant to paragraphs 3, 7 and 8 above is true and correct in all respects.

11. The Administrative Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender and each Reference Bank pursuant to paragraphs 3, 7 and 8 above.

12. Any determination by the Administrative Agent pursuant to this Exhibit G in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the absence of manifest error, be conclusive and binding on all Parties.

13. The Administrative Agent may from time to time, after consultation with the Borrower and the Lenders, determine and notify to all parties to the Agreement any amendments which are required to be made to this Exhibit G in order to comply with any change in law, regulation or any requirements from time to time imposed by the Bank of England, the Financial Services Authority or the European Central Bank (or, in any case, any other authority which replaces all or any of its functions) and any such determination shall, in the absence of manifest error, be conclusive and binding on all parties to the Agreement.

 

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EXECUTION VERSION

AMENDMENT NO. 1 TO CREDIT AGREEMENT

This Amendment No. 1 to the Credit Agreement (as defined below), dated as of June 19, 2006 (this “Amendment No. 1”), is entered into by and among CEMEX, S.A. de C.V., a sociedad anonima de capital variable organized and existing pursuant to the laws of the United Mexican States (the “Borrower”), CEMEX MÉXICO, S.A. de C.V., a sociedad anonima de capital variable organized and existing pursuant to the laws of the United Mexican States, EMPRESAS TOLTECA DE MÉXICO, S.A. de C.V., a sociedad anonima de capital variable organized and existing pursuant to the laws of the United Mexican States (each a “Guarantor” and together, the “Guarantors”), the several Lenders party hereto, BARCLAYS BANK PLC, NEW YORK BRANCH, as Administrative Agent, BARCLAYS CAPITAL, THE INVESTMENT BANKING DIVISION OF BARCLAYS BANK PLC, as Joint Lead Arranger and Joint Bookrunner and CITIGROUP GLOBAL MARKETS INC., as Documentation Agent, Joint Lead Arranger and Joint Bookrunner.

RECITALS

A. Borrower, the Guarantors, the Administrative Agent, the several Lenders party thereto, Barclays Bank PLC, The New York Branch, as Administrative Agent, Barclays Capital, The Investment Banking Division of Barclays Bank PLC, as Joint Lead Arranger and Joint Bookrunner, and Citigroup Global Markets Inc., as Documentation Agent, Joint Lead Arranger and Joint Bookrunner, are parties to that certain senior secured credit facility, dated as of May 31, 2005 (as now or hereafter amended, restated or otherwise modified, the “Credit Agreement”).

B. Borrower has requested that the Administrative Agent and the Lenders consent to the following amendment to the Credit Agreement.

C. This Amendment No. 1 shall constitute a Transaction Document and these Recitals shall be construed as part of this Amendment No. 1.

NOW THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, and of the Loans and other extensions of credit heretofore, now or hereafter made to, or for the benefit of, Borrower by Lenders, the Borrower, the Administrative Agent, and the Lenders hereby agree as follows:

1. Definitions. Except to the extent otherwise specified herein, capitalized terms used in this Amendment No. 1 shall have the same meanings ascribed to them in the Credit Agreement and Exhibits thereto.

2. Amendments.

2.1 The definition for “Applicable Margin” in Section 1.01 of the Credit Agreement shall be deleted and replaced in its entirety with the following language:

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““Applicable Margin” means, at any date, the applicable margin set forth below based upon the Borrower’s Consolidated Net Debt/EBITDA Ratio (it being understood that measurement of the Consolidated Net Debt/EBITDA Ratio as of the most recent Measurement Date is sufficient for this purpose):

 

		Applicable Margin
Consolidated Net Debt/EBITDA Ratio		Base Rate Loans			LIBOR Loans			Euribor Loans
3.00 to 1 or greater		0.40	%		0.40	%		0.40	%
Less than 3.00 to 1, but greater than or equal to 2.50 to 1		0.35	%		0.35	%		0.35	%
Less than 2.50 to 1, but greater than or equal to 2.00 to 1		0.30	%		0.30	%		0.30	%
Less than 2.00 to 1		0.25	%		0.25	%		0.25	%

.”

2.2 The following definitions will be added to Section 1.01:

““Loan Extension Request Date” has the meaning specified in Section 3.13.

“Loan Extension Consent” has the meaning specified in Section 3.13.

“Loan Extension Consent Date” has the meaning specified in Section 3.13.”

2.3 A new Section 3.13 shall be added to the Credit Agreement to read as follows:

“3.13 Loan Extension.

(i) Extension of Termination Date of Loan. The Borrower may, within 60 days, but not less than 45 days prior to June 6, 2007 (the “Extension Request Date”), by notice to the Administrative Agent, make written request of the Lenders to extend the Termination Date for an additional period of one (1) year. The Administrative Agent will give prompt notice to each of the Lenders of its receipt of any such request for extension of the Termination Date. Each Lender shall make a determination not later than 30 days prior to the Extension Request Date (the “Extension Consent Date”) as to whether or not it will agree to extend the Termination Date as requested (such approval of extension shall be an “Extension Consent”); provided, however, that failure by any Lender to make a timely response to the Borrower’s request for extension of the Termination Date shall be deemed to constitute a refusal by such Lender to extension of the Termination Date.

(ii) Lender Not Consenting. If by any Extension Consent Date the Borrower and the Administrative Agent have not received an Extension Consent from any Lender, the Termination Date, as it relates to such Lender, shall not be extended, the Commitment of such Lender shall terminate on the Termination Date applicable to it and any Loans made by such

 

2

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Lender and all accrued and unpaid interest thereon shall be due and payable on such Termination Date. Upon the termination of the Commitment of any such Lender, unless this Agreement is amended as provided in Section 3.13(iv), the aggregate amount of the Commitments shall be reduced by the amount of such terminated Commitment, and the Commitment Percentage of each other Lender shall be adjusted to that percentage obtained by dividing the Commitment of such Lender by the aggregate amount of the Commitments after giving effect to such reduction as provided in the definition of “Commitment Percentage” unless an Additional Lender is added as provided in Section 3.13 (iv).

(iii) Other Lenders. No refusal by any one Lender to consent to any extension of the Termination Date shall affect the extension of the Termination Date as it may relate to the Commitment and Loans of any Lender that consents to such extension as provided in Section 3.13(i), and one or more Lenders may consent to the extension of the Termination Date as it relates to them notwithstanding any refusal by any other Lenders so to consent.

(iv) Additional Lender or Lenders. If any Lender does not deliver an Extension Consent as provided in Section 3.13(i), upon the expiration of the Commitment of such Lender, or upon its termination as provided in Section 3.13(iv), the Borrower may with the approval of the Administrative Agent amend this Agreement as provided in Section 13.02 and 13.06 to add one or more other Lenders as parties, with such Commitment or Commitments as may be agreed to by the Administrative Agent and such other Lender or Lenders; provided that such additions do not increase the aggregate amount of the Commitments to an amount greater than the aggregate amount of Commitments in effect immediately before such expiration or termination.

(v) Notice. The Administrative Agent shall promptly advise each Lender of any change in Commitment Percentages and shall promptly provide each of the Lenders with a copy of any amendment made pursuant to Section 3.13(iv).”

3. Representations and Warranties. The Borrower and Credit Parties hereby represent and warrant to the Administrative Agent and the Lenders that:

3.1 The representations and warranties contained in the Credit Agreement are true and correct as of the date of this Amendment No. 1.

3.2 The execution, delivery and performance by the Borrower and the other Credit Parties of this Amendment No. 1 has been duly authorized by all necessary corporate action, and this Amendment No. 1 constitutes the legal, valid and binding obligation of the Borrower and Credit Parties enforceable against the Borrower and Credit Parties in accordance with its terms, except as the enforcement hereof may be subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’ rights generally or to general principles of equity.

3.3 The execution, delivery and performance of this Amendment No. 1 does not, and will not, contravene or conflict with any provision of (i) law, (ii) any judgment, decree or order, or (iii) the certificate or articles of incorporation or by-laws or other constituent

 

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documents of the Borrower and Credit Parties, and does not, and will not, contravene or conflict with, or cause any Lien to arise under, any provision of any indenture, agreement, mortgage, lease, instrument or other document binding upon or otherwise affecting the Borrower and Credit Parties or any property of the Borrower and Credit Parties.

3.4 No Default or Event of Default exists under the Credit Agreement or any other Transaction Document or will exist after or be triggered by the execution, delivery and performance of this Amendment No. 1. In addition, the Borrower and Credit Parties hereby represents, warrants and reaffirms that the Credit Agreement and each of the other Transaction Documents remains in full force and effect.

4. Conditions Precedent to Effectiveness. The effectiveness of the amendments set forth in Section 2 hereof are in each instance subject to the satisfaction of each of the following conditions precedent:

4.1 Amendment No. 1. This Amendment No. 1 shall have been duly executed and delivered by the Borrowers, the Administrative Agent and Lenders.

4.2 No Default. No Default or Event of Default shall have occurred and be continuing or would result from the effectiveness of this Amendment No. 1.

4.3 Opinion. The Administrative Agent and the Lenders shall have received opinions from the Borrower’s General Counsel, with respect to this Amendment No. 1 in form and substance acceptable to Agent.

4.4 Miscellaneous. Agent and Lenders shall have received such other agreements, instruments and documents as Agent or Lenders may reasonably request.

5. Reference to and Effect Upon the Credit Agreement and other Transaction Documents.

5.1 Full Force and Effect. Except as specifically provided herein, the Credit Agreement, the Notes and each other Transaction Document shall remain in full force and effect and each is hereby ratified and confirmed by the Borrower.

5.2 No Waiver. The execution, delivery and effect of this Amendment No. 1 shall be limited precisely as written and shall not be deemed to (i) be a consent to any waiver of any term or condition, or to any amendment or modification of any term or condition (except as specifically provided herein) of the Credit Agreement, the Notes or any other Transaction Document or (ii) prejudice any right, power or remedy which the Administrative Agent or any Lender now has or may have in the future under or in connection with the Credit Agreement or any other Transaction Document.

5.3 Certain Terms. Each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or any other word or words of similar import shall mean and be a reference to the Credit Agreement as amended hereby, and each reference in any other Transaction Document to the Credit Agreement or any word or words of similar import shall be and mean a reference to the Credit Agreement as amended hereby.

 

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6. Counterparts. This Amendment No. 1 may be executed in any number of counterparts, each of which when so executed shall be deemed an original but all such counterparts shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment No. 1 by telecopier shall be as effective as delivery of a manually executed counterpart signature page to this Amendment No. 1.

7. Costs and Expenses. As provided in the Credit Agreement, the Borrower shall pay the fees, costs and expenses incurred by Agent in connection with the preparation, execution and delivery of this Amendment No. 1 (including, without limitation, attorneys’ fees).

8. GOVERNING LAW. THIS AMENDMENT NO. 1 SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPALS.

9. Headings. Section headings in this Amendment No. 1 are included herein for convenience of reference only and shall not constitute a part of this Amendment No. 1 for any other purpose.

[Signature Pages Follow]

 

5

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IN WITNESS WHEREOF, this Amendment No. 1 has been duly executed as of the date first written above.

 

 

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[Amendment $1.2 bil Facility]

Exhibit (b)(1)(E)

EXECUTION VERSION

 

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AMENDED AND RESTATED CREDIT AGREEMENT

among

CEMEX, S.A. de C.V.,

as Borrower

and

CEMEX MÉXICO, S.A. de C.V.,

as Guarantor

and

EMPRESAS TOLTECA de MÉXICO, S.A. de C.V.,

as Guarantor

and

BARCLAYS BANK PLC, NEW YORK BRANCH,

as Issuing Bank and Documentation Agent

and

ING BANK N.V.,

as Issuing Bank

and

The Several Lenders Party Hereto,

as Lenders

and

BARCLAYS CAPITAL,

THE INVESTMENT BANKING DIVISION

OF BARCLAYS BANK PLC,

as Joint Bookrunner

and

CITIGROUP GLOBAL MARKETS INC.,

as Joint Bookrunner and Syndication Agent

and

ING CAPITAL LLC,

as Joint Bookrunner and Administrative Agent

US$700,000,000

Dated as of June 6, 2005

 

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TABLE OF CONTENTS

 

				Page
ARTICLE I DEFINITIONS				1
1.01		Certain Definitions		1
1.02		Other Definitional Provisions		18
1.03		Accounting Terms and Determinations		19
ARTICLE II THE LOAN FACILITIES				19
2.01		Revolving Loans		19
2.02		Swing Line Loans		23
2.03		Interest		26
ARTICLE III THE STANDBY L/C FACILITY				27
3.01		Issuance of the Standby L/C		27
3.02		Reimbursement Obligations		28
3.03		Obligations to Reimburse Standby L/C Drawing Absolute		29
3.04		Participating Interests		30
3.05		Limited Liability of the Issuing Banks		33
ARTICLE IV TERMINATION AND REDUCTION OF COMMITMENTS; FEES, TAXES, PAYMENT PROVISIONS				33
4.01		Termination or Reduction of Commitments		33
4.02		Extension of Termination Date		34
4.03		Fees		36
4.04		Computation of Fees		36
4.05		Taxes		36
4.06		General Provisions as to Payments		39
4.07		Funding Losses		40
4.08		Basis for Determining Interest Rate Inadequate or Unfair		40
4.09		Capital Adequacy		41
4.10		Illegality		41
4.11		Requirements of Law		42
4.12		Substitute Lenders		43
4.13		Sharing of Payments, Etc.		44
ARTICLE V CONDITIONS PRECEDENT				44
5.01		Conditions to Effectiveness		44
5.02		Conditions Precedent to Borrowings, Continuation or Conversion of the Loans and Issuances of Standby L/Cs		46

 

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TABLE OF CONTENTS

Continued

 

ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE BORROWER				47
6.01		Corporate Existence and Power		47
6.02		Power and Authority; Enforceable Obligations		47
6.03		Compliance with Law and Other Instruments		48
6.04		Consents/Approvals		48
6.06		Litigation		48
6.07		No Immunity		48
6.08		Governmental Regulations		48
6.09		Direct Obligations; Pari Passu; Liens		49
6.10		Subsidiaries		49
6.11		Ownership of Property		49
6.12		No Recordation Necessary		49
6.13		Taxes		50
6.14		Compliance with Laws		50
6.15		Absence of Default		50
6.16		Full Disclosure		50
6.17		Choice of Law; Submission to Jurisdiction and Waiver of Sovereign Immunity		50
6.18		Aggregate Exposure		51
6.19		Existing Standby L/C’s		51
6.20		Pension and Welfare Plans		51
6.21		Environmental Matters		51
6.22		Margin Regulations		52
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE GUARANTORS				53
7.01		Corporate Existence and Power		53
7.02		Power and Authority; Enforceable Obligations		53
7.03		Compliance with Law and Other Instruments		53
7.04		Consents/Approvals		53
7.05		Litigation; Material Adverse Effect		54
7.06		No Immunity		54
7.07		Governmental Regulations		54
7.09		No Recordation Necessary		54
7.10		Choice of Law; Submission to Jurisdiction and Waiver of Sovereign Immunity		54
ARTICLE VIII AFFIRMATIVE COVENANTS				55
8.01		Financial Reports and Other Information		55
8.02		Notice of Default and Litigation		56
8.03		Compliance with Laws and Contractual Obligations, Etc.		56
8.04		Payment of Obligations		56
8.05		Maintenance of Insurance		57
8.06		Conduct of Business and Preservation of Corporate Existence		57

 

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TABLE OF CONTENTS

Continued

 

8.07		Books and Records		57
8.08		Maintenance of Properties, Etc.		57
8.09		Use of Proceeds		58
8.10		Pari Passu Ranking		58
8.11		Transactions with Affiliates		58
8.12		Maintenance of Governmental Approvals		58
8.13		Measurement Date		58
8.14		Inspection of Property		58
ARTICLE IX NEGATIVE COVENANTS				59
9.01		Financial Conditions		59
9.02		Liens		59
9.03		Consolidations and Mergers		61
9.04		Sales of Assets, Etc		62
9.05		Change in Nature of Business		62
9.06		Margin Regulations		62
ARTICLE X OBLIGATIONS OF GUARANTORS				62
10.01		The Guaranty		62
10.02		Nature of Liability		62
10.03		Unconditional Obligations		63
10.04		Independent Obligation		63
10.05		Waiver of Notices		64
10.06		Waiver of Defenses		64
10.07		Bankruptcy and Related Matters		65
10.08		No Subrogation		66
10.09		Right of Contribution		66
10.10		General Limitation on Guaranty		66
10.11		Covenants of the Guarantors		67
ARTICLE XI EVENTS OF DEFAULT				67
11.01		Events of Default		67
11.02		Remedies		69
11.03		Notice of Default		70
11.04		Default Interest		70
ARTICLE XII THE ADMINISTRATIVE AGENT				71
12.01		Appointment and Authorization		71
12.02		Delegation of Duties		71
12.03		Liability of Administrative Agent		71
12.04		Reliance by Administrative Agent		72
12.05		Notice of Default		72

 

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TABLE OF CONTENTS

Continued

 

12.06		Credit Decision		72
12.07		Indemnification		73
12.08		Administrative Agent in Individual Capacity		74
12.09		Successor Administrative Agent		74
ARTICLE XIII THE ISSUING BANKS				75
13.01		Appointment		75
13.02		Liability of Issuing Bank		75
13.03		Reliance by Issuing Banks		75
13.04		Credit Decision		76
13.05		Indemnification		76
13.06		Issuing Banks in their Individual Capacities		77
13.07		Notice of Default		77
ARTICLE XIV THE JOINT BOOKRUNNERS				77
14.01		The Joint Bookrunners		77
14.02		Liability of Joint Bookrunners		77
14.03		Joint Bookrunners in their respective Individual Capacities		78
14.04		Credit Decision		78
ARTICLE XV MISCELLANEOUS				78
15.01		Notices		78
15.02		Amendments and Waivers		79
15.03		No Waiver; Cumulative Remedies		80
15.04		Payment of Expenses, Etc.		80
15.05		Indemnification		81
15.06		Successors and Assigns		81
15.07		Right of Set-off		83
15.08		Confidentiality		84
15.09		Use of English Language		84
15.10		GOVERNING LAW		84
15.11		Submission to Jurisdiction		84
15.12		Appointment of Agent for Service of Process		85
15.13		Waiver of Sovereign Immunity		85
15.14		Judgment Currency		86
15.15		Counterparts		86
15.16		USA PATRIOT Act.		86
15.17		Severability		87
15.18		Survival of Agreements and Representations		87

 

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TABLE OF CONTENTS

Continued

 

						Page
SCHEDULES
Schedule 1.01(a)		—		Commitments
Schedule 1.01(b)		—		Lending Offices
Schedule 1.01(c)		—		Notice Details
Schedule 3.01		—		Existing Standby L/Cs
Schedule 6.06		—		Litigation
Schedule 6.10		—		Subsidiaries
Schedule 7.05		—		Litigation
Schedule 9.02(e)(i)		—		Liens
Schedule 9.02(e)(ii)		—		Liens
EXHIBITS
Exhibit A		—		Form of Note
Exhibit B		—		Notice of Borrowing
Exhibit C		—		Form of Notice of Extension/Conversion
Exhibit D		—		Form of Assignment and Assumption Agreement
Exhibit E		—		Form of Opinion of Special New York Counsel to the Borrower and the Guarantors
Exhibit F		—		Form of Opinion of Mexican Counsel to the Borrower and the Guarantors
Exhibit G		—		Form of Standby Letter of Credit

 

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AMENDED AND RESTATED CREDIT AGREEMENT

AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 6, 2005 among CEMEX, S.A. de C.V., a sociedad anonima de capital variable organized and existing pursuant to the laws of the United Mexican States (the “Borrower”), CEMEX MÉXICO, S.A. de C.V., a sociedad anonima de capital variable organized and existing pursuant to the laws of the United Mexican States, EMPRESAS TOLTECA DE MÉXICO, S.A. de C.V., a sociedad anonima de capital variable organized and existing pursuant to the laws of the United Mexican States (each a “Guarantor” and together, the “Guarantors”), BARCLAYS BANK PLC, NEW YORK BRANCH (“Barclays”), as an Issuing Bank and Documentation Agent, ING BANK N.V., as an Issuing Bank (together with Barclays in its capacity as an Issuing Bank, the “Issuing Banks”), the several Lenders party hereto, BARCLAYS CAPITAL, THE INVESTMENT BANKING DIVISION OF BARCLAYS BANK PLC, as a Joint Bookrunner, CITIGROUP GLOBAL MARKETS INC., as a Joint Bookrunner and Syndication Agent and ING CAPITAL LLC, as a Joint Bookrunner and Administrative Agent.

RECITALS

WHEREAS, the Borrower entered into a Credit Agreement, dated as of June 23, 2004, among the Borrower, the Guarantors, Barclays, as an issuing bank and documentation agent, ING Bank N.V., as an issuing bank, the several lenders party thereto, Barclays Capital, the Investment Banking Division of Barclays, as a joint bookrunner and ING Capital LLC, as a joint bookrunner and administrative agent (the “Existing Agreement”).

WHEREAS, the Borrower proposes to amend and restate the Existing Agreement in its entirety.

NOW, THEREFORE, each of the Parties hereto hereby agrees as follows:

ARTICLE I

DEFINITIONS

1.01 Certain Definitions. As used in this Agreement, the following terms shall have the following meanings:

“Acquired Subsidiary” means any Subsidiary acquired by the Borrower or any other Subsidiary after the date hereof in an Acquisition, and any Subsidiaries of such Acquired Subsidiary on the date of such Acquisition.

“Acquiring Subsidiary” means any Subsidiary of the Borrower or any one of its Subsidiaries solely for the purpose of participating as the acquiring party in any Acquisition, and any Subsidiaries of such Acquiring Subsidiary acquired in such Acquisition.

“Acquisition” means any merger, consolidation, acquisition or lease of assets, acquisition of securities or business combination or acquisition, or any two or more of

 

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such transactions, if upon the completion of such transaction or transactions, the Borrower or any Subsidiary thereof has acquired an interest in any Person who is deemed to be a Subsidiary under this Agreement and was not a Subsidiary prior thereto.

“Additional Commitment Lender” has the meaning specified in Section 4.02(f).

“Adjusted Consolidated Net Tangible Assets” means, with respect to any Person, the total assets of such Person and its Subsidiaries (less applicable depreciation, amortization and other valuation reserves), including any write-ups or restatements required under Mexican GAAP (other than with respect to items referred to in clause (ii) below), after deducting therefrom (i) all current liabilities of such Person and its Subsidiaries (excluding the current portion of long-term debt) and (ii) all goodwill, trade names, trademarks, licenses, concessions, patents, unamortized debt discount and expense and other intangibles, all as determined on a consolidated basis in accordance with Mexican GAAP.

“Administrative Agent” means ING Capital LLC, in its capacity as administrative agent for each of the Participating Lenders, and its successors in such capacity.

“Administrative Agent’s Payment Office” means the Administrative Agent’s address for payments set forth on the signature pages hereof or such other address as the Administrative Agent may from time to time specify to the other Parties hereto pursuant to the terms of this Agreement.

“Affected Lender” has the meaning specified in Section 4.10(a).

“Affiliate” means, in relation to any Person, a Subsidiary of that Person or a Holding Company of that Person or any other Subsidiary of that Holding Company.

“Aggregate Available Standby L/C Sublimit” means, as of any date, the lesser of (a)(i) the aggregate amount of the Available Standby L/C Sublimit of each Issuing Bank minus (ii) the aggregate amount of the Standby L/C Exposure of each Issuing Bank at such time, and (b) the Available Commitments.

“Aggregate Committed Amount” means the aggregate amount of all of the Commitments.

“Aggregate Exposure” means the sum of (i) the Outstanding Borrowings under this Agreement and (ii) the Aggregate Standby L/C Exposure.

“Aggregate Standby L/C Sublimit” means, initially $200,000,000, as such amount may be reduced in accordance with Section 4.01.

“Aggregate Standby L/C Exposure” means the sum the Standby L/C Exposure of each Issuing Bank.

“Agreement” means this Amended and Restated Credit Agreement, as the same may hereafter be amended, supplemented or otherwise modified from time to time.

 

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“Applicable Margin” means, at any date, the applicable margin set forth below based upon the Borrower’s Consolidated Net Debt/EBITDA Ratio (it being understood that measurement of the Consolidated Net Debt/EBITDA Ratio as of the most recent Measurement Date is sufficient for this purpose):

 

		Applicable Margin
Consolidated Net Debt/EBITDA Ratio		Base Rate Loans			LIBOR Loans
3.00 to 1 or greater		0.45	%		0.45	%
Less than 3.00 to 1, but greater than or equal to 2.50 to 1		0.40	%		0.40	%
Less than 2.50 to 1, but greater than or equal to 2.00 to 1		0.35	%		0.35	%
Less than 2.00 to 1		0.30	%		0.30	%

; provided, however, the initial Applicable margin shall be 0.45%.

“Appropriate Issuing Bank” means, at any time, the Issuing Bank with the greatest Available Standby L/C Sublimit, or if the Available Standby L/C Sublimit for each Issuing Bank is equal, then the Issuing Bank designated as such in the Notice of Borrowing.

“Amendment Fee” has the meaning specified in Section 4.03(e).

“Assignee” has the meaning specified in Section 15.06(b).

“Assignment and Assumption Agreement” means an assignment and assumption agreement in substantially the form of Exhibit D.

“Available Commitments” means, as of any date, the Aggregate Committed Amount minus the Aggregate Exposure.

“Available Standby L/C Sublimit” means, with respect to each Issuing Bank, as of any date, the lesser of (a)(i) Standby L/C Sublimit for such Issuing Bank minus (ii) the Standby L/C Exposure for such Issuing Bank at such time, and (b) the Available Commitments.

“Average Aggregate Committed Amount” means, for any Utilization Period, the sum of the Aggregate Committed Amount as of the end of each day during such Utilization Period, divided by the number of days in such Utilization Period.

“Average Outstanding Loans” means, for any Utilization Period, the sum of the aggregate principal amount of Loans outstanding under this Agreement as of the end of each day during such Utilization Period, divided by the number of days in such Utilization Period.

 

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“Base Rate” means, for any day, the higher of (a) the Prime Rate or (b) the Federal Funds Rate plus 1/2% per annum, in each case as in effect for such day. Any change in the Prime Rate announced by the Reference Banks shall take effect at the opening of business on the day specified in the public announcement of such change.

“Base Rate Loan” means any Loan made or maintained at a rate of interest calculated with reference to the Base Rate.

“Bookrunners” or “Joint Bookrunners” means Barclays Capital, the Investment Banking Division of Barclays Bank PLC, and ING Capital LLC, in their capacity as joint bookrunners hereunder, and each of their successors in such capacity.

“Borrower” has the meaning specified in the preamble hereto.

“Borrowing” means the aggregate amount of Loans hereunder to be made to the Borrower pursuant to Article II on a particular date by each of the Lenders.

“Borrowing Request” means a Notice of Borrowing, a Swing Line Notice of Borrowing or a Standby L/C Request.

“Business Day” means any day other than a Saturday or Sunday or other day on which commercial banks in New York City or The Netherlands Antilles are authorized or required by law to close.

“Capital Lease” means, as to any Person, 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 Mexican GAAP and, for the purposes of this Agreement, the amount of such obligations at any time shall be the capitalized amount thereof at such time determined in accordance with Mexican GAAP.

“Capital Stock” means any and all shares, interests, participations or other equivalents (however designed) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

“Commitment” means, with respect to each Lender, the aggregate principal amount set forth opposite the name of such Lender in Schedule 1.01(a) or in any Assignment and Assumption Agreement, as such amount may be reduced or increased from time to time in accordance with the provisions hereof.

“Commitment Fee” has the meaning specified in Section 4.03(a).

 

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“Commitment Percentage” means, with respect to each Lender, a fraction (expressed as a decimal) the numerator of which is the Commitment of such Lender at such time and the denominator of which is the Aggregate Committed Amount at such time. The initial Commitment Percentages are set out on Schedule 1.01(a).

“Commitment Period” means the period from and including the Effective Date to but excluding the earlier of (i) the Termination Date, or (ii) the date on which the Commitments terminate in accordance with the provisions of this Agreement.

“Confidential Information” means information that the Borrower or a Guarantor furnishes to the Administrative Agent, the Joint Bookrunners or any Lender in a writing designated as confidential, but does not include any such information that is or becomes generally available to the public or that is or becomes available to the Administrative Agent or the Joint Bookrunners or such Lender from a source other than the Borrower or a Guarantor that is not, to the best of the Administrative Agent’s, the Joint Bookrunners’ or such Lender’s knowledge, acting in violation of a confidentiality agreement with the Borrower or Guarantor or any other Person.

“Consolidated” refers to the consolidation of accounts in accordance with Mexican GAAP.

“Consolidated Fixed Charges” means, for any period, the sum (without duplication) of (a) Consolidated Interest Expense for such period and (b) to the extent not included in (a) above, payments during such period in respect of the financing costs of financial derivatives in the form of equity swaps.

“Consolidated Fixed Charge Coverage Ratio” means, for any period of four consecutive fiscal quarters, the ratio of (a) EBITDA for such period to (b) Consolidated Fixed Charges for such period.

