EXHIBIT 99.1
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CONSTRUCTION AGENCY AGREEMENT
dated as of November 8, 2004
between
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ AUTOMOTIVE ▇▇▇▇▇▇▇▇▇▇, ▇.▇. DE C.V.,
as Construction Agent,
and
GE CAPITAL DE MEXICO, S. DE ▇. ▇. DE C.V.
as Owner
Dynatech South Industrial Park Facility
Located in Hermosillo, Mexico
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS............................................................................... 2
SECTION 1.1 Defined Terms.................................................................... 2
ARTICLE II GENERAL PROVISIONS........................................................................ 2
SECTION 2.1 Appointment and Acceptance....................................................... 2
SECTION 2.2 Delegation....................................................................... 3
SECTION 2.3 Conditions Precedent............................................................. 3
SECTION 2.4 Term............................................................................. 5
SECTION 2.5 Representations of the Construction Agent........................................ 5
SECTION 2.6 Covenants of the Construction Agent.............................................. 5
SECTION 2.7 [Reserved.]...................................................................... 10
SECTION 2.8 Casualty Occurrence.............................................................. 10
SECTION 2.9 Insurance........................................................................ 11
SECTION 2.10 Changes in the Construction Budget............................................... 14
SECTION 2.11 Cost Overrun..................................................................... 15
ARTICLE III PAYMENT OF PROJECT COSTS.................................................................. 15
SECTION 3.1 Funding of Project Costs......................................................... 15
SECTION 3.2 Ordering Equipment............................................................... 16
SECTION 3.3 Receipt of and Payment for Equipment............................................. 17
SECTION 3.4 Reimbursement of Purchase Price.................................................. 17
SECTION 3.5 Advances for Fees, Transaction Expenses, Equity Yield and Soft Costs............. 18
SECTION 3.6 Books and Records................................................................ 19
ARTICLE IV EVENTS OF DEFAULT......................................................................... 19
SECTION 4.1 Construction Agency Events of Default............................................ 19
ARTICLE V REMEDIES.................................................................................. 22
SECTION 5.1 Remedies for Construction Agency Events of Default............................... 22
SECTION 5.2 Full Recourse Events............................................................. 25
SECTION 5.3 No Limitations................................................................... 25
ARTICLE VI FEE; LIABILITIES OF CONSTRUCTION AGENT; ACKNOWLEDGMENTS................................... 25
SECTION 6.1 Construction Agency Compensation................................................. 25
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TABLE OF CONTENTS
(continued)
PAGE
SECTION 6.2 Construction Agent Acknowledgments............................................... 26
SECTION 6.3 Consequential Damages............................................................ 26
ARTICLE VII INDEMNIFICATION........................................................................... 26
SECTION 7.1 General, General Tax and Environmental Indemnity................................. 26
ARTICLE VIII MISCELLANEOUS............................................................................. 30
SECTION 8.1 Notices.......................................................................... 30
SECTION 8.2 Successors and Assigns........................................................... 31
SECTION 8.3 Participation; Syndication....................................................... 31
SECTION 8.4 GOVERNING LAW AND JURISDICTION................................................... 32
SECTION 8.5 Judgment Currency................................................................ 32
SECTION 8.6 Labor Relations.................................................................. 33
SECTION 8.7 Survival; Owner Cure and Overdue Rate............................................ 34
SECTION 8.8 Further Assurances............................................................... 34
SECTION 8.9 Time............................................................................. 34
SECTION 8.10 Amendments and Waivers........................................................... 35
SECTION 8.11 Counterparts..................................................................... 35
SECTION 8.12 Severability..................................................................... 35
SECTION 8.13 Headings and Table of Contents................................................... 35
SECTION 8.14 Knowledge of Owner............................................................... 35
EXHIBITS
APPENDIX A DEFINITIONS
EXHIBIT I ACCEPTABLE LETTER OF CREDIT
EXHIBIT II TAX BENEFITS AND ASSUMPTIONS
EXHIBIT III IMPORTATION PROCEDURES
EXHIBIT IV REPORTS AND RETURN REQUIREMENTS
EXHIBIT IV(A) FORM OF QUARTERLY STATEMENT
EXHIBIT V FORM OF FIN 46 LETTER
EXHIBIT VI SPECIAL ADMINISTRATIVE POWER-OF-ATTORNEY
EXHIBIT VII FACILITY MILESTONES
EXHIBIT VIII CONSTRUCTION BUDGET
EXHIBIT IX FORM OF FUNDING REQUEST
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CONSTRUCTION AGENCY AGREEMENT
This CONSTRUCTION AGENCY AGREEMENT, dated as of November 8, 2004 between GE
CAPITAL DE MEXICO, S. DE ▇. ▇. DE C.V., a Mexico sociedad de responsabilidad
limitada de capital variable with its domicile at Prolongacion Reforma #490,
Piso 3 Col. Santa Fe, Mexico, DF 01012 (the "Owner"), and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
AUTOMOTIVE ▇▇▇▇▇▇▇▇▇▇, ▇.▇. DE C.V., a Mexico sociedad anonima de capital
variable with its domicile at ▇▇▇▇▇ ▇▇ ▇ ▇▇ ▇/▇, ▇▇▇▇▇▇▇▇▇▇ Morelos, Saltillo,
▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ (the "Construction Agent" or the
"Company").
WITNESSETH :
WHEREAS, the Construction Agent, as Tenant, and Santa ▇▇▇▇▇ Industrial
Partners, L.P., a Delaware limited partnership, as Landlord (the "Landlord"),
have entered into a Lease Agreement dated as of December 19, 2003 (the "Site
Lease"), pursuant to which the Construction Agent has agreed to lease from the
Landlord the Site on which the Facility will be constructed and the Construction
Agent has granted to the Owner a perfected, first priority floating lien pledge
(prenda sin transmision de posesion) (the "Floating Lien") over the Pledged
Assets (as defined therein);
WHEREAS, the Owner, as Lessor of each Unit, the Equipment and the
Facility, and the Construction Agent, as Lessee of each Unit, the Equipment and
the Facility, are parties to that certain Master Lease Agreement dated as of
November 8, 2004, by and between the Owner, as owner and Lessor, and the
Company, as Lessee;
WHEREAS, the Owner is either a party to the other Project Documents or the
Construction Agent's assets and rights under such other Project Document are
covered by the Floating Lien; and
WHEREAS, subject to the terms and conditions hereof, (a) the Owner desires
to appoint the Company as its sole and exclusive agent, in respect of each Unit,
the Equipment and the Facility, to purchase the Units (title to which shall be
taken in the name of Owner) and to arrange and pay for the refurbishment,
delivery and installation of each Unit, the Equipment and the Facility on the
Site, (x) to oversee the performance of the Landlord under the Site Lease and of
Ford under the Ford Supply Agreement and of each other party to any other
Operative Document during the Construction Period, (y) to import certain Units
and Equipment into Mexico and (z) to perform the other Project Obligations (as
defined in Section 2.1) and (b) the Company desires, for the benefit of the
Owner, to accept such appointment pursuant to the terms of this Construction
Agency Agreement.
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Defined Terms.Capitalized terms used and not otherwise defined
herein, or in Section 23 of the Lease shall have the meanings assigned thereto
in Appendix A for all purposes hereof; and the general provisions and rules of
interpretation set forth in Appendix A shall apply to this Construction Agency
Agreement.
ARTICLE II
GENERAL PROVISIONS
SECTION 2.1 Appointment and Acceptance.
(a) Pursuant to and subject to the terms and conditions set forth herein
and in the other Operative Documents, the Owner, hereby designates and appoints
the Company as its exclusive representative and as agent to perform the duties
described under this Construction Agency Agreement and the other Operative
Documents (whether as a party or as conditional assignor to the Owner) during
the term of this Construction Agency Agreement, and the Company hereby
unconditionally accepts such designation and appointment, and the Company hereby
agrees to perform its duties, without any fee or other monetary compensation for
serving in such capacity, under this Construction Agency Agreement and the other
Operative Documents (whether as a party or as conditional assignor to the Owner)
during the Construction Period (collectively, the "Project Obligations"),
including, without limitation: (i) performance of all obligations of the Owner
under the Purchase Documents and the other Project Documents, (ii) performance
of all obligations of the Company as the "Tenant" under the Site Lease and the
"Supplier" under the Ford Supply Agreement and (iii) causing the purchase (title
to be taken in the name of the Owner), import (on behalf of the Owner as
provided herein), delivery, insuring, refurbishment, retrofit or technological
upgrade, installation, development, testing, maintenance, construction and
completion of each Unit, the Equipment and the Facility and the Construction
Agent shall be responsible for direct payment to the appropriate Governmental
Authority of all duties including, taxes, fees and expenses of any kind related
thereto. To perform the agency granted hereunder the Owner shall grant on the
date hereof in favor of the Construction Agent a special power-of-attorney for
administration acts in terms of the second paragraph of article 2554 of the
Federal Civil Code of Mexico and its correlative articles of the Federal
District of Mexico in the form of Exhibit VI hereto.
(b) The Construction Agent agrees to perform the Project Obligations in
compliance with all Applicable Laws, Governmental Approvals, Insurance
Requirements and Prudent Practice, and otherwise in compliance with this
Construction Agency Agreement, the Project Documents and all other Operative
Documents.
(c) In performing the Project Obligations, the Construction Agent shall
act only as the Owner's agent and representative as set forth herein. The
Construction Agent, as Owner's agent, shall issue and execute purchase orders
and contracts negotiated by Construction Agent as may be required for the
purchase of each Unit and the Equipment and the construction and
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operation of the Facility on the Site (collectively, "Third Party Contracts").
To the extent that Construction Agent has issued and executed Third Party
Contracts when it was not acting solely as agent for the Owner, Construction
Agent hereby irrevocably assigns to Owner all of the rights (but not the
obligations) arising under and related to each and every such Third Party
Contract and all documents executed pursuant thereto.
(d) The Owner agrees to cooperate with any commercially reasonable request
made by the Construction Agent with respect to the performance by the
Construction Agent of its import obligations and all other obligations under
this Construction Agency Agreement.
SECTION 2.2 Delegation. Subject to the other terms and conditions of this
Construction Agency Agreement and the other Operative Documents and consistent
with Prudent Practice, the Construction Agent may delegate any of its Project
Obligations (except with respect to the purchase of any Unit, the Equipment or
the Facility) to agents, contractors, employees or attorneys in fact; provided,
however, that no such delegation shall limit or reduce in any way the
Construction Agent's duties and obligations under this Construction Agency
Agreement.
SECTION 2.3 Conditions Precedent. Conditions precedent to any Advance by
the Owner include, but are not limited to, the following, each satisfactory in
form and substance to the Owner, its counsel and the Consultants:
(a) In respect of the initial Advance, completion of due diligence
satisfactory to Owner with respect to the Construction Agent and Guarantor and
operational, financial, regulatory, legal, environmental, all material third
party agreements and other matters;
(b) No material adverse change in Construction Agent or Guarantor or its
respective business;
(c) In respect of the initial Advance, the receipt of the Construction
Budget, the Preliminary Specifications, the Drawings and Specifications, the
Milestones and the assignment of all purchase orders from the Company to the
Owner and the consents (unless waived in writing by the Owner) of the applicable
Vendor. In respect of each Advance, receipt of detailed Unit and Equipment
descriptions, invoices, bills of sale (except for Advances made as progress
payments in respect of Unit(s), the Facility or Equipment covered by Purchase
Documentation), location of each Unit and Equipment, evidence of compliance with
all environmental and all other Governmental Authority requirements required at
that stage of completion, and Purchase Documentation relating to purchase of
Units, the Facility and Equipment and evidence of all other service, fees,
insurance premiums, Taxes, duties and costs paid as Project Costs with Advance
proceeds;
(d) Receipt of the Landlord Consent, and all releases, estoppel agreements
and landlord waivers and other documents, necessary to evidence and ensure
Owner's continued ownership of each Unit and the Equipment free and clear of all
Liens, claims and encumbrances and its access to each Unit and the Equipment in
the event of a Construction Agency Event of Default but shall not be required
for Equipment located at a Vendor for which a purchase order assignment and
consent has been obtained and delivered to the Owner;
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(e) In respect of the initial Advance, the Construction Closing Date
appraisal and, in respect of each subsequent Advance, an appraisal from the
Appraiser hired by the Owner to tag each Unit and the Equipment purchased with
the proceeds of such Advance by performance of a detailed or desktop review to
be determined by the Owner;
(f) In respect of the initial Advance, powers of attorney for non-U.S.
Affiliates of ▇▇▇▇▇▇▇ irrevocably designating ▇▇▇▇▇▇▇ as agent for service of
process, pursuant to the terms and conditions of the Intercompany Agreement and
for each subsequent Advance, a power of attorney for any additional non-U.S.
Affiliate of ▇▇▇▇▇▇▇, pursuant to the terms and conditions of the Intercompany
Agreement;
(g) In respect of the initial Advance, GE Commercial & Industrial Finance,
Inc. customary opinions of counsel on tax, regulatory and other legal matters
and the insurance certificates and broker's letter;
(h) Officers' certificates including standard representations and
warranties and that no Construction Agency Event of Default has occurred and is
continuing, all patents and other intellectual property rights necessary to
achieve Construction Completion and maintain Commercial Operation for each Unit,
the Equipment and the Facility have been licensed to the Owner under the License
Agreement, and there is no violation of Applicable Laws with respect to any
Unit, the Equipment, the Facility, or the Site and, in respect of the initial
Advance, Shareholders' Resolutions or Board of Directors approvals, as
applicable, from the Construction Agent and Guarantor; notwithstanding the
foregoing, each submission of a Funding Request by the Construction Agent shall
be deemed to constitute a representation and warranty by the Construction Agent
on the date of such Funding Request as to the matters specified in this
paragraph;
(i) In respect of the initial Advance, execution and delivery of this
Construction Agency Agreement, the Lease, the agreed form of the Schedule (as
defined in the Lease) including pricing assumptions and the reference indexing
rates, the Guaranty Trust, the Floating Lien, the Stock Pledge, the License
Agreement and the Guaranty and related Operative Documents;
(j) Receipt by the Owner of an Acceptable Letter of Credit with respect to
each Advance;
(k) In respect of the initial Advance, to be delivered to the Owner within
five (5) Business Days after funding, evidence of filing for registration of the
Floating Lien to cover tangible and intangible property, permits, licenses or
contracts of the Company which are material to any Unit, the Equipment or the
Facility and construction or operation on the Site, in the applicable Public
Registry of Commerce (Registro Publico of Comercio) of the place of corporate
domicile of the Company.
(l) [Reserved.]
(m) In respect of the initial Advance, receipt of reports from Engineering
Consultant, Environmental Consultant and Industry Consultant, with results
satisfactory to the Owner and in
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respect to each Advance, approval by Engineering Consultant and confirmation of
compliance with the Construction Budget, the Drawings and Specifications and the
Milestones;
(n) Such other documents and evidence with respect to the Construction
Agent, Guarantor, any Unit, the Equipment, the Facility and the Site as the
Owner shall reasonably request; and
(o) No Construction Agency Event of Default, or event which with the
giving of notice or passage of time would constitute a Construction Agency Event
of Default, has occurred and is continuing.
SECTION 2.4 Term. The term of this Construction Agency Agreement shall
commence on the Construction Closing Date and shall terminate (subject to
Section 7.1(e)) upon the first to occur of:
(a) the termination of this Construction Agency Agreement by the Owner
upon a Construction Agency Event of Default (it being understood and agreed that
the Owner may also terminate the Construction Agent's agency in part with
respect to any Project Obligation from time to time upon a Construction Agency
Event of Default);
(b) the full performance by the Construction Agent of all of its Project
Obligations and the Construction Completion of the Facility such that it is
capable of Commercial Operation and the receipt by the Owner of any amounts
required to be paid by the Construction Agent in connection therewith and the
termination of this Construction Agency Agreement;
(c) the Construction Completion Date; or
(d) the Construction Termination Date.
SECTION 2.5 Representations of the Construction Agent. The Construction
Agent hereby represents and warrants that:
(a) the list of items set forth in the Construction Budget is accurate and
complete and in addition to the items covered by the Floating Lien includes all
of the Units and the Equipment and Soft Costs necessary to construct, install,
use and operate the Facility in order to achieve Construction Completion on or
before the Construction Termination Date and the Construction Agent is not aware
of any existing condition or state of facts that is reasonably expected to
result in any material or adverse change in the Construction Budget; and
(b) the list of Existing Technology (as defined in the License Agreement)
is accurate and complete and includes all of the patents, copyrights, trademarks
and other intellectual property necessary for the Owner to construct, install,
use and operate the Units, the Equipment and the Facility, to achieve
Construction Completion and maintain Commercial Operation and to utilize the CD3
and Tactronic II cast skin (TAC II) technologies and processes.
SECTION 2.6 Covenants of the Construction Agent. The Construction Agent
hereby covenants and agrees that it will: (a) utilize all funds received by it
from Advances, or cause such funds to be utilized, solely for the purpose of
paying the Project Costs set forth in the
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applicable Funding Request as the same become due and payable (or for the
purpose of reimbursing itself for the payment of Project Costs) as set forth in
this Construction Agency Agreement, the Construction Budget, the Milestones and
the applicable Project Document(s) and provide to the Owner invoices, bills of
sale, warranty and patent and licensing assignments and other supporting
documentation as the Owner may reasonably deem necessary to properly document
all Advances for Project Costs;
(b) use commercially reasonable efforts to submit within 15 days after
this Construction Agency Agreement takes effect an acknowledgement of the
execution of this Construction Agency Agreement (with the Construction Budget
attached), in the applicable Public Registry of Commerce (Registro Publico of
Comercio) of the place of corporate domicile of the Company and in the
applicable Public Registry of Commerce (Registro Publico of Comercio) with
jurisdiction over the Site;
(c) cause the cost of constructing the Facility to be less than or equal
to the amount of the Project Costs as set forth in the Construction Budget and
acknowledges that in no event shall the Owner be required to exceed the
Commitment;
(d) cause construction of the Facility to be prosecuted diligently,
continuously and substantially in accordance with the Project Documents and any
other Operative Documents, including, without limitation, the undertaking of
routine repairs and maintenance and all other acts necessary or advisable in
connection with the purchase, import, construction, installation, use and
performance testing of each Unit, the Equipment (including satisfactory
completion of all test procedures and certificates of operation for any overhead
cranes) and the Facility, and perform or cause to be performed fully and
punctually all obligations of the "Tenant" under the Site Lease, the "Supplier"
under the Ford Supply Agreement and the other Project Documents including the
Preliminary Specifications, the Drawings and Specifications, the Construction
Budget and the Milestones, in compliance with Applicable Laws (including all
Environmental Laws and occupational safety requirements), Insurance Requirements
set forth in Section 2.9 and manufacturer and supplier warranties and patents
and licenses, Section 10 of the Lease and at all times to a standard consistent
with Prudent Practice;
(e) diligently administer the Site Lease, the Ford Supply Agreement and
the other Project Documents, including:
(i) overseeing purchasing of each Unit and the Equipment (title to
which shall be taken in the name of the Owner) and arranging for the
refurbishment and delivery of the Equipment to the Site and the
development, design, construction and testing and all other Project
Obligations with respect to each Unit, the Equipment and the Facility
substantially in accordance with the Project Documents, including the
Preliminary Specifications, the Drawings and Specifications, the
Milestones and the Construction Budget;
(ii) the maintenance of true, complete and correct copies of all
Project Documents, all books and records with respect to the performance
of the obligations of the Owner and the Construction Agent obligations
under the Project Documents and a complete set of the current and (when
available) "as-built" plans (and all supplements
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thereto) relating to each Unit, the Equipment and the Facility, and the
provision of access to the Consultants for the review of such documents,
books and records during normal business hours and at reasonable intervals
consistent with the achievement of the timely completion of the Facility;
(iii) the enforcement of performance by each party to each of the
Project Documents of their respective obligations and warranties
thereunder and the pursuit of remedies with respect to the breach of those
obligations, including bringing or defending any claims or settling any
disputes arising from Construction Agent's or any contractor's performance
of its Project Obligations; and
(iv) deliver to the Owner 30 days' prior written notice of any
assignment, transfer or sale by Landlord of the Site and the Construction
Agent agrees to use commercially reasonable best efforts to obtain, on or
before the effective date of Landlord's assignment, transfer or sale, from
any successor owner of the Site a consent and agreement on substantially
the same terms and conditions as the Landlord Consent; provided that if
such successor's consent and agreement is not obtained within 15 days
after delivery by the Construction Agent of such notice, the Construction
Agent shall, at the Owner's request, assign to the Owner all of the
Construction Agent's right, title and interest in the Site Lease (subject
to the right of the Owner to accept or reject, in its sole discretion,
such assignment at any time within 45 days' thereafter) and if the Owner
accepts such assignment of the Site Lease, the Owner shall be required to
sublease to the Construction Agreement and the Construction Agent shall be
required to sublease from the Owner the Site on the same terms and
conditions as the Site Lease;
(f) cause each Unit and the Equipment incorporated into the Facility to be
purchased, refurbished, imported (on behalf of the Owner as provided herein),
delivered, clearly and visibly tagged and identified as belonging to the Owner,
constructed, installed, equipped, maintained and operated (i) in accordance with
Prudent Practice, (ii) in accordance in all material respects with the Project
Documents, (iii) in a manner such that it shall at all times remain personal
property of the Owner, regardless of the degree of its annexation to any real
property, and shall not by reason of any installation in, or annexation to, real
or personal property become a part thereof, (iv) as required to maintain all
material manufacturer or vendor warranties and all patent and license agreements
with respect to each Unit, the Equipment and the Facility, (v) in compliance
with all Insurance Requirements, and (vi) in compliance with all Applicable Laws
and Governmental Approvals;
(g) take all steps, actions, cautions and initiatives (subject to any
limitations in any applicable Project Document) to minimize and mitigate the
liabilities of the Owner, any delays, increased costs or disruption with respect
to the Project Obligations relating to each Unit, the Equipment and the
completion of the Facility and to protect and preserve the value of each Unit,
the Equipment, the Facility and the Site and performance otherwise of all
Project Obligations;
(h) at all times provide on-site and other appropriate security at the
Site and comply with the terms, conditions, covenants and prohibitions
applicable to the Owner and Lessee as specified in the Project Documents;
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(i) cause all Liens on any Unit, the Equipment and/or the Facility and the
Site (including Liens or claims for material supplied or labor or services in
connection with the construction of the Facility), other than Permitted Liens,
to be fully discharged and Construction Agent shall notify Owner of any
additional tangible or intangible property, permits, licenses or contracts of
the Company or its Affiliates which is material to any Unit, the Equipment or
the Facility and construction and/or operation of the Facility;
(j) ensure that (x) all water, sewer, electric, gases, telephone, security
(including fire protection system) and drainage facilities and all other
utilities required for the performance of the Project Obligations and
commencement of Commercial Operation and Construction Completion of the Facility
will be available when required and the Construction Agent agrees to provide
promptly to Owner copies of all written agreements pertaining to utilities and
the Site and means of access between the Site and the Facility and public
highways and rail connections for pedestrians, motor vehicles and railcars will
be available when required, pursuant to all necessary permits or Governmental
Authority approvals required by Applicable Laws (including any that may be
required under applicable Environmental Laws), contracts and easements and (y)
all utilities serving the Facility or the Site, or proposed to serve the
Facility or the Site in accordance with the Project Documents, are located in,
and vehicular and railcar access to the Facility will be provided by, public or
private rights-of-way abutting the Site;
(k) ensure that all licenses, approvals, authorizations, patents,
copyrights and trademarks, consents, permits (including occupancy, work,
building, demolition and environmental permits, licenses, approvals,
authorizations and consents), easements and rights-of-way, including dedication,
required for (w) the transfers, conveyances, assignments or other contemplated
transactions in the Project Documents, (x) the construction of the Facility in
accordance with the Construction Budget, the Preliminary Specifications, the
Drawings and Specifications, the Milestones and the other Project Documents, the
Lease and this Construction Agency Agreement, (y) the Construction Completion
and Commercial Operation of the Facility, and (z) the use, generation, handling,
treatment, storage, transport, disposal or disposition of any Hazardous
Materials relating to any Unit, the Facility, and the Site during the
construction of the Facility, will, in each case, be obtained from the
appropriate Governmental Authorities having jurisdiction, prior to the time
required by such Governmental Authority, Construction Agent (and not Owner)
shall be solely responsible for complying with all Applicable Laws, including,
but not limited to Environmental Laws, in connection with the installation, use,
possession and operation of each Unit, the Equipment, the Facility and the Site
and shall obtain and maintain on its own behalf the authorizations, licenses,
permits, registrations and other documentation required in accordance with such
Applicable Laws, Construction Agent (and not Owner) will be solely liable for
any fines or penalties imposed by any Governmental Authority in connection with
the foregoing;
(l) cause the Facility to achieve Construction Completion on or prior to
the Construction Termination Date;
(m) notify the Owner in writing not more than five (5) Business Days after
the Construction Agent first believes in its reasonable judgment that the
Construction Completion Date will not occur on or prior to September 30, 2005
and submit with such notification a plan to
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achieve Construction Completion and Commercial Operation prior to the
Construction Termination Date, as extended by the Construction Termination
Extension;
(n) notify the Owner in writing not more than five (5) Business Days after
the Construction Agent first believes in its reasonable judgment that the
Construction Completion Date will not occur on or prior to the Construction
Termination Date, as extended by the Construction Termination Extension;
(o) following the date of Substantial Completion (as defined in the Site
Lease), (x) cause all outstanding items with respect to the Site Lease to be
completed in a timely manner in accordance with the Project Documents, (y) cause
final acceptance of the Site to be achieved in a timely manner in accordance
with the Project Documents but in all events prior to the Construction
Termination Date and (z) cause all outstanding punch list items with respect to
the Facility to be completed in a timely manner and otherwise cause Construction
Completion to be achieved in a timely manner in accordance with the Project
Documents and the standards set forth in clauses (i) through (vi) of clause (f)
of this Section 2.6 and Section 6.2 of this Construction Agency Agreement;
(p) ensure that all liquidated damages (including, if a Construction
Agency Event of Default has occurred and is continuing, the Ford E&D
Reimbursement) and other amounts actually paid and received by the Construction
Agent under the Project Documents are promptly paid to the Owner;
(q) at the request of the Owner, (i) (A) discuss with the Consultants (x)
those events in the Construction Documents requiring the review of the
Engineering Consultant, (y) other matters under the Project Documents that (1)
have been noted by the Consultants as significant matters or areas of concern,
(2) have been noted in any report or notice of the Construction Agent or any
contractor or subcontractor delivered to Owner or (3) the Construction Agent
deems significant (following consultation with the Consultants if requested) and
(z) those matters under this Construction Agency Agreement or other Project
Documents requiring the consent of the Owner and (B) take the applicable
Consultant's advice into consideration with respect thereto and (ii) arrange for
the Owner and the Consultants to have access to the Site, each Unit, the
Equipment and the Facility at all times during the Construction Period;
(r) notify the Owner in writing not more than ten (10) Business Days after
the Construction Agent, the Company or any Affiliate applies for, receives or
enters into or obtains any New Rights (as defined in the Floating Lien), cause
the Guarantor (and any of its Affiliates) to make available to the Owner
pursuant to the License Agreement any intellectual property (including, without
any limitation, any patents, improvements, derivations, derivative works,
continuations, continuation-in-parts, divisionals, reissues or changes arising
therefrom) which is necessary to achieve Construction Completion and maintain
Commercial Operation and to utilize the CD3 and Tactronic II cast skin (TAC II)
technologies and processes, and promptly register with the Mexican Institute of
Intellectual Property (Instituto Mexicano de la Propriedad Industrial) the
License Agreement with respect to all patents granted in Mexico including,
without limitation, International Publication No. WO 03/031139A1 "Plastic Skin
Forming Process" patent (if so registered in Mexico);
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(s) hold itself out solely as agent for the Owner, who shall be the owner
of each Unit, the Equipment and of the Facility for all purposes;
(t) comply with the requirements of "Reports" set forth in Exhibit IV of
this Construction Agency Agreement; and
(u) notwithstanding anything to the contrary in this Construction Agency
Agreement or other Operative Documents, the Construction Agent, Guarantor and
their respective Affiliates shall not modify, supplement or amend (i) the
Insurance Requirements, the Site Lease, the Milestones or the Construction
Budget, without the prior approval of the Owner and its Engineering Consultant
or (ii) with respect to operations of the Facility at the Site the Ford E&D
Reimbursement and the Ford Supply Agreement, the Preliminary Specifications or
the Drawings and Specifications, in any manner which could have a material
adverse effect on the Equipment or the Facility or the financial results of the
Ford Supply Agreement or the financial condition of Lessee or Guarantor, without
the prior approval (not to be unreasonably withheld) of the Owner and its
Engineering Consultant.
SECTION 2.7 [Reserved.]
SECTION 2.8 Casualty Occurrence. The Construction Agent shall promptly
notify the Owner in writing if the Facility or any Unit or Equipment shall be or
become worn out, lost, stolen, destroyed, irreparably damaged, including damages
caused by a caso fortuito or fuerza mayor event, in the reasonable determination
of the Construction Agent, or permanently rendered unfit for use from any cause
whatsoever (including a violation of applicable Environmental Laws concerning or
with respect to Hazardous Materials) (such occurrences being hereinafter called
"Casualty Occurrences"). The parties hereby acknowledge and agree that the
Facility and all Units and the Equipment shall be under the Construction Agent's
care and attention at all times, and that the Construction Agent shall take all
precautions and preventive measures to maintain the Facility and each and all
Units and Equipment in working condition and to use the Facility and the Units
and Equipment in accordance with this Construction Agency Agreement, therefore,
the Construction Agent shall be responsible for any Casualty Occurrence. The
foregoing shall not limit or otherwise affect any rights the Construction Agent
may have against third parties, provided, however, that if, and for so long as,
any default exists under this Construction Agency Agreement, the Construction
Agent shall not take any action with respect to manufacturer or Vendor
warranties or otherwise interfere with Owner's rights as owner. Unless otherwise
expressly provided for in Section 2.9(f) of this Construction Agency Agreement
and if any of the events set forth in the proviso to clause (ii) of Section
2.9(f) shall have occurred, on the first Business Day of the next succeeding
month (or the following month if such period is less than ten (10) Business
Days) after a Casualty Occurrence (the "Payment Date"), the Construction Agent
shall pay the Owner, as a contractual penalty (▇▇▇▇ convencional), the sum of
(x) the Lease Investment Balance of the Facility or such Unit or Equipment
calculated as of the first Business Day of the month next succeeding the date of
such Casualty Occurrence ("Calculation Date"); and (y) all indemnity and other
amounts which are due hereunder as of the Payment Date. Upon receipt of payment
in full, the Construction Agent shall be entitled to receive from the Owner
whatever interest the Owner has in the Facility or such Unit or Equipment, as
the case may be, on an AS IS, WHERE IS basis.
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SECTION 2.9 Insurance.
(a) Coverage. Without limiting any of the other obligations or liabilities
of the Construction Agent under this Construction Period, Construction Agent
shall, during the Construction Agency Agreement, carry and maintain, with
respect to each Unit, the Equipment and the Facility, at its own expense, at
least the minimum insurance coverage set forth in this Section 2.9. Construction
Agent shall also carry and maintain any other insurance that the Owner may
reasonably require from time to time. All insurance carried pursuant to this
Section 2.9 shall be placed with such insurers having a minimum A.M. Best rating
of A:X (subject to Section 2.9(g)), and be in such form, with terms, conditions,
limits and deductibles as shall be acceptable to Owner. The insurance required
to be carried and maintained by Construction Agent hereunder shall, in all
events, include the following:
(i) All Risk Property Insurance. The Construction Agent shall
maintain all risk property insurance covering the Equipment against
physical loss or damage, including but not limited to fire and extended
coverage, collapse, flood, earth movement and comprehensive boiler and
machinery coverage (including electrical malfunction and mechanical
breakdown). Coverage shall be written in the greater of the then current
Lease Investment Balance or replacement cost value in an amount acceptable
to Owner. Such insurance policy shall contain an agreed amount endorsement
waiving any coinsurance penalty and shall include expediting expense
coverage in an amount not less than $1,000,000; and
(ii) Business Interruption Insurance. As an extension of the
insurance required under subsection (a)(i), the Construction Agent shall
maintain, or cause to be maintained, business interruption insurance in an
agreed amount equal to 12 months projected net profits, and continuing
expenses and Project Costs. Deductibles shall not exceed 45 days; and
(iii) Commercial General Liability Insurance. The Construction Agent
shall maintain comprehensive general liability insurance written on an
occurrence basis with a limit of not less than $1,000,000. Such coverage
shall include, but not be limited to, premises/operations, broad form
contractual liability, independent contractors and subcontractors,
products/completed operations, property damage and personal injury
liability. Such insurance shall not contain an exclusion for punitive or
exemplary damages where insurable by Applicable Laws; and
(iv) Workers' Compensation/Employer's Liability. The Construction
Agent shall maintain (i) statutory insurance with the Mexican Institute of
Social Security (Instituto Mexicano del Seguro Social) (I.M.S.S.) for its
employees, or any other statutory insurance required by Mexican law with
respect to work-related injuries, disease or death of an employee of the
Construction Agent while at work or in the scope of his/her employment
with the Construction Agent, (ii) workers' compensation insurance or any
other statutory insurance required by applicable law with respect to
work-related injuries, disease or death of any expatriate employee of
Construction Agent while at work or in the scope of his/her employment
with the Construction Agent and (iii) Employer's Liability in an amount
not less than $1,000,000; and
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(v) Excess/Umbrella Liability. The Construction Agent shall maintain
excess or umbrella liability insurance written on an occurrence basis in
an amount not less than $25,000,000 providing coverage limits excess of
the insurance limits required under sections (a)(iii) and (a)(iv)
employer's liability only. Such insurance shall follow the form of the
primary insurances and drop down in case of exhaustion of underlying
limits and/or aggregates. Such insurance shall not contain an exclusion
for punitive or exemplary damages where insurable under Applicable Laws.
(b) Endorsements. The Construction Agent shall cause all insurance
policies carried and maintained in accordance with this Section 2.9 to be
endorsed as follows:
(i) The Owner shall be the named insured and the Construction Agent
shall be an additional named insured and loss payee as its interest may
appear with respect to the Equipment and the Facility covered by property
policies described in subsection (a)(i) and (a)(ii). The Construction
Agent shall be the named insured and the Owner shall be an additional
insured with respect to liability policies described in subsections
(a)(iii) and (a)(v). It shall be understood that any obligation imposed
upon the Construction Agent, including but not limited to the obligation
to pay premiums, shall be the sole obligation of the Construction Agent
and not that of the Owner; and
(ii) With respect to property policies described in subsections
(a)(i) and (a)(ii), the interests of the Owner shall not be invalidated by
any action or inaction of the Construction Agent, ▇▇▇▇▇▇▇ or any other
Person, and shall insure the Owner regardless of any breach or violation
by the Construction Agent or any other Person, of any warranties,
declarations or conditions of such policies; and
(iii) Inasmuch as the liability policies are written to cover more
than one insured, all terms conditions, insuring agreements and
endorsements, with the exception of the limits of liability, shall operate
in the same manner as if there were a separate policy covering each
insured; and
(iv) The insurers thereunder shall waive all rights of subrogation
against the Owner any right of setoff or counterclaim and any other right
to deduction, whether by attachment or otherwise; and
(v) Such insurance shall be primary without right of contribution of
any other insurance carried by or on behalf of the Owner with respect to
its interests as such in the Equipment; and
(vi) If such insurance is canceled for any reason whatsoever,
including nonpayment of premium, or any changes are initiated by the
Construction Agent or the carrier which affects the interests of the
Owner, such cancellation or change shall not be effective as to the Owner
until 30 days, (except for non-payment of premium which shall be 10 days)
after receipt by the Owner of written notice sent by registered mail from
such insurer.