“Consolidated Interest Expense” means, for any period, the total gross interest expense of the Borrower and its consolidated Subsidiaries allocable to such period in accordance with Mexican GAAP.

“Consolidated Net Debt” means, at any date, the sum (without duplication) of (a) the aggregate amount of all Debt of the Borrower and its Subsidiaries at such date, plus (b) to the extent not included in Debt the aggregate amount of all derivative financing in the form of equity swaps outstanding at such date (save to the extent cash collateralized) minus (c) all Temporary Investments of the Borrower and its Subsidiaries at such date.

“Consolidated Net Debt / EBITDA Ratio” means, the ratio of (a) Consolidated Net Debt to (b) EBITDA for any period of four consecutive fiscal quarters immediately preceding, which shall be calculated based on the most recent available consolidated financial statements of the Borrower and its Subsidiaries.

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any indenture, mortgage, deed of trust, loan agreement or other agreement to which such Person is a party or by which it or any of its property or assets is bound.

 

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“Credit Party” means any of the Borrower or the Guarantors.

“Debt” of any Person means, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business, (iv) all obligations of such Person as lessee under Capital Leases, (v) all Debt of others secured by a Lien on any asset of such Person, up to the value of such asset, as recorded in such Person’s most recent balance sheet, (vi) all obligations of such Person with respect to product invoices incurred in connection with export financing, and (vii) all obligations of such Person under repurchase agreements for the stock issued by such Person or another Person. For the avoidance of doubt, Debt does not include Derivatives. With respect to the Borrower and its subsidiaries, the aggregate amount of Debt outstanding shall be adjusted by the Value of Debt Currency Derivatives solely for the purposes of calculating the Consolidated Net Debt / EBITDA Ratio. If the Value of Debt Currency Derivatives is a positive mark-to-market valuation for the Borrower and its subsidiaries, then Debt shall decrease accordingly, and if the Value of Debt Currency Derivatives is a negative mark-to-market valuation for the Borrower and its subsidiaries, then Debt shall increase by the absolute value thereof.

“Debt Currency Derivatives” means derivatives of the Borrower and its subsidiaries related to currency entered into for the purposes of hedging exposures under outstanding Debt of the Borrower and its subsidiaries, including but not limited to cross-currency swaps and currency forwards.

“Default” means any condition, event or circumstance which, with the giving of notice or lapse of time or both, would, unless cured or waived, become an Event of Default.

“Defaulting Lender” has the meaning specified in Section 2.01(d).

“Derivatives” means any type of derivative obligations, including but not limited to equity forwards, capital hedges, cross-currency swaps, currency forwards, interest rate swaps and swaptions.

“Disbursement Date” means, with respect to a Drawing, the date on which such Drawing is paid by the relevant Issuing Bank and, with respect to a Loan, the date on which such Loan is made by the Participating Lender.

“Disposition” means, with respect to any property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof. The terms “Dispose” and “Disposed of” shall have correlative meanings.

“Dollars”, “$” and “U.S.$” each means the lawful currency of the United States.

 

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“Dow Jones Page 3750” means the display designated as page “3750” on the Dow Jones Market Screen (formerly known as the Telerate Service) or such other page as may replace the “3750” page on that service or such other service or services as may be nominated by the British Bankers’ Association for the purpose of displaying London interbank offered rates for Dollar deposits.

“Drawing” means a drawing made under a Standby L/C.

“EBITDA” means, for any period, the sum for the Borrower and its Subsidiaries, determined on a consolidated basis of (a) operating income (utilidad de operación), (b) cash interest income and (c) depreciation and amortization expense, in each case determined in accordance with Mexican GAAP consistently applied for such period. For the purposes of calculating EBITDA for any period of four consecutive fiscal quarters (each, a “Reference Period”) pursuant to any determination of the Consolidated Net Debt / EBITDA Ratio (but not Consolidated Fixed Charge Coverage Ratio), (i) if at any time during such Reference Period the Borrowers or any of its Subsidiaries shall have made any Material Disposition, the EBITDA for such Reference Period shall be reduced by an amount equal to the EBITDA (if positive) attributable to the property that is the subject of such Material Disposition for such Reference Period (but when the Material Disposition is by way of lease, income received by the Borrower or any of its Subsidiaries under such lease shall be included in EBITDA) and (ii) if at any time during such Reference Period the Borrower or any of its Subsidiaries shall have made any Material Acquisition, EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto (including the incurrence or assumption of any Debt) as if such Material Acquisition had occurred on the first day of such Reference Period. Additionally, if since the beginning of such Reference Period any Person that subsequently shall have become a Subsidiary or was merged or consolidated with the Borrower or any of its Subsidiaries as a result of a Material Acquisition occurring during such Reference Period shall have made any Disposition or Acquisition of property that would have required an adjustment pursuant to clause (i) or (ii) above if made by the Borrower or any of its Subsidiaries during such Reference Period, EBITDA for such period shall be calculated after giving pro forma effect thereto as if such Disposition or Acquisition had occurred on the first day of such Reference Period.

“Effective Date” has the meaning specified in Section 5.01.

“Environmental Action” means any audit procedure, action, suit, demand, demand letter, claim, notice of non-compliance or violation, notice of liability or potential liability, investigation, proceeding, consent order or consent agreement relating in any way to any Environmental Law, Environmental Permit or Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the environment, including (a) by any Governmental Authority for enforcement, cleanup, removal, response, remedial or other actions or damages and (b) by any Governmental Authority or any third party for damages, contribution, indemnification, cost recovery, compensation or injunctive relief.

 

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“Environmental Law” means any federal, state, local or foreign statute, law, ordinance, rule, regulation, technical standard (norma técnica or norma oficial Mexicana), code, order, judgment, decree or judicial agency interpretation, policy or guidance relating to pollution or protection of the environment, health, safety or natural resources, including those relating to the use, handling, transportation, treatment, storage, disposal, release or discharge of Hazardous Materials.

“Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto, as interpreted by the rules and regulations thereunder, all as the same may be in effect from time to time. References to sections of ERISA shall be construed also to refer to any successor sections.

“ERISA Affiliate” means an entity, whether or not incorporated, that is under common control with the Borrower within the meaning of Section 4001(a)(14) of ERISA, or is a member of a group that includes the Borrower and that is treated as a single employer under Sections 414(b) or (c) of the Code.

“Event of Default” has the meaning specified in Section 11.01.

“Existing Agreement” has the meaning specified in the Recitals hereto.

“Federal Funds Rate” means, for any relevant day, the overnight Federal funds rate as published for such day in the Federal Reserve Statistical Release H.15 (519) or any successor publication, or, if such rate is not published for any day, the rate for such day will be the rate set forth in the daily statistical release designated as the Composite 3:30 p.m. Quotation for U.S. Government Securities, or any successor publication, published by the Federal Reserve Bank of New York (including any such successor, the “Composite 3:30 p.m. Quotation” for such day under the caption “Federal Funds Effective Rate”). If on any relevant day the appropriate rate for such previous day is not yet published in either H.15 (519) or the Composite 3:30 p.m. Quotations, the rate for such day will be the arithmetic mean as determined by the Administrative Agent of the rates for the last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on that day by each of three leading brokers of recognized standing of Federal funds transactions in New York City selected by the Administrative Agent.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve System of the United States.

“Fee Letters” means the Original Fee Letter and the New Fee Letter.

“Foreign Financial Institution” means an institution registered as a foreign financial institution with the Ministry of Finance in the Mexican Banking and Financial Institutions, Pensions, Retirement and Foreign Investment Funds Registry for purposes of Article 195, Section I of the Mexican Income Tax Law.

 

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“Funding Default” means a default by a Lender pursuant to Section 2.01(d).

“Governmental Authority” means any branch of power or government or any state, department or other political subdivision thereof, or any governmental body, agency, authority (including any central bank or taxing or environmental authority), any entity or instrumentality (including any court or tribunal) exercising executive, legislative, judicial, regulatory, administrative or investigative functions of or pertaining to government.

“Guarantor” has the meaning specified in the preamble hereto.

“Hazardous Materials” means (a) radioactive materials, asbestos-containing materials, polychlorinated biphenyls, radon gas and (b) any other chemicals, materials or substances designated, classified or regulated as hazardous or toxic or as a pollutant or contaminant under any applicable Environmental Law.

“Holding Company” means, in relation to a company or a corporation, any other company or corporation in respect of which it is a Subsidiary.

“Indemnified Party” has the meaning specified in Section 15.05.

“Interest Payment Date” means (i) with respect to any Base Rate Loan, the last day of each March, June, September and December, the date of repayment of such Loan and the Termination Date and, (ii) with respect to any LIBOR Loan, the last day of each Interest Period for such Loan, the date of repayment of principal of such Loan and on the Termination Date, (iii) with respect to any Swing Line Loan, the Maturity Date thereof. If an Interest Payment Date falls on a date that is not a Business Day, such Interest Payment Date shall be deemed to be the next succeeding Business Day, except that in the case of LIBOR Loans where the next succeeding Business Day falls in the next succeeding calendar month, then on the next preceding Business Day.

“Interest Period” means, with respect to each Borrowing of LIBOR Loans, the period (i) commencing (A) on the date of such Borrowing or conversion of Base Rate Loans into LIBOR Loans or (B) in the case of the continuation of LIBOR Loans for a further Interest Period, on the last day of the immediately preceding Interest Period and (ii) ending one, two, three or six months thereafter as the Borrower may elect in the applicable Notice of Borrowing or Notice of Continuation/Conversion; provided, however, that:

(1) any Interest Period which would otherwise end on a day which is not a LIBOR Business Day shall, subject to paragraph (3) below, be extended to the next succeeding LIBOR Business Day unless such LIBOR Business Day falls in another calendar month, in which case such Interest Period shall end on the immediately preceding LIBOR Business Day;

(2) any Interest Period which begins on the last LIBOR Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to paragraph (3) below, end on the last LIBOR Business Day of a calendar month;

 

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(3) any Interest Period which would otherwise end after the last day of the Commitment Period shall end on the last day of the Commitment Period; and

(4) any Interest Period which would otherwise end after the Termination Date shall end on the Termination Date.

“Issuing Bank” means each of Barclays Bank PLC and ING Bank N.V., each in its capacity as issuer of Standby L/Cs, and its successors in such capacity.

“Joint Bookrunners Fees” has the meaning specified in Section 4.03(d).

“Lender” means each financial institution designated as such on the signature pages hereof, each Assignee which becomes a Lender pursuant to Section 15.06(b), each Additional Commitment Lender, each Substitute Lender and each of their respective successors or assigns.

“Lending Office” means, with respect to any Lender, (a) the office or offices of such Lender specified as its “Lending Office” or “Lending Offices” in Schedule 1.01(b) or (b) such other office or offices of such Lender as it may designate as its Lending Office by notice to the Borrower and the Administrative Agent and with the consent of the Issuing Banks (which shall not be unreasonably withheld).

“LIBOR”, applicable to any Interest Period, means the rate for deposits in Dollars for a period equal to such Interest Period quoted on the second LIBOR Business Day prior to the first day of such Interest Period, as such rate appears on Dow Jones Page 3750 as of 11:00 a.m. (London time) on such date as determined by the Administrative Agent and notified to the Lenders and the Borrower on such second prior LIBOR Business Day. If LIBOR cannot be determined based on the Dow Jones Page 3750, LIBOR means the arithmetic mean (rounded upwards to the nearest 1/16%) of the rates per annum, as supplied to the Administrative Agent, quoted by the Reference Banks to prime banks in the London interbank market for deposits in Dollars at approximately 11:00 a.m. (London time) two LIBOR Business Days prior to the first day of such Interest Period in an amount approximately equal to the principal amount of the Loans to which such Interest Period is to apply and for a period of time comparable to such Interest Period.

“LIBOR Business Day” means any Business Day on which commercial banks are open in London for the transaction of international business, including dealings in Dollar deposits in the international interbank markets.

“LIBOR Loan” means any Loan made or maintained at a rate of interest calculated with reference to LIBOR.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset. The Borrower or

 

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any Subsidiary of the Borrower shall be deemed to own, subject to a Lien, any asset that it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, Capital Lease or other title retention lease relating to such asset, or any account receivable transferred by it with recourse (including any such transfer subject to a holdback or similar arrangement that effectively imposes the risk of collectability on the transferor).

“Loan” means any Revolving Loan or any Swing Line Loan.

“Material Acquisition” any (a) acquisition of property or series of related acquisitions of property that constitutes assets comprising all or substantially all of an operating unit, division or line of business or (b) acquisition of or other investment in the Capital Stock of any Subsidiary or any Person which becomes a Subsidiary or is merged or consolidated with the Borrower or any of its Subsidiaries, in each case, which involves the payment of consideration by the Borrower and its Subsidiaries in excess of U.S.$25,000,000 (or the equivalent in other currencies).

“Material Adverse Effect” means a material adverse effect on (a) the business, condition (financial or otherwise), operations, performance, properties or prospects of the Borrower and its Subsidiaries taken as a whole, (b) the validity or enforceability of this Agreement or any of the Notes or the rights and remedies of the Administrative Agent or any Lender under this Agreement or any of the Notes or (c) the ability of the Borrower and/or the Guarantors to perform their Obligations under this Agreement , the Notes, the Fee Letter, any Notice of Borrowings, any certificates, waivers, or any other agreement delivered pursuant to this Agreement.

“Material Debt” means Debt (other than the Loans and the Standby L/C Exposure) of the Borrower and/or one or more of its Subsidiaries, arising in one or more related or unrelated transactions, in an aggregate principal amount outstanding exceeding U.S.$50,000,000 (or the equivalent thereof in other currencies).

“Material Disposition” means any Disposition of property or series of related Dispositions of property that yields gross proceeds to the Borrower or any of its Subsidiaries in excess of U.S.$25,000,000 (or the equivalent in other currencies).

“Material Subsidiary” means, at any date, (a) each Subsidiary of the Borrower (if any) (i) the assets of which, together with those of its Subsidiaries, on a consolidated basis, without duplication, constitute 5% or more of the consolidated assets of the Borrower and its Subsidiaries as of the end of the then most recently ended fiscal quarter for which quarterly financial statements have been prepared or (ii) the operating profit of which, together with that of its Subsidiaries, on a consolidated basis, without duplication, constitutes 5% or more of the consolidated operating profit of the Borrower and its Subsidiaries for the then most recently ended fiscal quarter for which quarterly financial statements have been prepared and (b) each Guarantor.

“Measurement Date” means any of the dates specified in Section 8.13.

 

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“Mexican GAAP” means, generally accepted accounting principles in Mexico as in effect from time to time, except that for purposes of Section 9.01, Mexican GAAP shall be determined on the basis of such principles in effect on the date hereof and consistent with those used in the preparation of the most recent audited financial statements referred to in Section 8.01. In the event that any change in Mexican GAAP shall occur and such change results in a change in the method of calculation of financial covenants, standards or terms in this Agreement, then the Borrower and the Administrative Agent agree to enter into negotiations in order to amend such provisions of this Agreement so as to equitably reflect such change in Mexican GAAP with the desired result that the criteria for evaluating the Borrower’s financial condition shall be the same after such change as if such change had not been made. Until such time as such an amendment shall have been executed and delivered by the Borrower, the Administrative Agent and the Required Lenders, all financial covenants, standards and terms in this Agreement shall continue to be calculated or construed as if such change in Mexican GAAP had not occurred.

“Mexico” means the United Mexican States.

“Ministry of Finance” means the Ministry of Finance and Public Credit of Mexico.

“New Fee Letter” means the fee letter entered into by the Borrower, Barclays, Citigroup Global Markets Inc. and ING Capital LLC dated as of April 20, 2005.

“Non-Extending Lender” means, in connection with extending the Termination Date and the Commitments in accordance with Section 4.02, (a) any Participating Lender that gives written notice to the Joint Bookrunners and Administrative Agent that it does not agree to extend its Commitment and (b) any Participating Lender that fails to give any notice within five Business Days prior to the effective date of such extension, whether or not such Participating Lender agrees to such extension, and shall, for purposes of the effectiveness of this Agreement, also include any lender under the Existing Agreement that elected not to extend its commitment under the Existing Agreement to be a Participating Lender hereunder.

“Note” means any promissory note of the Borrower delivered pursuant to this Agreement.

“Notice of Borrowing” has the meaning specified in Section 2.01(c).

“Notice of Extension/Conversion” has the meaning specified in Section 2.01(e).

“Obligations” means, (a) with respect to the Borrower, all of its indebtedness, obligations and liabilities to the Participating Lenders, the Joint Bookrunners and the Administrative Agent now or in the future existing under or in connection with the Transaction Documents, whether direct or indirect, absolute or contingent, due or to become due, and (b) with respect to each Guarantor, all of its indebtedness, obligations and liabilities to the Participating Lenders, the Joint Bookrunners and the Administrative Agent now or in the future existing under or in connection with the Transaction Documents, in each case whether direct or indirect, absolute or contingent, due or to become due.

 

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“Obligors” means the Borrower and each Guarantor.

“OECD Bank” shall mean any bank organized under the laws of a member of the Organization for Economic Cooperation and Development.

“Original Fee Letter” means the fee letter between the Issuing Banks and the Borrower dated as of May 10, 2004.

“Other Taxes” means any present or future stamp or documentary taxes or any other excise or property taxes, charges, imposts, duties, fees, or similar levies which arise from any payment made hereunder or under the Notes or from the execution, delivery, registration, performance or enforcement of, or otherwise with respect to, this Agreement or any other Transaction Document and which are imposed, levied, collected or withheld by any Governmental Authority.

“Outstanding Borrowings” means the aggregate principal amount of all Loans outstanding.

“Participant” has the meaning specified in Section 15.06(d).

“Participating Lender” means any Lender, Swing Line Lender or Issuing Bank, or if used in the plural, all thereof.

“Pension Plan” means a “pension plan”, as such term is defined in Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which any Credit Party or any of its ERISA Affiliates has any liability.

“Permitted Liens” has the meaning specified in Section 9.02.

“Person” means an individual, partnership, corporation, business trust, joint stock company, limited liability company, trust, unincorporated association, joint venture or other business entity or Governmental Authority, whether or not having a separate legal personality.

“Prime Rate” means the average of the rate of interest publicly announced by each of the Reference Banks from time to time as its Prime Rate in New York City, the Prime Rate to change as and when such designated rate changes. The Prime Rate is not intended to be the lowest rate of interest charged by the Administrative Agent or any Lender in connection with extensions of credit to debtors of any class, or generally.

“Process Agent” has the meaning specified in Section 15.12(a).

“Qualified Receivables Transaction” means any transaction or series of transactions that may be entered into by the Borrower or any Subsidiary pursuant to

 

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which the Borrower or any Subsidiary may sell, convey or otherwise transfer to a Special Purpose Vehicle (in the case of a transfer by the Borrower or any other Seller) and any other person (in the case of a transfer by a Special Purpose Vehicle), or may grant a security interest in, any Receivables Program Assets (whether now existing or arising in the future); provided that:

(a) no portion of the indebtedness or any other obligations (contingent or otherwise) of a Special Purpose Vehicle (i) is guaranteed by the Borrower or any other Seller or (ii) is recourse to or obligates the Borrower or any other Seller in any way such that the requirements for off balance sheet treatment under Financial Accounting Standards Bulletin 140 are not satisfied; and

(b) the Borrower and the other Sellers do not have any obligation to maintain or preserve the financial condition of a Special Purpose Vehicle or cause such entity to achieve certain levels of operating results.

“Receivables” means all rights of the Borrower or any other Seller to payments (whether constituting accounts, chattel paper, instruments, general intangibles or otherwise, and including the right to payment of any interest or finance charges), which rights are identified in the accounting records of the Borrower or such Seller as accounts receivable.

“Receivables Documents” means (a) a receivables purchase agreement, pooling and servicing agreement, credit agreement, agreements to acquire undivided interests or other agreement to transfer, or create a security interest in, Receivables Program Assets, in each case as amended, modified, supplemented or restated and in effect from time to time entered into by the Borrower, another Seller and/or a Special Purpose Vehicle, and (b) each other instrument, agreement and other document entered into by the Borrower, any other Seller or a Special Purpose Vehicle relating to the transactions contemplated by the items referred to in clause (a) above, in each case as amended, modified, supplemented or restated and in effect from time to time.

“Receivables Program Assets” means (a) all Receivables which are described as being transferred by the Borrower, another Seller or a Special Purpose Vehicle pursuant to the Receivables Documents, (b) all Receivables Related Assets in respect of such Receivables, and (c) all collections (including recoveries) and other proceeds of the assets described in the foregoing clauses.

“Receivables Program Obligations” means (a) notes, trust certificates, undivided interests, partnership interests or other interests representing the right to be paid a specified principal amount from the Receivables Program Assets and (b) related obligations of the Borrower, a Subsidiary of the Borrower or a Special Purpose Vehicle (including, without limitation, rights in respect of interest or yield hedging obligations, breach of warranty claims and expense reimbursement and indemnity provisions).

“Receivables Related Assets” means with respect to any “Receivables” (i) any rights arising under the documentation governing or relating to such Receivables

 

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(including rights in respect of liens securing such Receivables), (ii) any proceeds of such Receivables, (iii) other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable.

“Reference Banks” shall mean three banks in the London interbank market, initially Barclays Bank PLC, ING Bank N.V. and Citibank, N.A.

“Regulation T, U, or X” means Regulation T, U, or X, respectively, of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.

“Required Lenders” means, at any time, Lenders (other than Defaulting Lenders) whose Total Exposures, when aggregated, exceed 50% of the Aggregate Exposure minus the Total Exposure of any Defaulting Lenders at such time.

“Requirement of Law” means, as to any Person, any law, ordinance, rule, regulation or requirement of any Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Responsible Officer” of any Person means the Chief Financial Officer, the Corporate Planning and Finance Director, the Finance Director or the Comptroller of such Person.

“Revolving Loans” has the meaning specified in Section 2.01(a) hereof.

“Seller” means the Borrower and any Subsidiary or other affiliate of the Borrower (other than a Subsidiary or affiliate that is a Special Purpose Vehicle) which is a party to a Receivables Document.

“Special Purpose Vehicle” means a trust, partnership or other special purpose person established by the Borrower and/or its Subsidiaries to implement a Qualified Receivables Transaction.

“Standby L/C” means (i) a standby letter of credit issued by an Issuing Bank and substantially in the form of Exhibit G, as such may hereafter be amended or replaced from time to time pursuant to the terms of this Agreement, and (ii) any standby letter of credit of an Issuing Bank, issued and outstanding on the Effective Date pursuant to the terms of the Existing Agreement.

“Standby L/C Exposure” means, with respect to each Issuing Bank, at any time, the sum of (a) the aggregate undrawn amount at such time of all outstanding Standby L/Cs of such Issuing Bank plus (b) the aggregate unpaid amount at such time of all unreimbursed Drawings under all outstanding Standby L/Cs of such Issuing Bank.

 

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“Standby L/C Facility” means the Standby L/Cs, any Drawing (including any unreimbursed Drawing), any obligations of the Borrower in respect of the foregoing and the payments received by the Issuing Banks in respect of any of the foregoing.

“Standby L/C Fees” has the meaning specified in Section 4.03(b).

“Standby L/C Request” has the meaning specified in Section 3.01(c).

“Standby L/C Sublimit” means, with respect to each Issuing Bank, initially US$100,000,000, as such amount as may be reduced or increased in connection with an extension of the Termination Date and the Commitments in accordance with Section 4.02.

“Subsidiary” means with respect to any Person, any corporation, partnership, joint venture, limited liability company, trust, estate or other entity of which (or in which) more than 50% of (a) in the case of a corporation, the issued and outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency not in the control of such Person), (b) in the case of a limited liability company, partnership or joint venture, the interest in the capital or profits of such limited liability company, partnership or joint venture or (c) in the case of a trust or estate, the beneficial interest in such trust or estate, is at the time directly or indirectly owned or controlled by (X) such Person, (Y) such Person and one or more of its other Subsidiaries or (Z) one or more of such Person’s other Subsidiaries. For purposes of determining whether a trust formed in connection with a Qualified Receivables Transaction is a Subsidiary, notes, trust certificates, undivided interests, partnership interests or other interests of the type described in clause (a) of the definition of Receivables Program Obligations shall be counted as beneficial interests in such trust.

“Substitute Lender” means a commercial bank or other financial institution, acceptable to the Borrower, the Participating Lenders and the Administrative Agent, each in its sole discretion, and approved by the Joint Bookrunners (including such a bank or financial institution that is already a Lender hereunder), which assumes all or a portion of the Commitment of a Lender pursuant to the terms of this Agreement.

“Swing Line Lenders” means Barclays Bank PLC and ING Bank N.V., each acting in the capacity of Lender of Swing Line Loans hereunder.

“Swing Line Loans” means, collectively, the loans outstanding pursuant to Section 2.02 from time to time.

“Swing Line Maturity Date” means, with respect to any Swing Line Loan, the later of (i) the Business Day set forth in the relevant Swing Line Request as the date upon which such Swing Line Loan matures; provided that such date shall be no later than the third Business Day following the relevant Borrowing or (ii) the date to which the Swing Line Loan has been extended pursuant to Section 2.02(c)(iv).

 

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“Swing Line Request” means a request by the Borrower for a Swing Line Loan, which shall specify (i) the requested Borrowing Date, (ii) the requested date of maturity and (iii) the amount of such Swing Line Loan.

“Swing Line Sublimit” means, with respect to each Swing Line Lender individually, US$50,000,000 and in the aggregate, US$100,000,000.

“Tax Related Person” means any Person whose income is realized through, or determined by reference to, the Administrative Agent or a Lender[; provided that no Lender shall be deemed a Tax Related Person of the Administrative Agent, and the Administrative Agent shall not be deemed a Tax Related Person of any Lender].

“Taxes” means any and all present or future income, stamp, sales or other taxes, levies, imposts, duties, deductions, fees, charges or withholdings, and all liabilities with respect thereto collected, withheld or assessed by any Governmental Authority, excluding, (a) in the case of each Lender, each Issuing Bank, the Administrative Agent and any Tax Related Persons, such taxes (including income taxes or franchise taxes) as are imposed on or measured by its net income or capital by the jurisdiction (or any political subdivision thereof) under the laws of which it is organized or maintains a Lending Office or its principal office or performs its functions as Administrative Agent or as are imposed on such Lender, such Issuing Bank or the Administrative Agent or any of their Tax Related Persons (as the case may be) as a result of a present or former connection between the Lender, the Issuing Bank, the Administrative Agent or such Tax Related Person and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Lender, the Issuing Bank or such Administrative Agent having executed, delivered or performed its obligations or received a payment under, or enforced, the Transaction Documents) and (b) any taxes, levies, imposts, deductions, charges or withholdings to the extent imposed by reason of any Lender’s or Administrative Agent’s failure to (i) register as a Foreign Financial Institution with the Ministry of Finance and (ii) be a resident (or have a principal office which is a resident, if such Lender lends through a branch or agency) for tax purposes of a jurisdiction with which Mexico has in effect a treaty for the avoidance of double taxation (but only in respect of those taxes payable in excess of taxes that would have been payable had such Lender complied with those conditions).

“Temporary Investments” means, at any date, all amounts that would, in conformity with Mexican GAAP consistently applied, be set forth opposite the caption “cash and cash equivalent” (“efectivo y equivalentes de efectivo”) or “temporary investments” (“inversiones temporales”) on a consolidated balance sheet of the Borrower at such date.

“Termination Date” means the date which is the earliest of (a) the date four years following the Effective Date, or if extended with the written consent of a Participating Lender pursuant to Section 4.02, such later date as it relates to such Participating Lender or (b) if no Loans or Standby L/Cs are outstanding, the date the Commitments are terminated in accordance with this Agreement.

 

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“Total Exposure” means at any time, as to any Lender, the amount of its Commitment at such time, or, if the Commitments shall have terminated, its Total Outstandings at such time.

“Total Outstandings” means at any time, as to any Lender, the sum of the aggregate outstanding principal amount of such Lender’s Revolving Loans and its pro rata share of the aggregate outstanding Standby L/C Exposure and its pro rata share of the Swing Line Exposure.

“Transaction Documents” means a collective reference to this Credit Agreement, the Notes, any Assignment and Assumption Agreement, the Fee Letter, any Standby L/C, and all other related agreements and documents issued or delivered hereunder or thereunder or pursuant hereto or thereto.

“United States” means the United States of America, including the States and the District of Columbia, but excluding its territories and possessions.

“Utilization” means, for any Utilization Period, the percentage obtained by dividing the Average Outstanding Loans by the Average Aggregate Committed Amount.

“Utilization Period” means each calendar quarter, except that the initial Utilization Period shall commence on the Effective Date and end on June 30, 2005, and the final Utilization Period shall end on the Termination Date.

“Value of Debt Currency Derivatives” means, on any given date, the aggregate mark-to-market value of Debt Currency Derivatives, expressed as a positive number (if, on a mark-to-market basis, such aggregate amount reflects a net amount owed to the Borrower and its subsidiaries) or as a negative number (if, on a mark-to-market basis, such aggregate amount reflects a net amount owed by the Borrower and its subsidiaries).

“Welfare Plan” means a “welfare plan”, as such term is defined in Section 3(1) of ERISA.

1.02 Other Definitional Provisions.

(a) The terms “including” and “include” are not limiting and mean “including but not limited to” and “include but are not limited to”.

(b) The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement, and Article, Section, paragraph, Schedule and Exhibit references are to this Agreement unless otherwise specified.

(c) The meanings given to terms defined herein are equally applicable to both the singular and plural forms of such terms.

(d) In this Agreement, in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words

 

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“to” and “until” each means “to but excluding”. Periods of days referred to in this Agreement shall be counted in calendar days unless Business Days or LIBOR Business Days are expressly prescribed.

(e) The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement.

1.03 Accounting Terms and Determinations. All accounting and financing terms not specifically defined herein shall be construed in accordance with Mexican GAAP.

ARTICLE II

THE LOAN FACILITIES

2.01 Revolving Loans.

(a) Commitment. During the Commitment Period, subject to the terms and conditions hereof, each Lender, severally and not jointly with the other Lenders, agrees to make revolving credit loans in Dollars (the “Revolving Loans”) to the Borrower from time to time in an aggregate principal amount at any one time outstanding not to exceed such Lender’s Commitment for the purposes hereinafter set forth; provided that (i) with regard to the Lenders collectively, the aggregate principal amount of Loans outstanding, together with the Aggregate Standby L/C Exposure, at any one time shall not exceed the Aggregate Committed Amount, and (ii) with regard to each Lender individually, the aggregate principal amount of such Lender’s Commitment Percentage of all the Loans outstanding at any time, together with such Lender’s Commitment Percentage of its Standby L/C Exposure, shall not exceed the Commitment of such Lender. Revolving Loans may consist of Base Rate Loans or LIBOR Loans, or a combination thereof, as the Borrower may request, and may be repaid, prepaid and reborrowed in accordance with the provisions hereof; provided that if any Revolving Loan shall be made on the Effective Date or within three (3) Business Days thereafter such Revolving Loan may be a LIBOR Loan only if the Borrower delivers to the Administrative Agent a funding indemnity letter in form and substance satisfactory to the Administrative Agent.

(b) Loans and Borrowings. Each Revolving Loan shall be made as part of a Borrowing consisting of Revolving Loans made by the Lenders ratably in accordance with their Commitment Percentage. 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.

(c) Revolving Loan Borrowings.

(i) Requests for Borrowings. (A) To request a Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone, not later than 12:00 p.m., New York City time, (1) in the case of a request for a Base Rate Loan, on the business day prior to the day the Borrower designates therein as the Disbursement Date or (2) in the case of a request for a LIBOR Loan, on the date that is no less than three LIBOR Business Days prior to the Disbursement

 

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Date. Each such telephonic Borrowing request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the Administrative Agent of a written notice (the “Notice of Borrowing”) in the form attached as Exhibit B approved by the Administrative Agent and signed by the Borrower. Each such telephonic request and written Notice of Borrowing shall specify the following information in compliance with this Section 2.01:

 

(1)

that a Revolving Loan is requested;

 

(2)

the requested Disbursement Date, which shall be a Business Day;

 

(3)

the aggregate principal amount to be borrowed; and

 

(4)

whether the Borrowing shall be composed of Base Rate Loans, LIBOR Loans, or a combination thereof, and if LIBOR Loans are requested, the Interest Period(s) therefor.

(B) If the Borrower shall fail to specify in any such Notice of Borrowing (i) an applicable Interest Period in the case of a LIBOR Loan, then such notice shall be deemed to be a request for an Interest Period of one (1) month, or (ii) the type of Revolving Loan requested, then such notice shall be deemed to be a request for a LIBOR Loan hereunder.

(C) Not later than 1:00 p.m. New York City time on the Business Day on which the Notice of Borrowing is received, the Administrative Agent shall promptly advise each Lender of the details thereof and shall advise each Lender of the amount of such Lender’s Revolving Loan to be made as part of the requested Borrowing.

(ii) Minimum Amounts. Each Revolving Loan shall be in a minimum aggregate principal amount of $5,000,000, in the case of LIBOR Loans, or $1,000,000 (or the remaining Committed Amount, if less), in the case of Base Rate Loans, and integral multiples of $1,000,000 in excess thereof.

(d) Funding of Borrowings. Each Lender shall make each Revolving Loan to be made by it hereunder on the Disbursement Date by wire transfer of immediately available funds by 1:00 p.m., New York City time, to the account held by the Administrative Agent for such purpose most recently designated by it by notice to the Lenders. The Administrative Agent will make such Loans available to the Borrower by promptly crediting on the same day the amounts so received, in like funds, to the account number 36964215 that the Borrower maintains with Citibank, NA. NY (ABA No. 021000089 Ref: CEMEX) in New York City (the “Funding Account”) or any other account with such bank or any other financial institution designated by the Borrower in the applicable Notice of Borrowing. Unless the Administrative Agent shall have received notice from a Lender, prior to the time of any Borrowing, that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the

 

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Administrative Agent may, but shall not be required to, assume that such Lender has made such share available on such date in accordance with Section 2.01(c) and may in its sole discretion, but shall not be required to, in reliance upon such assumption, make available to the Borrower a corresponding amount. If any Lender either does not make its share of the applicable Borrowing available to the Administrative Agent or delays in doing so past 4:00 p.m., New York City time, on the Disbursement Date (such Lender (until it makes such share available) hereinafter referred to as a “Defaulting Lender”), then the Administrative Agent shall immediately notify the Borrower of such default. If the Administrative Agent has, in its sole discretion, made available to the Borrower an amount corresponding to such Defaulting Lender’s share of the Borrowing, then the Defaulting Lender and the Borrower jointly and severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, on 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 the Defaulting Lender, the Federal Funds Rate; or

 

(ii)

in the case of the Borrower, the interest rate applicable to Base Rate Loans.

If, with respect to the immediately preceding sentence, the Borrower pays such amount to the Administrative Agent, then the Defaulting Lender shall indemnify and hold harmless the Borrower from and against such amount, and if such Defaulting Lender pays such amount to the Administrative Agent, then such amount shall constitute such Defaulting Lender’s Loan included in such Borrowing. If the Administrative Agent, in its discretion, does not make available to the Borrower an amount corresponding to the Defaulting Lender’s share of the Borrowing then (x) the Defaulting Lender shall indemnify and hold harmless the Borrower from and against such amount as well as any and all losses, liabilities (including liabilities for penalties), actions, suits, judgments, demands, costs, and expenses (including reasonable fees and disbursements for counsel including allocated cost of internal counsel) resulting from any failure on the part of the Defaulting Lender to provide, or from any delay in providing, the Administrative Agent with such Defaulting Lender’s pro rata share of the Borrowing, but no Lender shall be so liable for any such failure on the part of or caused by any other Lender or the Administrative Agent or the Borrower, and (y) such share of the applicable Borrowing that was not made available shall (until made available) be disregarded for purposes of calculating the Commitment Fee pursuant to Section 4.03(a) and in the event such share has not been disregarded for such purposes, any amount paid by the Borrower in respect of such share shall be reimbursed to the Borrower by the applicable Defaulting Lender with interest thereon at the Federal Funds Rate for each day from and including the date such share of the Commitment Fee was paid by the Borrower to but excluding the date of reimbursement by the Defaulting Lender. The Administrative Agent, upon notice by the Borrower that such reimbursement is due from the applicable Defaulting Lender, shall notify such Defaulting Lender of the amount of the reimbursement due, including interest thereon, and shall forward such amount to the Borrower upon receipt from the Defaulting Lender. The Administrative Agent shall not, however, be liable to the Borrower for any failure by any Defaulting Lender to reimburse the Borrower for any amounts in respect of such Commitment Fee.

 

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(e) Extension and Conversion. The Borrower shall have the option, on any Business Day, to extend existing Revolving Loans into a subsequent permissible Interest Period or to convert Revolving Loans into Revolving Loans of another interest rate type; provided, however, that (i) except as provided in Section 4.07, LIBOR Loans may be converted into Base Rate Loans only on the last day of the Interest Period applicable thereto unless the Borrower agrees to pay all Funding Losses, (ii) LIBOR Loans may be extended, and Base Rate Loans may be converted into LIBOR Loans, only if the conditions in Section 5.02 have been satisfied, (iii) Loans extended as, or converted into, LIBOR Loans shall be subject to the terms of the definition of “Interest Period” set forth in Section 1.01 and shall be in such minimum amounts as provided in Section 2.01(c)(ii), and (iv) any request for extension or conversion of a LIBOR Loan that shall fail to specify an Interest Period shall be deemed to be a request for an Interest Period of one month. Each such extension or conversion shall be effected by the Borrower by giving a written notice (or telephone notice promptly confirmed in writing) (a “Notice of Extension/Conversion”) to the Administrative Agent prior to 10:00 a.m., New York City time, on the LIBOR Business Day of, in the case of the conversion of a LIBOR Loan into a Base Rate Loan, and on the third LIBOR Business Day prior to, in the case of the extension of a LIBOR Loan as, or conversion of a Base Rate Loan into, a LIBOR Loan, the date of the proposed extension or conversion, substantially in the form of Exhibit C hereto, specifying (A) the date of the proposed extension or conversion, (B) the Loans to be so extended or converted, (C) the types of Revolving Loans into which such Loans are to be converted, and, if appropriate, (D) the applicable Interest Periods with respect thereto. Each Notice of Extension/Conversion shall be irrevocable and shall constitute a representation and warranty by the Borrower of the matters specified in Sections 5.02(a) through (e). So long as there is no Default or Event of Default, in the event the Borrower does not request extension or conversion of any LIBOR Loan in accordance with this Section, or any such conversion or extension is not required by this Section, then such LIBOR Loan shall be continued as a Base Rate Loan at the end of each Interest Period applicable thereto, until the Borrower selects an alternate Interest Period or converts such Loans to LIBOR Loans. It is hereby understood and agreed that such failure by the Borrower to request such extension or conversion resulting in the automatic conversion of a LIBOR Loan into a Base Rate Loan shall also constitute a representation and warranty by the Borrower of the matters specified in Sections 5.02(a) through (e). In the event any LIBOR Loans are not permitted to be converted into another LIBOR Loan hereunder, such LIBOR Loans shall automatically be converted to Base Rate Loans at the end of the applicable Interest Period with respect thereto. The Administrative Agent shall give each Lender notice as promptly as practicable of any such proposed extension or conversion affecting any Loan.

(f) Repayment. The principal amount of all Revolving Loans shall be due and payable in full on the Termination Date.

(g) Prepayment. Loans may be repaid in whole or in part without premium or penalty; provided that (i) Loans may be prepaid only upon five (5) Business Days’ prior written notice to the Administrative Agent, (ii) prepayments of LIBOR Loans must be accompanied by payment of any Funding Losses under Section 4.07, and (iii) partial prepayments shall be in minimum principal Dollar Amounts of $10,000,000.

 

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(h) Revolving Notes. Each Lender’s Commitment Percentage of the Revolving Loans shall be evidenced by a duly executed revolving note in favor of such Lender in the form of Exhibit A attached hereto.

(i) Maximum Number of LIBOR Loans. The Borrower will be limited to a maximum number of ten (10) LIBOR Loans outstanding at any time. For purposes hereof, LIBOR Loans with separate or different Interest Periods will be considered as separate LIBOR Loans even if their Interest Periods expire on the same date.

(j) Notice. The Administrative Agent shall promptly advise each Lender of any change in Commitment Percentages made pursuant to Section 4.02.

2.02 Swing Line Loans.

(a) Swing Line Loans Commitments. During the Commitment Period, subject to the terms and conditions hereof, each Swing Line Lender hereby agrees to make Swing Line Loans to the Borrower in the aggregate amount up to but not exceeding the Swing Line Sublimit; provided, after giving effect to the making of any Swing Line Loan, in no event shall the aggregate amount of the Loans outstanding plus the aggregate amount of the Standby L/C Exposure exceed the Aggregate Committed Amount for the facility then in effect. Amounts borrowed pursuant to this Section 2.02 may be repaid, prepaid and reborrowed during the Commitment Period. Each Swing Line Lender’s commitment to make Swing Line Loans shall expire on the Termination Date and all Swing Line Loans and all other amounts owed hereunder with respect to the Swing Line Loans and the Revolving Commitments shall be paid in full no later than such date. Subject to Section 2.02(c)(iv), each Swing Line Loan shall mature on the Swing Line Maturity Date.

(b) Loans and Borrowings. Each Swing Line Loan shall be made as part of a Borrowing consisting of Swing Line Loans made by the Swing Line Lenders on a pro rata basis. The failure of any Swing Line Lender to make any Swing Line Loan required to be made by it shall not relieve any other Swing Line Lender of its obligations hereunder; provided that the Commitments of the Swing Line Lenders are several and no Swing Line Lender shall be responsible for any other Swing Line Lender’s failure to make Swing Line Loans as required.

(c) Borrowing Mechanics for Swing Line Loans.

(i) Swing Line Loans shall be made in an aggregate minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of that amount.

(ii) Whenever the Borrower desires that the Swing Line Lenders make a Swing Line Loan, the Borrower shall deliver to Administrative Agent, with a copy to each Swing Line Lender, a Swing Line Request no later than 11:00 a.m. (New York City time) on the proposed Disbursement Date. With respect to any Borrowing Date, the Borrower may deliver only a single Swing Line Request to the Administrative Agent. Any Swing Line Request, once delivered to the Administrative Agent in accordance with this Agreement, shall be irrevocable.

 

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(iii) Each Swing Line Lender shall make its pro rata share of the amount of the requested Swing Line Loan available to the Administrative Agent by no later than 2:00 p.m. (New York City time) on the applicable Disbursement Date by wire transfer of same day funds in Dollars, at the account held by the Administrative Agent for such purpose most recently designated by it by notice to the Swing Line Lenders. Except as provided herein, upon satisfaction or waiver by the Swing Line Lenders of the conditions precedent specified herein, the Administrative Agent shall make the proceeds of such Swing Line Loans available to the Borrower on the applicable Disbursement Date by causing an amount of same day funds in Dollars equal to the proceeds of all such Swing Line Loans received by Administrative Agent from each Swing Line Lender to be credited to the account of the Borrower at the Administrative Agent’s Payment Office, or to such other account as may be designated in writing to Administrative Agent by the Borrower.

(iv) The Borrower shall have the option, on any Business Day, to extend an existing Swing Line Loan for a subsequent three Business Day period; provided, however, that in no event may a Swing Line Loan be extended for more that two consecutive three Business Day periods. Each such extension shall be effected by the Borrower by giving a written notice of such extension (or telephone notice promptly confirmed in writing) to the Administrative Agent prior to 10:00 a.m., New York City time, on the Business Day of such extension.

(d) Repayment and Participations.

(i) Swing Line Loans shall be repaid, together with all accrued and unpaid interest thereon on the earlier to occur of (i) the Swing Line Maturity date and (ii) the Commitment Termination Date.

(ii) With respect to any Swing Line Loans which have not been paid by the Borrower when due, each Swing Line Lender may at any time in its sole and absolute discretion, deliver to the Administrative Agent (with a copy to the Borrower), no later than 10:00 a.m. (New York City time) at least one (1) Business Day in advance of the proposed Disbursement Date, a notice (which shall be deemed to be a Notice of Borrowing given by the Borrower) requesting that the Lenders make Revolving Loans that are Base Rate Loans to the Borrower, or its designee, on such Disbursement Date in an amount equal to the aggregate amount of such Swing Line Loans (the “Refunded Swing Line Loans”) outstanding on the date a Swing Line Lender gives such Notice requesting that Lenders make Revolving Loans. For purposes of this Section 2.02, the Borrower agrees that such Base Rate Loan to be made by the Lenders pursuant to the Notice of Borrowing shall be made to the accounts of each of the Swing Line Lenders, as Borrower’s designee, on a pro rata basis. Anything contained in this Agreement to the contrary notwithstanding, (1) the proceeds of such Revolving Loans made by the Lenders other than the Lenders that are also Swing Line Lenders shall be immediately delivered by the Administrative Agent to each Swing Line Lender, as Borrower’s designee, on a pro rata basis and applied to repay a corresponding

 

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portion of the Refunded Swing Line Loans and (2) on the day such Revolving Loans are made, each Swing Line Lender’s pro rata share of the Refunded Swing Line Loans shall be deemed to be paid by such Swing Line Lender with the proceeds of a Revolving Loan deemed to be made by such Swing Line Lender to the Borrower, or its designee, and such portion of the Swing Line Loans deemed to be so paid shall no longer be outstanding as Swing Line Loans and shall no longer be due, but shall instead constitute part of such Swing Line Lender’s outstanding Revolving Loans to the Borrower and shall be due under the revolving loan note, if any, issued by the Borrower to such Swing Line Lender in its capacity as Lender. The Borrower hereby authorizes the Administrative Agent and each Swing Line Lender to charge the Borrower’s accounts with the Administrative Agent and each Swing Line Lender (up to the amount available in each such account) in order to immediately pay each Swing Line Lender the amount of the Refunded Swing Line Loans to the extent the proceeds of such Revolving Loans made by the Lenders, including the Revolving Loan deemed to be made by such Swing Line Lender, are not sufficient to repay in full the Refunded Swing Line Loans. If any portion of any such amount paid (or deemed to be paid) to any Swing Line Lender should be recovered by or on behalf of the Borrower from such Swing Line Lender in bankruptcy, by assignment for the benefit of creditors or otherwise, the loss of the amount so recovered shall be ratably shared among all Lenders in the manner contemplated by Section 4.13.

(iii) If for any reason Revolving Loans are not made pursuant to Section 2.02(d)(ii) in an amount sufficient to repay any amounts owed to such Swing Line Lenders in respect of any outstanding Swing Line Loans on or before the third (3^rd) Business Day after demand is made for payment thereof by such Swing Line Lender, each Lender holding a Commitment shall be deemed to, and hereby agrees to, have purchased a participation in such outstanding Swing Line Loans, and in an amount equal to its pro rata share of the applicable unpaid amount together with accrued interest thereon. Upon one (1) Business Day’s notice from any Swing Line Lender, each Lender holding a Commitment shall deliver to each Swing Line Lender an amount equal to its respective participation in the applicable unpaid amount in same day funds at the domestic office of such Swing Line Lender. In order to evidence such participation, each Lender holding a Revolving Commitment agrees to enter into a participation agreement at the request of such Swing Line Lender in form and substance reasonably satisfactory to such Swing Line Lender. In the event any Lender holding a Revolving Commitment fails to make available to any Swing Line Lender the amount of such Lender’s participation as provided in this paragraph, each Swing Line Lender shall be entitled to recover such amount on demand from such Lender together with interest thereon for three Business Days at the rate customarily used by such Swing Line Lender for the correction of errors among banks and thereafter at the Base Rate, as applicable.

(iv) Notwithstanding anything contained herein to the contrary, (1) each Lender’s obligation to make Revolving Loans for the purpose of repaying any Refunded Swing Line Loans pursuant to the second preceding paragraph and

 

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each Lender’s obligation to purchase a participation in any unpaid Swing Line Loans pursuant to the immediately preceding paragraph shall be absolute and unconditional and shall not be affected by any circumstance, including without limitation (A) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against any Swing Line Lender, any Credit Party or any other Person for any reason whatsoever; (B) the occurrence or continuation of a Default or Event of Default; (C) any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of any Credit Party; (D) any breach of this Agreement or any other Credit Document by any party thereto; or (E) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing; provided, that such obligations of each Lender are subject to the condition that each Swing Line Lender believed in good faith that all conditions under Section 5.02 to the making of the applicable Refunded Swing Line Loans or other unpaid Swing Line Loans, were satisfied at the time such Refunded Swing Line Loans or unpaid Swing Line Loans were made, or the satisfaction of any such condition not satisfied had been waived by Requisite Lenders prior to or at the time such Refunded Swing Line Loans or other unpaid Swing Line Loans were made; and (2) no Swing Line Lender shall be obligated to make any Swing Line Loans (A) if it has elected not to do so after the occurrence and during the continuation of a Default or Event of Default or (B) at a time when a Funding Default exists unless such Swing Line Lender has entered into arrangements satisfactory to it and the Borrower to eliminate each such Swing Line Lender’s risk with respect to the Defaulting Lender’s participation in such Swing Ling Loan, including by cash collateralizing such Defaulting Lender’s pro rata share of the outstanding Swing Line Loans.

2.03 Interest.

(a) Base Rate Loans. Each Base Rate Loan shall bear interest at a rate per annum equal to the Base Rate plus the Applicable Margin.

(b) LIBOR Loans. Each LIBOR Loan shall bear interest at a rate per annum equal to LIBOR plus the Applicable Margin.

(c) Swing Line Loans. Each Swing Line Loan shall bear interest at a rate per annum equal to the Base Rate plus the Applicable Margin.

(d) 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 applicable to Base Rate Loans as provided in Section 2.03(a).

(e) Payment of Interest. Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and, upon termination of the

 

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Commitments; provided that (i) interest accrued on a Swing Line Loan shall be payable on the Swing Line Maturity Date, (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 LIBOR Rate Borrowing prior to the end of the Interest Period therefore, accrued interest on such Borrowing shall be payable on the effective date of such conversion.

(f) Computation. All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Base Rate at times when the 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 Base Rate or LIBOR Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

ARTICLE III

THE STANDBY L/C FACILITY

3.01 Issuance of the Standby L/C.

(a) Subject to the terms and conditions set forth herein, including but not limited to the conditions precedent specified in Section 5.02, and so long as no Default or Event of Default shall have occurred and be continuing, the Borrower may request the Issuing Banks to issue, in support of certain obligations of the Borrower and any of its Subsidiaries including but not limited to, contingent liabilities arising in connection with forward sales contracts, leases, insurance contracts and arrangements, service contracts, equipment contracts, financing transactions and other payment obligations, and each Issuing Bank agrees to issue on the terms set out in this Section 3.01 below, from time to time during the period from and including the Effective Date to but excluding the date that is five Business Days prior to the Termination Date, a Standby L/C denominated in Dollars for the Borrower’s own account, and having a stated amount not exceeding the Available Standby L/C Sublimit at the time of issuance; provided, however, that the issuance of such requested Standby L/C shall not cause the Issuing Bank to violate any law or regulation to which it is or may be subject. The Standby L/C shall be substantially in the form indicated in Exhibit G, as determined by the Borrower or in any other form that may be reasonably agreed upon by the Appropriate Issuing Bank and the Borrower.

(b) The Borrower, the Guarantors and the Participating Lenders hereby acknowledge and agree that, as of the date hereof, Standby L/Cs issued pursuant to the Existing Agreement are outstanding, and the outstanding amount of each issued Standby L/C is set forth on Schedule 3.01 hereto. From and after the date hereof and upon fulfillment of the conditions specified in Section 5.02 hereof, each such existing letter of credit, as such may have been amended, shall be deemed and treated for all purposes hereof as a “Standby L/C” hereunder, and each Lender, without further action on its part, shall be deemed to have purchased a participation in each such Standby L/C as provided in Section 3.04 hereof in accordance with its Commitment.

 

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(c) To request the issuance of a Standby L/C, the Borrower shall deliver notice (a “Standby L/C Request”) to the Appropriate Issuing Bank requesting the issuance of a Standby L/C, specifying the date of issuance (which shall be a Business Day that is no earlier than either (i) the Business Day following the Business Day on which the Appropriate Issuing Bank shall have received the request for the issuance of the Standby L/C, if such request is received by the Appropriate Issuing Bank prior to 11:00 a.m. (New York City time), or (ii) the Business Day that is two (2) Business Days following the Business Day on which the Appropriate Issuing Bank shall have received the request for the issuance of the Standby L/C, if such request is received is by the Appropriate Issuing Bank after 11:00 a.m. (New York City time) but before 5:00 p.m. (New York City time); provided however, that the Appropriate Issuing Bank, in its sole discretion and on a request by request basis, may elect to accept a request for issuance of a Standby L/C specifying an issuance date not complying with the terms of this parenthetical), the date on which such Standby L/C is to expire, the amount of such Standby L/C, the name and address of the beneficiary thereof and any such other information as shall be necessary to prepare such Standby L/C. On the requested date of issuance, the Appropriate Issuing Bank shall, subject to the terms and conditions set forth herein and so long as no Default or Event of Default shall have occurred or be continuing, issue a Standby L/C in accordance with the Borrower’s request pursuant to this paragraph (c).

(d) Each Standby L/C shall have a minimum stated amount equal to U.S.$5,000,000 and shall expire at or prior to the close of business on the earlier of (i) the date that is 360 days after the date of issuance of such Standby L/C and (ii) the date that is five Business Days prior to the Termination Date.

(e) Notwithstanding Clause (d) of this Section 3.01, if the Borrower is requesting a Standby L/C that is less than the Aggregate Available Standby L/C Sublimit, but greater than the Available Standby L/C Sublimit for each Issuing Bank, the Borrower may request a Standby L/C from each Issuing Bank in an amount up to the Available Standby L/C Sublimit for such Issuing Bank, on a pro rata basis determined on the basis of each Issuing Bank’s Standby L/C Exposure, after giving effect to the requested Standby L/C, and each Issuing Bank shall be deemed to be the Appropriate Issuing Bank for the purposes of Section 3.01(c) hereof.

(f) Each Lender hereby irrevocably authorizes the Issuing Banks to issue Standby L/Cs under and in accordance with this Agreement, to pay the amount of any draft presented under any Standby L/C in accordance with the terms and conditions thereof, to receive from the Borrower reimbursement for Standby L/C Drawings and to take such action on its behalf under the provisions of this Agreement and the other Transaction Documents and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Issuing Bank by the terms hereof or thereof, together with such powers as are reasonably incidental thereto.

3.02 Reimbursement Obligations.

(a) The Borrower agrees to reimburse the Issuing Banks for the full amount of any Drawing paid by an Issuing Bank on a Disbursement Date; provided, however, that in no event shall such reimbursement be made prior to the time such Drawing is paid by such Issuing Bank.

 

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(b) If the amount of any Drawing is not reimbursed in full on the Disbursement Date by the Borrower, then the amount thereof which is not so reimbursed shall bear interest from (and including), the Disbursement Date until (but excluding) the date of actual payment thereof at a rate per annum equal to the Base Rate plus 2.00%, payable on demand.

3.03 Obligations to Reimburse Standby L/C Drawing Absolute.

(a) The obligations of the Borrower to reimburse an Issuing Bank for any Drawing shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, under all circumstances whatsoever, including the following circumstances:

(i) any lack of validity or enforceability of any Transaction Document;

(ii) any amendment to or waiver of or any consent to departure from the terms of any Transaction Document;

(iii) the existence of any claim, set-off, defense or other right which the Borrower may have at any time against the beneficiary of any Standby L/C or any transferee of any Standby L/C (or any Person for whom any such transferee may be acting), the Administrative Agent, any Participating Lender or any other Person, whether in connection with this Agreement, any other Transaction Document or any unrelated transaction;

(iv) any draft, statement or any other document presented under a Standby L/C proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatsoever; or

(v) payment by an Issuing Bank under a Standby L/C against presentation of a draft or document which does not comply with the terms of such Standby L/C.

(b) The Issuing Banks shall not be responsible to any Person:

(i) for the validity, genuineness or legal effect of any document submitted to an Issuing Bank by any Person in connection with the issuance of, or any Drawing under, any Standby L/C; provided, however, that nothing in this clause (i) shall relieve an Issuing Bank from its obligations to honor a Drawing under a Standby L/C that strictly complies with the terms of such Standby L/C;

 

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(ii) for errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher;

(iii) for any loss or delay in the transmission or otherwise of any document required in order to make a Drawing under a Standby L/C or of the proceeds thereof;

(iv) for the misapplication by the beneficiary of a Standby L/C of the proceeds of a Drawing under such Standby L/C; or

(v) for any consequences arising from causes beyond the control of an Issuing Bank (including, any acts of any Governmental Authority);

provided, however, that the provisions of this Section 3.03 shall not limit any right or claim the Borrower may have against an Issuing Bank to the extent of any direct, as opposed to consequential or special, damages suffered by the Borrower which the Borrower proves were caused by such Issuing Bank’s gross negligence or willful misconduct, it being understood that the existence of any such right or claim shall not in any way affect the obligation of the Borrower to reimburse such Issuing Bank for all Drawings under Standby L/Cs.

3.04 Participating Interests.

(a) Without further action on the part of the Issuing Banks and the Lenders, each Lender severally purchases from the Issuing Banks, without recourse to the Issuing Banks, and the Issuing Banks hereby sell to each such Lender, an undivided interest, to the extent of such Lender’s Commitment Percentage, in each Standby L/C issued or to be issued hereunder or issued pursuant to the Existing Agreement, all Drawings, all interest thereon and all other rights, costs and expenses of the Issuing Banks hereunder and under such Standby L/C with respect thereto.