(c) Certifications. On and thereafter during the Construction Period with
respect to each Unit and the Equipment purchased by the Owner as of such date,
and at each policy
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renewal, but not less than annually with respect to all Equipment then owned by
the Owner, the Construction Agent shall provide to the Owner a certification
from each insurer or by an authorized representative of each insurer. Such
certification shall identify the underwriters, the type of insurance, the
limits, deductibles, and term thereof and shall specifically list the special
provisions delineated for such insurance required for this Section 2.9.
(d) Insurance Report. Concurrently with the furnishing of all certificates
referred to in this Section 2.9, the Construction Agent shall furnish the Owner
with a statement from an independent insurance broker, acceptable to the Owner,
stating that all premiums then due have been paid and that, in the opinion of
such broker, the insurance then maintained by the Construction Agent is in
accordance with this Section 2.9. Furthermore, upon its first knowledge, such
broker shall advise the Owner promptly in writing of any default in the payment
of any premiums or any other act or omission, on the part of any person, which
might invalidate or render unenforceable, in whole or in part, any insurance
provided by the Construction Agent and/or user hereunder.
(e) General. Upon request, the Construction Agent shall furnish Owner with
copies of all insurance policies, binders and cover notes or other evidence of
such insurance. Notwithstanding anything to the contrary herein, no provision of
this Section 2.9 or any provision of this Construction Agency Agreement shall
impose on the Owner any duty or obligation to verify the existence or adequacy
of the insurance coverage maintained by the Construction Agent, nor shall the
Owner be responsible for any representations or warranties made by or on behalf
of the Construction Agent to any insurance broker, company or underwriter. The
Owner, at its sole option, may obtain such insurance if not provided by the
Construction Agent and in such event, the Construction Agent shall reimburse the
Owner upon demand for the cost thereof together with interest.
(f) Proceeds of Insurance. Proceeds of any insurance covering damage or
loss of any Unit, the Equipment and the Facility shall be payable to the Owner
as loss payee and, so long as no Construction Agency Event of Default shall
occur and be continuing, shall be applied as follows:
(i) If the Construction Agent believes that, based on reasonable
estimates of loss, the amount of insurance proceeds payable in respect of
any casualty event or any series of related casualty events to be less
than or equal to U.S.$5,000,000, the Construction Agent may elect to
restore or replace the property affected by such casualty event without
the consent of the Owner; provided that the Construction Agent certifies
to the Owner that Construction Completion can be achieved for the Facility
prior to the Construction Termination Date;
(ii) If the Construction Agent believes that, based on reasonable
estimates of loss, the amount of insurance proceeds payable in respect of
any casualty event or any series of related casualty events to be in
excess of U.S.$ 5,000,000, the Construction Agent may elect to restore or
replace the property affected by such casualty event if the Construction
Agent has delivered to the Owner, within twenty (20) days from the
occurrence of such casualty event, a Construction Restoration or
Replacement Plan with respect to such casualty that is based upon, or
accompanied by, each of the following:
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(A)(1) a detailed breakdown of the nature and extent of such casualty
event and (2) a bona fide assessment (from a contractor reasonably
acceptable to the Owner) of the estimated cost and time needed to restore
or replace the affected property; (B) satisfactory evidence that such
insurance proceeds and the Company's other available funds are sufficient
to make the necessary restorations to or replacement of the affected
property such that Construction Completion will be achieved for the
Facility prior to the Construction Termination Date; (C) delivery of an
Authorized Officer's certificate of the Construction Agent certifying
that, at the completion of the restoration or replacement, no Construction
Agency Event of Default shall have occurred and be continuing in
connection with such casualty event; and (D) confirmation by the
Engineering Consultant of the Owner, of its agreement (based on the
information available to them) with the matters set forth in clauses (A)
through (B) above within twenty (20) days after the receipt of the
foregoing information and its approval of such Construction Restoration or
Replacement Plan; provided that, if the Construction Agent does not
deliver such Construction Restoration or Replacement Plan within such 20
day period or if the Owner or its Engineering Consultant rejects the
proposed Construction Restoration or Replacement Plan, the Construction
Agent shall promptly pay, or cause to be paid, proceeds of any insurance
to the Owner, as loss payee, which shall be applied, in the Owner's
discretion, toward the replacement, restoration or repair of any Unit, the
Equipment or the Facility to the condition required by Section 2.6(d) or
(f) and Section 6.2 of this Construction Agency Agreement or towards
payment of the Construction Agent's payment obligations under Section 2.8
of this Construction Agency Agreement; and
(iii) If a Construction Agency Event of Default shall have occurred
and be continuing, then the Construction Agent shall remit to Owner, as
loss payee, proceeds of any insurance covering damage or loss which
proceeds shall be applied, in Owner's discretion, to repair or replace the
Facility, the Unit or the Equipment in accordance with clause (ii) above.
(g) From the date hereof through December 1, 2004, the minimum rating
requirement for insurers imposed by Section 2.9 (a) shall not apply to the
following insurance carriers if such insurance carrier listed on subparagraphs
(i), (ii) and (iii) of this paragraph has an A.M. Best rating of A- or higher
and if and so long as the Construction Agent's insurance broker provides a
letter to the Owner on the date hereof and every quarter thereafter confirming
such minimum rating for such insurance carrier:
(i) Montpelier Reinsurance Company;
(ii) Arch Reinsurance Company; and
(iii) Converium provided, that in no event shall Converium Re be
allowed to participate on the Construction Agent's insurance program after
December 1, 2004.
SECTION 2.10 Changes in the Construction Budget. Notwithstanding the
provisions of Section 2.5(a) of this Construction Agency Agreement, the Owner
and the Construction Agent acknowledge that during the Construction Period it
may be necessary to add, delete or substitute
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one or more of the items set forth in the Construction Budget. Additions,
deletions or substitutions in the Construction Budget may be accomplished after
execution of this Construction Agency Agreement, as follows;
(a) Those additions, deletions and substitutions that do not alter the
Construction Budget by more than One Hundred Thousand Dollars ($100,000.00), may
be accomplished unilaterally by the Construction Agent; provided that the
Commitment is not exceeded. Such addition, deletion or substitution shall be
effected by written notice from the Construction Agent to the Owner and shall be
binding on the Construction Agent and the Owner;
(b) Those additions and deletions, and those substitutions of a like-kind
Unit or Equipment for which the cost is more than ten percent (10%) greater or
less than the amount included in the Construction Budget for such Unit or
Equipment, that alter the Construction Budget by more than One Hundred Thousand
Dollars ($100,000.00) shall be accomplished by a written instrument prepared by
the Construction Agent and signed by the Construction Agent and the Owner and
the Engineering Consultant, stating their agreement on (i) the added, deleted or
substituted item(s) in the Construction Budget, and (ii) the amount of the
adjustment, if any, in the Construction Budget; provided that the Commitment is
not exceeded (a "Change Order"). The Construction Agent shall provide to the
Owner a description of each proposed addition, deletion and substitution to the
Construction Budget set forth in a requested Change Order and supporting
documentation satisfactory to the Owner and Consulting Engineer in respect
thereof; and
(c) If the aggregate amount of all additions, deletions and substitutions
made to the Construction Budget from time to time after the Construction Closing
Date is One Million Dollars ($1,000,000.00) or greater, all subsequent
additions, deletions and substitutions to the Construction Budget will require a
Change Order and shall be governed by the terms and conditions set forth in
Section 2.10(b) above.
SECTION 2.11 Cost Overrun. If the Construction Agent wishes to acquire and
install at the Site any equipment, or equipment parts, supplies or accessories
pursuant to any cost overrun, change order or other variation in excess of
available contingencies under the Construction Budget (a "Cost Overrun"), the
Owner shall have the right, but not the obligation, to finance such Cost
Overrun. The Construction Agent shall request an amendment to the Construction
Budget to include any Cost Overrun and an Advance from the Owner to fund any
Cost Overrun, which request may be accepted by Owner in its sole discretion.
Notwithstanding the foregoing, to the extent any Cost Overrun of Equipment
constitutes a Non-Severable Improvement (i) it must be and remain free and clear
of all liens, claims and encumbrances and (ii) it shall be deemed solely the
property of Owner and Owner shall receive a ▇▇▇▇ of sale for any such
Nonseverable Improvement as a pre-condition to any Advance therefor.
ARTICLE III
PAYMENT OF PROJECT COSTS
SECTION 3.1 Funding of Project Costs.
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(a) During the Construction Period, the Construction Agent may request
that the Owner advance funds up to and including the amount of the Commitment
for the payment of Project Costs included in the Construction Budget (and the
Construction Agent shall make all certifications and satisfy all requirements
set forth in Article III and Section 2.3 of this Construction Agency Agreement
in connection therewith), and the Owner agrees that it will so advance funds for
the payment of Project Costs, up to and including an aggregate total amount
equal to the Commitment, to the extent provided for under, and subject to the
conditions, restrictions and limitations contained in this Construction Agency
Agreement (an "Advance"). The Construction Agent and the Owner acknowledge and
agree that the Construction Agent's right to obtain funds and obligation to
advance funds for the payment of Project Costs is subject in all respects to the
terms and conditions of this Construction Agency Agreement and each of the other
Operative Documents. Whenever during the Construction Period the Construction
Agent desires that the Owner provide an Advance of funds for use and application
to pay Project Costs in accordance with the Operative Documents, the
Construction Agent shall submit to the Owner a Funding Request (each, a "Funding
Request") at least eight (8) Business Days prior to the last Business Day in any
calendar month during the Construction Period on which the Construction Agent
requires a distribution of funds (the "Requested Funding Date"), or in the case
of the initial Advance of funds on the Construction Closing Date, at least three
(3) Business Days in advance of such date, subject to compliance with the
applicable conditions precedent set forth in Section 2.3 of this Construction
Agency Agreement (including an Acceptable Letter of Credit). Each Funding
Request shall (i) be signed by an Authorized Officer of the Construction Agent,
and be substantially in the form of Exhibit IX, (ii) be approved by Appraiser as
evidenced by delivery to the Owner of a tagging Appraisal, (iii) be approved by
Engineering Consultant and shall be in compliance with the Construction Budget,
as evidenced by delivery to the Owner of a written certificate, and (iv) be
accompanied by appropriate purchase orders, invoices and other relevant Purchase
Documents, as applicable, and (v) be approved by the Owner. No more than one
Advance may be requested and drawn in any calendar month (except for November
2004, during which two (2) Advances may be requested and drawn) and each Advance
shall be in the amount of $25,000 or more (or the equivalent in Mexico currency
thereof); provided that the Owner shall not be obligated to fund more than 20
Vendor invoices in the aggregate during any one calendar month, and the Owner
shall pay such invoices directly to the Vendor (which may be the Company).
Advances for invoices in compliance with the Construction Budget and the other
terms and conditions of this Construction Agency Agreement may also be paid by
the Construction Agent directly to the applicable Vendors, and the Owner shall
reimburse the Construction Agent the amount of such payments at the end of each
calendar month (subject to the Owner's receipt of evidence of the Construction
Agent's payments thereof and the conditions set forth in the next preceding
sentence).
(b) If the conditions precedent to an Advance shall have been satisfied,
then no later than 12:00 pm Noon, New York City time, on each Requested Funding
Date, the Owner shall pay directly to the Vendor (which may be the Company) the
amount designated in such Funding Request.
SECTION 3.2 Ordering Equipment. The Construction Agent, pursuant to the
agency granted to it by the Owner in Article I hereof, may order, receive and
accept Units or the Equipment, on behalf of the Owner, and require the Owner to
pay to the applicable Vendor(s) the purchase price for each Unit(s) or the
Equipment which the parties agree will be leased to Lessee
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pursuant to the Lease, including the applicable Schedule thereto.
Notwithstanding any provision to the contrary herein, the Construction Agent's
ability to obligate the Owner to purchase any Unit or Equipment pursuant to such
agency, shall be limited by the following: (i) the Construction Agent must issue
a purchase order to the Vendor(s) of the Unit or Equipment and such purchase
order must disclose to all Vendors that the Construction Agent is ordering the
Unit(s) of Equipment as agent for the Owner; (ii) all of the Equipment ordered
and/or accepted hereunder must be included in the Construction Budget and must
meet at least one of the general description categories contained in the
Construction Budget; (iii) the aggregate purchase price for all Equipment
purchased in connection with any Funding Request must be less than, or equal to,
the capitalized Lessor's Cost specified on that Funding Request; (iv) the
purchase order must provide for passage of clear title to the Owner no later
than upon payment of the full purchase price; (v) the purchase price of each
Unit(s) or Equipment must not be more than the then current Fair Market Value
therefore, as confirmed by tagging Appraisal; (vi) each piece of tangible
personal property that constitutes Equipment must qualify for all the Tax
Benefits in the hands of the Owner upon its purchase by the Construction Agent
on behalf of the Owner when incorporated into the Facility and the Facility is
placed in-service and (vii) with respect to any documentation, technical or
confidential business information and/or software relating to any Unit or the
Equipment (collectively, "Software"), the purchase order will grant the Owner a
license to use the Software and will allow the Owner to grant a sublicense to
the Lessee to use such Software pursuant to the Lease and will allow the Owner
to grant a sublicense to a third party after a termination or the expiration of
this Construction Agency Agreement or of the Lease in the event the Construction
Agent or the Lessee, as the case may be, does not exercise any purchase option
that may be provided to it in this Construction Agency Agreement or the Lease,
as the case may be. The Company additionally agrees that all purchase orders
executed by the Construction Agent hereunder shall otherwise be on terms and
conditions acceptable to the Owner, in its sole discretion.
SECTION 3.3 Receipt of and Payment for Equipment. With respect to any
Unit(s) of Equipment ordered by the Construction Agent as Owner's agent pursuant
to the terms and conditions of this Construction Agency Agreement, the
Construction Agent agrees to perform all obligations of the purchaser in the
time and manner required by the applicable purchase order, except that upon the
request of the Construction Agent, the Owner shall, pay the purchase price
thereof directly to the Vendor in the time and manner required by the purchase
order, subject to the terms of the last sentence of Section 3.1(a) of this
Construction Agency Agreement. Any request by the Construction Agent for the
Owner to pay a Vendor the purchase price shall be accompanied by purchase orders
(which comply with the conditions of Section 3.2), invoices and other
documentation ("Purchase Documentation"), in form and substance satisfactory to
the Owner in its sole discretion, which (i) describes all Units of Equipment
ordered, received and accepted by the Construction Agent in connection with this
Construction Agency Agreement and the Lease, including the applicable Schedule
thereto, and (ii) includes evidence that upon payment of the purchase price to
the Vendor for each such Unit of Equipment, clear title thereto shall pass from
the Vendor to the Owner.
SECTION 3.4 Reimbursement of Purchase Price. If (i) the Company has
already purchased any Unit of Equipment (not purchased on behalf of the Owner)
and on the Construction Closing Date is the owner of such Unit, free and clear
of any Liens (including no Permitted Liens), or (ii) the Company has made
partial payment of the purchase price for any
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Unit of Equipment for which title thereto is retained by the Vendor, then upon
receipt by the Owner of the applicable Funding Request (for which applicable
conditions precedent have been satisfied or waived by the Owner) and the
applicable Purchase Documentation (including evidence that Owner shall have free
and clear title to such Units of Equipment upon payment in full of the purchase
price to Vendor), the Owner shall, in the case of clause (i) above, reimburse
the Company, in its capacity as Vendor, for the aggregate purchase price for all
such Unit(s) of Equipment, and will acquire title over such Unit(s) of Equipment
from the Company, free and clear of any Lien, and in the case of (ii) above,
shall reimburse Company for the portion of the purchase price it has previously
paid to the Vendor(s) with respect to such Unit(s) of Equipment and shall pay
the remaining unpaid portion of the purchase price to the Vendor(s) as and when
required by the Purchase Documents in accordance with the provisions of Section
3.3.
SECTION 3.5 Advances for Fees, Transaction Expenses, Equity Yield and Soft
Costs. Upon the execution and delivery by the Construction Agent of a Funding
Request for the payment of Project Costs included in the Construction Budget
(other than related to the purchase of an Unit(s) or the Equipment), the Owner
shall advance the amount requested (provided, that in no event shall the Owner
be required to exceed the Commitment amount) and shall pay such amount directly
to the designated supplier of such services.
(a) Commitment Fee. The parties agree that the total amount of the
Commitment Fee shall be deemed fully earned at the Construction Closing Date and
shall be satisfied at the time and in the manner as provided by the Fee Letter.
(b) Transaction Expenses. All Transaction Expenses, including up to
$150,000 in the aggregate of the Construction Agent's out-of-pocket expenses
which are included in the Construction Budget and incurred in connection with
this Construction Agency Agreement or the Lease, shall be included in Project
Costs and shall be paid by the Owner in a lump sum to the applicable provider of
such services (only with respect to the $150,000 of Construction Agent
Transaction Expense, in advance) from proceeds of Advances requested by the
Construction Agent in a Funding Request(s).
(c) Equity Yield. Equity Yield shall accrue monthly (and regardless of
whether a Funding Request or Advance is made for any given month) on each
Advance funded by the Owner for each day during the Construction Period after
which such Advance was made. Equity Yield accrued pursuant to this Construction
Agency Agreement shall be calculated on the basis of a 360-day year for the
actual days elapsed. Each determination of the rate of Equity Yield made by the
Owner shall be conclusive and binding on the Construction Agent in the absence
of manifest error. The Owner shall, at the request of the Construction Agent,
deliver to the Construction Agent a statement showing the quotations used by the
Owner to calculate any rate of Equity Yield.
(d) Soft Costs. Soft Costs which are included in the Construction Budget
and incurred in connection with this Construction Agency Agreement, shall be
included in Project Costs and shall be paid by the Owner to the applicable
provider of such services, from proceeds of Advances requested by the
Construction Agent in a Funding Request(s).
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SECTION 3.6 Books and Records. The Construction Agent shall maintain full
and accurate books and records of all Unit(s) of Equipment orders, service
contracts, receipts and payments. All such books and records shall be maintained
in a form acceptable to the Owner in its sole discretion. Such books and records
shall be open for inspection and examination by the Owner and its
representatives, including its accountants, the Appraiser and the Engineering
Consultant, during the Construction Agent's normal business hours.
ARTICLE IV
EVENTS OF DEFAULT
SECTION 4.1 Construction Agency Events of Default. The occurrence of any
of the following events during the Construction Period shall constitute an event
of default under this Construction Agency Agreement (herein called a
"Construction Agency Event of Default") and shall give rise to the rights and
remedies of Owner set forth in Article V:
(i) The Construction Agent (a) fails to apply any Advances made by
the Owner to the payment of the appropriate Unit(s) or Equipment purchase
price in accordance with the terms of this Construction Agency Agreement,
(b) otherwise fails to apply any Advances made by the Owner to the payment
of the appropriate Project Costs within thirty (30) days after receipt of
written notice from the Owner or any contractor of the misapplication or
(c) otherwise commits fraud in connection with the transactions
contemplated hereby or by the Operative Agreements;
(ii) The Construction Agent fails to maintain its insurance coverage
or otherwise fails to fully satisfy the Insurance Requirements required
under Section 2.9 of this Construction Agency Agreement;
(iii) The Construction Agent breaches any of its other covenants or
obligations hereunder (excluding those covenants and obligations covered
by clauses (i) and (ii) above and clauses (vi), and (xvii) below) and the
Construction Agent fails to cure each breach within 30 days after written
notice thereof;
(iv) A summary of the Site Lease is not filed for registration with
the Public Registry of Commerce (Registro Publico de Comercio) with
jurisdiction over the place where the Site is located within thirty (30)
days after the Construction Closing Date;
(v) Any representation or warranty made by the Construction Agent,
▇▇▇▇▇▇▇ and/or its Affiliate in connection with any Construction Document,
the Lease, the Guaranty, the License Agreement, the Site Lease, the Ford
Supply Agreement, the Guaranty Trust, the Stock Pledge or the Floating
Lien shall be false or misleading in any material respect;
(vi) The Construction Agent shall or shall attempt to (except as
expressly permitted by the provisions of this Construction Agency
Agreement) sell, transfer, encumber (except to the extent of a Permitted
Lien), or assign, any Unit, Equipment or any part thereof, or use any
Unit, Equipment for an illegal purpose or permit the same to occur;
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(vii) Any certificate, statement, representation, warranty or audit
contained herein or heretofore or hereafter prepared by and furnished by
the Construction Agent or ▇▇▇▇▇▇▇ to the Owner proving to have been false
or misleading in any material respect at the time as of which the facts
therein set forth were stated or certified;
(viii) The Construction Agent or ▇▇▇▇▇▇▇ admits in writing its
inability to pay its debts as they become due, terminates its corporate
existence, or ceases to do business as a going concern;
(ix) The Construction Agent or ▇▇▇▇▇▇▇ shall file a voluntary
petition in bankruptcy concurso mercantil or a voluntary petition or
answer seeking reorganization in a proceeding under any bankruptcy or
receivership laws (as now or hereinafter in effect) or an answer admitting
the material allegations of a petition filed against the Construction
Agent or ▇▇▇▇▇▇▇ in any such proceeding or the Construction Agent or
▇▇▇▇▇▇▇ shall, by voluntary petition, answer or consent, seek relief under
the provisions of any other now existing or future bankruptcy concurso
mercantil, receivership or other similar law providing for the
reorganization or liquidation of corporations, or providing for an
agreement, composition, extension or adjustment with its creditors;
(x) Petition is filed against the Construction Agent or ▇▇▇▇▇▇▇ in a
proceeding under applicable bankruptcy laws, concurso mercantil,
receivership or other insolvency laws, as now or hereafter in effect, and
is not withdrawn, stayed or dismissed within 60 days thereafter, or if,
under the provisions of any law providing for reorganization or
liquidation of corporations, which may apply to the Construction Agent or
▇▇▇▇▇▇▇ any court of competent jurisdiction shall assume jurisdiction,
custody or control of the Construction Agent or ▇▇▇▇▇▇▇ or of any
substantial part of their property, and such jurisdiction, custody or
control shall remain in force unrelinquished, unstayed or unterminated for
a period of 60 days;
(xi) The Construction Agent shall have merged into, or conveyed,
transferred or leased substantially all of its assets as an entirety to
any Person (such Person being referred to as a "Successor" and such
action(s) being referred to as an "Event)," unless prior to such Event,
(i) the Successor is engaged in a similar line of business and is
organized and existing under the laws of the United States of America,
Mexico or any state thereof, (ii) after taking the transaction into
account, the Successor or a substitute guarantor shall have a senior
secured debt rating of "Ba1" or better from ▇▇▇▇▇'▇ or a rating of "BB+"
or better from S&P, (iii) the Successor or any substitute guarantor has a
net worth of at least $300,000,000 and (iv) the Successor executes and
delivers to the Owner an agreement containing an effective assumption by
it of the due and punctual performance of the Construction Agent under the
applicable Operative Documents to which the Construction Agent is a party;
(xii) There occurs under the Credit Agreement, the Guaranty Trust,
the Floating Lien, the Stock Pledge or the Site Lease an Event of Default
(as such term is defined therein), or there occurs a Default (as such term
is defined under the Lease) under the Lease, or there occurs a breach by
Supplier under the Ford Supply Agreement or there
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occurs a default by ▇▇▇▇▇▇▇ under the Guaranty or the License Agreement
which has not been duly waived or cured thereunder;
(xiii) If there occurs under any real property lease for which the
Construction Agent is a tenant with respect to an Equipment Location (i) a
payment default which has not been duly waived or cured thereunder; or
(ii) with respect to any such real property lease that Owner or any
Affiliate or assignees of Owner's interest herein, individually or
collectively, has no control over the exercise of any remedy, a
declaration of a default for which all applicable cure periods have lapsed
or the commencement of the exercise of any remedy thereunder;
(xiv) There occurs a default under any other agreement between Owner
(or any Affiliate of Owner) and the Construction Agent or ▇▇▇▇▇▇▇
including, without limitation, the Intercompany Agreement and the Fee
Letter;
(xv) There occurs a default under any of ▇▇▇▇▇▇▇; or the
Construction Agent's credit agreements or financing facilities or similar
arrangements under which, in each case any indebtedness equal to or
exceeding an aggregate principal amount of $35,000,000 or more was created
or is governed thereby which has not been duly waived or cured thereunder;
(xvi) ▇▇▇▇▇▇▇ shall no longer, directly or indirectly, control 100%
of the equity interests in the Company or any successor entity other than
as permitted by Section 4.1(xi);
(xvii) The Construction Agent shall fail to maintain or to renew or
replace at least 30 days before its expiring any Acceptable Letter of
Credit in accordance with its terms and this Construction Agency
Agreement;
(xviii) Any Acceptable Letter of Credit shall cease to be binding on
the provider thereof, shall be rendered unenforceable in any material
respect, or any such provider thereof shall expressly renounce or
repudiate in writing its obligations thereunder (unless such Acceptable
Letter of Credit has been replaced by a replacement Acceptable Letter of
Credit);
(xix) The direct or indirect contest by the Construction Agent of
the validity of the Lien granted in favor of, or for the benefit of, Owner
in any of the Operative Agreements (including the Floating Lien), or the
taking of any action by the Construction Agent to repudiate, or purport to
discontinue or terminate this Construction Agency Agreement or any of the
other Operative Documents;
(xx) If this Construction Agency Agreement or any of the other
Operative Documents shall cease (1) to be a legal, valid and binding
obligation, or (2) to be in full force and effect;
(xxi) The Construction Agent shall fail to cause Construction
Completion to be achieved for an amount less than or equal to the
Commitment.; or
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(xxii) The Lessee fails to deliver to Lessor at the Construction
Completion Date its Certificate of Acceptance (as defined in the Lease)
with respect to each Unit, the Equipment and the Facility.
ARTICLE V
REMEDIES
SECTION 5.1 Remedies for Construction Agency Events of Default.
(a) The Construction Agent shall give the Owner notice, as soon as
possible, of the occurrence of any Construction Agency Event of Default.
(b) In the event of a Construction Agency Event of Default under Section
4.1(viii),(ix),(x) and (xi), this Construction Agency Agreement shall terminate
automatically and the Construction Agent shall be required, immediately and
automatically, to pay to the Owner an amount equal to 100% of all Advances for
Project Costs, accrued Equity Yield on Advances, the Owner's out-of-pocket fees,
costs and expenses, including breakage costs, plus any other amounts owed to the
Owner by the Construction Agent, Lessee, Guarantor or their respective
Affiliates under the Operative Documents, incurred by Owner in connection with
each Unit, the Equipment and the uncompleted Facility and the Operative
Documents (the "Lease Investment Balance").
(c) In the event of a Construction Agency Event of Default under any other
subparagraph under Section 4.1, the Owner shall have to right to elect to
proceed, at its sole election, under the provisions of Section 5.1(c)(i) or
Section 5.1(c)(ii) hereof:
(i) The Owner may elect to terminate this Construction Agency
Agreement by giving the Construction Agent written notice of such termination.
If the Owner elects to terminate this Construction Agency Agreement, the
Construction Agent shall have the option to purchase on an AS IS, WHERE IS
BASIS, all, but not less than all, Units, the Equipment, and the Facility for an
amount equal to the Lease Investment Balance (plus all applicable taxes),
together with any other sums due under this Construction Agency Agreement on
such date.
(A) If the Construction Agent elects to exercise its purchase
option in accordance with this Section 5.1(c)(i), the Construction Agent shall
give the Owner notice of its intention to do so no later than fifteen (15) days
following notification by the Owner that the Owner has elected to terminate this
Construction Agency Agreement (time being of the essence). The purchase of all,
but not less than all, Units, the Equipment, and the Facility by the
Construction Agent pursuant to this Section 5.1(c)(i) shall be completed no
later than fifteen (15) days following the date of such notice from the
Construction Agent.
(B) If the Construction Agent does not elect to exercise its
purchase option in accordance with this Section 5.1(c)(i), or if after having
exercised its purchase option in accordance with this Section 5.1(c)(i) fails to
complete the purchase pursuant to the terms of this Section 5.1(c)(i), the Owner
shall retain title to each Unit, the Equipment and the Facility, free and clear
of any interest of the Construction Agent, the Lessee under the Lease, and the
Company, and the Owner shall have the right:
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(1) in the event the Owner is exercising its remedies as
a result of any Construction Agency Event of Default described under Sections
4.1(i) through (vii) or (xii) through (xxii) above that arises, in whole or in
part, as a consequence of a Full Recourse Event (each a "Full Recourse
Construction Agency Event of Default"), to require the Construction Agent to pay
to the Owner immediately upon receipt of such notice an amount equal to the
Lease Investment Balance. In the event the Owner elects to proceed under this
Section 5.1(c)(i)(B)(1), the Owner shall have the right to require the
Construction Agent, at the Construction Agent's cost, to return each Unit, the
Equipment and the Facility to the Owner in compliance with all of the "Return
Requirements" set forth in Exhibit IV of this Construction Agency Agreement and
thereafter, the Owner can remarket and lease or sell any Unit, the Equipment or
the Facility, in its sole discretion. The proceeds derived from any such lease
or sale, net of all normal and customary costs, closing costs and carrying
costs, shall be distributed first, to the Owner in the amount of the Lease
Investment Balance, second, to the extent the Construction Agent has paid to the
Owner the Lease Investment Balance, to the Construction Agent to reimburse it to
the extent of its payment of the Lease Investment Balance, and third to the
Owner to the extent remaining proceeds received are in excess of the unpaid
Lease Investment Balance.
(2) in the event the Owner is exercising its remedies as
a result of any Construction Agency Event of Default described under Sections
4.1(i) through (vii) or (xii) through (xxii) above that does not arise, in whole
or in part, as a consequence of a Full Recourse Event (each a "Limited Recourse
Construction Agency Event of Default"), to require the Construction Agent to pay
to the Owner immediately upon receipt of such notice an amount equal to
eighty-nine and nine tenths percent (89.9%) of all advances theretofor made for
GAAP Defined Project Costs, incurred for the uncompleted Facility (the "Recourse
Obligation"). In the event the Owner elects to proceed under this Section
5.1(c)(i)(B)(2), the Owner shall have the right to request the Construction
Agent, at the Construction Agent's cost, to return each Unit, the Equipment and
the Facility to the Owner in compliance with all of the "Return Requirements"
set forth in Exhibit IV of this Construction Agency Agreement and thereafter,
the Owner can remarket and lease or sell any Unit, the Equipment or the
Facility, in its sole discretion. The proceeds derived from any such lease or
sale, net of all normal and customary costs, closing costs and carrying costs,
shall be distributed first, to the Owner in the amount of the excess of the
Lease Investment Balance over the Recourse Obligation payment, if any, received
by the Owner, second, to the extent the Construction Agent has paid to the Owner
the Recourse Obligation, to the Construction Agent to reimburse it to the extent
of its payment of the Recourse Obligation, and third, to the Owner to the extent
remaining proceeds received are in excess of the unpaid Lease Investment
Balance.
(ii) The Owner may elect to complete construction of the Facility
and to commence the Lease (upon achievement of the Construction Completion
Date requirements).
(d) In addition to the foregoing remedies, if a Construction Agency Event
of Default shall have occurred and is continuing, then (unless the Construction
Agent has purchased the Facility pursuant to Section 5.1(c)(i)(A)), the Owner
may, at its sole discretion, elect to exercise any or all of its rights under
the Floating Lien, with respect to any of the property, permits or other
interests of the Company covered thereby which relate to any Unit, the
Equipment, the
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Facility or the Site, the License Agreement, with respect to intellectual
property owned by ▇▇▇▇▇▇▇ and/or under the Guaranty Trust and the Stock Pledge,
with respect to the Company's shares of stock; provided, however, that with
respect to any Limited Recourse Construction Agency Event of Default, the Owner
may only exercise any or all of its rights under the Guaranty Trust if the
Construction Agent has failed to timely and fully perform any of its obligations
under Section 5.1(c)(i)(B)(2). In the event the Owner elects to exercise its
remedies under Section 5.1 by both leasing or selling any Unit, the Equipment or
the Facility and electing to exercise its rights under the Guaranty Trust, with
respect to the Company's shares of stock, in no event shall the Owner be
entitled to retain proceeds from such remedies in excess of the Lease Investment
Balance and any other amounts owed to the Owner by the Construction Agent, the
Lessee, the Guarantor or their respective Affiliates under the Operative
Documents.
(e) In addition to the foregoing remedies, if a Construction Agency Event
of Default shall have occurred and is continuing, then (unless the Construction
Agent has purchased the Facility pursuant to Section 5.1(c)(i)(A)), the Owner
may, at its sole discretion, with respect to any Unit or Equipment for which a
partial or progress payment has been made by or on behalf of the Owner, elect to
pay the balance owed with respect to any such Unit or Equipment to purchase such
Unit or Equipment and to receive title thereto, free and clear of all Liens. If
such Construction Agency Event of Default is the result of a Limited Recourse
Construction Agency Event of Default, the parties acknowledge and agree that
"all advances theretofor made" pursuant to Section 5.1(c)(i)(B)(2) for such Unit
or Equipment shall be the entire purchase price paid (including, without
limitation, the balance of the purchase price paid by the Owner pursuant to this
Section 5.1(e) after a Limited Recourse Construction Agency Event of Default has
occurred and is continuing).
(f) After a Construction Agency Event of Default shall have occurred and
is continuing, at the Owner's request and at the Construction Agent's expense,
the Construction Agent shall, as soon as reasonably possible, retain a qualified
and competent Environmental Consultant (who is acceptable to the Owner) to
undertake the Environmental Evaluations.
(g) In the event the Owner has terminated this Construction Agency
Agreement after the occurrence of a Construction Agency Event of Default and at
the time of such termination the Construction Agent is occupying the Site, the
Construction Agent's right to lawfully occupy the Site shall immediately cease
upon the Owner's election to foreclose the Floating Lien with respect to the
Site Lease and within thirty (30) days of receipt of written demand from the
Owner, the Construction Agent agrees that it shall vacate the Site without
causing any damage thereto. The Construction Agent's failure to vacate as
provided above shall be deemed a trespass and the Owner shall have all rights at
law and equity with respect to such occurrence.
(h) After a Construction Agency Event of Default shall have occurred and
is continuing, the parties agree that the Owner shall have the right to
terminate the Company as Construction Agent (it being agreed that such
termination shall not relieve the Company of any liabilities incurred prior to
such termination) and to appoint, at the Company's expense, a successor
construction agent (in the Owner's sole discretion).