(b) As promptly as practicable upon becoming aware that the Borrower has not reimbursed or will not reimburse the relevant Issuing Bank in full for a Drawing under any Standby L/C in accordance with Section 3.02(a) or (b) on any applicable Disbursement Date, such Issuing Bank shall notify the Administrative Agent which shall promptly notify each Lender to such effect and each Lender shall (i) not later than 4:30 p.m. (New York City time) on the Business Day such notice is received from the Administrative Agent (if such notice is received at or prior to 12:00 noon (New York City time)) or (ii) not later than 11:00 a.m. (New York City time) on the Business Day following receipt of such notice (if such notice is received after 12:00 noon (New York City time)) pay to the Administrative Agent, at the Administrative Agent’s Payment Office, for the account of such Issuing Bank, an amount equal to such Lender’s Commitment Percentage of such unreimbursed Drawing. Notwithstanding clause (ii) of this paragraph (b), if a Lender does not make available to the Administrative Agent on the applicable Disbursement Date such Lender’s Commitment Percentage of any unreimbursed Drawing, such Lender shall be required to pay interest to the Administrative Agent for the account of such the Issuing Bank on its Commitment Percentage of the

 

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amount of such unreimbursed Drawing at the Federal Funds Rate from such Disbursement Date until the date payment is received by the Administrative Agent; provided, however, that if the Federal Funds Rate does not cover such Issuing Bank’s cost of funds, the applicable rate of interest shall be such rate as determined by such Issuing Bank, in good faith, to be equal to its cost of funds; and provided, further, that if any amount remains unpaid by any Lender for more than five Business Days after receipt of notice, such Lender shall, commencing on the day next following such fifth Business Day, pay interest to the Administrative Agent for the account of such Issuing Bank at a rate per annum equal to the Federal Funds Rate (or such other rate as may be determined by such Issuing Bank as set forth herein) plus 2.00%. Upon receipt of any such funds, the Administrative Agent shall promptly pay such funds to such Issuing Bank.

(c) If the Administrative Agent receives a Lender’s Commitment Percentage of an unreimbursed Drawing on the corresponding Disbursement Date therefor, or if the Administrative Agent receives such payment together with interest thereon in accordance with the provisions of the preceding paragraph (b), such Lender shall be entitled to receive interest on its Commitment Percentage of such Standby L/C Drawing, as provided in Section 3.04(e)(ii) below, from the applicable Disbursement Date.

(d) The payment obligations of each Lender to the relevant Issuing Bank as described in this Section 3.04 shall be absolute, irrevocable and unconditional under any and all circumstances whatsoever and shall not be affected by any circumstance, including:

(i) any set-off, counterclaim, defense or other right which such Lender or any other Person may have against the Administrative Agent, an Issuing Bank or any other Person for any reason whatsoever;

(ii) the occurrence or continuance of a Default or Event of Default or the termination of the Commitments or the expiration the applicable Standby L/C;

(iii) any adverse change in the condition (financial or otherwise) of the Borrower;

(iv) any breach of any Transaction Document by any party thereto;

(v) any violation or asserted violation of law by any Lender or any affiliate thereof;

(vi) the failure of any Lender to perform its obligations hereunder;

(vii) any amendment to or extension of an issued and outstanding Standby L/C; or

(viii) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing;

provided, however, that no Lender shall be liable for any portion of such liability resulting from such Issuing Bank’s gross negligence or willful misconduct.

 

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(e) The relevant Issuing Bank agrees to pay promptly upon receipt to the Administrative Agent for the account of each Lender (i) first, such Lender’s Commitment Percentage of all amounts received from the Borrower in payment, in whole or in part, of an unreimbursed Standby L/C Drawing, but only to the extent that such Lender has paid in full its Commitment Percentage of such Standby L/C Drawing to the Administrative Agent for the account of such Issuing Bank pursuant to Section 3.04(c) above and (ii) second, such Lender’s Commitment Percentage of any interest received from the Borrower with respect to any such unreimbursed Standby L/C Drawing, but only to the extent such Lender has paid in full its Commitment Percentage of such Standby L/C Drawing to the Administrative Agent for the account of such Issuing Bank pursuant to Section 3.04(c) above.

(f) If, on account of the bankruptcy, insolvency, concurso mercantil or governmental intervention (or similar event) of the Borrower, an Issuing Bank or the Administrative Agent is required at any time (whether before or after the Termination Date) to return to the Borrower or to a trustee, receiver, liquidator, custodian or other similar official or any other Person, any portion of the payments made by (or on behalf of) the Borrower to the Administrative Agent for the account of an Issuing Bank (or directly to an Issuing Bank) in reimbursement of any unreimbursed Drawing and interest thereon, each Lender shall, on demand of such Issuing Bank or the Administrative Agent, forthwith return to such Issuing Bank or the Administrative Agent for the account of such Issuing Bank any amounts transferred to such Lender by such Issuing Bank or the Administrative Agent in respect thereof pursuant to the terms hereof plus such Lender’s pro rata share of any interest on such payments required to be paid to the Person recovering such payments plus interest on all amounts so demanded from the day such amounts are returned by such Issuing Bank or the Administrative Agent, as the case may be, to the day such amounts are returned by such Lender to such Issuing Bank or the Administrative Agent at a rate per annum for each day equal to the Federal Funds Rate; provided, however, that if the Federal Funds Rate does not cover such Issuing Bank’s or the Administrative Agent’s cost of funds, the applicable rate of interest shall be such rate as determined by such Issuing Bank or the Administrative Agent, in good faith, to be equal to its cost of funds; and provided, further, that if any amount remains unpaid by any Lender for more than five Business Days after demand, such Lender shall, commencing on the day next following such fifth Business Day, pay interest to such Issuing Bank or the Administrative Agent, as the case may be, at a rate per annum equal to the Federal Funds Rate plus 2.00%. In any case when an amount is returned to any Person pursuant to this paragraph (f), the reimbursement obligation of the Borrower contained in Section 3.02(a) will be reinstated as of the original date such reimbursement obligation arose.

(g) The Borrower hereby confirms and acknowledges that each Lender shall have a direct claim against the Borrower for the principal of and interest on each portion of any unreimbursed Standby L/C Drawing advanced by such Lender to an Issuing Bank and that each Lender shall to the extent applicable be entitled to all the rights of the Issuing Bank against the Borrower (to the extent not exercised by such Issuing Bank) as if such Lender had funded its Commitment Percentage of the Standby L/C Drawing directly to the beneficiary of the applicable Standby L/C.

 

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(h) Each Issuing Bank and each Lender, with respect to the amounts payable to it in respect of any unreimbursed Standby L/C Drawing, and the Administrative Agent, with respect to all amounts payable in respect of unreimbursed Standby L/C Drawings, shall maintain on its books in accordance with its usual practice, loan accounts, setting forth its Commitment Percentage of each Standby L/C Drawing, the applicable interest rate and the amounts of principal and interest paid and payable by the Borrower from time to time hereunder with respect thereto; provided, however, that the failure by an Issuing Bank, any Lender or the Administrative Agent to record any such amount on its books or any error in such recordation shall not affect the obligations of the Borrower with respect thereto. In the case of any dispute, action or proceeding relating to any amount payable in respect of any unreimbursed Standby L/C Drawings, the entries in each such account shall be prima facie evidence of such amount. In the case of any discrepancy between the entries in an Issuing Bank’s books and any Lender’s books or the Administrative Agent’s books, an Issuing Bank’s books shall be considered correct in the absence of manifest error.

3.05 Limited Liability of the Issuing Banks. As between an Issuing Bank on the one hand, and the Borrower on the other, the Borrower assumes all risks of any acts or omissions of the beneficiaries of Standby L/Cs with respect to their use of the Standby L/Cs or the proceeds thereof. Neither of the Issuing Banks nor any of its employees, officers, directors or agents shall be liable or responsible for any acts or omissions of the beneficiaries in connection therewith.

ARTICLE IV

TERMINATION AND REDUCTION OF

COMMITMENTS; FEES, TAXES, PAYMENT PROVISIONS

4.01 Termination or Reduction of Commitments.

(a) Mandatory Termination. Subject to Section 4.02, the Commitments shall terminate on the Termination Date.

(b) Voluntary Termination. Upon at least five Business Days’ notice to the Administrative Agent, the Joint Bookrunners and the Issuing Banks, but no sooner than six months after the Effective Date, the Borrower may terminate the existing Commitments by instructing each beneficiary of a Standby L/C to surrender such Standby L/C to the relevant Issuing Bank for cancellation; and provided, further, however, that the existing Commitments shall not be terminated so long as (i) any Standby L/C is outstanding or (ii) any Loan is outstanding or (iii) any Drawing, interest, fee or expenses remain unpaid. Upon at least five Business Days prior notice to the Administrative Agent and the Issuing Banks, the Borrower may terminate any Standby L/C, in accordance with its terms, by surrendering, or causing the beneficiary thereof to surrender, such Standby L/C to the relevant Issuing Bank for cancellation.

 

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(c) Reduction of Standby L/C. Upon at least five Business Days prior notice to the Administrative Agent and each Issuing Bank, the Borrower may reduce the stated amount of any Standby L/C to be reduced, in accordance with its terms, by surrendering, or causing the beneficiary thereof to surrender, such Standby L/C to the relevant Issuing Bank for cancellation in exchange for a new Standby L/C having the reduced stated amount and otherwise having the same terms as the Standby L/C being cancelled; provided, however, that the stated amount of any Standby L/C shall not as a result of such reduction be reduced below U.S.$3,000,000.

(d) Any reduction of the Commitments shall reduce the Commitment of each Lender pro rata except as otherwise specified in Section 4.02(e).

(e) No reduction or termination of the Commitments shall in any event release any Lender from any of its direct or indirect obligations to the Issuing Banks in respect of (i) any Standby L/Cs issued prior to such termination or reduction or (ii) any Drawing.

4.02 Extension of Termination Date.

(a) Extension of Termination Date/Reduction of Standby L/C. Upon at least five Business Days’ prior notice to the Administrative Agent and each Issuing Bank, but no sooner than six months after the Effective Date, the Borrower may permanently reduce the amount of the Aggregate Standby L/C Sublimit and the Standby L/C Sublimit for each Issuing Bank by a minimum amount of U.S.$5,000,000 or any integral multiple of U.S.$1,000,000 in excess thereof; provided, however, the Standby L/C Sublimit for any Issuing Bank may not be reduced below the Standby L/C Exposure of such Issuing Bank and any reductions in the Standby L/C Sublimit for the Issuing Banks must be made on a pro rata basis. The Borrower may, within 90 days, but not less than 45 days, prior to each anniversary date of the original Effective Date (each anniversary date being referred to as an “Anniversary Date”), by notice to the Administrative Agent, the Issuing Banks and the Lenders, make a written request of the Participating Lenders to extend the Termination Date for an additional period of one (1) year. The Administrative Agent will give prompt notice to each of the Participating Lenders of its receipt of any such request for extension of the Termination Date. Each Participating Lender shall make a determination not later than 30 days prior to the then applicable Anniversary Date (the “Extension Consent Date”) as to whether or not it will agree to extend the Termination Date as requested (such approval of an extension shall be an “Extension Consent”); provided, however, that failure by any Participating Lender to make a timely response to the Borrower’s request for extension of the Termination Date shall be deemed to constitute a refusal by such Participating Lender to an extension of the Termination Date.

(b) Lender Not Consenting. If by any Extension Consent Date the Borrower and the Administrative Agent have not received an Extension Consent from any Participating Lender, the Termination Date, as it relates to such Participating Lender, shall not be extended, the Commitment of such Participating Lender shall terminate on the Termination Date applicable to it and any Loans or Standby L/C, as applicable, made by such Participating Lender and all accrued and unpaid interest thereon shall be due and payable on such Termination Date. Upon the termination of the Commitment of any such

 

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Lender, unless this Agreement is amended as provided in Sections 4.02(e) or 4.02(f), the aggregate amount of the Commitments shall be reduced by the amount of such terminated Commitment, and the Commitment Percentage of each other Lender shall be adjusted to that percentage obtained by dividing the Commitment of such Lender by the aggregate amount of the Commitments after giving effect to such reduction as provided in the definition of “Commitment Percentage”.

(c) Other Lenders. No refusal by any one Participating Lender to consent to any extension of the Termination Date shall affect the extension of the Termination Date as it may relate to the Commitment and Loans of any Participating Lender that consents to such extension as provided in Section 4.02(b), and one or more Participating Lenders may consent to the extension of the Termination Date as it relates to them notwithstanding any refusal by any other Lenders so to consent; provided that even as to the consenting Lenders, the Termination Date will be extended only upon consent to such an extension by the Required Lenders.

(d) Termination of Commitment. If any Participating Lender does not deliver an Extension Consent as provided in Section 4.02(b) and no Loans or Standby L/Cs, as applicable are then outstanding, the Borrower may upon at least three (3) Business Days’ prior notice to such Participating Lender and to the Administrative Agent terminate the Commitment of such Lender. Upon any such termination, the Commitment Percentage of each other Lender shall be adjusted, if necessary, to that percentage obtained by dividing the Commitment of such Lender by the aggregate amount of the Commitments after giving effect to such termination and any increases in the aggregate amount of the Commitments under the provisions of Section 4.02(e) or Section 4.02(f).

(e) Increase in Commitment of Other Lender or Lenders. If any Lender does not deliver an Extension Consent as provided in Section 4.02(b), upon the expiration of the Commitment of such Lender, or upon its termination as provided in Section 4.02(d), the Borrower may offer each Lender that has delivered an Extension Consent as provided in Section 4.02(b) a reasonable opportunity to increase its Commitment by an amount equal to its pro rata share (based on its Commitment before giving effect to such increase) of the Commitment of the Lender that does not deliver an Extension Consent as provided in Section 4.02(b). After giving such Lenders such an opportunity, the Borrower may with the approval of the Administrative Agent amend this Agreement to increase the Commitment of any other Lender or Lenders with the consent of such Lender or Lenders; provided that such increase does not increase the aggregate amount of the Commitments to an amount greater than the Aggregate Committed Amount in effect immediately before such expiration or termination.

(f) Additional Lender or Lenders. If any Lender does not deliver an Extension Consent as provided in Section 4.02(b), upon the expiration of the Commitment of such Lender, or upon its termination as provided in Section 4.02(d), the Borrower may with the approval of the Administrative Agent amend this Agreement as provided herein to add one or more other Lenders (each an “Additional Commitment Lender”) as parties, with such Commitments as may be agreed to by the Administrative Agent and such other Lender or Lenders; provided that such additions do not increase the Aggregate Committed Amount to an amount greater than the aggregate amount of Commitments in effect immediately before such expiration or termination.

 

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4.03 Fees.

(a) Commitment Fee. The Borrower agrees to pay to the Administrative Agent, quarterly in arrears for each Utilization Period, for the account of the Lenders ratably in accordance with their Commitment Percentage a commitment fee (the “Commitment Fee”) (i) if the Utilization is greater than or equal to 50%, at the rate of 30% of the Applicable Margin per annum for the relevant Utilization Period on the average Available Commitments for the Utilization Period or (ii) if the Utilization is less than 50%, at the rate of 40% of the Applicable Margin per annum for the relevant Utilization Period on the average Available Commitments for the Utilization Period. The Commitment Fee shall accrue from the Effective Date to the Termination Date and shall be payable in arrears on the last day in each of March, June, September, and December and on the Termination Date provided that if any day or the Termination Date is not a Business Day, then the Commitment Fee shall be payable on the next succeeding Business Day.

(b) Standby L/C Fees. The Borrower will pay to each Issuing Bank Standby L/C documentation fees (the “Standby L/C Fees”) in the amounts and at the times agreed to by the Issuing Banks and the Borrower in the Original Fee Letter.

(c) Letter of Credit Utilization Fees. A letter of credit utilization fee, at a rate per annum equal to the Applicable Margin for the relevant quarterly period from time to time in effect, calculated on a per annum basis on the daily amount of Aggregate Standby L/C Exposure from time to time, payable to the Administrative Agent for the account of the Lenders in arrears on (i) the last day of each calendar quarter, commencing on the first such date after the Borrowing Date, and (ii) the Termination Date.

(d) Joint Bookrunners Fees. The Borrower will pay to the Joint Bookrunners, for the sole account of the Joint Bookrunners, the arrangement fees (the “Joint Bookrunners Fees”) and other fees in the amounts and at the times agreed to by the Joint Bookrunners and the Borrower in the New Fee Letter.

(e) Amendment Fee. The Borrower will pay to the Administrative Agent, for the account of the Lenders, an amendment fee (the “Amendment Fee”) in accordance with the Summary of Terms and Conditions agreed to by the Borrower and the Joint Bookrunners on April 20, 2005.

4.04 Computation of Fees. All fees calculated on a per annum basis shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed.

4.05 Taxes.

(a) Any and all payments by the Borrower or a Guarantor, as the case may be, to any Lender, any Issuing Bank, the Joint Bookrunners or the Administrative Agent under this Agreement and the other Transaction Documents shall be made free and clear of, and without deduction or withholding for or on account of, any Taxes. In addition, the Borrower shall promptly pay all Other Taxes.

 

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(b) Except as otherwise provided in Section 4.05(c), the Borrower and the Guarantors jointly and severally agree to indemnify and hold harmless each Lender, each Issuing Bank and the Administrative Agent for the full amount of Taxes or Other Taxes (without duplication) excluding in each case United States backup withholding Taxes imposed because of payee underreporting (including any Taxes or Other Taxes (without duplication) imposed by any jurisdiction on amounts payable under this Section 4.05) paid by or assessed against any Lender, any Issuing Bank or the Administrative Agent in respect of any sum payable hereunder and any liability (including penalties, interest, additions to tax and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted, except to the extent that such penalties, interest, additions to tax or expenses are incurred solely as a result of any gross negligence or willful misconduct of such Lender, Issuing Bank or Administrative Agent, as the case may be. Payment under this indemnification shall be made within 30 days after the date any Lender, any Issuing Bank or the Administrative Agent makes written demand therefor, setting forth in reasonable detail the basis and calculation of such amounts (such written demand shall be presumed correct, absent significant error).

(c) If the Borrower or the Guarantors, as the case may be, shall be required by law to deduct or withhold any Taxes or Other Taxes from or in respect of any sum payable hereunder to any Lender, any Issuing Bank or the Administrative Agent, then:

(i) the sum payable shall be increased as necessary so that after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section 4.05, but excluding in each case United States backup withholding Taxes imposed because of payee underreporting) such Lender, such Issuing Bank or the Administrative Agent receives an amount equal to the sum it would have received had no such deductions or withholdings been made; provided, that, the Borrower shall not be required to increase any amounts payable to such Lender, Issuing Bank or the Administrative Agent to the extent such increased amounts would be in excess of the amounts that would have been payable to such Lender or Issuing Bank had such Lender, Issuing Bank or Administrative Agent complied with the requirements of Section 4.05(f) or to the extent provided in Section 4.05(g);

(ii) the Borrower or the Guarantors, as the case may be, shall make such deductions and withholdings; and

(iii) the Borrower or the Guarantors, as the case may be, shall pay the full amount deducted or withheld to the relevant taxing authority or other authority in accordance with applicable law.

(d) Within 30 days after the date of any payment by the Borrower or the Guarantors, as the case may be, of Taxes or Other Taxes, the Borrower or the Guarantors, as the case may be, shall furnish to the Administrative Agent the original or a certified copy of a receipt evidencing payment thereof or other evidence of payment reasonably satisfactory to the Administrative Agent.

 

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(e) If the Borrower or the Guarantors, as the case may be, is required to pay additional amounts to the Administrative Agent, any Lender or any Issuing Bank pursuant to Section 4.05(c) other than amounts related to the withholding of Mexican tax at the rate applicable to interest payments received by foreign financial institutions registered with the Secretaría de Hacienda y Crédito Público as a Foreign Financial Institution for the purposes of Article 195, Section I of the Mexican Income Tax law, then the Administrative Agent, such Lender or such Issuing Bank, as the case may be, shall, upon reasonable request by the Borrower or the Guarantors, use reasonable efforts (consistent with legal and regulatory restrictions) to change the jurisdiction of its Lending Office, issuing office or office for receipt of payments by the Borrower and Guarantors hereunder, as the case may be, so as to eliminate or reduce the obligation of the Borrower or the Guarantor, as the case may be, to pay any such additional amounts which may thereafter accrue or to indemnify the Administrative Agent, such Lender or such Issuing Bank in the future, if such change in the reasonable judgment of the Administrative Agent, such Lender or such Issuing Bank is not otherwise disadvantageous to such Lender or such Issuing Bank.

(f) Each Issuing Bank, each Lender and the Administrative Agent shall, from time to time at the request of the Borrower or the Administrative Agent (as the case may be), promptly furnish to the Borrower and the Administrative Agent (as the case may be), such forms, documents or other information (which shall be accurate and complete) as may be reasonably required to establish any available exemption from, or reduction in the amount of, applicable Taxes; provided, however, that none of any Issuing Bank, any Lender or the Administrative Agent shall be obliged to disclose information regarding its tax affairs or computations to the Borrower in connection with this paragraph (f), it being understood that the identity of any Person shall not be considered for these purposes as information regarding its tax affairs or computations. Each of the Borrower and the Administrative Agent shall be entitled to rely on the accuracy of any such forms, documents or other information furnished to it by any Person and shall have no obligation to make any additional payment or indemnify any Person for any Taxes, interest or penalties that would not have became payable by such Person had such documentation been accurate.

(g) In the case of an assignment, transfer, grant of a participation, designation of a new Lending Office, issuing office [or Administrative Agent’s Payment Office or appointment of a successor Administrative Agent], the Borrower and Guarantors shall not be required to pay or increase any amounts, pursuant to this Section 4.05 following such event, in excess of the amounts the Borrower and Guarantors were required to pay or increase immediately prior to such an event, except to the extent such event occurs pursuant to Section 4.12 or to the extent of increases in such amounts resulting from a change in applicable law occurring after such event.

(h) If any Issuing Bank, the Administrative Agent or any Lender receives a refund or credit in respect of Taxes or Other Taxes as to which it has been indemnified by

 

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the Borrower or a Guarantor, as the case may be, pursuant to Section 4.05(b) and such refund or credit is directly and clearly attributable to this Agreement, it shall notify the Borrower or such Guarantor, as the case may be, of the amount of such refund or credit and shall return to the Borrower or such Guarantor, as the case may be, such refund or the benefit of such credit; provided, however, that (A) such Issuing Bank, the Administrative Agent or such Lender, as the case may be, shall not be obligated to make any effort to obtain such refund or credit or to provide the Borrower or the Guarantors with any information on or justification for the arrangement of its tax affairs or otherwise disclose to the Borrower, the Guarantors or any other Person any information that it considers to be proprietary or confidential, and (B) the Borrower or such Guarantor, as the case may be, upon the request of such Issuing Bank, the Administrative Agent or such Lender, as the case may be, shall return the amount of such refund or the benefit of such credit to such Issuing Bank, the Administrative Agent or such Lender, as the case may be, if such Issuing Bank, the Administrative Agent or such Lender, as the case may be, is required to repay the amount of such refund or the benefit of such credit to the relevant authorities within six years of the date the Borrower or such Guarantor, as the case may be, is paid such amount by such Issuing Bank, the Administrative Agent or such Lender, as the case may be.

(i) The agreements in this Section 4.05 shall survive the termination of this Agreement and the payment of the Borrower’s Obligations.

4.06 General Provisions as to Payments.

(a) All payments to be made by the Borrower or the Guarantors, as the case may be, shall be made without set-off, counterclaim or other defense. Except as otherwise expressly provided herein, all payments by the Borrower shall be made to the Administrative Agent for the account of the Lenders, the Swing Line Lenders or the Issuing Banks, as the case may be, at the Administrative Agent’s Payment Office, and shall be made in Dollars and in immediately available funds, no later than 3:30 p.m. (New York City time) (but not earlier than 11:30 a.m. (New York City time) in respect of any Drawing under a Standby L/C), on the dates specified herein but in no event prior to the payment by the relevant Issuing Bank of such Drawing, as the case may be, to be reimbursed. The Administrative Agent will promptly distribute to the relevant Issuing Bank or to each Lender its Commitment Percentage (or other applicable share as expressly provided herein) of each payment in like funds as received. Any payment received by the Administrative Agent later than 3:30 p.m. (New York City time) shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue until such following Business Day.

(b) Except and to the extent otherwise specifically provided herein, whenever any payment to be made hereunder is due on a day which is not a Business Day, the date for payment thereof shall be extended to the immediately following Business Day and, if interest is stated to be payable in respect thereof, interest shall continue to accrue to such immediately following Business Day.

 

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(c) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to an Issuing Bank or the Lenders hereunder that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may (but shall not be so required), in reliance upon such assumption, cause to be distributed to the relevant Issuing Bank or each Lender, as the case may be, on such due date an amount equal to the amount then due to such Issuing Bank or such Lender. If and to the extent that the Borrower shall not have made such payment, the relevant Issuing Bank or each Lender, as the case may be, shall repay to the Administrative Agent forthwith on demand such amount distributed to such Issuing Bank or such Lender together with accrued interest thereon, for each day from the date such amount is distributed to such Issuing Bank or such Lender until the date such Issuing Bank or such Lender repays such amount to the Administrative Agent, at the Federal Funds Rate; provided, however, that if any amount remains unpaid by the relevant Issuing Bank or any Lender for more than five Business Days after the Administrative Agent has made a demand for such amount, such Issuing Bank or such Lender shall, commencing on the day next following such fifth Business Day, pay interest to the Administrative Agent at a rate per annum equal to the Federal Funds Rate plus 1%, and, provided further, that if any such amount remains unpaid by the relevant Issuing Bank or any Lender for more than ten Business Days, such Issuing Bank or such Lender shall, commencing on the day next following such tenth Business Day, pay interest to the Administrative Agent at a rate per annum equal to the Federal Funds Rate plus 2.00%.

4.07 Funding Losses. If the Borrower makes any payment of principal with respect to any LIBOR Loan on any day other than the last day of the Interest Period applicable thereto, or if the Borrower fails to borrow any LIBOR Loans after notice has been given to any Lender in accordance with Section 2.01 or to convert or continue a Loan as a LIBOR Loan after a Notice of Extension/Conversion has been delivered by the Borrower pursuant to Section 2.01(e), or if the Borrower fails to prepay any LIBOR Loans after notice has been given pursuant to Section 2.01, the Borrower shall reimburse each Lender within 15 days after demand for any resulting loss or expense incurred by it, including any loss incurred in obtaining, liquidating or reemploying deposits bearing interest by reference to LIBOR from third parties (“Funding Losses”), provided such Lender shall have delivered to the Borrower a certificate setting forth in reasonable detail the computations for the amount of such loss or expense, which certificate shall be conclusive in the absence of manifest error.

4.08 Basis for Determining Interest Rate Inadequate or Unfair. If on or prior to the first day of any Interest Period for any LIBOR Loan:

(a) the Administrative Agent determines that by reason of circumstances affecting the London interbank market, reasonably adequate means do not exist for ascertaining LIBOR applicable to such Interest Period or that deposits in Dollars (in the applicable amounts) are not being offered in the London interbank market for such Interest Period, or

 

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(b) the Required Lenders advise the Administrative Agent that LIBOR as determined by the Administrative Agent will not adequately and fairly reflect the cost to any Lender of making or maintaining its Loan for such Interest Period,

(c) then the Administrative Agent shall forthwith give notice thereof to the Borrower and the Lenders. In the event of any such determination or advice, until the Administrative Agent shall have notified the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, any request by the Borrower for a Loan of the affected amount or Interest Period, or a conversion to or continuation of a Loan of the affected amount or Interest Period shall be deemed rescinded and such request shall instead be considered a request for a Base Rate Loan. Each determination by the Administrative Agent hereunder shall be conclusive absent manifest error.

4.09 Capital Adequacy.

If any Participating Lender has determined, after the date hereof, that the adoption or the becoming effective of, or any change in, or any change by any Governmental Authority, central bank, or comparable agency charged with the interpretation or administration thereof in the interpretation or administration of, any applicable law, rule, or regulation regarding capital adequacy, or compliance by such Participating Lender with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank, or comparable agency, has or would have the effect of increasing such Participating Lender’s cost of maintaining its Commitment or Standby L/C, as the case may be, or making or maintaining any Loans or any Standby L/C, as the case may be, or reducing the rate of return on such Participating Lender’s capital or assets as a consequence of its commitments or obligations hereunder to a level below that which such Participating Lender could have achieved but for such adoption, effectiveness, change, or compliance (taking into consideration such Lender’s policies with respect to capital adequacy), then, upon notice from such Participating Lender to the Borrower, the Borrower shall be obligated to pay to such Participating Lender such additional amount or amounts as will compensate such Participating Lender for such increased cost or reduction in amount received. Each determination by any such Lender of amounts owing under this Section shall, absent manifest error, be conclusive and binding on the parties hereto. The relevant Lender will, upon request, provide a certificate in reasonable detail as to the amount of such increased cost or reduction in amount received and method of calculation.

Upon any Participating Lender’s making a claim for compensation under this Section 4.09, (i) such Participating Lender shall use commercially reasonable efforts (consistent with legal and regulatory restrictions) to change the jurisdiction of its lending office or assign its rights and obligations hereunder to another of its offices, branches or affiliates so as to eliminate or reduce any such additional payment by the Borrower which may thereafter accrue, if such change is not otherwise disadvantageous to such Lender, and (ii) the Borrower may replace such Lender in accordance with Section 4.12.