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SECTION 5.2 Full Recourse Events. As used herein, "Full Recourse Event"
means any Construction Agency Event of Default arising in whole or in part as a
consequence of any of the following:
(a) Any fraudulent act or omission of Lessee or the Construction
Agent in connection with the (i) the negotiation, execution, delivery,
consummation and/or performance of any operative document; or (ii) the
acquisition, construction or operation of each Unit, the Equipment and the
Facility;
(b) The misapplication of any Advance or any portion thereof or any
other funds made available to Lessee, the Construction Agent, or any of
their respective Affiliates;
(c) An insolvency event affecting the Construction Agent, Lessee or
Guarantor;
(d) Lessee, Guarantor, the Construction Agent or any of their
respective Affiliates shall breach any of their respective obligations,
covenants, representations or warranties under any Operative Document or
any other contractual agreement or Governmental Approval relating to any
Unit, the Equipment or the Facility;
(e) Failure of the Company to make any payment due under the
Construction Agency Agreement or the Lease or other Operative Documents
including, without limitation, any amounts owed to the Owner with respect
to a Limited Recourse Construction Agency Event of Default; or
(f) Failure of the Construction Agent to timely achieve Construction
Completion of the Facility so that it is capable of Commercial Operation
by the Construction Completion Date, unless a Construction Termination
Extension is consented to by the parties (such consent not to be
unreasonably withheld) in which case, by the Construction Termination
Date, in accordance with predetermined Milestones and the other Project
Documents.
SECTION 5.3 No Limitations. Nothing herein shall be construed as a
limitation on (A) the right of the Owner to recover damages (including but not
limited to attorneys fees and other legal costs) following the occurrence and
continuance of a Construction Agency Event of Default from the proceeds of each
Unit, the Equipment, the Facility, the Guaranty, the Floating Lien, the Guaranty
Trust, the Stock Pledge, the Ford E&D Reimbursement and the Acceptable Letter of
Credit or any other collateral, or (B) any claim for indemnity as permitted and
subject to the limitations stated herein.
ARTICLE VI
FEE; LIABILITIES OF CONSTRUCTION AGENT; ACKNOWLEDGMENTS
SECTION 6.1 Construction Agency Compensation. The Construction Agent will
not be entitled to, and the Owner shall have no obligation to pay, any fee or
other compensation for the
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performance of the Construction Agent's obligations under this Construction
Agency Agreement.
SECTION 6.2 Construction Agent Acknowledgments. The Construction Agent
hereby assumes and shall bear the entire risk of any loss, theft, damage to, or
destruction of the Facility, any Unit or Equipment from any cause whatsoever.
The foregoing shall not limit or otherwise affect any rights the Construction
Agent may have against third parties; provided, however, that if, and for so
long as, any default exists under this Construction Agency Agreement, the
Construction Agent shall not take any action with respect to manufacturer or
Vendor warranties or otherwise interfere with Owner's rights as owner. The
Construction Agent acknowledges and agrees for the benefit of the Owner that (x)
after acceptance by the Construction Agent, each Unit, the Equipment and the
Facility are in its control and possession during the Construction Period, (y)
the Construction Agent is responsible for the acts and omissions of its
contractors, subcontractors and agents to the extent such acts and omissions
relate to the Project Obligations and (z) all Units, the Equipment, the Facility
(including any replacements thereof or substitutions therefor) and the Site
shall be under the Construction Agent's care and attention at all times and the
Construction Agent shall take all precautions and preventive measures to
deliver, install, maintain and use each and all Units, the Equipment, the
Facility and the Site in working order and to use the Units, the Equipment, the
Facility and the Site in accordance with the Operative Documents, therefore, the
Construction Agent shall be responsible for any loss, damage or destruction of
any Unit, the Equipment, the Facility, and/or the Site. The foregoing shall not
limit or otherwise affect any rights the Construction Agent may have against
third parties, provided, however, that if, and for so long as, any default
exists under this Construction Agency Agreement, the Construction Agent shall
not take any action with respect to manufacturer or Vendor warranties or
otherwise interfere with Owner's rights as owner.
SECTION 6.3 Consequential Damages. The Construction Agent waives, to the
maximum extent not prohibited by Applicable Law, any right it may have against
the Owner to claim or recover any loss of profit, loss of use, loss of
production, loss of contracts, loss of savings for any other indirect or
consequential loss or damage that may be suffered by the Construction Agent,
whether caused by breach of contract, tort (including but not limited to
negligence), strict liability or otherwise.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 General, General Tax and Environmental Indemnity.
(a) The Construction Agent hereby agrees to defend, indemnify, save and
keep harmless (on an After-Tax Basis), Owner, its shareholders, agents,
directors, officers, employees, successors and assigns (each an "Indemnified
Party"), from and against any and all losses, damages, penalties and injuries
suffered by such Indemnified Party, and claims (including Environmental Claims),
actions and suits against such Indemnified Party (herein a "Claim"), including
reasonable legal expenses, of whatsoever kind and nature, in contract or tort
law, whether caused by the active or passive negligence of the Owner (other than
gross negligence or willful misconduct) arising out of or related to this
Construction Agency Agreement, the
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transaction contemplated hereby or by the other Operative Documents or the
enforcement hereof or related to any Unit, the Equipment, the Facility or the
Site, including, but not limited to, Owner's strict liability in law, arising
out of the selection, importation, manufacture, purchase, acceptance or
rejection of any Unit, Equipment, the Facility or the Site, the ownership or
possession thereof, and the delivery, import, possession, maintenance, use,
condition, return or operation of any Unit, the Equipment or the Facility
(including, without limitation, latent and other defects, whether or not
discoverable by Owner or the Construction Agent and any claim for patent,
trademark or copyright infringement or environmental loss or damage) and the
violation of any Environmental Law by the Construction Agent; provided, that
such indemnity, including the indemnity provided for in subparagraph (d) of this
Section 7.1, shall not be available to the extent (i) such Claim is attributable
to the gross negligence, willful misconduct or breach of this Construction
Agency Agreement by such Indemnified Party, or (ii) such Claim arises and
relates to periods after the later of (x) the termination or expiration of this
Construction Agency Agreement or (y) the return of any Unit, the Equipment or
the Facility in accordance with the terms hereof. The Construction Agent shall,
upon request, defend any actions based on, or arising out of, any of the
foregoing.
(b) Except as provided below in Section 7.1(c) hereof, the Construction
Agent shall have no liability for (i) taxes imposed by the United States of
America or any State or political subdivision thereof which are based on or
measured by the gross or net income, gross or net worth or profit of the Owner,
(ii) taxes imposed on the Owner that would not have been imposed but for an
Owner's Lien or (iii) any Mexican Taxes imposed on the gross or net income,
gross or net worth, or profit of Lessor, including Mexican Taxes imposed on
gross or net income, gross or net worth, or profit as a result of a Change in
Law in Mexico, except to the extent such Mexican net income Taxes are the result
of an act or omission of Lessee (other than an act or omission required by the
Operative Documents) (collectively, the "Excluded Taxes").
The Construction Agent shall report (to the extent that it is legally
permissible) and pay, prior to delinquency, subject to the Construction Agent's
right to contest the same in accordance with clause (iii) of the definition of
Permitted Lien, all taxes, fees, duties and assessments due, imposed, assessed
or levied against: (i) any Unit, the Equipment, the Facility or the Site (or the
construction, import, installation, financing, refinancing, warranty, ownership,
maintenance, repair, condition, alteration, modification, improvement,
restoration, refurbishing, rebuilding, transport, assembly, repossession,
dismantling, abandonment, retirement, decommissioning, storage, replacement,
return, acquisition, sale or other disposition, insuring, sublease, manufacture,
design, acceptance, rejection, purchase, ownership, delivery, leasing,
possession, mortgaging, operation or other use or non-use of any thereof, in
each case, by the Construction Agent or any Affiliate or any other user or
Person in possession of any Unit or the Equipment (or any part thereof)); (ii)
any amounts paid or payable hereunder (subject to the last sentence of Section
8.2 and 8.3 of this Construction Agency Agreement) or the other Operative
Documents; (iii) any of the Operative Documents; (iv) the conduct of business or
affairs of the Construction Agent or any Affiliate thereof; (v) the Owner (with
respect to Operative Documents or any transactions contemplated hereby); or (vi)
the Construction Agent, by any foreign, Mexican or United States federal, state
or local government or taxing authority in any of the foregoing related to any
of the transactions contemplated by the Operative Documents, including, without
limitation, all license and registration fees, and all sales, use, personal
property, real property, ad valorem, value added, rental, transfer, excise,
gross receipts, goods and services, franchise, stamp
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or other taxes, imports, customs or other duties and charges, other than
Excluded Taxes, together with any penalties, fines or interest thereon (all
hereinafter called "Taxes"). The Construction Agent shall (i) pay, indemnify and
hold harmless the Owner (on an After-Tax Basis) upon receipt of written request
for reimbursement for any Taxes (but excluding the Excluded Taxes) charged to or
assessed against the Owner, (ii) on request of the Owner, submit to the Owner
written evidence of the Construction Agent's payment of Taxes, (iii) on all
reports or returns show the ownership of each Unit, the Equipment and the
Facility, and (iv) send a copy of the reports or returns referred to in clause
(iii) above to the Owner; provided, however, that the Construction Agent shall
have no liability for taxes imposed on the Owner resulting from (w) the willful
misconduct or gross negligence of the Owner, (x) taxes imposed on the Owner that
would not have been imposed but for Owner's breach of any covenant or the
inaccuracy of any representation or warranty of the Owner under this
Construction Agency Agreement, except to the extent attributable to a breach of
covenant or inaccuracy of a representation by the Construction Agent or an
Affiliate thereof, (y) taxes imposed on Owner that would not have been imposed
but for an Owner's Lien, or (z) any Mexican withholding Taxes imposed on a
transferee of Lessor to the extent such Mexican withholding Taxes exceed the
Mexican withholding Taxes that would have been imposed on Lessor in the absence
of a transfer other than Taxes imposed in connection with a Construction Agency
Event of Default or Taxes imposed in the After-Tax Basis calculation; provided
further, however that in the event that if either the Owner or GECMG,
participate any of their respective interests in this transaction to a third
party, such participant shall not be entitled to receive any greater payment
under this Section 7.1(b) than the Owner would have been entitled to receive
with respect to the participation sold to such participant, other than in
connection with a Construction Agency Event of Default or Taxes imposed in the
After-Tax Basis calculation. At the Owner's request, the Construction Agent, as
the Owner's agent, shall pay directly any such Taxes imposed.
(c) This Construction Agency Agreement has been entered into on the
assumption that (i) Owner will be treated as the owner of each Unit, the
Equipment and the Facility, and (ii) the Owner will be entitled to all tax
benefits reflected in Exhibit II of this Construction Agency Agreement ("Tax
Benefits") in the hands of the Owner (all references to the Owner in this
Section include the Owner and its assignees and the consolidated taxpayer group
of which the Owner and any assignee is a member), for the term of this
Construction Agency Agreement as well as the term of the Lease.
If, with respect to any portion of the Construction Period, for any reason
whatsoever (i) tax counsel of Owner, reasonably acceptable to Construction
Agent, shall determine that due to an act or failure to act by Construction
Agent, a change in law or a breach or inaccuracy of the assumptions identified
in Exhibit II to this Construction Agency Agreement or a breach of Construction
Agent's representations in Section 2.5 to the extent applicable to the
Construction Period there is not a reasonable basis for Owner to claim, or Owner
is required to reduce, defer, recompute or recapture, on its United States
Federal income tax return all or any portion of the Tax Benefits with respect to
the Facility or is required to include any amounts in income other than those
identified in paragraph (d) of Exhibit II to this Construction Agency Agreement,
or (ii) any such Tax Benefit claimed on the United States Federal income tax
return of Owner is disallowed, reduced, deferred, recomputed or recaptured, or
(iii) Owner shall become liable for additional tax as a result of a substitution
or modification of, or an attachment, addition or alteration to the Equipment,
the sale or transfer of any Unit or Equipment by Construction Agent
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to Owner at any time or any assignment of purchase orders with respect to
additional Equipment from Construction Agent to Owner (any such determination,
disallowance, adjustment, recomputation or recapture being hereinafter called a
"Loss"), then Construction Agent shall pay to Owner, as an indemnity on an
After-Tax Basis, such amount as shall, in the reasonable opinion of Owner,
reimburse Owner for such additional United States Federal, state, local and
foreign income taxes payable by Owner. Such amount shall be payable upon demand
after Owner has suffered a Loss accompanied by a statement describing in
reasonable detail such Loss and the computation of such amount. If Owner
actually realizes a tax benefit as a result of a loss of a Tax Benefit for which
Construction Agent has indemnified Owner and such tax benefit was not taken into
account in computing the amount of such indemnity payment, Owner shall pay to
Construction Agent the amount of such tax benefit actually realized. Any
subsequent loss of such tax benefit by Owner shall be deemed to be a loss of Tax
Benefit subject to indemnification hereunder. Anything in this Section to the
contrary notwithstanding, Construction Agent shall have no obligation to
indemnify Owner from or against any such Loss to the extent that such Loss is
caused by: (i) any failure by Owner to properly or timely claim on its United
States Federal income tax return any Tax Benefit on any Equipment (unless such
failure is based upon a determination by tax counsel of Owner reasonably
acceptable to Construction Agent that Owner has no reasonable basis to claim
such Tax Benefit with respect to such Equipment); (ii) any failure of Owner to
have sufficient taxable income to benefit from the Tax Benefits; (iii) any
liability of Owner for any alternative minimum taxes; (iv) any voluntary sale or
participation or other voluntary disposition of its interest under this
Construction Agency Agreement or any Equipment by Owner other than (x) after a
Construction Agency Event of Default, (y) as a result of a Substitution by
Construction Agent, or (z) as a result of any act or failure to act by
Construction Agent; (v) any event which results in a payment by Construction
Agent in an amount equal to, or measured by, the Stipulated Loss Value to the
extent that such Loss was included in Owner's calculation of such Stipulated
Loss Value; (vi) any change in tax law enacted and effective after the Basic
Lease Commencement Date other than changes of tax law relating to acts or
omissions of Construction Agent whether or not permitted by this Construction
Agency Agreement (unless required by the Operative Documents); (vii) the
application of the mid-quarter convention within the meaning of Section
168(d)(4)(C) of the Code or the "short year" provisions of the Code or
regulations thereunder; (viii) any willful misconduct or gross negligence of
Owner; (ix) the failure of Owner to take action in a timely manner in contesting
any action which reasonably could result in the payment by Construction Agent in
respect of a Loss, but only if such failure effectively precludes Owner or where
applicable, Construction Agent, in its contest of any claim and only to the
extent Owner has a reasonable basis for so contesting the action and the contest
would have been otherwise reasonable given the relevant facts and circumstances,
or (x) the failure of the Owner to be structured in a manner that the income or
loss generated by the transactions contemplated hereby are reflected on the
consolidated U.S. Federal income tax return which includes the U.S. corporate
entities that own the equity interests in the Owner.
(d) Construction Agent shall defend, indemnify (on an After-Tax Basis) and
hold harmless Owner and its Affiliates, successors and assigns, directors,
officers, employees and agents, from and against any Environmental Claim and,
unless Construction Agent is then contesting in good faith such Environmental
Claim and Construction Agent has set aside on its books appropriate reserves
therefor, Construction Agent shall fully and promptly pay, perform and discharge
any such Environmental Claim.
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(e) Notwithstanding anything to the contrary in this Construction Agency
Agreement, all liabilities and obligations of Construction Agent that accrued
prior to any termination of this Construction Agency Agreement and the
indemnities set forth in this Article VII shall survive any termination of this
Construction Agency Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Notices. All notices, consents, directions, approvals,
instructions, requests, demands and other communications required or permitted
by the terms hereof to be given to any Person shall be in writing , personally
delivered, delivered by overnight courier service, sent by facsimile
transmission (with confirmation of receipt), or sent by certified mail, return
receipt requested, addressed to the other party at its respective address stated
below or at such other address as such party shall from time to time designate
in writing to the other party; as shall be effective from the date of receipt.
If to the Construction Agent: ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Automotive Company de Mexico,
S.A. de C.V. ▇▇▇▇▇ ▇▇ ▇ ▇▇ ▇/▇, ▇▇▇▇▇▇▇▇▇▇
Morelos, Saltillo, C.P. 25017,
Saltillo,
Coahuila, Mexico.
Attention: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇ ▇▇ ▇▇ or (▇▇▇) ▇▇▇ ▇▇ ▇▇.
Facsimile: (▇▇▇) ▇ ▇▇ ▇▇ ▇▇
With a copy to: ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Blvd. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ 1, piso 12, Plaza
Scotiabank Inverlat,
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, D.F.
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (5255) ▇▇▇▇-▇▇▇▇ or (5255) 5279-2907
Facsimile: (5255) 5557-8812
If to the Owner: GE Capital de Mexico S. de ▇.▇. de C.V.
Prolongacion Reforma ▇▇. ▇▇▇
▇▇▇▇ ▇ ▇▇▇. ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Controller
Telephone: (▇▇▇▇) ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇▇) ▇▇▇▇▇▇▇▇
With copies to: GE Commercial Finance
Commercial & Industrial Finance
▇▇▇ ▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Portfolio Manager
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GE Commercial Finance
Commercial & Industrial Finance
▇▇▇ ▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
SECTION 8.2 Successors and Assigns. (a) This Construction Agency Agreement
shall be binding upon and inure to the benefit of the Owner, the Construction
Agent and their respective successors and permitted assigns; provided, however,
that, except as provided in Section 4.1(xi) hereof, the Construction Agent may
not assign this Construction Agency Agreement or any of its rights or
obligations hereunder in whole or in part to any Person without the prior
written consent of the Owner and any attempt to do so shall be null and void.