4.10 Illegality.

(a) Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof occurring

 

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after the Effective Date shall make it unlawful for any Lender to make or maintain any Commitment or any Loan as contemplated by this Credit Agreement, then such Lender, together with Lenders giving notice under Section 4.08, shall be an “Affected Lender” and by written notice to the Borrower and to the Administrative Agent:

(i) such Lender may declare that such Loans will not thereafter (for the duration of such unlawfulness or impossibility) be made by such Lender hereunder, whereupon, in the case of any request for a LIBOR Loan, as to such Lender, such request shall only be deemed a request for a Base Rate Loan (unless it should also be illegal for the Affected Lender to provide a Base Rate Loan, in which case such Loan shall bear interest at a commensurate rate to be agreed upon by the Administrative Agent and the Affected Lender, and so long as no Event of Default shall have occurred and be continuing, the Borrower), unless such declaration shall be subsequently withdrawn;

(ii) such Lender may require that all outstanding LIBOR Loans, made by it be converted to Base Rate Loans, in which event all such LIBOR Loans shall be automatically converted to Base Rate Loans as of the effective date of such notice as provided in paragraph (b) below; and

(iii) if it is also illegal for the Affected Lender to make Base Rate Loans, such Lender may declare all amounts owed to them by the Borrower to the extent of such illegality to be due and payable; provided, however, the Borrower has the right, with the consent of the Administrative Agent to find an additional Lender to purchase the Affected Lenders’ rights and obligations.

In the event any Lender shall exercise its rights under (i) or (ii) above with respect to any Loans, all payments and prepayments of principal that would otherwise have been applied to repay the LIBOR Loans that would have been made by such Lender or the converted LIBOR Loans of such Lender shall instead be applied to repay the Base Rate Loans made by such Lender in lieu of, or resulting from the conversion, of such LIBOR Loans.

(b) For purposes of this Section 4.10, a notice to the Borrower by any Lender shall be effective as to each such Loan, if lawful, on the last day of the Interest Period currently applicable to such Loan; in all other cases such notice shall be effective on the date of receipt by the Borrower.

4.11 Requirements of Law.

If, after the date hereof, the adoption of or any change in any Requirement of Law or in the interpretation or application thereof applicable to any Lender, or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority, in each case made subsequent to the Effective Date (or, if later, the date on which such Lender becomes a Lender):

(a) shall impose, modify, or hold applicable any reserve, special deposit, compulsory loan, or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans, or other extensions of credit by, or any other acquisition of funds by, any office of such Lender that is not otherwise included in the determination of the LIBOR hereunder; or

 

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(b) shall impose on such Lender any other condition (excluding any tax of any kind whatsoever);

and the result of any of the foregoing is to increase the cost to such Lender, by an amount that such Lender reasonably deems to be material, of making, converting into, continuing, or maintaining LIBOR Loans or to reduce any amount receivable hereunder in respect thereof, then, in any such case, upon notice delivered to the Borrower from such Lender, through the Administrative Agent, in accordance herewith, the Borrower shall be obligated to promptly pay such Lender, upon its demand, any additional amounts necessary to compensate such Lender for such increased cost or reduced amount receivable; provided that, in any such case, the Borrower may elect to convert the LIBOR Loans made by such Lender hereunder to Base Rate Loans by giving the Administrative Agent at least one (1) Business Day’s notice of such election. If any Lender becomes entitled to claim any additional amounts pursuant to this Section, it shall provide notice thereof to the Borrower, promptly upon occurrence of such event, but in any case within three (3) days from the date of such event, through the Administrative Agent, certifying (x) that one of the events described in this paragraph (a) has occurred and describing in reasonable detail the nature of such event, (y) as to the increased cost or reduced amount resulting from such event and (z) as to the additional amount demanded by such Lender and a reasonably detailed explanation of the calculation thereof. Such a certificate as to any additional amounts payable pursuant to this subsection submitted by such Lender, through the Administrative Agent, to the Borrower shall be conclusive and binding on the parties hereto in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. If any Lender becomes aware of a proposed change in any Requirement of Law that would entitle it to claim any additional amounts pursuant to this Section it shall promptly, upon the Lender becoming aware of such event, provide notice to the Borrower through the Administrative Agent.

4.12 Substitute Lenders. If any Lender has demanded compensation pursuant to Sections 4.09 or 4.11 or has exercised its rights pursuant to Section 4.10(a)(iii), and such Lender does not waive its right to future additional compensation pursuant to Section 4.09 or 4.11, the Borrower shall have the right (i) to replace such Lender with a Substitute Lender or Substitute Lenders that shall succeed to the rights of such Lender under this Agreement upon execution of an Assignment and Assumption Agreement and payment by the Borrower of the related processing fee of U.S.$3,500 to the Administrative Agent and a fee of U.S.$1,500 payable directly to each Issuing Bank; or (ii) to remove such Lender, reduce the Commitments by the amount of the Commitment of such Lender, and adjust the Commitment Percentage of each Lender such that the percentage of each other Lender shall be increased to equal the percentage equivalent of a fraction. The numerator of which is the Commitment of such other Lender and the denominator of which is the Commitments of the Lenders minus the Commitments of the Lender who demanded payment pursuant to Sections 4.09 or 4.11 or exercised its rights pursuant to Section 4.10(a)(iii); provided, however, that such Lender shall not be replaced or removed hereunder until such Lender has been repaid in full all amounts owed to it pursuant to this Agreement and the other Transaction Documents (including Sections 4.07 and 4.09) unless any such amount is being contested by the Borrower in good faith.

 

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4.13 Sharing of Payments, Etc.

(a) If, other than as expressly provided elsewhere herein, any Lender shall obtain on account of the Obligations owing to it any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) in excess of its Commitment Percentage of payments on account of the Obligations obtained by all the Participating Lenders (an “excess payment”), such Lender shall forthwith (i) notify the Administrative Agent of such fact, and (ii) purchase from the other Lenders such participations in such Obligations owing to them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender, such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender’s Commitment Percentage (according to the proportion of (A) the amount of such paying Lender’s required repayment to (B) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. The Administrative Agent will keep records (which shall be conclusive and binding in the absence of demonstrable error) of participations purchased pursuant to this Section 4.13 and will in each case notify the Lenders following any such purchases.

(b) If any Lender shall commence any action or proceeding in any court to enforce its rights hereunder after consultation with the other Lenders and, as a result thereof or in connection therewith, it shall receive any excess payment, then such Lender shall not be required to share any portion of such excess payment with any Lender which has the legal right to, but does not, join in any such action or proceeding or commence and diligently prosecute a separate action or proceeding to enforce its rights in another court.

(c) The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 4.13 may exercise all its rights of set-off with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.

ARTICLE V

CONDITIONS PRECEDENT

5.01 Conditions to Effectiveness. The obligations of the Participating Lenders under this Agreement are subject to the satisfaction or waiver of the following conditions precedent (the date on which all such conditions precedent are satisfied or waived being the “Effective Date”):

(a) Agreement. The Administrative Agent shall have received counterparts of this Agreement duly executed by each party hereto, and there shall have been delivered to the Administrative Agent for the account of each Lender, a Note, executed by the Borrower.

 

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(b) Opinions of Borrower’s and each Guarantor’s Counsel. The Administrative Agent shall have received (i) the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, New York counsel to the Borrower and the Guarantors, in substantially the form of Exhibit E, and (ii) the opinion of Lic. Ramiro G. Villareal Morales, Mexican counsel to the Borrower, in substantially the form of Exhibit F.

(c) Opinion of Counsel to the Administrative Agent. The Administrative Agent shall have received (i) a favorable opinion of Ritch, Heather y Mueller, S.C., special Mexican counsel to the Administrative Agent and the Participating Lenders, and (ii) the opinion of Sullivan & Cromwell LLP, New York counsel to the Participating Lenders.

(d) Governmental Approvals. The Administrative Agent shall have received certified copies of any and all necessary approvals, authorizations, or consents of, or notices to, or registrations with any Governmental Authority required for the Borrower and each Guarantor to enter into, or perform its obligations under, the Transaction Documents.

(e) Organizational Documents of the Borrower and the Guarantors. The Administrative Agent shall have received certified copies of (i) the acta constitutiva and estatutos sociales in effect on the Effective Date of the Borrower and each Guarantor, (ii) the powers-of-attorney of each Person executing any Transaction Document on behalf of the Borrower and each Guarantor, together with specimen signatures of such Person and (iii) all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to the authorization for the execution, delivery and performance of each such Transaction Document and the transactions contemplated hereby and thereby. All certificates shall state that the resolutions or other information referred to in such certificates have not been amended, modified, revoked or rescinded as of the date of such certificates (which shall not be earlier than five Business Days before the Effective Date).

(f) Agent for Service of Process. The Administrative Agent shall have received a power of attorney, notarized under Mexican law, granted by the Borrower and each Guarantor to the Process Agent in respect of the Transaction Documents together with evidence that the Process Agent has accepted its appointment as Process Agent pursuant to Section 15.12.

(g) Fees and Expenses. The Borrower shall have paid all fees and expenses owing to the Participating Lenders, the Joint Bookrunner and the Administrative Agent to the extent of and payable on or before the Effective Date of the Agreement, and all other fees and expenses owing hereunder and under the Fee Letters to the extent due and payable on or before the Effective Date of the Agreement.

(h) No Default. No Default or Event of Default shall have occurred and be continuing either prior to or after giving effect to the transactions contemplated on the Effective Date, and the Borrower and each Guarantor shall have provided a certificate from a Responsible Officer of the Borrower to such effect to the Administrative Agent.

 

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(i) Representations and Warranties. The representations and warranties of the Borrower and of each Guarantor contained in this Agreement and each other Transaction Document shall be true on and as of the Effective Date, and the Borrower and each Guarantor shall have provided a certificate to such effect to the Administrative Agent.

(j) No Material Adverse Effect. No Material Adverse Effect shall have occurred since December 31, 2004 and there shall have occurred no circumstance and/or event of a financial, political or economic nature in Mexico that has a reasonable likelihood of having a material adverse effect on the ability of the Borrower or the Guarantors to perform their obligations under this Agreement and the other Transaction Documents; for the avoidance of doubt, the fact that the Borrower has acquired the shares of RMC Group p.l.c. shall not itself be deemed to have been a Material Adverse Effect.

(k) Other Documents. The Administrative Agent shall have received such other certificates, powers of attorney and other documents and undertakings relating to the authority for, and the execution, delivery and validity of, the Transaction Documents, as may be reasonably requested by the Administrative Agent or any Participating Lender through the Administrative Agent.

(l) Fees, Costs and Expenses under the Existing Agreement. The Borrower shall have paid all accrued and unpaid fees payable under the Existing Agreement to the extent due and payable on or before the Effective Date of this Agreement.

(m) Existing Loans. All outstanding Loans under the Existing Agreement shall have been (or contemporaneously with the closing of the amendment and restatement will be) repaid in full or reallocated fully under this Credit Agreement, and all commitments thereunder shall have been terminated.

5.02 Conditions Precedent to Borrowings, Continuation or Conversion of the Loans and Issuances of Standby L/Cs. The obligation of any Lender to make a Loan on the occasion of any Borrowing or to continue or convert any Loan or for an Issuing Bank to issue a Standby L/C is subject to the satisfaction of the following conditions:

(a) Notices. In the case of Borrowings, continuance or conversion of Loans, the Administrative Agent shall have received a Notice of Borrowing, Swing Line Request or a Notice of Extension/Conversion as required by Section 2.01(c), 2.02(c) or 2.01(e), respectively, and, in the case of issuances of Standby L/Cs, the Appropriate Issuing Bank shall have received a Standby L/C Request as required by Section 3.01(c);

(b) Availability. (i) Immediately after such Borrowing (after giving effect to the payment of any unreimbursed Drawing with the proceeds of such Borrowing), the continuation or conversion of any Loan or the issuance of the Standby L/C, as the case may be, the Total Outstandings for such Lender shall not exceed the Commitment of such Lender; and (ii) in the case of issuances of Standby L/Cs, the stated amount of the Standby L/C subject of such issuance shall not exceed the Available Standby L/C Sublimit.

(c) No Default. Immediately before and after giving effect to such Borrowing or the continuation or conversion of any Borrowing or the issuance of such Standby L/C,

 

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no Default or Event of Default shall have occurred and be continuing and such Borrowing or continuation or conversion of any Loan or issuance of a Standby L/C thereof will not cause or result in a Default or Event of Default; and

(d) Representations and Warranties. The representations and warranties of the Borrower contained in this Agreement and in each other Transaction Document and of each Guarantor contained in this Agreement shall be true and correct in all material respects on and as of the date of any Borrowing, continuation or conversion of any Loan or issuance of a Standby L/C thereof.

(e) Fees. In the case of issuances of Standby L/Cs, the Borrower shall have paid to the Issuing Banks all of the Standby L/C Fees due and payable on or before the issuance of such Standby L/C.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE BORROWER

The Borrower represents and warrants that:

6.01 Corporate Existence and Power.

(a) The Borrower is a corporation (sociedad anónima de capital variable) duly incorporated, validly existing and in good standing under the laws of Mexico and has all requisite corporate power and authority (including all governmental licenses, permits and other approvals except for such licenses, permits and approvals the absence of which will not have a Material Adverse Effect) to own its assets and carry on its business as now conducted and as proposed to be conducted.

(b) All of the outstanding stock of the Borrower has been validly issued and is fully paid and non-assessable.

6.02 Power and Authority; Enforceable Obligations.

(a) The execution, delivery and performance by the Borrower of each Transaction Document to which it is or will be a party, and the consummation of the transactions contemplated hereby and thereby, are within the Borrower’s corporate powers and have been duly authorized by all necessary corporate action pursuant to the estatutos sociales of the Borrower.

(b) This Agreement and the other Transaction Documents to which the Borrower is a party have been duly executed and delivered by the Borrower and constitute the legal, valid and binding obligations of the Borrower enforceable in accordance with their respective terms, except as enforceability may be limited by applicable concurso mercantil, bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally or general equity principles.

6.03 Compliance with Law and Other Instruments. The execution, delivery of and performance under this Agreement and each of the other Transaction Documents to which

 

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the Borrower is a party and the consummation of the transactions herein or therein contemplated, and compliance with the terms and provisions hereof and thereof, do not and will not (a) conflict with, or result in a breach or violation of, or constitute a default under, or result in the creation or imposition of any Lien upon the assets of the Borrower pursuant to, any Contractual Obligation of the Borrower or (b) result in any violation of the estatutos sociales of the Borrower or any provision of any Requirement of Law applicable to the Borrower.

6.04 Consents/Approvals. No order, permission, consent, approval, license, authorization, registration or validation of, or notice to or filing with, or exemption by, any Governmental Authority or third party is required to authorize, or is required in connection with, the execution, delivery and performance by the Borrower of this Agreement and the other Transaction Documents to which the Borrower is a party or the taking of any action contemplated hereby or by any other Transaction Document.

6.05 Financial Information. The consolidated balance sheet of the Borrower and its Subsidiaries as at December 31, 2004, and the related consolidated statements of income and cash flows of the Borrower and its Subsidiaries for the fiscal year then ended, accompanied by an opinion of KPMG Cardenas Dosal, S.C., independent public accountants, and the consolidated balance sheet of the Borrower and its Subsidiaries as at March 31, 2005, and the related consolidated statements of income and cash flows of the Borrower and its Subsidiaries for the three months then ended, duly certified by the chief financial officer of the Borrower, copies of which have been furnished to each Lender, fairly present, subject, in the case of said balance sheet as at March 31, 2005, and said statements of income and cash flows for the three months then ended, to year-end audit adjustments, the consolidated financial condition of the Borrower and its Subsidiaries as at such dates and the consolidated results of the operations of the Borrower and its Subsidiaries for the periods ended on such dates, all in accordance with Mexican GAAP, consistently applied.

6.06 Litigation. Except as set forth in Schedule 6.06, there is no pending or threatened action, suit, investigation, litigation or proceeding, including any Environmental Action, affecting the Borrower or any of its Subsidiaries before any court, Governmental Authority or arbitrator that (a) would be reasonably likely to have a Material Adverse Effect or (b) purports to affect the legality, validity or enforceability of any Transaction Document or the consummation of the transactions contemplated thereby, and there has been no adverse change in the status, or financial effect on the Borrower or any of its Subsidiaries, of the litigation described in Schedule 6.06.

6.07 No Immunity. The Borrower is subject to civil and commercial law with respect to its obligations under this Agreement and each other Transaction Document to which it is a party and the execution, delivery and performance of this Agreement or any such other Transaction Document by the Borrower constitute private and commercial acts rather than public or governmental acts. Under the laws of Mexico neither the Borrower nor any of its property has any immunity from jurisdiction of any court or any legal process (whether through service or notice, attachment prior to judgment or attachment in aid of execution).

6.08 Governmental Regulations. The Borrower is not, and is not controlled by, (a) an “investment company” within the meaning of the United States Investment Company Act

 

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of 1940, as amended or (b) a “holding company”, or of a “subsidiary company” of a “holding company”, or an “affiliate” of a “holding company” or of a “subsidiary” of a “holding company”, within the meaning of the Public Utility Holding Company Act of 1935, as amended.

6.09 Direct Obligations; Pari Passu; Liens.

(a)(i) This Agreement constitutes a direct, unconditional unsubordinated and unsecured obligation of the Borrower, and (ii) the Loans, when made, will constitute direct, unconditional unsubordinated and unsecured obligations of the Borrower.

(b) The obligations of the Borrower under this Agreement and the Loans rank and will rank in priority of payment at least pari passu with all other senior unsecured Debt of the Borrower.

(c) There are no Liens on the property of the Borrower or any of its Subsidiaries other than Permitted Liens.

6.10 Subsidiaries. As of March 31, 2005, all Material Subsidiaries of the Borrower are listed on Schedule 6.10, without giving effect to the acquisition of RMC Group p.l.c.

6.11 Ownership of Property. (a) Except as, in the aggregate, could not reasonably be expected to have a Material Adverse Effect, each of the Borrower and its Subsidiaries has title in fee simple to, or a valid leasehold interest in, all its real property, and good title to, or a valid leasehold interest in, all its other property, and none of such property is subject to any Lien except Permitted Liens and (b) each Credit Party maintains insurance as required by Section 8.05.

6.12 No Recordation Necessary.

(a) This Agreement and the Notes are in proper legal form under the law of Mexico for the enforcement thereof against the Borrower under the law of Mexico. To ensure the legality, validity, enforceability or admissibility in evidence of this Agreement and each other Transaction Document in Mexico, it is not necessary that this Agreement or any other Transaction Document be filed or recorded with any Governmental Authority in Mexico or that any stamp or similar tax be paid on or in respect of this Agreement or any other document to be furnished under this Agreement, unless such stamp or similar taxes have been paid by the Borrower; provided, however, that in the event any legal proceedings are brought in the courts of Mexico, an official Spanish translation of the documents required in such proceedings, including this Agreement, would have to be approved by the court after the defendant is given an opportunity to be heard with respect to the accuracy of the translation, and proceedings would thereafter be based upon the translated documents.

(b) It is not necessary (i) in order for the Administrative Agent or any Participating Lender to enforce any rights or remedies under the Transaction Documents or (ii) solely by reason of the execution, delivery and performance of this Agreement by the Administrative Agent or any Participating Lender, that the Administrative Agent or

 

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such Participating Lender be licensed or qualified with any Mexican Governmental Authority or be entitled to carry on business in Mexico.

6.13 Taxes.

(a) Each Obligor has filed all material tax returns which are required to be filed by it and has paid all taxes due pursuant to such returns or pursuant to any material assessment received by the Borrower, except where the same may be contested in good faith by appropriate proceedings and as to which such Obligor maintains reserves to the extent it is required to do so by law or pursuant to Mexican GAAP. The charges, accruals and reserves on the books of each Obligor in respect of taxes or other governmental charges are, in the opinion of the Borrower, adequate.

(b) Except for tax imposed by way of withholding on interest, fees and commissions remitted from Mexico, there is no tax (other than taxes on, or measured by, income or profits), levy, impost, deduction, charge or withholding imposed, levied, charged, assessed or made by or in Mexico or any political subdivision or taxing authority thereof or therein either (i) on or by virtue of the execution or delivery of this Agreement or any of the other Transaction Documents or (ii) on any payment to be made by the Borrower pursuant to this Agreement or any of the other Transaction Documents. The Borrower and each Guarantor is permitted to pay any additional amounts payable pursuant to Section 4.05.

6.14 Compliance with Laws. The Borrower and its Subsidiaries are in compliance in all material respects with all applicable Requirements of Law (including with respect to the licenses, certificates, permits, franchises, and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, antitrust laws or Environmental Laws and the rules and regulations and laws with respect to social security, workers’ housing funds, and pension funds obligations), except where the failure to so comply would not have a Material Adverse Effect.

6.15 Absence of Default. No Default or Event of Default has occurred and is continuing.

6.16 Full Disclosure. All information heretofore furnished by the Borrower to the Administrative Agent, the Joint Bookrunners or any Participating Lender for purposes of or in connection with this Agreement or any transaction contemplated hereby (other than projections and other “forward-looking” information that have been prepared on a reasonable basis and in good faith by the Borrower) is, and all such information hereafter furnished by the Borrower to the Administrative Agent, the Joint Bookrunners or any Participating Lender will be, true and accurate in all material respects on the date as of which such information is stated or certified and does not omit to state any material fact necessary in order to make the statements contained herein or therein, taken as a whole, not misleading. The Borrower has disclosed to the Participating Lenders in writing any and all facts which may have a Material Adverse Effect.

6.17 Choice of Law; Submission to Jurisdiction and Waiver of Sovereign Immunity. In any action or proceeding involving the Borrower arising out of or relating to this

 

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Agreement in any Mexican court or tribunal, any Participating Lender, the Joint Bookrunners and the Administrative Agent would be entitled to the recognition and effectiveness of the choice of law, submission to jurisdiction and waiver of sovereign immunity provisions of Sections 15.10, 15.11 and 15.13.

6.18 Aggregate Exposure. The Aggregate Exposure does not exceed the Aggregate Committed Amount.

6.19 Existing Standby L/C’s. Attached hereto as Schedule 3.01 is a complete and accurate list of the outstanding Standby L/C’s under the Existing Agreement, listed by number, stated amount, date of issue and expiry.

6.20 Pension and Welfare Plans. During the consecutive twelve-month period prior to the date of the execution and delivery of this Agreement and prior to the date of any Borrowing hereunder, no steps have been taken to terminate any Pension Plan, and no contribution failure has occurred with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA. No condition exists or event or transaction has occurred with respect to any Pension Plan which would reasonably be expected to result in the incurrence by any Credit Party, any of its Subsidiaries, or any its ERISA Affiliates of any material liability (other than liabilities incurred in the ordinary course of maintaining the Pension Plan), fine or penalty. No Credit Party, nor any of its Subsidiaries, has any contingent liability with respect to any post-retirement benefit under a Welfare Plan which would reasonably be expected to have a Material Adverse Effect, other than liability for continuation coverage described in Part 6 of Title I of ERISA.

6.21 Environmental Matters.

Except as would not have or be reasonably expected to have a Material Adverse Effect:

(a) Each of the properties owned or leased by a Credit Party or any of its Subsidiaries (the “Real Properties”) and all operations at the Real Properties are in compliance with all applicable Environmental Laws, and there is no violation of any Environmental Law with respect to the Real Properties or the businesses operated by the Credit Parties or any of their Subsidiaries (the “Businesses”), and there are no conditions relating to the Businesses or Real Properties that would reasonably be expected to give rise to liability under any applicable Environmental Laws.

(b) No Credit Party has received any written notice of, or inquiry from any Governmental Authority regarding, any violation, alleged violation, non-compliance or liability regarding Hazardous Materials or compliance with Environmental Laws with regard to any of the Real Properties or the Businesses, nor, to the knowledge of a Credit Party or any of its Subsidiaries, is any such notice being threatened.

(c) Hazardous Materials have not been transported or disposed of from the Real Properties, or generated, treated, stored or disposed of at, on or under any of the Real Properties or any other location, in each case by, or on behalf or with the permission of, a Credit Party or any of its Subsidiaries in a manner that would give rise to liability under any applicable Environmental Laws.

 

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(d) No judicial proceeding or governmental or administrative action is pending or, to the knowledge of a Credit Party or any of its Subsidiaries, threatened, under any Environmental Law to which a Credit Party or any of its Subsidiaries is or will be named as a party, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding under any Environmental Law with respect to a Credit Party or any of its Subsidiaries, the Real Properties or the Businesses.

(e) There has been no release (including, without limitation, disposal) or to the Borrower’s knowledge, threat of release of Hazardous Materials at or from the Real Properties, or arising from or related to the operations of a Credit Party or any of its Subsidiaries in connection with the Real Properties or otherwise in connection with the Businesses where such release constituted a violation of, or would give rise to liability under, any applicable Environmental Laws.

(f) None of the Real Properties contains any Hazardous Materials at, on or under the Real Properties in amounts or concentrations that, if released, constitute a violation of, or could give rise to liability under, Environmental Laws.

(g) No Credit Party, nor any of its Subsidiaries, has assumed any liability of any Person (other than another Credit Party or one of its Subsidiaries) under any Environmental Law.

(h) This Section 6.21 constitutes the only representations and warranties of the Credit Parties with respect to any Environmental Law or Hazardous Substance.

6.22 Margin Regulations. No part of the proceeds of the Loans hereunder will be used, directly or indirectly, for the purpose of purchasing or carrying any “margin stock” within the meaning of Regulation U, or for the purpose of purchasing or carrying or trading in any securities. If requested by any Participating Lender or the Administrative Agent, the Borrower will furnish to the Administrative Agent and each Participating Lender a statement to the foregoing effect in conformity with the requirements of FR Form U-1 referred to in said Regulation U. No indebtedness being reduced or retired out of the proceeds of the Loans hereunder was or will be incurred for the purpose of purchasing or carrying any margin stock within the meaning of Regulation U or any “margin security” within the meaning of Regulation T. “Margin stock” within the meaning of Regulation U does not constitute more than 25% of the value of the consolidated assets of the Borrower and its Subsidiaries. Neither the execution and delivery hereof by the Borrower, nor the performance by it of any of the transactions contemplated by this Agreement (including, without limitation, the direct or indirect use of the proceeds of the Loans) will violate or result in a violation of the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or regulations issued pursuant thereto, or Regulation T, U, or X.

 

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ARTICLE VII

REPRESENTATIONS AND WARRANTIES OF THE GUARANTORS

Each of the Guarantors separately represents and warrants that:

7.01 Corporate Existence and Power.

(a) Such Guarantor is a corporation (sociedad anónima de capital variable) duly incorporated, validly existing and in good standing under the laws of Mexico and has all requisite corporate power and authority (including all governmental licenses, permits and other approvals except for such licenses, permits and approvals the absence of which will not have a Material Adverse Effect) to own its assets and carry on its business as now conducted and as proposed to be conducted.

(b) All of the outstanding stock of such Guarantor has been validly issued and is fully paid and non-accessible.

7.02 Power and Authority; Enforceable Obligations.

(a) The execution, delivery and performance by such Guarantor of each Transaction Document to which it is or will be a party, and the consummation of the transactions contemplated hereby and thereby, are within such Guarantor’s corporate powers and have been duly authorized by all necessary corporate action pursuant to the estatutos sociales of such Guarantor.

(b) This Agreement and the other Transaction Documents to which such Guarantor is a party have been duly executed and delivered by such Guarantor and constitute legal, valid and binding obligations of such Guarantor enforceable in accordance with their respective terms, except as enforceability may be limited by applicable concurso mercantil, bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally or general equity principals.

7.03 Compliance with Law and Other Instruments. The execution, delivery and performance of this Agreement and any of the other Transaction Documents to which such Guarantor is a party and the consummation of the transactions herein or therein contemplated, and compliance with the terms and provisions hereof and thereof, do not and will not (a) conflict with, or result in a breach or violation of, or constitute a default under, or result in the creation or imposition of any Lien upon the assets of such Guarantor pursuant to, any Contractual Obligation of such Guarantor or (b) result in any violation of the estatutos sociales of such Guarantor or any provision of any Requirement of Law applicable to such Guarantor.

7.04 Consents/Approvals. No order, permission, consent, approval, license, authorization, registration or validation of, or notice to or filing with, or exemption by, any Governmental Authority or third party is required to authorize, or is required in connection with, the execution, delivery and performance by such Guarantor of this Agreement and the other Transaction Documents to which such Guarantor is a party or the taking of any action contemplated hereby or by any other Transaction Document.

 

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7.05 Litigation; Material Adverse Effect. Except as set forth in Schedule 7.05, there is no pending or threatened action, suit, investigation, litigation or proceeding, including any Environmental Action, affecting the Borrower or any of its Subsidiaries before any court, Governmental Authority or arbitrator that (i) would be reasonably likely to have a Material Adverse Effect or (ii) purports to affect the legality, validity or enforceability of any Transaction Document or the consummation of the transactions contemplated thereby, and there has been no adverse change in the status, or financial effect on the Borrower or any of its Subsidiaries, of the litigation described in Schedule 7.05.

7.06 No Immunity. Such Guarantor is subject to civil and commercial law with respect to its obligations under this Agreement and each other Transaction Document to which it is a party and the execution, delivery and performance of this Agreement or any such other Transaction Document by such Guarantor constitute private and commercial acts rather than public or governmental acts. Under the laws of Mexico neither such Guarantor nor any of its property has any immunity from jurisdiction of any court or any legal process (whether through service or notice, attachment prior to judgment or attachment in aid of execution).

7.07 Governmental Regulations. Such Guarantor is not, and is not controlled by, (a) an “investment company” within the meaning of the United States Investment Company Act of 1940, as amended or (b) a “holding company”, or a “subsidiary company” of a “holding company”, or an “affiliate” of a “holding company” or of a “subsidiary” of a “holding company”, within the meaning of the Public Utility Holding Company Act of 1935, as amended.

7.08 Direct Obligations; Pari Passu.

(a) This Agreement constitutes a direct, unconditional unsubordinated and unsecured obligation of such Guarantor.

(b) The obligations of such Guarantor under this Agreement rank and will rank in priority of payment at least pari passu with all other senior unsecured Debt of such Guarantor.

7.09 No Recordation Necessary. This Agreement is in proper legal form under the law of Mexico for the enforcement thereof against such Guarantor under the law of Mexico. To ensure the legality, validity, enforceability or admissibility in evidence of this Agreement and each other Transaction Document in Mexico, it is not necessary that this Agreement or any other Transaction Document be filed or recorded with any Governmental Authority in Mexico or that any stamp or similar tax be paid on or in respect of this Agreement or any other document to be furnished under this Agreement unless such stamp or similar taxes have been paid by the Borrower or the Guarantors; provided, however, that in the event any legal proceedings are brought in the courts of Mexico, an official Spanish translation of the documents required in such proceedings, including this Agreement, would have to be approved by the court after the defendant is given an opportunity to be heard with respect to the accuracy of the translation, and proceedings would thereafter be based upon the translated documents.

7.10 Choice of Law; Submission to Jurisdiction and Waiver of Sovereign Immunity. In any action or proceeding involving such Guarantor arising out of or relating to this

 

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Agreement in any Mexican court or tribunal, the Participating Lenders, the Joint Bookrunners and the Administrative Agent would be entitled to the recognition and effectiveness of the choice of law, submission to jurisdiction and waiver of sovereign immunity provisions of Sections 15.10, 15.11 and 15.13.

ARTICLE VIII

AFFIRMATIVE COVENANTS

The Borrower covenants and agrees that for so long as any Obligation under this Agreement or any other Transaction Document remains unpaid, any Standby L/Cs remain outstanding or any Lender has any Commitment hereunder:

8.01 Financial Reports and Other Information. The Borrower will deliver to the Administrative Agent (with a copy for each Participating Lender):

(a) as soon as available and in any event within 120 days after the end of each fiscal year of the Borrower, a copy of the annual audit report for such year for the Borrower and its Subsidiaries containing consolidated and consolidating balance sheets of the Borrower and its Subsidiaries, as of the end of such fiscal year and consolidated statements of income and cash flows of the Borrower and its Subsidiaries, for such fiscal year, in each case accompanied by an opinion acceptable to the Required Lenders by KPMG Cardenas Dosal, S.C. or other independent public accountants of recognized standing acceptable to the Required Lenders, together with (i) a certificate of such accounting firm to the Lenders stating that in the course of the regular audit of the business of the Borrower and its Subsidiaries, which audit was conducted by such accounting firm in accordance with Mexican GAAP, such accounting firm has obtained no knowledge that a Default or Event of Default has occurred and is continuing, or if, in the opinion of such accounting firm a Default or Event of Default has occurred and is continuing, a statement as to the nature thereof and (ii) a certificate of a Responsible Officer of the Borrower, stating that no Default or Event of Default has occurred and is continuing or, if a Default or Event of Default has occurred and is continuing, a statement as to the nature thereof and the action that the Borrower has taken and proposes to take with respect thereto; provided that in the event of any change in the Mexican GAAP used in the preparation of such financial statements, the Borrower shall also provide, for informational purposes only, a statement of reconciliation conforming such financial statements to Mexican GAAP consistent with those applied in the preparation of the financial statements referred to in Section 6.05 and provided further that all such documents will be prepared in English;

(b) as soon as available and in any event within 60 days after the end of each of the first three quarters of each fiscal year of the Borrower, consolidated balance sheets of the Borrower and its Subsidiaries, as of the end of such quarter and consolidated statements of income and cash flows of the Borrower and its Subsidiaries for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, duly certified (subject to year-end audit adjustments) by any Responsible Officer of the

 

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Borrower as having been prepared in accordance with Mexican GAAP and together with a certificate of a Responsible Officer of the Borrower, as to compliance with the terms of this Agreement and stating that no Default or Event of Default has occurred and is continuing or, if a Default or Event of Default has occurred and is continuing, a statement as to the nature thereof and the action that the Borrower has taken and proposes to take with respect thereto; provided that in the event of any change in the Mexican GAAP used in the preparation of such financial statements, the Borrower shall also provide, for informational purposes only, a statement of reconciliation conforming such financial statements to Mexican GAAP consistent with those applied in the preparation of the financial statements referred to in Section 6.05 and provided further that all such documents will be prepared in English; and

(c) Together with the financials delivered pursuant to Section 8.01(b) with respect to the fiscal quarter ended June 30, 2005 only, a schedule of all Material Subsidiaries of the Borrower, after giving effect to the acquisition of RMC Group p.l.c.

8.02 Notice of Default and Litigation. The Borrower will furnish to the Administrative Agent (and the Administrative Agent will notify each Participating Lender):

(a) as soon as practicable and in any event within five days after the occurrence of each Default or Event of Default continuing on the date of such statement, a statement of the chief financial officer of the Borrower setting forth details of such Default or Event of Default and the action that the Borrower has taken and proposes to take with respect thereto; and

(b) promptly after the commencement thereof, notice of all litigation, actions, investigations and proceedings before any court, Governmental Authority or arbitrator affecting the Borrower or any of its Subsidiaries of the type described in Section 6.06 or the receipt of written notice by the Borrower or any of its subsidiaries of potential liability or responsibility for violation, or alleged violation of any federal, state or local law, rule or regulation (including but not limited to Environmental Laws) the violation of which could reasonably be expected to have a Material Adverse Effect.

8.03 Compliance with Laws and Contractual Obligations, Etc. The Borrower will comply, and cause each of its Subsidiaries to comply, in all material respects, with all applicable Requirements of Law (including with respect to the licenses, approvals, certificates, permits, franchises, notices, registrations and other governmental authorizations necessary to the ownership of its respective properties or to the conduct of its respective business, antitrust laws or Environmental Laws and laws with respect to social security and pension funds obligations) and all material Contractual Obligations, except where the failure to so comply could not reasonably be expected to have a Material Adverse Effect.

8.04 Payment of Obligations. The Borrower will pay and discharge, and cause each of its Subsidiaries to pay and discharge, before the same shall become delinquent, (a) all taxes, assessments and governmental charges or levies assessed, charged or imposed upon it or upon its property and (b) all lawful claims that, if unpaid, might by law become a Lien upon its property, except where the failure to make such payments or effect such discharges could not

 

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reasonably be expected to have a Material Adverse Effect; provided, however, that neither the Borrower nor any of its Subsidiaries shall be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim that is being contested in good faith and by proper proceedings and as to which appropriate reserves are being maintained, unless and until any Lien resulting therefrom attaches to its property and becomes enforceable against its other creditors.

8.05 Maintenance of Insurance. The Borrower will maintain, and cause each of its Subsidiaries to maintain, insurance with reputable insurance companies or associations in such amounts and covering such risks as is usually carried by companies of established reputation engaged in similar businesses and owning similar properties in the same general areas in which the Borrower or such Subsidiary operates.

8.06 Conduct of Business and Preservation of Corporate Existence. The Borrower will continue to engage in business of the same general type as now conducted by the Borrower and will preserve and maintain, and cause each of its Material Subsidiaries to preserve and maintain, its corporate existence, rights (charter and statutory), licenses, consents, permits, notices or approvals and franchises deemed material to its business; provided that neither the Borrower nor any of its Subsidiaries shall be required to maintain its corporate existence in connection with a merger or consolidation in compliance with Section 9.03; and provided, further that neither the Borrower nor any of its Subsidiaries shall be required to preserve any right or franchise if the Borrower or any such Subsidiary shall in its good faith judgment, determine that the preservation thereof is no longer in the best interests of the Borrower or such Subsidiary, as the case may be, and that the loss thereof could not reasonably be expected to have a Material Adverse Effect.

8.07 Books and Records. The Borrower will keep, and cause each of its Subsidiaries to keep, proper books of record and account, in which full and correct entries shall be made of all financial transactions and the assets and business of the Borrower and each such Subsidiary in accordance with Mexican GAAP, consistently applied.

8.08 Maintenance of Properties, Etc. The Borrower will:

(a) maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its properties that are used or useful in the conduct of its business in good working order and condition, ordinary wear and tear excepted, and

(b) maintain, preserve and protect all intellectual property and all necessary governmental and third party approvals, franchises, licenses and permits, material to the business of the Borrower or its Subsidiaries, provided neither paragraph (a) nor this paragraph (b) shall prevent the Borrower or any of its Subsidiaries from discontinuing the operation and maintenance of any of its properties or allowing to lapse certain approvals, licenses or permits which discontinuance is desirable in the conduct of its business and which discontinuance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

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8.09 Use of Proceeds.

(a) The Borrower will use the proceeds of all Loans made hereunder for general corporate purposes, including but not limited to the repayment of indebtedness.

(b) The Borrower will ensure that at no time shall the Aggregate Exposure of the Participating Lenders exceed the Aggregate Committed Amount then in effect.

8.10 Pari Passu Ranking. The Borrower will ensure that at all times the Obligations of the Borrower and each of the Guarantors under the Transaction Documents constitute unconditional general obligations of such Obligor ranking in priority of payment at least pari passu with all other senior unsecured, unsubordinated Debt of such Obligor.

8.11 Transactions with Affiliates. The Borrower will conduct, and cause each of its Subsidiaries to conduct, all transactions otherwise permitted under this Agreement with any of its Affiliates on terms that are commercially reasonable and no less favorable to the Borrower or such Subsidiary than it would obtain in a comparable arm’s-length transaction with a Person not an Affiliate.

8.12 Maintenance of Governmental Approvals. The Borrower will maintain in full force and effect at all times all approvals of and filings with any Governmental Authority or third Party required under applicable law for the conduct of its business (including, without limitation, antitrust laws or Environmental Laws) and the performance of the Obligors’ obligations hereunder and under the other Transaction Documents by the Borrower and/or the Guarantors, as applicable, and for the validity or enforceability hereof and thereof, except where failure to maintain any such approvals or filings could not reasonably be expected to have a Material Adverse Effect.

8.13 Measurement Date. The Borrower shall provide to the Administrative Agent a certificate of a Responsible Officer detailing the latest twelve month total Consolidated Net Debt/EBITDA Ratio as soon as practicable, but in no event later than five Business Days after the consolidated financial statements of the Borrower and its Subsidiaries have been delivered pursuant to Section 8.01 (each such date, a “Measurement Date”).

8.14 Inspection of Property. At any reasonable time during normal business hours and from time to time with at least ten Business Days prior notice, or at any time if a Default or Event of Default shall have occurred and be continuing, permit the Administrative Agent or any of the Participating Lenders or any agents or representatives thereof to examine and make abstracts from the records and books of account of, and visit the properties of, each of the Borrower or the Guarantors, and to discuss the affairs, finances and accounts of the Borrower or such Guarantor with any of its officers or directors and with its independent certified public accountants. All expenses associated with such inspection shall be borne by the inspecting Participating Lenders; provided that if a Default or an Event of Default shall have occurred and be continuing, any expenses associated with such inspection shall be borne jointly and severally by the Borrower and the Guarantors.

 

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ARTICLE IX

NEGATIVE COVENANTS

The Borrower covenants and agrees that for so long as any Obligation under this Agreement or any other Transaction Document remains unpaid, any Standby L/C remains outstanding or any Lender has any Commitment hereunder:

9.01 Financial Conditions.

(a) The Borrower shall not permit the Consolidated Net Debt / EBITDA Ratio at any time to exceed 3.5 to 1.

(b) The Borrower shall not permit the Consolidated Fixed Charge Coverage Ratio at the end of each fiscal quarter to be less than 2.5 to 1.

(c) Concurrently with the delivery by the Borrower of any financial statements pursuant to Section 8.01 the Borrower shall deliver to the Administrative Agent (with a copy to each Participating Lender) a certificate from a Responsible Officer containing all information and calculations necessary for determining compliance by the Borrower with Sections 9.01 (a) and (b) above.

9.02 Liens. The Borrower shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any property or asset of the Borrower or any Subsidiary, whether now owned or held or hereafter acquired, other than the following Liens (“Permitted Liens”):

(a) Liens for taxes, assessments and other governmental charges the payment of which is being contested in good faith by appropriate proceedings promptly initiated and diligently conducted and for which adequate reserves or other appropriate provision, if any, as shall be required by Mexican GAAP shall have been made;

(b) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics and materialmen incurred in the ordinary course of business for sums not yet due or the payment of which is being contested in good faith by appropriate proceedings promptly initiated and diligently conducted and for which such reserves or other appropriate provision, if any, as shall be required by Mexican GAAP shall have been made;

(c) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security;

(d) any attachment or judgment Lien, unless the judgment it secures shall not, within 60 days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall not have been discharged within 60 days after the expiration of any such stay;

 

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(e) Liens existing on the date of this Agreement (other than liens with respect to the acquisition of RMC Group p.l.c.) that are described in Schedule 9.02(e)(i) hereto and liens existing as of March 31, 2005 (including liens with respect to the acquisition of RMC Group p.l.c.) that are described in Schedule 9.02(e)(ii) hereto;

(f) any Lien on property acquired by the Borrower after the date hereof that was existing on the date of acquisition of such property; provided that such Lien was not incurred in anticipation of such acquisition, and any Lien created to secure all or any part of the purchase price, or to secure Debt incurred or assumed to pay all or any part of the purchase price, of property acquired by the Borrower or any of its Subsidiaries after the date hereof; provided, further, that (A) any such Lien permitted pursuant to this clause (f) shall be confined solely to the item or items of property so acquired (including, in the case of any Acquisition of a corporation through the acquisition of 51% or more of the voting stock of such corporation, the stock and assets of any Acquired Subsidiary or Acquiring Subsidiary) and, if required by the terms of the instrument originally creating such Lien, other property which is an improvement to, or is acquired for specific use with, such acquired property; and (B) if applicable, any such Lien shall be created within nine months after, in the case of property, its acquisition, or, in the case of improvements, their completion;

(g) any Lien renewing, extending or refunding any Lien permitted by clause (f) above; provided that the principal amount of Debt secured by such Lien immediately prior thereto is not increased or the maturity thereof reduced and such Lien is not extended to other property;

(h) any Liens created on shares of capital stock of the Borrower or any of its Subsidiaries solely as a result of the deposit or transfer of such shares into a trust or a special purpose vehicle (including any entity with legal personality) of which such shares constitute the sole assets; provided that (A) any shares of Subsidiary stock held in such trust, corporation or entity could be sold by the Borrower; and (B) proceeds from the deposit or transfer of such shares into such trust, corporation or entity and from any transfer of or distributions in respect of the Borrower’s or any Subsidiary’s interest in such trust, corporation or entity are applied as provided under Section 9.04; and provided, further that such Liens may not secure Debt of the Borrower or any Subsidiary (unless permitted under another clause of this Section 9.02);

(i) any Liens on securities securing repurchase obligations in respect of such securities;

(j) any Liens in respect of any Receivables Program Assets which are or may be sold or transferred pursuant to a Qualified Receivables Transaction; and

(k) in addition to the Liens permitted by the foregoing clauses (a) through (j), Liens securing Debt of the Borrower and its Subsidiaries (taken as a whole) not in excess of 5% of the Adjusted Consolidated Net Tangible Assets of the Borrower and its Subsidiaries;

 

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unless, in each case, the Borrower has made or caused to be made effective provision whereby the Obligations hereunder are secured equally and ratably with, or prior to, the Debt secured by such Liens (other than Permitted Liens) for so long as such Debt is so secured.

9.03 Consolidations and Mergers. None of the Guarantors nor the Borrower shall, in one or more related transactions, (x) consolidate with or merge into any other Person or permit any other Person to merge into it or (y), directly or indirectly, transfer, convey, sell, lease or otherwise dispose of all or substantially all of its properties or assets to any Person, unless, with respect to any transaction described in clause (x) or (y), immediately after giving effect to such transaction:

(a) the Person formed by any such consolidation or merger, if it is not the Borrower or such Guarantor, or the Person that acquires by transfer, conveyance, sale, lease or other disposition all or substantially all of the properties and assets of the Borrower or such Guarantor (any such Person, a “Successor”) (i) shall be a corporation organized and validly existing under the laws of its place of incorporation, which in the case of a Successor to the Borrower shall be Mexico, the United States, Canada, France, Belgium, Germany, Italy, Luxembourg, the Netherlands, Portugal, Spain, Switzerland or the United Kingdom, or any political subdivision thereof, (ii) in the case of a Successor to the Borrower, shall expressly assume, pursuant to a written agreement in form and substance satisfactory to the Required Lenders, the Obligations of the Borrower pursuant to this Agreement and the performance of every covenant on part of the Borrower to be performed and observed and (iii) in the case of a Successor to any Guarantor, shall expressly assume, pursuant to a written agreement in form and substance satisfactory to the Required Lenders, the performance of every covenant of this Agreement on part of such Guarantor to be performed and observed;

(b) in the case of any such transaction involving the Borrower or any Guarantor, the Borrower or such Guarantor, or the Successor of any thereof, as the case may be, shall expressly agree to indemnify each Participating Lender and the Administrative Agent against any tax, levy, assessment or governmental charge payable by withholding or deduction thereafter imposed on such Participating Lender and/or the Administrative Agent solely as a consequence of such transaction with respect to payments under the Transaction Documents;

(c) immediately after giving effect to such transaction, including for purposes of this clause (c) the substitution of any Successor to the Borrower for the Borrower or the substitution of any Successor to a Guarantor for such Guarantor and treating any Debt or Lien incurred by the Borrower or any Successor to the Borrower, or by a Guarantor of the Borrower or any Successor to such Guarantor, as a result of such transactions as having been incurred at the time of such transaction, no Default or Event of Default shall have occurred and be continuing; and

(d) the Borrower shall have delivered to the Administrative Agent an officer’s certificate and an opinion of counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a written agreement is required in connection with such transaction, such written agreement comply with the relevant provisions of this Article IX and that all conditions precedent provided for in this Agreement relating to such transaction have been complied with.

 

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9.04 Sales of Assets, Etc. The Borrower will not, and will not permit any of its Material Subsidiaries to, sell, lease or otherwise dispose of any of its assets (including the capital stock of any Subsidiary), other than (a) inventory, trade receivables and assets surplus to the needs of the business of the Borrower or any Subsidiary sold in the ordinary course of business and (b) assets not used, usable or held for use in connection with cement operations and related operations, unless the proceeds of the sale of such assets are retained by the Borrower or such Subsidiary, as the case may be, and, as promptly as practicable after such sale (but in any event within 180 days of such sale), the proceeds are applied to (i) expenditures for property, plant and equipment usable in the cement industry or related industries; (ii) the repayment of senior Debt of the Borrower or any of its Subsidiaries, whether secured or unsecured; or (iii) investments in companies engaged in the cement industry or related industries.

9.05 Change in Nature of Business. The Borrower shall not make, or permit any of its Material Subsidiaries to make, any material change in the nature of its business as carried on at the date hereof.

9.06 Margin Regulations. The Borrower shall not use any part of the proceeds of the Loans or any Standby L/C for any purpose which would result in any violation (whether by the Borrower, the Administrative Agent, any Issuing Bank or the Lenders) of Regulation T, U or X of the Federal Reserve Board or to extend credit to others for any such purpose. The Borrower shall not engage in, or maintain as one of its important activities, the business of extending credit for the purpose of purchasing or carrying any margin stock (as defined in such regulations).

ARTICLE X

OBLIGATIONS OF GUARANTORS

10.01 The Guaranty. Each of the Guarantors jointly and severally hereby unconditionally and irrevocably guarantee (as a primary obligor and not merely as surety) payment in full as provided herein of all Obligations payable by the Borrower to each Participating Lender, the Administrative Agent and the Joint Bookrunners under this Agreement and the other Transaction Documents and the Fee Letters, as and when such amounts become payable (whether at stated maturity, by acceleration or otherwise).

10.02 Nature of Liability. The obligations of the Guarantors hereunder are guarantees of payment and shall remain in full force and effect until all Obligations of the Borrower have been validly, finally and irrevocably paid in full and all Commitments have been terminated, and shall not be affected in any way by the absence of any action to obtain such amounts from the Borrower or by any variation, extension, waiver, compromise or release of any or all Obligations from time to time therefor. Each Guarantor waives all requirements as to promptness, diligence, presentment, demand for payment, protest and notice of any kind with respect to this Agreement and the other Transaction Documents.

 

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10.03 Unconditional Obligations. Notwithstanding any contrary principles under the laws of any jurisdiction other than the State of New York, the obligations of each of the Guarantors hereunder shall be unconditional, irrevocable and absolute and, without limiting the generality of the foregoing, shall not be impaired, terminated, released, discharged or otherwise affected by the following:

(a) the existence of any claim, set-off or other right which either of the Guarantors may have at any time against the Borrower, the Administrative Agent, the Issuing Banks, any Lenders or any other Person, whether in connection with this transaction or with any unrelated transaction;

(b) any invalidity or unenforceability of this Agreement or any other Transaction Document relating to or against the Borrower or either of the Guarantors for any reason (including for the reason that the obtaining of the Standby L/Cs may be in excess of the powers of the Borrower or of its officers, directors or other agents, acting or purporting to act on its behalf, or be in any way irregular or defective);

(c) any provision of applicable law or regulation purporting to prohibit the payment by the Borrower of any amount payable by the Borrower under this Agreement or any of the other Transaction Documents or the payment, observance, fulfillment or performance of any other Obligations;

(d) any change in the name, purposes, business, capital stock (including the ownership thereof) or constitution of the Borrower;

(e) any amendment, waiver or modification of any Transaction Document in accordance with the terms hereof and thereof; or

(f) any other act or omission to act or delay of any kind by the Borrower, the Administrative Agent, the Participating Lenders or any other Person or any other circumstance whatsoever which might otherwise constitute a legal or equitable discharge of or defense to either of the Guarantors’ obligations hereunder.

10.04 Independent Obligation. The obligations of each of the Guarantors hereunder are independent of the Borrower’s obligations under the Transaction Documents and of any guaranty or security that may be obtained for the Obligations. The Administrative Agent and the Participating Lenders may neglect or forbear to enforce payment hereunder, under any Transaction Document or under any guaranty or security, without in any way affecting or impairing the liability of each Guarantor hereunder. The Administrative Agent or the Participating Lenders shall not be obligated to exhaust recourse or take any other action against the Borrower or under any agreement to purchase or security which the Administrative Agent or the Participating Lenders may hold before being entitled to payment from the Guarantors of the obligations hereunder or proceed against or have resort to any balance of any deposit account or credit on the books of the Administrative Agent or the Participating Lenders in favor of the Borrower or each of the Guarantors. Without limiting the generality of the foregoing, the Administrative Agent or the Participating Lenders shall have the right to bring suit directly against either of the Guarantors, either prior or subsequent to or concurrently with any lawsuit against, or without bringing suit against, the Borrower and/or the other Guarantor.

 

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10.05 Waiver of Notices. Each of the Guarantors hereby waives notice of acceptance of this ARTICLE X and notice of any liability to which it may apply, and waives presentment, demand for payment, protest, notice of dishonor or nonpayment of any such liability, suit or the taking of other action by the Administrative Agent or the Participating Lenders against, and any other notice, to the Guarantors.

10.06 Waiver of Defenses. To the extent permitted by New York law and notwithstanding any contrary principles under the laws of any other jurisdiction, each of the Guarantors hereby waives any and all defenses to which it may be entitled, whether at common law, in equity or by statute which limits the liability of, or exonerates, guarantors or which may conflict with the terms of this ARTICLE X, including failure of consideration, breach of warranty, statute of frauds, merger or consolidation of the Borrower, statute of limitations, accord and satisfaction and usury. Without limiting the generality of the foregoing, each of the Guarantors consents that, without notice to such Guarantor and without the necessity for any additional endorsement or consent by such Guarantor, and without impairing or affecting in any way the liability of such Guarantor hereunder, the Administrative Agent and the Participating Lenders may at any time and from time to time, upon or without any terms or conditions and in whole or in part, (a) change the manner, place or terms of payment of, and/or change or extend the time or payment of, renew or alter, any of the Obligations, any security therefor, or any liability incurred directly or indirectly in respect thereof, and this ARTICLE X shall apply to the Obligations as so changed, extended, renewed or altered; (b) exercise or refrain from exercising any right against the Borrower or others (including the Guarantors) or otherwise act or refrain from acting, (c) settle or compromise any of the Obligations, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof to the payment of any such liability (whether due or not) of the Borrower to creditors of the Borrower other than the Administrative Agent and the Participating Lenders and the Guarantors, (d) apply any sums by whomsoever paid or howsoever realized, other than payments of the Guarantors of the Obligations, to any liability or liabilities of the Borrower under the Transaction Documents or any instruments or agreements referred to herein or therein, to the Administrative Agent and the Participating Lenders regardless of which of such liability or liabilities of the Borrower under the Transaction Documents or any instruments or agreements referred to herein or therein remain unpaid; (e) consent to or waive any breach of, or any act, omission or default under the Obligations or any of the instruments or agreements referred to in this Agreement and the other Transaction Documents, or otherwise amend, modify or supplement the Obligations or any of such instruments or agreements, including the Transaction Documents; and/or (f) request or accept other support of the Obligations or take and hold any security for the payment of the Obligations or the obligations of the Guarantors under this ARTICLE XI, or allow the release, impairment, surrender, exchange, substitution, compromise, settlement, rescission or subordination thereof. Furthermore, each of the Guarantors hereby waives to the extent permitted by law any right to which it may be entitled to under Articles 2830, 2836, 2842, 2845, 2846, 2848 and 2849 of the Mexican Federal Civil Code and related Articles contained in the Civil Codes of the States in Mexico. The Guarantors further expressly waive the benefits of order, excusión y division contained in Articles 2814, 2815, 2817, 2818, 2820, 2821, 2822, 2823, 2837, 2838, 2840, 2841

 

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and other related Articles of the Mexican Federal Civil Code and related Articles contained in other Civil Codes of the States of Mexico. The Guarantors hereby represent that the terms of each such provision of each such civil code are known in form and substance to each such Guarantor.

10.07 Bankruptcy and Related Matters.

(a) So long as any of the Obligations remain outstanding, each of the Guarantors shall not, without the prior written consent of the Administrative Agent (acting with the consent of the Required Lenders), commence or join with any other Person in commencing any bankruptcy, liquidation, reorganization, concurso mercantil or insolvency proceedings of, or against, the Borrower.

(b) If acceleration of the time for payment of any amount payable by the Borrower under this Agreement or the Notes is stayed upon the insolvency, bankruptcy, reorganization, concurso mercantil or any similar event of the Borrower or otherwise, all such amounts otherwise subject to acceleration under the terms of this Agreement shall nonetheless be payable by the Guarantors hereunder forthwith on demand by the Administrative Agent made at the request of the Participating Lenders.

(c) The obligations of each of the Guarantors under this ARTICLE X shall not be reduced, limited, impaired, discharged, deferred, suspended or terminated by any proceeding or action, voluntary or involuntary, involving the bankruptcy, insolvency, concurso mercantil, receivership, reorganization, marshalling of assets, assignment for the benefit of creditors, readjustment, liquidation or arrangement of the Borrower or similar proceedings or actions or by any defense which the Borrower may have by reason of the order, decree or decision of any court or administrative body resulting from any such proceeding or action. Without limiting the generality of the foregoing, the Guarantors’ liability shall extend to all amounts and obligations that constitute the Obligations and would be owed by the Borrower but for the fact that they are unenforceable or not allowable due to the existence of any such proceeding or action.

(d) Each of the Guarantors acknowledges and agrees that any interest on any portion of the Obligations which accrues after the commencement of any proceeding or action referred to above in Section 10.07(c) (or, if interest on any portion of the Obligations ceases to accrue by operation of law by reason of the commencement of said proceeding or action, such interest as would have accrued on such portion of the Obligations if said proceedings or actions had not been commenced) shall be included in the Obligations, it being the intention of the Guarantors, the Administrative Agent, and the Participating Lenders that the Obligations which are to be purchased by the Guarantors pursuant to this ARTICLE X shall be determined without regard to any rule of law or order which may relieve the Borrower of any portion of such Obligations. The Guarantors will take no action to prevent any trustee in bankruptcy, receiver, debtor in possession, assignee for the benefit of creditors or similar person from paying the Administrative Agent, or allowing the claim of the Administrative Agent, for the benefit of the Administrative Agent, and the Participating Lenders, in respect of any such interest accruing after the date of which such proceeding is commenced, except to the extent any such interest shall already have been paid by the Guarantors.