The Owner may, without the consent of the Construction Agent, assign any or all
of its right, title and interest in this Construction Agency Agreement,
provided, that so long as no Construction Agency Event of Default has occurred
and is continuing, the Owner will not assign all or any portion of its right,
title and interest in this Construction Agency Agreement to (i) a Competitor of
the Construction Agent or (ii) any entity that the Construction Agent
determines, based on written advice of its auditors and as confirmed to the
Owner in an Officer's Certificate of the Construction Agent delivered to the
Owner within ten days after receipt of notice by the Owner as to the identity of
the proposed transferee, will result in the Construction Agent consolidating its
financial reports with such entity. The Construction Agent agrees that it will
pay all amounts due under this Construction Agency Agreement and the other
Operative Documents to the Owner; provided, however, if the Construction Agent
receives written notice of an assignment from the Owner, the Construction Agent
will pay all amounts payable under this Construction Agency Agreement or any
other Operative Document to such assignee or as instructed by the Owner. The
Construction Agent agrees reasonably to cooperate with the Owner in connection
with any such proposed assignment, including the execution and delivery of such
other documents, instruments, notices, opinions, certificates and
acknowledgments, as reasonably may be required by the Owner or such assignee,
and the delivery of all information concerning the Construction Agent and
Guarantor that is reasonably necessary for the Owner to complete the assignment;
and the Construction Agent further agrees to confirm in writing receipt of a
notice of assignment as reasonably may be requested by assignee. The
Construction Agent hereby waives and agrees not to assert against any such
assignee any defense, set-off, recoupment claim or counterclaim that the
Construction Agent has or may at any time have against the Owner for any reason
whatsoever, provided, however, that nothing contained in this sentence shall be
construed as a waiver by Construction Agent of its right to assert against
Owner, in a separate action against Owner, any claims that the Construction
Agent has against Owner. The parties acknowledge and agree that the Construction
Agent shall not be liable for or incur any increase or withholding of Taxes as a
result of such assignment by the Owner other than Taxes imposed in the After-Tax
Basis calculation; provided, that no Construction Agency Event of Default has
occurred and is continuing.
SECTION 8.3 Participation; Syndication. Construction Agent acknowledges
that it has been advised that the interest of the Owner in this Construction
Agency Agreement and the other Operative Agreements and/or the Facility may be
conveyed to or participated to, in whole or in part, and may be used as security
for financing obtained from, one or more third parties without the consent of
Construction Agent pursuant to a syndication. In connection herewith GECMG
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may initiate discussions with potential participants regarding their
participation in this transaction. Construction Agent and its management will
assist in all syndication efforts. Such assistance will include, but not be
limited to: (i) prompt assistance in the preparation of an information
memorandum and verification of the accuracy and completeness of the information
contained therein; (ii) preparation of other information, offering materials and
projections by the Construction Agent and its advisors taking into account this
transaction; (iii) providing GECMG with all information reasonably deemed
necessary by GECMG to complete the syndication successfully; (iv) confirmation
as to accuracy and completeness of such information, offering materials and
projections; (v) participation of Construction Agent's senior management in
meetings and conference calls with potential lenders and Rating Agencies, if
applicable, at such times and places as GECMG may reasonably request; and (vi)
using best efforts to ensure that the syndication efforts benefit from all
existing lending and investor relationships. GECMG reserves the right to provide
to industry trade organizations information necessary and customary for General
Electric Capital Corporation's inclusion as lead arranger in league table
measurements. The parties agree that all information provided to the Owner from
the Construction Agent, Lessee, ▇▇▇▇▇▇▇, as Guarantor, and any affiliate thereof
and/or any third parties acting on behalf of such parties may be used in the
syndication process and confidentiality agreements will not be required from
other investors (other than GECMG's standard confidentiality statements). The
parties acknowledge and agree that the Construction Agent shall not be liable
for or incur any increase or withholding of Taxes as a result of such
participation or syndication by the Owner other than Taxes imposed on an
After-Tax Basis; provided, that no Construction Agency Event of Default has
occurred and is continuing.
SECTION 8.4 GOVERNING LAW AND JURISDICTION. THIS CONSTRUCTION AGENCY
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF MEXICO. FOR THE INTERPRETATION AND COMPLIANCE WITH THIS
AGREEMENT, THE PARTIES HEREBY EXPRESSLY AND IRREVOCABLE SUBMIT THEMSELVES TO THE
JURISDICTION OF THE COMPETENT COURTS OF MEXICO CITY, FEDERAL DISTRICT OF MEXICO,
MEXICO, EXPRESSLY WAIVING ANY OTHER JURISDICTION TO WHICH THEY MAY BE ENTITLED
BY REASON OF THEIR PRESENT OR FUTURE DOMICILE, OR FOR ANY OTHER REASON.
SECTION 8.5 Judgment Currency. (a) Obligation to Pay in Dollars. The
Construction Agent's obligations under this Construction Agency Agreement to
make payment in Dollars (the "Obligation Currency" shall not be discharged or
satisfied by any tender or recovery pursuant to any judgment expressed in or
converted into any currency other than the Obligation currency, except to the
extent that such tender or recovery results in the effective receipt of the full
amount of the Obligation Currency expressed to be payable under this
Construction Agency Agreement. If, for the purpose of obtaining or enforcing
judgment against the Construction Agent in any court or in any jurisdiction, it
becomes necessary to convert into or from any currency other than the Obligation
Currency (such other currency being hereinafter referred to as the "Judgment
Currency") an amount due in the Obligation Currency, the conversion shall be
made at the rate of exchange at which Citibank N.A. could purchase Dollars with
such Judgment Currency in accordance with normal banking procedures in ▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America, as of the day (or, if such
day is not a Business Day, on the next succeeding
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Business Day) on which the judgment is given (such Business Day being
hereinafter referred to as the "Judgment Currency Conversion Date").
(b) Additional Amounts. If there is a change in the rate of exchange
prevailing between the Judgment Currency Conversion Date and the date of actual
payment of the amount due from the Construction Agent, the Construction Agent
covenants to pay, or cause to be paid, such additional amounts, if any (but, in
any event, not a lesser amount), as may be necessary to ensure that the amount
paid in the Judgment Currency, when converted at the rate of exchange prevailing
on the date of payment, will produce the amount of the Obligation Currency that
could have been purchased with the amount of Judgment Currency stipulated in the
judgment or judicial award against it at the rate of exchange prevailing on the
Judgment Currency Conversion Date. If there is a change in the rate of exchange
prevailing between the Judgment Currency Conversion Date and the date of actual
payment of the amount due that results in the Construction Agent paying an
amount in excess of that necessary to discharge or satisfy any judgment against
it, the Owner shall transfer or cause to be transferred to the Construction
Agent the amount of such excess (net of any Taxes and reasonable and customary
costs incurred in connection therewith).
(c) Determination of Amount. For purposes of determining the applicable
currency equivalent or other rate of exchange under this Section 8.5, such
amount shall include any premium and costs payable in connection with the
purchase of the Obligation Currency.
SECTION 8.6 Labor Relations. The Construction Agent acknowledges and
agrees that there is no employment relationship between the Owner and the
personnel, employees, and subcontractors of the Construction Agent or its
Affiliates, and responsibility for such labor relationships belongs exclusively
to the Construction Agent or its Affiliates in accordance with the requirements
of articles 8, 10, and 20 of the Mexican Federal Labor Law (Ley Federal del
Trabajo). The Construction Agent or its Affiliates is the "Employer" for all
purposes of Mexico law with respect to all of the personnel and employees at the
Construction Agent's service, and they are the only person benefiting from the
services rendered by such personnel and employees.
The Construction Agent represents and warrants that it or its Affiliates
has the legal and economic capacity to comply with its labor obligations, so
that it or its Affiliates shall be solely responsible for all obligations with
respect to their respective personnel and employees.
Therefore, in the case of any labor dispute between the Construction Agent
and its or its Affiliate's and its personnel, employees and subcontractors, in
which, for any reason, the Owner is involved, the Construction Agent shall
release and indemnify the Owner (on an After-Tax Basis) from any kind of claim
made against it by any of the Construction Agent's or its Affiliate's personnel,
employees and subcontractors, and the Construction Agent shall have the
obligation to pay any amounts as indemnification (severance) and other claims
made by any personnel, employee, or subcontractor, and the Construction Agent
hereby releases the Owner from any responsibility therefor.
The Construction Agent shall reimburse the Owner, for all costs and
expenses caused by any labor dispute filed directly or indirectly against the
Construction Agent or the Owner or with respect to any Unit, the Equipment
and/or the Facility.
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The Construction Agent represents and warrants that it or its Affiliate is
solely responsible for fulfillment of its obligations with respect to their
respective personnel, employees and subcontractors with regard to the Mexican
Institute of Social Security (IMSS), Employee Housing Fund Institute (INFONAVIT)
and Retirement Savings Fund System (SAR), so that it or its Affiliate shall be
solely responsible to cover the quotas and contributions required by reason of
its personnel, employees and subcontractors before IMSS, INFONAVIT and SAR.
Therefore, in the case of any kind of claim related to IMSS, INFONAVIT, or SAR,
involving the Owner in any way, the Construction Agent will hold the Owner
harmless from such claims and will be solely responsible for any such claims.
The Construction Agent shall reimburse the Owner, all costs and expenses
caused by any dispute filed directly or indirectly against the Construction
Agent, or the Owner or with respect to any Unit, the Equipment and/or the
Facility relating directly or indirectly to IMSS, INFONAVIT or SAR.
SECTION 8.7 Survival; Owner Cure and Overdue Rate.
(a) The representations, warranties and covenants of the Construction
Agent herein shall be deemed to survive the closing hereunder. The obligations
of the Construction Agent under Section 7 hereof which accrue during the
Construction Period and obligations which by their express terms survive the
termination of this Construction Agency Agreement, shall survive the termination
of this Construction Agency Agreement.
(b) In case of a failure of the Construction Agent to comply with any
provision of this Construction Agency Agreement, Owner shall have the right, but
shall not be obligated, to effect such compliance, in whole or in part; and all
moneys spent and expenses and obligations incurred or assumed by Owner in
effecting such compliance (together with interest thereon at the Overdue Rate)
shall be paid to Owner within 5 days after the date Owner sends notice to the
Construction Agent requesting payment. Owner's effecting such compliance shall
not be a waiver of Construction Agent's default.
(c) Any amount not paid to Owner when due hereunder shall bear interest,
both before and after any judgment or termination hereof, at the lesser of the
Index Rate plus 2% per annum or the maximum rate allowed by law (the "Overdue
Rate").
SECTION 8.8 Further Assurances. Construction Agent agrees, upon Owner's
request, to execute any instrument necessary or expedient for filing, recording
or perfecting the interest of Owner, and to execute and deliver to Owner such
further documents, instruments and assurances and to take such further action as
Owner from time to time reasonably may request in order to carry out the intent
and purpose of the transactions contemplated hereunder and by the other
Operative Documents.
SECTION 8.9 Time. Time is of the essence of this Construction Agency
Agreement and the other Project Documents. Owner's failure at any time to
require strict performance by Construction Agent of any of the provisions hereof
and the other Project Documents shall not waive or diminish Owner's right
thereafter to demand strict compliance herewith or therewith.
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SECTION 8.10 Amendments and Waivers. This Construction Agency Agreement,
each Exhibit and each Appendix constitute the entire agreement of the parties
with respect to the subject matter hereof. This Construction Agency Agreement,
together with the other Operative Documents, on and as of the date hereof,
constitutes the entire agreement of the parties hereto with respect to the
subject matter hereof, and all prior or contemporaneous understandings or
agreements, whether written or oral, among any of the parties hereto with
respect to such subject matter are hereby superseded in their entireties. No
term or provision of this Construction Agency Agreement may be terminated,
amended, supplemented or modified, or compliance therewith waived, except by an
instrument or instruments in writing, executed by the Owner and the Construction
Agent.
SECTION 8.11 Counterparts. This Construction Agency Agreement may be
executed on any number of separate counterparts and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
SECTION 8.12 Severability. Any provision of this Construction Agency
Agreement that 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, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 8.13 Headings and Table of Contents. The headings and table of
contents contained in this Construction Agency Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
SECTION 8.14 Knowledge of Owner. For all purposes of this Construction
Agency Agreement, the Owner shall not be deemed to have knowledge of any
Construction Agency Event of Default or default or event of default under any of
the Operative Documents unless the Owner receives written notice thereof given
by the Construction Agent, in accordance with the terms of this Construction
Agency Agreement.
[Remainder of Page is Intentionally Left Blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Construction
Agency Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ AUTOMOTIVE
▇▇▇▇▇▇▇▇▇▇, ▇.▇. DE C.V.,
as Construction Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Title: Attorney-in-fact
GE CAPITAL DE MEXICO, S. DE ▇. ▇. DE C.V.
as Owner
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Controller
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APPENDIX A
TO CONSTRUCTION AGENCY
AGREEMENT
APPENDIX A - DEFINITIONS
GENERAL PROVISIONS
In this Appendix A and each Operative Document (as hereinafter defined),
unless otherwise provided herein or therein:
(i) the terms set forth in this Appendix A or in any such Operative
Document shall have the meanings herein provided for and any term used in
an Operative Document and not defined therein or in this Appendix A but in
another Operative Document shall have the meaning provided for in such
other Operative Document;
(ii) any term defined in this Appendix A by reference to another
document, instrument or agreement shall continue to have the meaning
ascribed thereto whether or not such other document, instrument or
agreement is in effect;
(iii) words in the singular include the plural and vice versa;
(iv) words referring to a gender include any gender;
(v) a reference to a part, clause, section, paragraph, article,
party, annex, appendix, exhibit, schedule or other attachment to or in
respect of an Operative Document is a reference to a part, clause,
section, paragraph, or article of, or a party, annex, appendix, exhibit,
schedule or other attachment to, such Operative Document unless, in any
such case, otherwise expressly provided in any such Operative Document;
(vi) a reference to any statute, regulation, proclamation, ordinance
or law includes all statutes, regulations, proclamations, ordinances or
laws varying, consolidating or replacing the same from time to time, and a
reference to a statute includes all regulations, policies, protocols,
codes, proclamations and ordinances issued or otherwise applicable under
that statute unless, in any such case, otherwise expressly provided in any
such statute or in such Operative Document;
(vii) a definition of or reference to any document, instrument or
agreement includes each amendment or supplement to, or restatement,
replacement, substitution, successor, modification or novation of, any
such document, instrument or agreement unless otherwise specified in such
definition or in the context in which such reference is used;
(viii) a reference to a particular section, paragraph or other part
of a particular statute shall be deemed to be a reference to any other
section, paragraph or other part substituted therefor from time to time
unless otherwise specified;
A-1
(ix) if a capitalized term describes, or shall be defined by
reference to, a document, instrument or agreement that has not as of any
particular date been executed and delivered and such document, instrument
or agreement is attached as an exhibit to the Participation Agreement (as
hereinafter defined), such reference shall be deemed to be to such form
and, following such execution and delivery and subject to paragraph (vii)
above, to the document, instrument or agreement as so executed and
delivered;
(x) a reference to any Person (as hereinafter defined) includes such
Person's successors and permitted assigns;
(xi) any reference to "days" shall mean calendar days unless
"Business Days" or "LIBOR Business Days" (as hereinafter defined) are
expressly specified;
(xii) if the date as of which any right, option or election is
exercisable, or the date upon which any amount is due and payable, is
stated to be on a day that is not a Business Day or a LIBOR Business Day,
as the case may be, such right, option or election may be exercised, and
such amount shall be deemed due and payable, on the next succeeding
Business Day or the next succeeding LIBOR Business Day, as the case may
be, with the same effect as if the same was exercised or made on such date
or day and no interest shall accrue or be payable with respect to such
payment;
(xiii) words such as "hereunder", "hereto", "hereof" and "herein"
and other words of similar import shall, unless the context requires
otherwise, refer to the whole of the applicable document and not to any
particular article, section, subsection, paragraph or clause thereof; and
(xiv) a reference to "including" means including without limiting
the generality of any description preceding such term, and for purposes
hereof and of each Operative Document the rule of ejusdem generis shall
not be applicable to limit a general statement, followed by or referable
to an enumeration of specific matters, to matters similar to those
specifically mentioned.
A-2
DEFINED TERMS
"Acceptable Letter of Credit" shall mean a valid and enforceable
irrevocable transferable letter of credit executed and delivered pursuant to
Section 2.3(j) of this Construction Agency Agreement in substantially the form
of Exhibit I hereto and otherwise in form and substance acceptable to Owner that
is: (1) issued by an Acceptable Letter of Credit Bank to Owner (or its Affiliate
or other designee), (2) having a stated expiration date of not earlier than 364
days after the date of original issuance, (3) drawable in full if not renewed or
replaced with an Acceptable Letter of Credit 30 days before its expiry, (4)
having, as of the date of issuance, a stated amount not less than the Required
Amount, (5) payable and drawable at an office of such issuing bank in the United
States, (6) payable in U.S. dollars in immediately available funds, (7) issued
under arrangements not illegal for the parties to enter into, (8) is governed by
the Uniform Customs and Practice for Documentary Credits (revision effective
January 1, 1994), International Chamber of Commerce Publication No. 500 or the
International Standby Practices (ISP98) International Chamber of Commerce
Publication No. 590, and, to the extent not inconsistent therewith, the laws of
New York State, and (9) which shall permit the beneficiary thereof to assign its
interest without the consent of such Acceptable Letter of Credit Bank.
"Acceptable Letter of Credit Bank" shall mean a bank (1) the senior
unsecured debt obligations (or long-term deposits) of which upon the date of
issuance of an Acceptable Letter of Credit is rated at least "A3" by ▇▇▇▇▇'▇ and
at least "A-" by S&P, with capital in excess of $500,000,000.00, (2) from whom
receipt of a letter does not violate Owner's then current policies including its
credit and lending country exposure limits, which country limits shall be deemed
satisfied if the bank is a United States bank, (3) as to whom there shall be no
material litigation or arbitration proceeding threatened pending between Owner
and such bank and (4) whom is otherwise reasonably acceptable to Owner acting in
good faith.
"Additional Construction Document" shall mean any material contract or
undertaking to which the Construction Agent or the Owner is a party relating to
the development, construction, operation, administration or maintenance of any
Unit, the Equipment or the Facility entered into after the Construction Closing
Date.
"Advance" shall have the meaning set forth in Section 3.1(a) of the
Construction Agency Agreement, in each case, made in accordance with the
applicable Operative Document.
"Adverse Environmental Condition" shall refer to (i) an Environmental
Emission (including, without limitation, a sudden or non-sudden accidental or
non-accidental Environmental Emission), of, or exposure to, any Hazardous
Material in violation of any Environmental Law, at, in, by, or from the Facility
or any Equipment, (ii) the generation, handling, use, transportation, storage,
treatment or disposal of Hazardous Material in connection with the construction
of the Facility, each Unit and the Equipment and the Site in violation of any
Environmental Law, or (iii) the violation, or alleged violation, of any
Environmental Law resulting from ownership, possession, use, operation or
modification of the Facility, each Unit and the Equipment and the Site.
"Affiliate" of any specified Person shall mean any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For purposes
A-3
of this definition, "control" when used with respect to any particular Person
shall mean the power to direct, or cause the direction of, the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise, and the terms "controlling",
"controlled" and "under common control" have meanings correlative to the
foregoing; provided, however, that any Person owning, directly or indirectly,
10% or more of the securities having ordinary voting power for the election of
directors or other members of the Governing Body of a corporation, or 10% or
more of the partnership or other ownership interests of any other Person, is
deemed to control such corporation or other Person.
"After-Tax Basis" shall mean, in the context of determining the amount of
a payment to be made on such basis, the payment of an amount which, after
reduction by the net increase in Taxes of the recipient (actual or constructive)
of such payment, which net increase shall be calculated by taking into account
any reduction in such Taxes resulting from any tax benefits realized or to be
realized by the recipient as a result of such payment, shall be equal to the
amount required to be paid. In calculating the amount payable by reason of this
provision, all income taxes payable and tax benefits realized or to be realized
shall be determined on the assumptions that (i) the recipient is subject to
applicable income taxes at the highest marginal tax rates then applicable to
widely held corporations that are in effect in the applicable jurisdictions for
the relevant period or periods and (ii) all related tax benefits are utilized at
the highest marginal tax rates then applicable to widely held corporations that
are in effect in the applicable jurisdictions for the relevant period or
periods, and shall take into account the deductibility of state and local income
taxes for U.S. Federal income tax purposes.
"Applicable Laws" means all laws, judgments, decrees, ordinances and
regulations and any other governmental rules, orders and determinations and all
requirements having the force of law, now or hereafter enacted, made or issued,
whether or not presently contemplated, including (without limitation) compliance
with all requirements of zoning laws, labor laws and Environmental Laws,
compliance with which is required with respect to any Unit, the Equipment, the
Facility and the Site, whether or not such compliance shall require structural,
unforeseen or extraordinary changes to any Unit, the Equipment, the Facility and
the Site or the operation, occupancy or use thereof.
"Applicable Margin" shall mean (i) 4.75% per annum during the Construction
Period up to but not including any Construction Termination Extension and (ii)
6.25% per annum during any Construction Termination Extension.
"Appraiser" shall mean Deloitte & Touche LLP and/or Hilco Appraisal
Services, LLC, licensed appraisers pursuant to Title XI of FIRREA (as determined
by Owner).
"Authorized Officer" shall mean, with respect to any Person, its Chairman
of the Board, its Chief Executive Officer, its President, any Senior Vice
President, the Chief Financial Officer, any Vice President, the Treasurer or any
other management employee (A) that has the power to take the action in question
and has been authorized, directly or indirectly, by the Governing Body of such
Person, (B) working under the direct supervision of such Chairman of the Board,
Chief Executive Officer, President, Senior Vice President, Chief Financial
Officer, Vice President or Treasurer and (C) whose responsibilities include the
administration of the
A-4
transactions and agreements contemplated by the Operative Documents and the
overall transaction.
"Breakage Costs" shall mean an amount equal to the amount, if any,
required to compensate the Owner or the Lessor, as the case may be, for any
additional losses (including any loss, cost or expense incurred by reason of the
liquidation or reemployment of deposits or funds acquired by the Owner to fund
its obligations under the Operative Documents, but excluding any lost profits)
that it may sustain or incur.
"Business Day" shall mean any day other than a Saturday, a Sunday, and any
day on which commercial banking institutions located in ▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, or the State of New York are authorized by law or
other governmental action to close.
"Calculation Date" shall have the meaning set forth in Section 2.8 of the
Construction Agency Agreement.
"Casualty Occurrence" shall have the meaning set forth in Section 2.8 of
the Construction Agency Agreement.
"Change in Law" shall mean any change in, or the introduction, adoption,
effectiveness or phase-in of any Applicable Law or in the interpretation,
re-interpretation or application thereof or compliance by any Person with any
request or directive (whether or not having the force of law) from any
Governmental Authority made subsequent to the date of the Construction Agency
Agreement.
"Change Order" shall have the meaning set forth in Section 2.10(b) of the
Construction Agency Agreement.
"Claim" shall have the meaning set forth in Section 7.1(a) of the
Construction Agency Agreement.
"Closing Appraisal" shall mean the appraisals, dated the Construction
Closing Date, prepared by an Appraiser and addressed to the Owner, which Closing
Appraisal shall:
(i) confirm that the Facility Cost shall be equal to the aggregate
fair market value of the Facility on the Lease Commencement Date;
(ii) determine the economic useful life of the Facility and confirm
that the Facility shall be reasonably estimated on the Lease Commencement
Date to have (i) a remaining economic useful life equal to 133.33% of the
Basic Lease Term and (ii) a fair market value at the end of the Basic
Lease Term equal to at least 20% of the Facility Cost, without regard to
inflation or deflation during the Basic Lease Term;
(iii) confirm that it is reasonable to expect that upon expiration
or termination of the Lease, it will be commercially feasible for a party
other than the Company to operate the Facility;
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(iv) allocate the percentage of the Facility Cost eligible for each
category of Depreciation Deduction;
(v) confirm orderly liquidation values for the Units, the Equipment
and the Facility; and
(vi) address any other matters that the Owner shall request.
"Code" shall mean the Internal Revenue Code of 1986, as amended and
superceded from time to time, and the rules and regulations promulgated
thereunder.
"▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Products Co., a Delaware corporation.
"Commercial Capacity" shall mean the capacity specified in the Ford Supply
Agreement.
"Commercial Operation" shall mean the capability of the Facility to
operate in all respects as required by the Ford Supply Agreement and at
Commercial Capacity and which satisfies the Construction Completion
requirements.
"Commitment" shall mean (i) U.S.$80,000,000 for Units, the Equipment, the
Facility and Soft Costs, plus (ii) all of the Equity Yield accrued during the
Construction Period, plus (iii) the Commitment Fee, plus (iv) Transaction
Expenses, including up to $150,000 in the aggregate of the Construction Agent's
out-of-pocket Transaction Expenses, incurred in connection with Project Costs,
the Construction Budget and this Construction Agency Agreement, but in no event,
in the aggregate greater than U.S.$90,000,000.
"Commitment Fee" shall mean the "Commitment Fee" as such term is defined
in the Fee Letter.
"Company" shall mean ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Automotive ▇▇▇▇▇▇▇▇▇▇, ▇.▇. de C.V.,
a Mexican sociedad anonima de capital variable.
"Competitor" shall mean any Person which competes with the Construction
Agent in the interior automotive trim business, provided that Competitor shall
not mean any Affiliate of Owner that is engaged as a passive investor in the
lease financing of equipment as an equity or debt investor in any such Person
provided, that the financial organizations of automobile original equipment
manufacturers shall not be considered "Competitors".
"Consultants" shall mean the Appraiser, the Engineering Consultant,
Industry Consultant and the Environmental Consultant.
"Construction Agency Agreement" shall mean the Construction Agency
Agreement, dated as of November 8, 2004, between the Construction Agent and the
Owner.
"Construction Agency Event of Default" shall have the meaning set forth in
Section 4.1 of this Construction Agency Agreement.
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"Construction Agent" shall mean the Company in its capacity as agent under
the Construction Agency Agreement.
"Construction Budget" shall mean the budget attached as Exhibit VIII to
the Construction Agency Agreement, which budget sets forth all costs to be
incurred for the purchase (in the name of the Owner), modification,
technological upgrade, delivery, installation of each Unit and the Equipment and
including all Soft Costs for the development, construction, start-up and testing
of the Facility, as may be amended, modified or adjusted in accordance with the
Construction Agency Agreement.
"Construction Closing Date" shall mean November [_____], 2004.
"Construction Completion" shall mean the Facility is completed and in
Commercial Operation, which is expected to be September 30, 2005. The Facility
will be deemed to be completed upon receipt by Owner of evidence, satisfactory
in form and substance, of (i) certification by Ford Motor Company through its
Production Part Approval Process ("PPAP"), (ii) successful completion of
fundings of Project Costs in accordance with the Construction Budget for the
purchase, refurbishment, delivery and installation of all Units, the Equipment
and the Facility at the Site, (iii) certification of satisfactory completion by
the Engineer Consultant hired by the Owner to monitor successful completion of
the Facility, (iv) the Appraisal (as defined in the Lease) by the Appraiser and
a tax opinion, (v) Lessee's Certificate of Acceptance, (vi) Lessee's acceptance
of an amended Schedule, including acknowledgment of repricing and representation
and warranty that the conditions precedent to the Lease have been satisfied,
(vii) title to each Unit, the Equipment and the Facility, is held by Owner, free
and clear of all Liens, (viii) the Facility and the Site satisfy all
environmental, health and safety requirements, and (ix) all permits necessary to
operate each Unit, the Equipment and the Facility, for which failure to obtain
could have a material adverse effect.
"Construction Completion Date" shall mean the date upon which Construction
Completion is achieved and the Basic Term (as defined in the Lease) commences
with respect to the Facility.
"Construction Documents" shall mean, collectively, the Site Lease, the
Ford Supply Contract, the Construction Budget, the Milestones, the "Preliminary
Specifications" as defined in Section 6(a) of the Site Lease, the "Drawings and
Specifications" as defined in Section 6(b) of the Site Lease, the License
Agreement and any other Additional Construction Documents or other agreements
with architects or contractors entered into by the Construction Agent in
connection with the construction of the Facility and in accordance with the
Construction Agency Agreement.
"Construction Period" shall mean the period that commences on the
Construction Closing Date and ends on the Lease Commencement Date.
"Construction Restoration or Replacement Plan" shall mean a plan and time
schedule for the application of insurance proceeds in the case of a casualty
event (including a Casualty Occurrence)and any other funds available to the
Construction Agent with which to restore or replace any property affected by a
casualty event (including a Casualty Occurrence).
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"Construction Termination Date" shall mean twelve (12) months after the
Construction Closing Date; provided, however, that if through no fault of the
Construction Agent the Facility has not then been completed but can reasonably
be anticipated to be completed and Construction Completion achieved within the
next six (6) months, the Construction Termination Date shall be extended by six
(6) months (the "Construction Termination Extension").
"Construction Termination Extension" shall have the meaning set forth in
the definition of "Construction Termination Date".
"Contaminant" shall mean those substances, including, without limitation,
asbestos, polychlorinated biphenyls ("PCBs"), and radioactive substances and
Hazardous Materials in general, which are regulated by or form the basis of
liability under any Environmental Law.
"Cost Overrun" shall have the meaning set forth in Section 2.11 of the
Construction Agency Agreement.
"Credit Agreement" shall mean the Credit Agreement dated as of December
20, 2001 as Amended and Restated as of September 1, 2004 among ▇▇▇▇▇▇▇, as
Borrower, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Corporation, the Lenders named therein, Deutsche Bank
Securities Inc., as Documentation Agent, Credit Suisse First Boston, as
Syndication Agent, and ▇▇ ▇▇▇▇▇▇ Chase Bank, as Administrative Agent, as amended
from time to time and any successor credit agreement entered into in connection
with a refinancing, refunding or replacements thereto. References to any terms
defined in the Credit Agreement shall mean the Credit Agreement as in effect as
of the Construction Closing Date without regard to any further amendments or
supplements.
"Dollars" and the sign "$" shall mean lawful money of the United States.
"Drawings and Specifications" shall have the meaning set forth in
Paragraph 6(b) of the Site Lease, including any amendment or modification agreed
to by the parties thereto and approved by the Owner.
"Engineering Consultant" shall mean ▇▇▇▇▇, Incorporated or such other
recognized engineering firm as the Owner shall designate.
"Environmental Claim" shall mean any loss, cost, including investigation,
removal, cleanup and remedial costs, damage, liability, fine, penalty, penalty
interest and surcharges or expense (including, without limitation, reasonable
attorneys' engineering and other professional or expert fees), and damages to,
loss of the use of or decrease in value of the Facility, any Unit or the
Equipment arising out of or based on any Adverse Environmental Condition to the
extent attributable to events occurring prior to the later of the return of the
Facility or the Equipment, in accordance with the terms of this Construction
Agency Agreement, or the expiration or termination of this Construction Agency
Agreement.
"Environmental Condition" shall mean any event or condition, including the
presence or Release of any Hazardous Material at, into, on or under any land,
water, air or otherwise within or into the environment or within any structure,
or the presence of wetlands or protected species or organism which does or
reasonably could (i) require assessment, investigation, abatement, correction,
clean-up, mitigation, removal, remediation or any other response action, (ii)
give rise
A-8
to an Environmental Claim or any obligation or liability of any nature (whether
civil or criminal, arising under a theory of negligence or strict liability, or
otherwise) under or relating to any Environmental Law, (iii) create or
constitute a public or private nuisance or trespass, (iv) constitute a violation
of or non-compliance with any Environmental Law, (v) result in or contribute to
the actual or threatened loss of or damage to any property, natural resources,
wildlife or environmental media, or the death of or injury to any Person or (vi)
result in limitations under Environmental Law on the development or use of the
Property.
"Environmental Consultant" shall mean Geomatrix Consultants, Inc..
"Environmental Emission" shall refer to any actual or threatened release,
spill, emission, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor environment into or
out of any of the Equipment, including, without limitation, the movement of any
Contaminant through or in the air, soil, surface water or groundwater.
"Environmental Evaluation" shall mean a Phase I Environmental Site
Assessment (an "ESA") and a limited Phase II ESA ("Baseline Study") of the Site.
The Environmental Consultant shall prepare a scope of work for the Baseline
Study, acceptable to Lessor, which scope of work shall be sufficient to
establish the presence or absence of soil contamination on the Site. In the
event that the Phase I ESA identifies recognized environmental concerns and the
Environmental Consultant recommends further evaluation and investigation of the
Site in addition to the Baseline Study, the Construction Agent will retain a
qualified and competent environmental consultant (who is also acceptable to
Lessor) to undertake, as soon as reasonably practicable, a Phase II ESA. In the
event that the Phase I ESA identifies recognized environmental concerns and the
Environmental Consultant does not recommend further evaluation and investigation
of the Site, Lessor may request, which request must be based on, and reasonably
related to, the findings and conclusions of the Phase I ESA, that Lessee retain
a qualified and competent environmental consultant (who is also acceptable to
Lessor) to conduct a complete or limited Phase II ESA, in addition to the
Baseline Study. Copies of any Phase I ESA or Phase II ESA reports shall be
provided to Lessor and any such evaluations shall be at Lessee's expense.
"Environmental Laws" shall mean any Federal, foreign, state or local law,
rule or regulation, international treaty, Mexican official norm (▇▇▇▇▇ oficial
mexicana), standard, criteria, administrative interpretation, authorization,
order, writ, injunction, judgment, decree, resolution or other requirement of
any Governmental Authority pertaining to the protection of the environment, air,
water, groundwater, soil, subsoil, natural resources, florae, wildlife species,
or to the generation, handling, use, storage, treatment, disposal, release,
recycling or transportation of any Hazardous Materials, or human exposure
thereto, including, but not limited to, Mexico's General Law of Ecological
Balance and Environmental Protection (Ley General del Equilibrio Ecologico y la
Proteccion al Ambiente), Mexico's National Waters Law (Ley de Aguas Nacionales),
Mexico's General Health Law (Ley General de Salud, to the extent relating to
environmental matters), Mexico's General Law for the Prevention and Integral
Management of Waste (Ley General para la Prevencion y Gestion Integral de los
Residuos), Mexican official norms NOM-052-SEMARNAT-1993 and NOM-053-
SEMARNAT-1993, Mexico's Federal Regulation on Environment, Health and Safety in
the Work Place (Reglamento Federal de Seguridad, Higiene y Medio Ambiente en el
Trabajo) and any Mexican official norms relating to
A-9
health or safety matters issued by Mexico's Federal Ministry of Labor and Public
Welfare, including but not limited to Mexican official norm NOM-010-STPS-1999,
as these laws have been amended (or supplemented with the effect of force of
law), and the regulations promulgated pursuant thereto.
"Environmental Report" shall mean, the "Phase I Environmental Site
Assessment, dated November 7, 2003,which was prepared by ▇▇▇▇▇▇ Environmental
Services.
"Equipment" shall mean all equipment, apparatus, furnishings, fittings and
tangible and intangible personal property of every kind and nature whatsoever
set forth in the Construction Budget and purchased by the Owner pursuant to the
terms and conditions of the Construction Agency Agreement and the Construction
Budget and using the proceeds of an Advance and now or subsequently contained in
or used or usable in any way in connection with any purchase, construction,
installation or operation of the Facility.
"Equity Yield" shall mean, with respect to any Yield Period, a percentage
rate per annum equal to the LIBOR Rate for such Yield Period plus the Applicable
Margin.
"Event" shall have the meaning set forth in Section 4.1(xi) of the
Construction Agency Agreement.
"Excluded Taxes" shall have the meaning specified in Section 7.1(b) of the
Construction Agency Agreement.
"Facility" shall mean the personal property associated with the dry cast
(TAC II), injection molding, foaming, assembly and sequencing and paint line
automotive interior production facility to be developed, installed, assembled,
constructed and operated, and all Units and the Equipment set forth on the
Construction Budget and purchased, constructed and installed, at the Site (but
not including real property) pursuant to the Construction Agency Agreement and
the other Project Documents.