 

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(e) Notwithstanding anything to the contrary contained herein, if all or any portion of the Obligations are paid by or on behalf of the Borrower, the obligations of the Guarantors hereunder shall continue and remain in full force and effect or be reinstated, as the case may be, in the event that all or any part of such payment(s) are rescinded or recovered, directly or indirectly, from the Administrative Agent and/or the Participating Lenders as a preference, preferential transfer, fraudulent transfer or otherwise, and any such payments which are so rescinded or recovered shall constitute Obligations for all purposes under this ARTICLE X, to the extent permitted by applicable law.

10.08 No Subrogation. Notwithstanding any payment or payments made by any of the Guarantors hereunder or any set-off or application of funds of any of the Guarantors by the Administrative Agent or any Participating Lender, no Guarantor shall be entitled to be subrogated to any of the rights of the Administrative Agent or any Participating Lender against the Borrower or any other Guarantor or any collateral security or guarantee or right of offset held by the Administrative Agent or any Participating Lender for the payment of the Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower or any other Guarantor in respect of payments made by such Guarantor hereunder, until all amounts owing to the Administrative Agent and the Participating Lenders by the Borrower on account of the Obligations shall have been indefeasibly paid in full in cash. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Obligations shall not have been indefeasibly paid in full in cash, such amount shall be held by such Guarantor in trust for the Issuing Bank, the Administrative Agent and the Lenders, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Administrative Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if required), to be applied against the Obligations, whether matured or unmatured, in such order as the Administrative Agent may determine.

10.09 Right of Contribution. Subject to Section 10.08, each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder who has not paid its proportionate share of such payment. The provisions of this Section 10.09 shall in no respect limit the obligations and liabilities of any Guarantor to the Administrative Agent, the Joint Bookrunners and the Participating Lenders, and each Guarantor shall remain liable to the Administrative Agent, the Joint Bookrunners and the Participating Lenders for the full amount guaranteed by such Guarantor hereunder.

10.10 General Limitation on Guaranty. In any action or proceeding involving any applicable corporate law, or any applicable bankruptcy, insolvency, reorganization, concurso mercantil or other law affecting the rights of creditors generally, if the obligations of any Guarantor under this Section 10.10 would otherwise, taking into account the provisions of Section 10.09, be held or determined to be void, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under Section 10.01, then,

 

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notwithstanding any other provision hereof to the contrary, the amount of such liability shall, without any further action by such Guarantor, any Participating Lender, the Administrative Agent or any other Person, be automatically limited and reduced to the highest amount that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding.

10.11 Covenants of the Guarantors. Each Guarantor hereby covenants and agrees that, so long as any Obligations under this Agreement and any other Transaction Document remains unpaid, any Standby L/C remains outstanding or any Participating Lender has any Commitment hereunder, it shall comply with the covenants contained or incorporated by reference in this Agreement to the extent applicable to it as a Subsidiary of the Borrower.

ARTICLE XI

EVENTS OF DEFAULT

11.01 Events of Default. The following specified events shall constitute “Events of Default” for the purposes of this Agreement:

(a) Payment Defaults. The Borrower shall (i) fail to reimburse any Drawing or fail to pay any principal of any Loan when due in accordance with the terms hereof or (ii) fail to pay any interest on any Drawing, or any Loan, any fee or any other amount payable under this Agreement or any Note within three Business Days after the same becomes due and payable; or

(b) Representation and Warranties. Any representation or warranty made by the Borrower herein or in any other Transaction Document or made by either Guarantor herein or which is contained in any certificate, document or financial or other statement furnished at any time under or in connection with this Agreement or any other Transaction Document, as applicable, shall prove to have been incorrect in any material respect on or as of the date made if such failure shall remain unremedied for 30 days after the earlier of the date on which (i) the chief financial officer of the Borrower or such Guarantor, as the case may be, becomes aware of such incorrectness or (ii) written notice thereof shall have been given to the Borrower by the Administrative Agent; or

(c) Specific Defaults. The Borrower or a Guarantor, as applicable, shall fail to perform or observe any term, covenant or agreement contained in Section 8.01, 8.02(a), 8.06 (with respect to the Borrower’s and each Guarantor’s existence only), 8.09(b) or 8.10 or ARTICLE IX; or

(d) Other Defaults. The Borrower or a Guarantor, as applicable, shall fail to perform or observe any term, covenant or agreement contained in this Agreement or the Notes, the Fee Letter, any Notice of Borrowings, any certificates, waivers, or any other agreements delivered pursuant to this Agreement (other than as provided in paragraphs (a) and (c) above) and such failure shall continue unremedied for a period of 30 days after the earlier of the date on which (i) the chief financial officer of the Borrower becomes aware of such failure or (ii) written notice thereof shall have been given to the Borrower by the Administrative Agent at the request of any Lender; or

 

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(e) Defaults under Other Agreements. The occurrence of a default or event of default under any indenture, agreement or instrument relating to any Material Debt of the Borrower or any of its Subsidiaries, and (unless any principal amount of such Material Debt is otherwise due and payable) such default or event of default results in the acceleration of the maturity of any principal amount of such Material Debt prior to the date on which it would otherwise become due and payable; or

(f) Voluntary Bankruptcy. The Borrower or any Material Subsidiary shall commence a voluntary case or other proceeding seeking liquidation, reorganization, concurso mercantil or other relief with respect to itself or its debts under any bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action to authorize any of the foregoing or the equivalent thereof under Mexican law (including the Ley de Concursos Mercantiles); or

(g) Involuntary Bankruptcy. An involuntary case or other proceeding shall be commenced against the Borrower or any Material Subsidiary seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency, concurso mercantil or other similar law now or hereafter in effect (including but not limited to the Ley de Concursos Mercantiles) or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 60 consecutive days; or an order for relief shall be entered against the Borrower or any Material Subsidiaries under any bankruptcy, insolvency suspensión de pagos or other similar law as now or hereafter in effect; or

(h) Monetary Judgment. A final judgment or judgments or order or orders not subject to further appeal for the payment of money in an aggregate amount in excess of U.S.$50,000,000 shall be rendered against the Borrower and/or any of its one or more Subsidiaries of the Borrower that are neither discharged nor bonded in full within 30 days thereafter; or

(i) Pari Passu. The Obligations of the Borrower under this Agreement or of any Guarantor under this Agreement shall fail to rank at least pari passu with all other senior unsecured Debt of the Borrower or such Guarantor, as the case may be; or

(j) Validity of Agreement. The Borrower shall contest the validity or enforceability of any Transaction Document or shall deny generally the liability of the Borrower under any Transaction Documents or either Guarantor shall contest the validity of or the enforceability of their guarantee hereunder or any obligation of either Guarantor under ARTICLE X hereof shall not be (or is claimed by either Guarantor not to be) in full force and effect;

 

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(k) Governmental Authority. Any governmental or other consent, license, approval, permit or authorization which is now or may in the future be necessary or appropriate under any applicable Requirement of Law for the execution, delivery, or performance by the Borrower or either Guarantor of any Transaction Document to which it is a party or to make such Transaction Document legal, valid, enforceable and admissible in evidence shall not be obtained or shall be withdrawn, revoked or modified or shall cease to be in full force and effect or shall be modified in any manner that would have an adverse effect on the rights or remedies of the Administrative Agent or the Participating Lenders; or

(l) Expropriation, Etc. Any Governmental Authority shall condemn, nationalize, seize or otherwise expropriate all or any substantial portion of the property of, or capital stock issued or owned by, the Borrower or either Guarantor or take any action that would prevent the Borrower or either Guarantor from performing its obligations under this Agreement or the Notes, the Fee Letter, any Notice of Borrowings, any certificates, waivers, or any other agreements delivered pursuant to this Agreement; or

(m) Moratorium; Availability of Foreign Exchange. A moratorium shall be agreed or declared in respect of any Debt of the Borrower or either Guarantor or any restriction or requirement not in effect on the date hereof shall be imposed, whether by legislative enactment, decree, regulation, order or otherwise, which limits the availability or the transfer of foreign exchange by the Borrower or either Guarantor for the purpose of performing any material obligation under this Agreement or the Notes, the Fee Letter, any Notice of Borrowings, any certificates, waivers, or any other agreements delivered pursuant to this Agreement to which it is a party; or

(n) Change of Ownership or Control. The beneficial ownership (within the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended) of 20% or more in voting power of the outstanding voting stock of the Borrower or either Guarantor is acquired by any Person; provided that the acquisition of beneficial ownership of capital stock of the Borrower or either Guarantor by Lorenzo H. Zambrano or any member of his immediate family shall not constitute an Event of Default.

11.02 Remedies. If any Event of Default has occurred and is continuing,

(a) the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders or the relevant Issuing Bank, as applicable:

(i) terminate all or a portion of the Commitments, including with respect to Standby L/Cs;

(ii) declare, by notice to the Borrower, the principal amount of all outstanding Loans to be forthwith due and payable, whereupon such principal amount, together with accrued interest thereon and any fees and all other Obligations accrued hereunder, shall become immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived; and/or

 

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(iii) demand that the Borrower promptly and in any event no later than the next Business Day deliver cash to the Administrative Agent for the benefit of Issuing Banks (and Borrower shall then promptly and in any event no later than the next Business Day after receipt of such demand so deliver) in an amount equal to 100% of the aggregate outstanding amount of Standby L/Cs;

(b) In the case of any Event of Default specified in Section 11.01(f) or (g), without notice or any other act by the Lenders, the Commitments shall be automatically terminated and the Loans (together with accrued interest thereon) and all other Obligations of the Borrower hereunder shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower and the Borrower shall immediately deliver cash to the Administrative Agent for the benefit of Issuing Banks (and Borrower shall then immediately so deliver) in an amount equal to 100% of the aggregate outstanding amount of Standby L/Cs;

(c) Borrower hereby agrees that all amounts deposited pursuant to section 11.02 (a)(iii) above shall be held in a segregated account, for the benefit of the Issuing Banks and each Lender with a participation in any Standby L/Cs then outstanding, and that the Borrower hereby agrees that it will have no rights or access to such accounts during the continuation of the Event of Default, except as set forth in Section 11.02(d) below. Any such cash shall be made available by the Administrative Agent to the Issuing Banks to reimburse the Issuing Banks for payments of drafts drawn under such Standby L/C and any fees and all other Obligations in connection therewith and the unused portion thereof, after all such Standby L/Cs shall have expired or been fully drawn upon, shall be applied to pay any other Obligations.

(d) After all such Standby L/Cs shall have expired or been fully drawn upon or the Event of Default is waived or cured, the balance, if any, of such cash shall be (subject to any rights of third parties and except as otherwise directed by a court of competent jurisdiction) returned to the Borrower.

provided, however, that nothing in this Section 11.02 shall (x) impair the obligation of any Issuing Bank to make payments in accordance with the Standby L/Cs or (y) impair the obligation of the Borrower to reimburse each Issuing Bank for, or the obligation of any Lender to fund its participation in, any Drawing, made subsequent to the time any remedy provided in this paragraph shall have been exercised.

11.03 Notice of Default. The Administrative Agent shall give notice to the Borrower of any event occurring under Section 11.01(a), (b), (c) or (d) promptly upon being requested to do so by any Participating Lender and shall thereupon notify all the Participating Lenders thereof.

11.04 Default Interest. In the event of default by the Borrower in the payment on the due date of any sum due under this Agreement, the Borrower shall pay interest on demand

 

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on such sum from the date of such default to the day of actual receipt of such sum by the Administrative Agent (as well after as before judgment) at the rate specified in Section 2.03(d). So long as the default continues, the default interest rate shall be recalculated on the same basis at intervals of such duration as the Administrative Agent may select, provided that the amount of unpaid interest at the above rate accruing during the preceding period (or such longer period as may be the shortest period permitted by applicable law for the capitalization of interest) shall be added to the amount in respect of which the Borrower is in default.

ARTICLE XII

THE ADMINISTRATIVE AGENT

12.01 Appointment and Authorization. Each Participating Lender hereby irrevocably designates and appoints ING Capital LLC as the Administrative Agent of such Participating Lender under this Agreement, and each Participating Lender hereby irrevocably authorizes the Administrative Agent to take such action on its behalf under the provisions of this Agreement and each other Transaction Document and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement or any other Transaction Document, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Transaction Document, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Administrative Agent have or be deemed to have any fiduciary relationship with any Participating Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Transaction Document or otherwise exist against the Administrative Agent.

12.02 Delegation of Duties. The Administrative Agent may execute any of its duties under this Agreement or any other Transaction Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects with reasonable care.

12.03 Liability of Administrative Agent. Neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be (a) liable for any action taken or omitted to be taken by it or any such Person under or in connection with this Agreement or any other Transaction Document or the transactions contemplated hereby (except for its or such Person’s own gross negligence or willful misconduct), or (b) responsible in any manner to any of the Participating Lenders for any recital, statement, representation or warranty made by the Borrower, the Guarantors or any officer thereof contained in this Agreement or in any other Transaction Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Transaction Document, or for the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Transaction Document, or for any failure of the Borrower, the Guarantors or any other party to any Transaction Document to perform its obligations hereunder or thereunder. Except as otherwise expressly stated herein, the Administrative Agent shall not be under any obligation to any Participating Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Transaction Document, or to inspect the properties, books or records of the Borrower or the Guarantors.

 

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12.04 Reliance by Administrative Agent.

(a) The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or teletype message, statement, order or other document or telephone conversation believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Transaction Document unless it shall first receive such advice or concurrence of the Required Lenders or the relevant Issuing Bank, as the case may be, as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders or the relevant Issuing Bank, as the case may be, against any and all liability and expense which may be incurred by it by reason of failing to take, taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Transaction Document in accordance with a request or consent of the Required Lenders (or when expressly required hereby, all the Lenders), or the relevant Issuing Bank, as the case may be, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders or such Issuing Bank, as the case may be.

(b) For purposes of determining compliance with the conditions specified in Section 5.01, each Participating Lender that has executed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter sent by the Administrative Agent to such Participating Lender for consent, approval, acceptance or satisfaction on or before the Effective Date.

12.05 Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default (except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of each Issuing Bank and the Lenders) unless the Administrative Agent shall have received written notice from a Lender, an Issuing Bank or the Borrower referring to this Agreement and describing such Default or Event of Default and stating that such notice is a “Notice of Default”. The Administrative Agent shall promptly notify each Issuing Bank and the Lenders of its receipt of any such notice. The Administrative Agent shall take such action with respect to such Default or Event of Default as may be requested by the Required Lenders; provided, however, that unless and until the Administrative Agent has received any such request, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable or in the best interest of the Lenders and the Issuing Banks.

12.06 Credit Decision. Each Participating Lender expressly acknowledges that neither the Administrative Agent nor any of its Affiliates, officers, directors, employees, agents

 

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or attorneys-in-fact has made any representation or warranty to it, and that no act by the Administrative Agent hereafter taken, including any review of the affairs of the Borrower, the Guarantors, or any of their Affiliates, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Participating Lender. Each Participating Lender acknowledges to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent or any other Participating Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower, the Guarantors, and their Affiliates and all applicable Participating Lender regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement. Each Participating Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Participating Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Transaction Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower or the Guarantors. Except for notices, reports and other documents expressly herein required to be furnished to the Participating Lenders by the Administrative Agent, the Administrative Agent shall not have any duty or responsibility to provide any Participating Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Borrower or the Guarantors which may come into the possession of the Administrative Agent or any of its Affiliates, officers, directors, employees, agents or attorneys-in-fact.

12.07 Indemnification. Whether or not the transactions contemplated hereby are consummated, the Lenders agree to indemnify upon demand the Administrative Agent and its Affiliates, directors, officers, agents and employees (to the extent not reimbursed by the Borrower and without limiting the obligation of the Borrower to do so), ratably according to the respective amounts of their Commitment Percentages in effect on the date the cause for indemnification arose, from and against any and all claims, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including at any time following the payment of the Obligations or the Termination Date) be imposed on, incurred by or asserted against the Administrative Agent (or any of its Affiliates, directors, officers, agents and employees) in any way relating to or arising out of this Agreement or any other Transaction Document, or any documents contemplated by or referred to herein or the transactions contemplated hereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided, however, that no Lender shall be liable for the payment of any portion of such claims, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements to the extent it results from the gross negligence or willful misconduct of the Administrative Agent or its Affiliates, directors, officers, agents or employees. Without limitation of the foregoing, each Lender shall reimburse the Administrative Agent upon demand for its ratable share of any reasonable and documented costs or out-of-pocket expenses (including legal fees) incurred by the Administrative Agent in connection with the preparation, execution, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this

 

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Agreement, any other Transaction Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the Borrower.

12.08 Administrative Agent in Individual Capacity. ING Capital LLC may make loans to, issue letters of credit for the account of, accept deposits from and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with the Borrower, the Guarantors or any of their Affiliates as though ING Capital LLC were not the Administrative Agent hereunder and without notice to or consent of the Participating Lenders. The Participating Lenders acknowledge that, pursuant to such activities, ING Capital LLC, New York Branch or its Affiliates may receive information regarding the Borrower, the Guarantors and their Affiliates (including information that may be subject to confidentiality obligations in favor of the Borrower or the Guarantors) and acknowledge that the Administrative Agent shall be under no obligation to provide such information to them. With respect to the Obligations, ING Capital LLC shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not the Administrative Agent, and the terms “Lender” and “Lenders” include ING Capital LLC in its individual capacity.

12.09 Successor Administrative Agent. The Administrative Agent may, and at the request of the Required Lenders and/or the Issuing Banks shall, resign as Administrative Agent upon 30 days’ notice to the Participating Lenders and the Borrower. If the Administrative Agent resigns under this Agreement, the Required Lenders and/or the Issuing Banks shall appoint from among the Participating Lenders a successor agent for the Participating Lenders, which appointment shall be subject to the approval of the Borrower, such approval not to be unreasonably withheld (unless a Default or Event of Default shall have occurred and be continuing, in which case such approval shall not be required). If no successor agent is appointed prior to the effective date of the resignation of the Administrative Agent, the Administrative Agent may appoint, after consulting with the Participating Lenders and the Borrower, a successor agent from among the Participating Lenders. Upon the acceptance of its appointment as successor agent hereunder, such successor agent shall succeed to all the rights, powers and duties of the retiring Administrative Agent and the term “Administrative Agent” shall mean such successor agent effective upon its appointment, and the retiring Administrative Agent’s rights, powers and duties as Administrative Agent shall be terminated, without any other or further act on the part of such retiring Administrative Agent. After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this ARTICLE XII and Sections 15.04 and 15.05 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement. If no successor Administrative Agent has accepted the appointment as Administrative Agent by the date which is 30 days following a retiring Administrative Agent’s notice of resignation, the retiring Administrative Agent’s resignation shall nevertheless thereupon become effective and either the Borrower or the retiring Administrative Agent may, on behalf of the Participating Lenders, appoint a successor Administrative Agent, which shall be a commercial bank organized or licensed under the laws of the United States or of any State thereof and having a combined capital and surplus of at least U.S.$400,000,000.

 

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ARTICLE XIII

THE ISSUING BANKS

13.01 Appointment. Each Lender hereby irrevocably designates and appoints each of Barclays Bank PLC, New York Branch and ING Bank N.V., as an Issuing Bank under this Agreement, and each Lender hereby irrevocably authorizes each of Barclays Bank PLC, New York Branch and ING Bank N.V., as an Issuing Bank, to take such action under the provisions of this Agreement and each other Transaction Document and to exercise such powers and perform such duties as are expressly delegated to the Issuing Banks by the terms of this Agreement or any other Transaction Document, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement or in any other Transaction Document, the Issuing Banks shall not have any duties or responsibilities, except those expressly set forth herein or in any other Transaction Document, nor shall the Issuing Banks have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Transaction Document or otherwise exist against the Issuing Banks; provided, however, that nothing contained in this ARTICLE XIII shall be deemed to limit or impair the rights and obligations of the Issuing Banks under the Standby L/Cs issued hereunder.

13.02 Liability of Issuing Bank. Neither of the Issuing Banks nor any of their respective officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be (a) liable for any action taken or omitted to be taken by it or any such Person under or in connection with this Agreement or any other Transaction Document (except for its or such Person’s own gross negligence or willful misconduct), or (b) responsible in any manner to any Lender for any recital, statement, representation or warranty made by the Borrower or any officer thereof contained in this Agreement or in any other Transaction Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Issuing Banks under or in connection with, this Agreement or any other Transaction Document, or for the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Transaction Document, or for any failure of the Borrower or any other party to any Transaction Document to perform its obligations hereunder or thereunder. Except as otherwise expressly stated herein, and except for the obligation to examine all documents stipulated in any Standby L/C issued hereunder, in accordance with the Uniform Customs and Practice for Documentary Credits and applicable law, the Issuing Banks shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Transaction Document, or to inspect the properties, books or records of the Borrower or the Guarantors.

13.03 Reliance by Issuing Banks. Each of the Issuing Banks shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or teletype message, statement, order or other document or telephone conversation believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel, independent accountants and other experts selected by an Issuing Bank. Except for the issuance of any Standby L/Cs issued hereunder, in accordance with the terms of this Agreement and the payment of Drawings, as the case may be, thereunder, each of the Issuing Banks shall be fully justified in failing or refusing to take any action under this Agreement or any other Transaction Document unless it shall first receive such advice or concurrence of the Required Lenders as such Issuing Bank deems appropriate and, if it so

 

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requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of failing to take, taking or continuing to take any such action. Each Issuing Bank shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Transactions Documents in accordance with a request of the Required Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders.

13.04 Credit Decision. Each Lender expressly acknowledges that neither of the Issuing Banks nor any of either of their respective Affiliates, officers, directors, employees, agents or attorneys-in-fact has made any representation or warranty to it, and that no act by any Issuing Bank hereafter taken, including any review of the affairs of the Borrower, the Guarantors or any of their Affiliates, shall be deemed to constitute any representation or warranty by any Issuing Bank to any Lender. Each Lender acknowledges to the Issuing Banks that it has, independently and without reliance upon the Issuing Banks, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower, the Guarantors and their Affiliates and all applicable bank regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Issuing Banks, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Transaction Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects operations, property, financial and other condition and creditworthiness of the Borrower and the Guarantors.

13.05 Indemnification. Whether or not the transactions contemplated hereby are consummated, the Lenders agree to indemnify upon demand from an Issuing Bank or its Affiliates, directors, officers, agents and employees (to the extent not reimbursed by the Borrower and without limiting the obligation of the Borrower to do so in accordance with Section 15.05), ratably according to the respective amounts of their Commitment Percentages in effect on the date the cause for indemnification arose, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including at any time following the payment of the Obligations or the Termination Date) be imposed on, incurred by or asserted against such Issuing Bank (or any of its Affiliates, directors, officers, agents or employees) in any way relating to or arising out of this Agreement or any other Transaction Document, or any documents contemplated by or referred to herein or the transactions contemplated hereby or any action taken or omitted by such Issuing Bank under or in connection with any of the foregoing; provided, however, that no Lender shall be liable for (a) the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements to the extent it results from such Issuing Bank’s gross negligence or willful misconduct or (b) any untrue statement of a material fact in the material furnished in writing by such Issuing Bank to the Borrower for inclusion in any offering statement or any omission in such offering statement to state a material fact required to be stated therein in light of the circumstances under which they were made. Notwithstanding the foregoing, no Lender shall be required to fund any other Lender’s portion of an unreimbursed Drawing or Standby L/C Drawing, as the case may be, which such other Lender fails to fund hereunder.

 

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13.06 Issuing Banks in their Individual Capacities. Each of Barclays Bank PLC and ING Bank N.V. and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with the Borrower or any of its Affiliates as though it was not an Issuing Bank hereunder and without notice to or consent of the Lenders. The Lenders acknowledge that, pursuant to such activities, each Issuing Bank or its Affiliates may receive information regarding the Borrower, the Guarantors and their Affiliates (including information that may be subject to confidentiality obligations in favor of the Borrower or the Guarantors) and acknowledge that each Issuing Bank shall be under no obligation to provide such information to them. With respect to the Obligations, each of Barclays Bank PLC, New York Branch and ING Bank N.V. shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not an Issuing Bank, and the terms “Lender” and “Lenders” shall include each of ING Bank N.V. and Barclays Bank PLC, New York Branch in its individual capacity.

13.07 Notice of Default. Neither of Issuing Banks shall be deemed to have knowledge or notice of any Default or Event of Default unless such Issuing Bank shall have received written notice from the Administrative Agent, any Participating Lender, the Borrower or a Guarantor referring to this Agreement and describing such Default or Event of Default.

ARTICLE XIV

THE JOINT BOOKRUNNERS

14.01 The Joint Bookrunners. The Borrower hereby confirms the designation of Barclays Capital, the Investment Banking Division of Barclays Bank PLC, ING Capital LLC, and Citigroup Global Markets Inc., as arrangers and Joint Bookrunners for the Revolving Facility and the Standby L/C Facility. The Joint Bookrunners assume no responsibility or obligation hereunder for servicing, enforcement or collection of the Obligations, or any duties as agent for the Participating Lenders. The title “Joint Bookrunner” or “Book-runner” implies no fiduciary responsibility on the part of the Joint Bookrunners to the Administrative Agent, or the Participating Lenders and the use of either such title does not impose on the Joint Bookrunners any duties or obligations under this Agreement except as may be expressly set forth herein.

14.02 Liability of Joint Bookrunners. Neither the Joint Bookrunners nor any of their respective officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be (a) liable for any action lawfully taken or omitted to be taken by them or any such Person under or in connection with this Agreement or any other Transaction Document (except for such Joint Bookrunner’s own gross negligence or willful misconduct), or (b) responsible in any manner to any Lender for any recital, statement, representation or warranty made by the Borrower or any officer thereof, contained in this Agreement or in any other Transaction Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Arrangers under or in connection with, this Agreement or any other Transaction Document or for the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Transaction Document or for any failure of the Borrower or any other party to any other Transaction Document to perform its obligations hereunder or thereunder. Except as otherwise expressly stated herein, the Joint Bookrunners shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Transaction Document, or to inspect the properties, books or records of the Borrower.

 

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14.03 Joint Bookrunners in their respective Individual Capacities. Each of Barclays Capital, the Investment Banking Division of Barclays Bank PLC and its Affiliates, ING Capital LLC and its Affiliates, and Citigroup Global Markets Inc. and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrower or any of its Affiliates as though they were not the Joint Bookrunners hereunder.

14.04 Credit Decision. Each Lender expressly acknowledges that neither the Joint Bookrunners nor any of their respective Affiliates, officers, directors, employees, agents or attorneys-in-fact have made any representation or warranty to it, and that no act by the Joint Bookrunners hereafter taken, including any review of the affairs of the Borrower or the Guarantors, shall be deemed to constitute any representation or warranty by the Joint Bookrunners to any Lender. Each Lender acknowledges to the Joint Bookrunners that it has, independently and without reliance upon the Joint Bookrunners, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower or the Guarantors and their Affiliates and made its own decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Joint Bookrunners, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Transaction Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower or the Guarantors. The Joint Bookrunners shall not have any duty or responsibility to provide any Lender with any information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Borrower which may come into the possession of the Arrangers or any of their respective officers, directors, employees, agents, attorneys-in-fact or Affiliates.

ARTICLE XV

MISCELLANEOUS

15.01 Notices.

(a) Except as otherwise expressly provided herein, all notices, requests, demands or other communications to or upon any party hereunder shall be in writing (including facsimile transmission) and shall be sent by an overnight courier service, transmitted by facsimile or delivered by hand to such party: (i) in the case of the Borrower, the Guarantors, the Issuing Banks, the Joint Bookrunners or the Administrative Agent, at its address or facsimile number set forth on Schedule 1.01(c) or at such other address or facsimile number as such party may designate by notice to the other parties hereto and (ii) in the case of any Lender, at its address or facsimile number set forth in Schedule 1.01(b) or at such other address or facsimile number as such Lender may designate by notice to the Borrower, the Issuing Banks, the Joint Bookrunners and the Administrative Agent.

 

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(b) Unless otherwise expressly provided for herein, each such notice, request, demand or other communication shall be effective (i) if sent by overnight courier service or delivered by hand, upon delivery, (ii) if given by facsimile, when transmitted to the facsimile number specified pursuant to paragraph (a) above and confirmation of receipt of a legible copy thereof is received, or (iii) if given by any other means, when delivered at the address specified pursuant to paragraph (a) above; provided, however, that notices to the Administrative Agent under ARTICLE II, III, IV, V or XII shall not be effective until received.

15.02 Amendments and Waivers. No amendment or waiver of any provision of this Agreement, and no consent to any departure by the Borrower or any Guarantor from the terms of this Agreement, shall in any event be effective unless the same shall be in writing, consented to by the Borrower or the applicable Guarantors, as the case may be, and acknowledged by the Administrative Agent (which shall be a purely ministerial action), and signed or consented to by the Required Lenders, and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall:

(a)(i) except as specifically provided herein, increase or decrease the Commitment of any Participating Lender;

(ii) extend the maturity of any of the Obligations, extend the time of payment of interest thereon, or, other than as provided in Section 4.02, extend the Termination Date;

(iii) forgive any Obligation, reduce the principal amount of the Obligations, reduce the rate of interest thereon, reduce the amount or change the method of calculation of any Fee hereunder (other than the Standby L/C Fees, Agency Fees or Arrangement Fees), or change the provisions of 4.06(a);

in each case without the consent of the Borrower and each Participating Lender directly affected thereby;

(b)(i) amend, modify or waive any provision of this Section 15.02;

(ii) change the percentage specified in the definition of Required Lenders or the number of Lenders which shall be required for the Lenders or any of them to take any action under this Agreement (except as provided in Article IV for Non-Extending Lenders); or

(iii) amend, modify or waive any provision of Section 5.01;

(iv) amend or modify the definition of “Available Standby L/C Sublimit” in Section 1.01 hereof;

(v) amend, modify or waive any provision of Section 5.02; or

(vi) amend, modify or waive any provision of Section 15.06;

 

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in each case without the consent of the Borrower and all the Participating Lenders;

(c) amend, modify or waive any provision of ARTICLE XII without the written consent of the Administrative Agent;

(d) amend, modify or waive any provision of ARTICLE XIV without the consent of the Joint Bookrunners;

(e) amend, modify or waive any provision of ARTICLE III and XIII without the consent of the Required Lenders and the Issuing Bank; and

(f) amend, modify or waive any provision of Section 2.02, without the consent of the Required Lenders and the Swing Line Lenders.

15.03 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any Participating Lender, any right, remedy, power or privilege hereunder or under any other Transaction Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or thereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies herein provided are cumulative and not exclusive of any rights or remedies provided by law.

15.04 Payment of Expenses, Etc. The Borrower agrees to pay on demand

(a) all reasonable and documented out-of-pocket costs and expenses (including reasonable legal fees and disbursements of special Mexican counsel to the Administrative Agent, English and New York counsel to the Issuing Banks and the allocated cost of in-house counsel to the Administrative Agent), syndication (including printing, distribution and bank meetings), travel, telephone and duplication expenses and other reasonable and documented costs and out of- pocket expenses in connection with the arrangement, documentation, negotiation and closing of the Transactions Documents, subject to the maximum amount set forth in a letter agreement between the Borrower and the Joint Bookrunners;

(b) all reasonable and documented out-of-pocket costs and expenses incurred by the Administrative Agent and the Issuing Banks in connection with any amendment to, waiver of, or consent to any Transaction Document or the transactions contemplated hereby, including the reasonable fees and reasonable and documented out-of-pocket expenses of special Mexican and New York counsel to the Administrative Agent and the Issuing Banks; and

(c) all reasonable and documented, out-of-pocket costs and expenses incurred by the Administrative Agent or any Participating Lender in connection with the enforcement of and/or preservation of any rights under this Agreement or any other Transaction Document (whether through negotiations, legal proceedings or otherwise), including the reasonable fees and reasonable and documented out-of-pocket expenses of special Mexican and New York counsel to the Administrative Agent and such Participating Lender.

 

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15.05 Indemnification. The Borrower agrees to indemnify and hold harmless the Joint Bookrunners, the Administrative Agent, each Issuing Bank and each Lender and each of their Affiliates and their officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and against any and all claims, damages, losses, liabilities and expenses (including reasonable fees and expenses of counsel and the allocated cost of in-house counsel), but excluding taxes that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) (a) the Transaction Documents, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Loans or (b) or any Environmental Action relating in any way to the Borrower or any of its Subsidiaries, except to the extent such claim, damage, loss, liability or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified Party’s gross negligence or willful misconduct. In the case of an investigation, litigation or other proceeding to which the indemnity in this Section 15.05 applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by the Borrower, its directors, shareholders or creditors or an Indemnified Party or any other Person or any Indemnified Party is otherwise a party thereto and whether or not the transactions contemplated hereby are consummated. The Borrower and each Guarantor also agrees not to assert any claim against the Joint Bookrunners, the Administrative Agent, an Issuing Bank, any Lender, any of their Affiliates, or any of their respective directors, officers, employees, attorneys and agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the Transaction Documents, any of the transactions contemplated herein or the actual or proposed use of the proceeds of the Transaction Documents. Neither the Joint Bookrunner, the Administrative Agent, an Issuing Bank nor any Lender shall be deemed to have any fiduciary relationship with the Borrower or any Guarantor.

15.06 Successor and Assigns.

(a) The provisions of this Agreement shall be binding upon the Borrower, the Guarantors, their successors and assigns and shall inure to the benefit of the Issuing Bank, the Joint Bookrunners, the Administrative Agent and the Lenders and their respective successors and assigns, except that the Borrower and the Guarantors may not assign or otherwise transfer any of their rights or obligations under this Agreement without the prior written consent of all Lenders except pursuant to the terms of this Agreement.

(b) Any Lender (other than an Issuing Bank in its capacity as such) may at any time, and any Lender, if demanded by the Borrower or an Issuing Bank pursuant to Section 2.01(d) or Section 4.10 upon at least five Business Days’ notice to such Lender and the Administrative Agent, shall, assign to one or more commercial banks either (i) registered as a Foreign Financial Institution and a resident (or having its principal office as a resident, if lending through a branch or agency) for tax purposes in a jurisdiction that is a party to an income tax treaty to avoid double taxation with Mexico on the date of such assignment, qualified to receive the benefits of said treaty or (ii) organized and existing under the laws of Mexico on the date of such assignment (each an “Assignee”) all, or a proportionate part of all, of its Commitment and its rights and obligations under this Agreement and the Notes, and such Assignee shall assume such

 

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rights and obligations, pursuant to an Assignment and Assumption Agreement executed by such Assignee and such transferor Lender, with (and subject to) the subscribed consent of the Borrower and the Administrative Agent (which consents shall not be unreasonably withheld or delayed, and if a Default or Event of Default has occurred and is continuing, the consent of the Borrower shall not be required) and the Issuing Bank (which consent may be withheld for any reason; except that where such Assignee is an OECD Bank, consent may not be unreasonably withheld); provided, however, that if an Assignee is an Affiliate of such transferor Lender, which Affiliate is registered as a Foreign Financial Institution and meets the tax residence and qualification requirements of clause (ii) above and, at the time of such assignment, the additional amounts payable with respect to Taxes to such Assignee will not exceed such amounts payable to the transferor Lender, no such consent shall be required other than from the relevant Issuing Bank; and provided further that, in the case of an assignment of only part of such rights and obligations, the Assignee shall acquire a Total Exposure of not less than U.S.$3,000,000 and integral multiples of U.S.$1,000,000 in excess thereof. Upon execution and delivery of an Assignment and Assumption Agreement and payment by the Assignee to the transferor Lender of an amount equal to the purchase price agreed between such transferor Lender and such Assignee, such Assignee shall be a Lender party to this Agreement and shall have all the rights and obligations of a Lender with a Commitment as set forth in such instrument of assumption (in addition to any Commitment previously held by it), and the transferor Lender shall be released from its obligations hereunder to a corresponding extent (except to the extent the same arose prior to the assignment), and no further consent or action by any party shall be required. Upon the consummation of any assignment pursuant to this paragraph (b), the transferor Lender, the Administrative Agent and the Borrower shall make appropriate arrangements so that a new Note is issued to the Assignee at the expense of the Assignee. In connection with any such assignment (other than a transfer by a Lender to one of its Affiliates), the transferor Lender (or in the case of Section 2.01(d) or 4.11, the Borrower), without prejudice to any claims the Borrower may have against any Defaulting Lender, shall pay to the Administrative Agent an administrative fee for processing such assignment in the amount of U.S.$2,000 and to the Issuing Bank a fee of U.S.$1,000.

(c) Nothing herein shall prohibit any Lender from pledging or assigning any Note to any Federal Reserve Bank of the United States in accordance with applicable law and without compliance with the foregoing provisions of this Section 15.06; provided, however, that such pledge or assignment shall not release such Lender from its obligations hereunder.

(d) Any Lender may, without any consent of the Borrower, the Administrative Agent, the Issuing Banks or any other third party at any time grant to one or more banks or other institutions (i) registered as a Foreign Financial Institution and (ii) resident (or having its principal office as a resident, if lending through a branch or agency) for tax purposes in a jurisdiction that is a party to an income tax treaty to avoid double taxation with Mexico on the date of such assignment and qualified to receive the benefits of said treaty and having (at the time such Lender or financial institution becomes a Participant) a withholding tax rate under such treaty applicable to payments hereunder no higher than that applicable to payments to such Lender (each a “Participant”) participating interests in

 

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its Commitment or any or all of its Loans or its share of the Standby L/C Exposure. In the event of any such grant by a Lender of a participating interest to a Participant, whether or not upon notice to the Borrower, the Issuing Banks and the Administrative Agent, such Lender shall remain responsible for the performance of its obligations hereunder, and the Borrower and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement pursuant to which any Lender may grant such a participating interest shall provide that such Lender shall retain the sole right and responsibility to enforce the obligations of the Borrower hereunder, including the right to approve any amendment, modification or waiver of any provision of this Agreement; provided, however, that such participation agreement may provide that such Lender will not agree to any modification, amendment or waiver of this Agreement extending the maturity of any Obligation in respect of which the participation was granted, or reducing the rate or extending the time for payment of interest thereon or reducing the principal thereof, or reducing the amount or basis of calculation of any fees to accrue in respect of the participation, without the consent of the Participant. The Borrower agrees that each Participant shall, to the extent provided in its participation agreement, be entitled to the benefits of Sections 4.07 and 4.10 with respect to its participating interest as if it were a Lender named herein; provided, however, that the Borrower shall not be required to pay any greater amounts pursuant to such Sections than it would have been required to pay but for the sale to such Participant of such Participant’s participation interest. An assignment or other transfer which is not permitted by paragraph (b) or (c) above shall be given effect for purposes of this Agreement only to the extent of a participating interest granted in accordance with this paragraph (d).

(e) Any Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 15.06, disclose to the Assignee or Participant or proposed Assignee or Participant, any information relating to the Borrower furnished to such Lender by or on behalf of the Borrower; provided that, prior to any such disclosure, the Assignee or Participant or proposed Assignee or Participant shall agree to preserve the confidentiality of any Confidential Information relating to the Borrower received by it from such Lender.

15.07 Right of Set-off. In addition to any rights and remedies of the Participating Lenders provided by law, each such Participating Lender shall have the right, without prior notice to the Borrower or the Guarantors, any such notice being expressly waived by the Borrower and the Guarantors to the extent permitted by applicable law, upon any amount becoming due and payable by the Borrower or the Guarantors hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final, including any amounts deposited pursuant to Section 11.02(a)(iii)), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Participating Lender, or any branch or agency thereof to or for the credit or the account of the Borrower or the Guarantors. Each Participating Lender agrees promptly to notify the Borrower, or such Guarantor, as the case may be, and the Administrative Agent after any such set-off and application made by such Participating Lender, provided that the failure to give such notice shall not affect the validity of such set-off and application.

 

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15.08 Confidentiality. Neither the Administrative Agent nor any Participating Lender shall disclose any Confidential Information to any other Person without the prior written consent of the Borrower, other than (a) to the Administrative Agent’s, or such Participating Lender’s Affiliates and their officers, directors, employees, agents and advisors and, as contemplated by Section 15.06(e), to actual or prospective Assignees and Participants, and then only on a confidential basis, (b) as required by any law, rule or regulation (including as may be required in connection with an audit by the Administrative Agent’s, or such Participating Lender’s independent auditors, and as may be required by any self-regulating organizations) or as may be required by or necessary in connection with any judicial process and (c) as requested by any state, federal or foreign authority or examiner regulating banks or banking. Notwithstanding the foregoing or anything contained in any Transaction Document to the contrary, the parties (and each employee, representative, or other agent of the parties) may disclose to any and all persons, without limitation of any kind, the tax treatment and any facts that may be relevant to the tax structure of the transactions contemplated by this Agreement, provided, however, that no party (and no employee, representative, or other agent thereof) shall disclose any other information that is not relevant to understanding the tax treatment and tax structure of such transactions (including the identity of any party and any information that could lead another to determine the identity of any party), or any other information to the extent that such disclosure could result in a violation of any federal or state securities law.

15.09 Use of English Language. All certificates, reports, notices and other documents and communications given or delivered pursuant to this Agreement shall be in the English language (other than the documents required to be provided pursuant to Section 5.01(e)(iii), Section 8.01 and Section 8.02 which shall be in the English language or in the Spanish language accompanied by an English translation or summary). Except in the case of the laws of, or official communications of, Mexico, the English language version of any such document shall control the meaning of the matters set forth therein.

15.10 GOVERNING LAW. THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.

15.11 Submission to Jurisdiction

(a) Each of the parties hereto hereby irrevocably and unconditionally submits to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court located in the Borough of Manhattan in New York City and any appellate court thereof for purposes of any suit, legal action or proceeding arising out of or relating to this Agreement, any other Transaction Document or the transactions contemplated hereby, and each of the parties hereto hereby irrevocably agrees that all claims in respect of such suit, action or proceeding may be heard and determined in such federal or New York State court and, with respect to the Borrower and the Guarantors, as well as in the competent court of their own corporate domicile.

 

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(b) Each of the parties hereto hereby irrevocably waives, to the fullest extent it may effectively do so, any objection that it may now or hereafter have to the laying of venue of any such suit, action or proceeding in any such federal or New York State court and irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of any such suit, action or proceeding.

(c) Each of the parties hereto irrevocably waives the right to object, with respect to such claim, suit, action or proceeding brought in any such court, that such court does not have jurisdiction over it.

(d) Each of the parties hereto agrees, to the fullest extent it may effectively do so under applicable law, that a final judgment in any suit, action or proceeding of the nature referred to in paragraph (a) above brought in any such court shall be conclusive and binding upon such party and may be enforced in other jurisdictions by suit on the judgment or in any manner provided by law.

(e) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ACTIONS OF ANY ARRANGER, THE ADMINISTRATIVE AGENT, ANY ISSUING BANK OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

15.12 Appointment of Agent for Service of Process.

(a) The Borrower and each Guarantor hereby irrevocably appoints CT Corporation System, with an office on the date hereof at 111 Eighth Avenue, 13th Floor, New York, New York 10011, as its agent (the “Process Agent”) to receive on behalf of itself and its property, service of copies of the summons and complaint and any other process which may be served in any such action or proceeding brought in any New York State or federal court sitting in New York City. Such service may be made by delivering a copy of such process to the Borrower or any Guarantor, as the case may be, in care of the Process Agent at its address specified above, and the Borrower and each Guarantor, as the case may be, hereby authorizes and directs the Process Agent to accept such service on its behalf. The appointment of the Process Agent shall be irrevocable until the appointment of a successor Process Agent. The Borrower and each Guarantor, further agrees to promptly appoint a successor Process Agent in New York City prior to the termination for any reason of the appointment of the initial Process Agent.

(b) Nothing in Section 15.11 or in this Section 15.12 shall affect the right of any party hereto to serve process in any manner permitted by law or limit any right that any party hereto may have to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

15.13 Waiver of Sovereign Immunity. To the extent that the Borrower or a Guarantor has or hereafter may acquire any immunity from jurisdiction of any court or from any

 

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legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, or otherwise) with respect to itself or its property, the Borrower or the Guarantor, as the case may be, hereby irrevocably waives such immunity in respect of its obligations hereunder to the extent permitted by applicable law. Without limiting the generality of the foregoing, the Borrower and each Guarantor agrees that the waivers set forth in this Section 15.13 shall have force and effect to the fullest extent permitted under the Foreign Sovereign Immunities Act of 1976 of the United States and are intended to be irrevocable for purposes of such Act.

15.14 Judgment Currency.

(a) All payments made under this Agreement and the other Transaction Documents shall be made in Dollars. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due from the Borrower in Dollars into another currency, the parties hereto agree to the fullest extent that they may legally and effectively do so that the rate of exchange used shall be that at which in accordance with normal banking procedures (based on quotations from four major dealers in the relevant market) the Administrative Agent, each Issuing Bank or each Lender, as the case may be, could purchase Dollars with such currency at or about 11:00 a.m. (New York City time) on the Business Day preceding that on which final judgment is given.

(b) The Obligations in respect of any sum due to any Lender, an Issuing Bank or the Administrative Agent hereunder or under any other Transaction Document shall, to the extent permitted by applicable law notwithstanding any judgment expressed in a currency other than Dollars, be discharged only to the extent that on the Business Day following receipt by such Lender, such Issuing Bank or the Administrative Agent of any sum adjudged to be so due in such other currency such Lender, such Issuing Bank or the Administrative Agent may in accordance with normal banking procedures purchase Dollars with such other currency. If the amount of Dollars so purchased is less than the sum originally due to such Issuing Bank, such Lender or the Administrative Agent, the Borrower and each of the Guarantors agree, to the fullest extent it may legally do so, as a separate obligation and notwithstanding any such judgment, to indemnify such Issuing Bank, such Lender or the Administrative Agent against such resulting loss.

15.15 Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile shall be effective as delivery of a manually executed counterpart of this Agreement.

15.16 USA PATRIOT Act. The Participating Lenders, to the extent that they are subject to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), hereby notify the Borrower that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow the Issuing Banks to identify the Borrower in accordance with the Act.

 

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15.17 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction, and the remaining portion of such provision and all other remaining provisions hereof will be construed to render them enforceable to the fullest extent permitted by law.

15.18 Survival of Agreements and Representations.

(a) All representations and warranties made herein or in any other Transaction Document shall survive the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.

(b) The covenants and agreements contained in Sections 4.05, 4.07, 4.09, 4.10, 15.04, 15.05, 15.08, 15.09, 15.11, 15.12 and 15.14, and the obligations of the Lenders under Sections 12.07 and 13.05, shall survive the termination of the Commitments, the expiration of Standby L/Cs and the payment of all Obligations and, in the case of any Lender that may assign any interest in its Commitment or obligations hereunder, with respect to matters occurring before such assignment, shall survive the making of such assignment to the extent any claim arising thereunder relates to any period prior to such assignment, notwithstanding that such assigning Lender may cease to be a “Lender” hereunder.

 

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EXECUTION VERSION

AMENDMENT NO. 1 TO CREDIT AGREEMENT

This Amendment No. 1 to the Credit Agreement (as defined below), dated as of June 21, 2006 (this “Amendment No. 1”), is entered into by and among CEMEX, S.A. de C.V., a sociedad anonima de capital variable organized and existing pursuant to the laws of the United Mexican States (the “Borrower”), CEMEX MÉXICO, S.A. de C.V., a sociedad anonima de capital variable organized and existing pursuant to the laws of the United Mexican States, EMPRESAS TOLTECA DE MÉXICO, S.A. de C.V., a sociedad anonima de capital variable organized and existing pursuant to the laws of the United Mexican States (each a “Guarantor” and together, the “Guarantors”), BARCLAYS BANK PLC, NEW YORK BRANCH (“Barclays”), as an Issuing Bank and Documentation Agent, ING BANK N.V., as an Issuing Bank (together with Barclays in its capacity as an Issuing Bank, the “Issuing Banks”), the several Lenders party hereto, BARCLAYS CAPITAL, THE INVESTMENT BANKING DIVISION OF BARCLAYS BANK PLC, as a Joint Bookrunner, CITIGROUP GLOBAL MARKETS INC., as a Joint Bookrunner and Syndication Agent and ING CAPITAL LLC, as Administrative Agent (the Syndication Agent, the Documentation Agent and the Administrative Agent, together the “Agents”).

RECITALS

A. The Borrower, the Guarantors, Barclays, as an Issuing Bank and Documentation Agent, ING Bank N.V., as an Issuing Bank, the several Lenders party thereto, Barclays Capital, the Investment Banking Division of Barclays Bank PLC, as a Joint Bookrunner, Citigroup Global Markets Inc., as a Joint Bookrunner and Syndication Agent, and ING Capital LLC, as Administrative Agent, are parties to that certain amended and restated credit facility, dated as of June 6, 2005 (as now or hereafter amended, restated or otherwise modified, the “Credit Agreement”).

B. Borrower has requested that the Agents and the Lenders consent to the following amendment to the Credit Agreement.

C. This Amendment No. 1 shall constitute a Transaction Document and these Recitals shall be construed as part of this Amendment No. 1.

NOW THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, and of the Loans and other extensions of credit heretofore, now or hereafter made to, or for the benefit of, Borrower by Lenders, the Borrower, the Agents, and the Lenders hereby agree as follows:

1. Definitions. Except to the extent otherwise specified herein, capitalized terms used in this Amendment No. 1 shall have the same meanings ascribed to them in the Credit Agreement and Exhibits thereto.

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2. Amendments.

2.1 The definition for “Applicable Margin” in Section 1.01 of the Credit Agreement shall be deleted and replaced in its entirety with the following language:

““Applicable Margin” means, at any date, the applicable margin set forth below based upon the Borrower’s Consolidated Net Debt/EBITDA Ratio (it being understood that measurement of the Consolidated Net Debt/EBITDA Ratio as of the most recent Measurement Date is sufficient for this purpose):

 

		Applicable Margin
Consolidated Net Debt/EBITDA Ratio		Base Rate Loans			LIBOR Loans
3.00 to 1 or greater		0.35	%		0.35	%
Less than 3.00 to 1, but greater than or equal to 2.50 to 1		0.30	%		0.30	%
Less than 2.50 to 1, but greater than or equal to 2.00 to 1		0.25	%		0.25	%
Less than 2.00 to 1		0.20	%		0.20	%

.”

2.2 The following definitions will be added to Section 1.01:

““Loan Extension Request Date” has the meaning specified in Section 4.14.

“Loan Extension Consent” has the meaning specified in Section 4.14.

“Loan Extension Consent Date” has the meaning specified in Section 4.14.”

2.3 A new Section 4.14 shall be added to the Credit Agreement to read as follows:

 

“4.14

Loan Extension.

(i) Extension of Termination Date of Loan. The Borrower may, within 60 days, but not less than 45 days, prior to June 6, 2007 (the “Loan Extension Request Date”), by notice to the Administrative Agent, make written request of the Lenders to extend the Termination Date for an additional period of one (1) year. The Administrative Agent will give prompt notice to each of the Lenders of its receipt of any such request for extension of the Termination Date. Each Lender shall make a determination not later than 30 days prior to the then applicable Loan Extension Request Date (the “Loan Extension Consent Date”) as to whether or not it will agree to extend the Termination Date as requested (such approval of extension shall be an “Loan Extension Consent”); provided, however, that failure by any Lender to make a timely response to the Borrower’s request for extension of the Termination Date shall be deemed to constitute a refusal by such Lender to extension of the Termination Date.

 

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(ii) Lender Not Consenting. If by any Loan Extension Consent Date the Borrower and the Administrative Agent have not received a Loan Extension Consent from any Lender, the Termination Date, as it relates to such Lender, shall not be extended, the Commitment of such Lender shall terminate on the Termination Date applicable to it and any Loans made by such Lender and all accrued and unpaid interest thereon shall be due and payable on such Termination Date. Upon the termination of the Commitment of any such Lender, unless this Agreement is amended as provided in Section 4.14(iv), the aggregate amount of the Commitments shall be reduced by the amount of such terminated Commitment, and the Commitment Percentage of each other Lender shall be adjusted to that percentage obtained by dividing the Commitment of such Lender by the aggregate amount of the Commitments after giving effect to such reduction as provided in the definition of “Commitment Percentage” unless an Additional Lender is added as provided in Section 4.14 (iv).

(iii) Other Lenders. No refusal by any one Lender to consent to any extension of the Termination Date shall affect the extension of the Termination Date as it may relate to the Commitment and Loans of any Lender that consents to such extension as provided in Section 4.14(i), and one or more Lenders may consent to the extension of the Termination Date as it relates to them notwithstanding any refusal by any other Lenders so to consent.

(iv) Additional Lender or Lenders. If any Lender does not deliver a Loan Extension Consent as provided in Section 4.14(i), upon the expiration of the Commitment of such Lender, the Borrower may, with the approval of the Administrative Agent, amend this Agreement as provided in Sections 15.02 and 15.06 to add one or more other Lenders as parties, with such Commitment or Commitments as may be agreed to by the Administrative Agent and such other Lender or Lenders; provided that such additions do not increase the aggregate amount of the Commitments to an amount greater than the aggregate amount of Commitments in effect immediately before such expiration or termination.

(v) Notice. The Administrative Agent shall promptly advise each Lender of any change in Commitment Percentages and shall promptly provide each of the Lenders with a copy of any amendment made pursuant to Section 4.14(iv).”

3. Representations and Warranties. The Borrower and Credit Parties hereby represent and warrant to the Administrative Agent and the Lenders that:

3.1. The representations and warranties contained in the Credit Agreement are true and correct as of the date of this Amendment No. 1.

3.2. The execution, delivery and performance by the Borrower and the other Credit Parties of this Amendment No. 1 has been duly authorized by all necessary corporate action, and this Amendment No. 1 constitutes the legal, valid and binding obligation of the Borrower and Credit Parties enforceable against the Borrower and Credit Parties in accordance with its terms, except as the enforcement hereof may be subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’ rights generally or to general principles of equity.

 

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3.3. The execution, delivery and performance of this Amendment No. 1 does not, and will not, contravene or conflict with any provision of (i) law, (ii) any judgment, decree or order, or (iii) the certificate or articles of incorporation or by-laws or other constituent documents of the Borrower and Credit Parties, and does not, and will not, contravene or conflict with, or cause any Lien to arise under, any provision of any indenture, agreement, mortgage, lease, instrument or other document binding upon or otherwise affecting the Borrower and Credit Parties or any property of the Borrower and Credit Parties.

3.4. No Default or Event of Default exists under the Credit Agreement or any other Transaction Document or will exist after or be triggered by the execution, delivery and performance of this Amendment No. 1. In addition, the Borrower and Credit Parties hereby represents, warrants and reaffirms that the Credit Agreement and each of the other Transaction Documents remains in full force and effect.

4. Conditions Precedent to Effectiveness. The effectiveness of the amendments set forth in Section 2 hereof are in each instance subject to the satisfaction of each of the following conditions precedent:

4.1. Amendment No. 1. This Amendment No. 1 shall have been duly executed and delivered by each of the Borrower, the Administrative Agent and Lenders.

4.2. No Default. No Default or Event of Default shall have occurred and be continuing or would result from the effectiveness of this Amendment No. 1.

4.3. Opinions. The Administrative Agent and the Lenders shall have received opinions from the Borrower’s General Counsel, with respect to this Amendment No. 1 in form and substance acceptable to the Administrative Agent.

4.4. Miscellaneous. The Administrative Agent and Lenders shall have received such other agreements, instruments and documents as the Administrative Agent or Lenders may reasonably request.

5. Reference to and Effect Upon the Credit Agreement and other Transaction Documents.

5.1. Full Force and Effect. Except as specifically provided herein, the Credit Agreement, the Notes and each other Transaction Document shall remain in full force and effect and each is hereby ratified and confirmed by the Borrower.

5.2. No Waiver. The execution, delivery and effect of this Amendment No. 1 shall be limited precisely as written and shall not be deemed to (i) be a consent to any waiver of any term or condition, or to any amendment or modification of any term or condition (except as specifically provided herein) of the Credit Agreement, the Notes or any other Transaction Document or (ii) prejudice any right, power or remedy which the Administrative Agent or any Lender now has or may have in the future under or in connection with the Credit Agreement or any other Transaction Document.

 

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5.3. Certain Terms. Each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or any other word or words of similar import shall mean and be a reference to the Credit Agreement as amended hereby, and each reference in any other Transaction Document to the Credit Agreement or any word or words of similar import shall be and mean a reference to the Credit Agreement as amended hereby.

6. Counterparts. This Amendment No. 1 may be executed in any number of counterparts, each of which when so executed shall be deemed an original but all such counterparts shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment No. 1 by telecopier shall be as effective as delivery of a manually executed counterpart signature page to this Amendment No. 1.

7. Costs and Expenses. As provided in the Credit Agreement, the Borrower shall pay the fees, costs and expenses incurred by Agent in connection with the preparation, execution and delivery of this Amendment No. 1 (including, without limitation, attorneys’ fees).

8. GOVERNING LAW. THIS AMENDMENT NO. 1 SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPALS.

9. Headings. Section headings in this Amendment No. 1 are included herein for convenience of reference only and shall not constitute a part of this Amendment No. 1 for any other purpose.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, this Amendment No. 1 has been duly executed as of the date first written above.

 

 

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[Amendment $700 mil Facility]

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[Amendment $700 mil Facility]

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[Amendment $700 mil Facility]

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[Amendment $700 mil Facility]

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[Amendment $700 mil Facility]

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[Amendment $700 mil Facility]

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[Amendment $700 mil Facility]

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[Amendment $700 mil Facility]

---

 

[Amendment $700 mil Facility]

---

 

[Amendment $700 mil Facility]

---

 

[Amendment $700 mil Facility]

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[Amendment $700 mil Facility]

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[Amendment $700 mil Facility]

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[Amendment $700 mil Facility]

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[Amendment $700 mil Facility]