"Facility Cost" shall mean $80,000,000 which includes a construction
cushion of up to $5 million and up to $5 million of capitalized charges, fees
and expenses (including up to $150,000 of Lessee's out-of-pocket expenses), plus
all Equity Yield and Commitment Fee and any Breakage Costs payable.
"Fee Letter" shall mean that certain Commitment Fee Letter agreement,
dated as of the date of the Construction Agency Agreement, between the Company
and the Owner, with respect to the Commitment Fee.
"Financial Officer" shall mean (i) the Executive Vice President and
General Manager of the Company and (ii) the Chief Financial Officer of the
Company.
"FIRREA" shall mean the Federal Financial Institution Reform, Recovery and
Enforcement Act of 1989.
A-10
"Floating Lien" shall mean the Floating Lien Pledge Agreement (contrato de
prenda sin transmision de posesion) dated as of the date of the Construction
Agency Agreement, entered into by and between Company, as pledgor, and Owner, as
pledgee.
"Ford E&D Reimbursement" shall mean all engineering and design costs
(including without limitation, the costs enumerated under Section 27.03 of the
"Global Terms and Conditions" contained within the Ford Supply Agreement)
payable by Ford Motor Company or its Affiliate(s) to the Company upon achieving
program approval milestones, pursuant to the Ford Supply Agreement.
"Ford Supply Agreement" shall mean, collectively, the "Global Terms and
Conditions" agreement, dated January 1, 2004, and each related "Target
Agreement" entered into by and between the Company and Ford Motor Company or its
Affiliate(s).
"Full Recourse Construction Agency Event of Default" shall have the
meaning set forth in Section 5.1(c)(i)(B)(1) of the Construction Agency
Agreement.
"Funding Request" shall have the meaning specified in Section 3.1(a) of
the Construction Agency Agreement.
"GAAP" shall mean generally accepted accounting principles in the United
States of America as in effect from time to time, consistently applied.
"GAAP Defined Project Costs" shall mean, without limitation, the amounts
advanced by the Owner for the following: (a) the amounts defined as Project
Costs specified in (i), (ii) and (iii) of the definition of "Project Costs" plus
(b) any other amounts paid by the Owner which would be defined as project costs
under GAAP, plus (c) Owner's Accrued Interest.
"GECMG" shall mean GECC Capital Markets Group, Inc.
"Governing Body" of any Person shall mean the board of directors, board of
trustees, management committee, managing partner or other governing entity.
"Governmental Approvals" shall mean any and all permits, acceptances,
authorizations, certificates, registrations, consents, approvals, waivers,
exceptions, variances, orders, judgments, binding written interpretations,
decrees, licenses, exemptions, publications, filings, notices to and
declarations of or with, or required by, any Governmental Authority, or required
by any Applicable Laws (including Environmental Laws), and shall include,
without limitation, any and all such environmental and operating permits and
licenses that are required for the construction, use, occupancy, zoning and
operation of the Facility on the Site as provided in the Operative Documents.
"Governmental Authority" shall mean any nation or government, any state,
provincial or other political subdivision thereof (whether federal, state or
local), any court and any administrative agency or other regulatory body,
instrumentality, authority or entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
A-11
"Guaranty" shall mean the Guaranty, dated the Construction Closing Date,
by ▇▇▇▇▇▇▇ for the benefit of Owner and of Lessor under the Lease.
"Guaranty Trust" shall mean the Irrevocable Guaranty Trust Agreement dated
as of the date of the Construction Agency Agreement, among ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
Holdings, S.A. de C.V. and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Automotive Company de Mexico, S.A.
de C.V., as settlers, Owner, as beneficiary in first place, and Banco Invex,
S.A. Institucion de Banca Multiple, Invex Groupo Financiero, Fiduciario, as
trustee.
"Hazardous Material" shall mean any hazardous or toxic substance, material
or waste, pollutant or contaminant, whether in solid, liquid or gaseous form, or
any hazardous or toxic constituents thereof, and in general any waste, substance
or material which generation, use, handling, treatment, remediation, storage,
transportation, disposal, discharge, release, existence or emission are in any
way governed by or subject to any Environmental Laws, including without
limitation any and all hazardous or toxic substances, materials or wastes
governed by, subject to or defined under applicable Environmental Laws,
including, but not limited to, petroleum or petroleum-derived products, radon
gas, asbestos, asbestos containing materials, polychlorinated biphenyls,
radioactive substances and in general any substance, material or waste that is
of a corrosive, reactive, explosive, toxic, flammable or biologically infectious
nature and any containers, recipients, packages or soils that may have been in
contact with any such materials, wastes or substances.
"Importation Related Taxes" shall mean the following taxes and duties: (i)
value added tax payable upon any kind of goods importation into Mexico; (ii)
Import Duties payable in accordance with the Mexican General Tax Law for Imports
and Exports (Ley de los Impuestos Generales de Importacion y Exportacion); (iii)
Customs Processing Fees (Derecho de Tramite Aduanero); and (iv) dumping and
countervailing duties payable upon any kind of goods importation into Mexico.
"Indemnified Party" shall have the meaning specified in Section 7.1(a) of
the Construction Agency Agreement.
"Indemnity Agreement" shall mean that certain Indemnity Agreement dated as
of the date of the Construction Agency Agreement, between ▇▇▇▇▇▇▇ and Owner.
"Independent" when used with respect to any specified Person shall mean
such a Person who (i) is in fact independent, (ii) does not have any direct
financial interest or any material indirect financial interest in the Company or
any Affiliate of the Company and (iii) is not connected with the Company or any
Affiliate of the Company as an officer, employee, promoter, underwriter,
trustee, partner, director or Person performing similar functions.
"Independent Appraiser" shall mean a disinterested, licensed professional
appraiser of industrial property who (i) meets the personal property
qualifications criteria established by the Appraisal Foundation, (ii) is a
member of the Appraisal Institute or holds the senior accreditation of the
American Society of Appraisers, (iii) is in the regular employ, or is a
principal of, a nationally recognized appraisal firm, (iv) has substantial
experience in the business of appraising
A-12
facilities similar to the Facility and (v) is a licensed appraiser pursuant to
Title XI of FIRREA (if FIRREA is in effect at the time of determination).
"Index Rate" shall mean, for any day, a floating rate equal to the higher
of (i) the rate publicly quoted from time to time by The Wall Street Journal as
the "base rate on corporate loans posted by at least 75% of the nation's 30
largest banks" (or, if The Wall Street Journal ceases quoting a base rate of the
type described, the highest per annum rate of interest published by the Federal
Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected Interest Rates" as the bank prime loan rate or its equivalent), and
(ii) the Federal Funds Rate plus 50 basis points per annum. Each change in any
interest rate provided for in the Agreement based upon the Index Rate shall take
effect at the time of such change in the Index Rate.
"Industry Consultant" shall mean Automotive Associates International, LLC.
"Insurance Requirements" shall mean, as the case may be, the terms and
conditions of any insurance policy required by Section 2.9 of the Construction
Agency Agreement and Section 10 of the Lease to be maintained by the
Construction Agent and/or the Lessee or to be maintained or arranged, on behalf
of the Owner, by the Construction Agent and/or the Lessee, and all requirements
of the issuer of any such policy.
"Intercompany Agreement" shall mean the Intercompany Subordination
Agreement dated as of the date of the Construction Agency Agreement, among GE
Capital De Mexico, S. de ▇. ▇. de C.V., the Company, Guarantor and the other
Subordinated Creditors (as defined in the Intercompany Agreement).
"IRS" shall mean the Internal Revenue Service of the United States
Department of Treasury or any successor or predecessor agency thereto.
"Judgment Currency" shall have the meaning set forth in Section 8.5 of the
Construction Agency Agreement.
"Judgment Currency Conversion Date" shall have the meaning set forth in
Section 8.5 of the Construction Agency Agreement.
"Landlord" shall mean Santa ▇▇▇▇▇ Industrial Partners, L.P., a Delaware
limited partnership.
"Landlord Consent" shall mean the Consent and Agreement dated as of the
date of the Construction Agency Agreement, between Santa ▇▇▇▇▇ Industrial
Partners, L.P., as landlord, and Owner.
"Lease" shall mean the Master Lease Agreement, dated as of November 8,
2004, by and between the Owner and the Lessee and all Schedules thereto.
"Lease Investment Balance" shall have the meaning specified in Section
5.1(b) of the Construction Agency Agreement.
"Lessee" shall mean the Company, as lessee of the Facility under the
Lease.
A-13
"Lessor" shall mean the Owner, as lessor of the Facility under the Lease.
"LIBOR Base Rate" shall mean, with respect to each day during each Yield
Period, the rate per annum determined on the basis of the rate for deposits in
Dollars for a period equal to such Yield Period commencing on the first day of
such Yield Period appearing on Page 3750 of the Telerate screen as of 11:00
A.M., London time, two Business Days prior to the beginning of such Yield
Period. In the event that such rate does not appear on Page 3750 of the Telerate
screen (or otherwise on such screen), the "LIBOR Base Rate" for purposes of this
definition shall be determined by reference to such other comparable publicly
available service for displaying LIBOR rates as may be selected by the Owner.
"LIBOR Business Day" shall mean a Business Day on which dealings in Dollar
deposits are carried on in the London interbank market.
"LIBOR Rate" shall mean with respect to each day during each Yield Period,
a rate per annum determined for such day in accordance with the following
formula (rounded upward to the nearest 1/100th of 1%):
LIBOR Base Rate
---------------------------
1.00 - Eurocurrency Reserve
Requirements
"License Agreement" shall mean the License Agreement dated the date of the
Construction Agency Agreement, by and between ▇▇▇▇▇▇▇ and Owner.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, easement or encumbrance, lien (statutory or
other), charge, lease or other security interest or any preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including any conditional sale or other title retention agreement
and any lease having substantially the same economic effect as any of the
foregoing).
"Limited Recourse Construction Agency Event of Default" shall have the
meaning set forth in Section 5.1(c)(i)(B)(2) of the Construction Agency
Agreement.
"Loss" shall have the meaning set forth in Section 7.1(c) of the
Construction Agency Agreement.
"Milestone" shall mean a schedule for the construction of the Facility
prepared by the Construction Agent, Landlord and Ford and approved by the Owner
and the Engineering Consultant, set forth in Exhibit VII of the Construction
Agency Agreement, as the same may be amended from time to time as agreed by the
Construction Agent, Landlord, Ford, the Owner and the Engineering Consultant.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc., a division of Dun &
Bradstreet Corporation, and its successors and assigns.
A-14
"Non-Severable Improvement" shall mean any equipment, part, supply or
accessory furnished or attached to any Unit, the Equipment or the Facility which
is not readily removable therefrom.
"Obligation Currency" shall have the meaning set forth in Section 8.5 of
the Construction Agency Agreement.
"Officer's Certificate" shall mean with respect to any Person, a
certificate signed by any Authorized Officer of such Person.
"Operative Documents" shall mean the Lease (including each Schedule
thereto), the Site Lease (including Landlord's Consent), the Fee Letter, the
Intercompany Agreement, the Indemnity Agreement, the Construction Agency
Agreement, (including each Schedule thereto) any Additional Construction
Document, any Acceptable Letter of Credit, the Ford E&D Reimbursement, the
Guaranty Trust, the Floating Lien, the Stock Pledge, the Ford Supply Agreement,
the License Agreement, the Guaranty and all Purchase Documents, Construction
Documents and Project Documents and all other consents, agreements and documents
relating thereto or to any Unit, the Equipment, the Facility or the Site.
"Overdue Rate" shall have the meaning set forth in Section 8.7(c) of the
Construction Agency Agreement.
"Owner" shall mean GE Capital De Mexico, S. de ▇. ▇. de C.V., a Mexico
Sociedad de Responsabilidad Limitaa de Capital Variable company.
"Owner's Accrued Interest" shall mean interest, accrued monthly on each
advance by Owner with respect to GAAP Defined Project Costs ("GAAP Advance"),
for each day during the Construction Period after such GAAP Advance was made.
Owner's Accrued Interest shall be calculated on the basis of a 360-day year for
the actual days elapsed and the rate of Owner's Accrued Interest shall mean with
respect to any Yield Period, a percentage rate equal to the LIBOR Rate for such
Yield Period plus 0.35%.
"Owner's Lien" shall mean any Lien on the Facility or any part thereof
arising as a result of (i) Claims against or any act or omission of the Owner
that is not related to, or that is in violation of, any Operative Document or
the transactions contemplated thereby or that is in breach of any covenant or
agreement of the Owner specified therein, (ii) Taxes imposed upon the Owner or
the Owner that are not indemnified against by the Construction Agent pursuant to
any Operative Document or are not related to or that are in violation of any
Operative Document or the transactions contemplated thereby or (iii) Claims
against or affecting the Owner arising out of the voluntary or involuntary
transfer by the Owner of any portion of the interest of the Owner in the
Facility, the Site, the Project Documents, other than as contemplated or
permitted by the Operative Documents.
"Payment Date" shall have the meaning set forth in Section 2.8 of the
Construction Agency Agreement.
"Permitted Lien" shall mean (i) the rights of the Owner and the
Construction Agent as herein provided, (ii) Owner's Liens, (iii) Liens for
taxes, assessment or other governmental
A-15
charge either not yet delinquent or being diligently contested in good faith by
appropriate proceedings and so long as adequate reserves are maintained and
disclosed with respect to such Liens and available to the Construction Agent for
the payment of such taxes and only so long as neither such proceedings nor such
Liens involve any material danger of the sale, forfeiture, loss or loss of use
of any Unit, the Equipment, the Facility or any part thereof or the Site, or any
interest of the Owner therein or any risk of criminal liability of the Owner and
the Construction Agent has given Owner prior written notice of the Construction
Agent's intent to contest any such taxes and the Construction Agent has agreed
to indemnify the Owner for any and all costs and expenses (including, without
limitation reasonable attorneys' fees) which the Owner may incur as a result of
such contest, (iv) inchoate materialmen's, mechanics', carriers', workmen's,
repairmen's, or other like inchoate Liens imposed by law arising in the ordinary
course of Construction Agent's business for sums either not delinquent or being
diligently contested in good faith and only so long as neither such proceedings
nor any such Liens involve any material danger of the sale, forfeiture, loss or
loss of use of the Equipment, or any part thereof, or any interest of the Owner
therein or any material risk of material civil liability and further provided
that adequate reserves are maintained with respect to such Liens and provided
that the Construction Agent has given the Owner written notice thereof, (v) the
rights of others under agreements or arrangements to the extent expressly
permitted under this Construction Agency Agreement, (vi) Liens arising out of
any judgment or award against the Construction Agent with respect to which at
the time an appeal or proceeding for review is being prosecuted in good faith by
appropriate proceedings diligently conducted and with respect to which there
shall have been secured a stay of execution pending such appeal or proceeding
for review and so long as adequate reserves are available to the Construction
Agent for the payment of such obligations and there is no material danger of
sale, forfeiture, loss, or loss of use of the Equipment or material risk of
material civil liability and the Construction Agent shall have given the Owner
written notice thereof, and (vii) any Lien against which the Construction Agent
causes to be provided a bond in such amount and under such terms and conditions
as are reasonably satisfactory to the Owner.
"Person" shall mean any natural person, corporation, cooperative,
partnership, limited liability company, joint venture, joint-stock company,
firm, association, trust, unincorporated organization, government or political
subdivision thereof, governmental agency or any other entity, whether acting in
an individual, fiduciary or other capacity.
"Preliminary Specifications" shall have the meaning set forth in Section
6(a) of the Site Lease, including any amendment or modification agreed to by the
parties thereto and approved by the Owner.
"Project Costs" shall mean, without duplication, the amounts advanced for
payment of fees, expenses, costs and other items related to purchasing,
importing, designing, engineering, surveying, developing, financing,
constructing, installing, starting-up and testing each Unit, the Equipment and
the Facility, in accordance with, and set forth on, the Construction Budget and
the other Project Documents and specified below:
(i) the cost to purchase from the Vendor (which may be the Company)
each Unit and the Equipment, as specified in the Construction Budget;
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(ii) all contractor payments listed in the Construction Budget in
respect of each Unit and the Equipment;
(iii) Soft Costs; provided that the amount of Project Costs
allocated to Soft Costs shall not exceed 25% of the total Project Costs
allocated to Units or other tangible personal property;
(iv) all expenses relating to environmental audits, inspections or
studies with respect to the Facility;
(v) fees and other expenses relating to each tagging appraisal of an
Unit and the Equipment with respect to an Advance, and the Closing
Appraisals;
(vi) fees and expenses of the Environmental Consultant, the
Engineering Consultant, the Industry Consultant and any other Consultants;
(vii) all Equity Yield and Commitment Fees and any Breakage Costs
accrued monthly and/or payable in respect of the Advances;
(viii) up to $150,000 for Company's out-of-pocket Transaction
Expenses associated with the transactions contemplated by the Operative
Documents;
(ix) (1) any transaction privilege, personal property, tangible or
intangible taxes incurred in connection with each Unit, the Equipment and
the Facility and (2) any Tax indemnifiable pursuant to Section 7.1(b) and
(c) of the Construction Agency Agreement;
(x) all Transaction Expenses, to the extent not otherwise included
in this definition;
(xi) the funding of the Commitment Fee;
(xii) Engineering and design cost of $861,606, as listed in the
Construction Budget;
(xiii) such other items with respect to each Unit, the Equipment and
the Facility as the Owner may approve in writing; and
(xiv) any other amounts to be funded from proceeds of Advances
pursuant to the Operative Documents.
"Project Documents" shall mean, collectively, the Purchase Documents, the
Construction Documents and, when entered into, each Additional Construction
Document. Third Party Contracts, if any, together with any replacement or
substitute agreement for any of the foregoing.
"Project Obligations" shall have the meaning specified in Section 2.1(a)
of the Construction Agency Agreement.
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"Prudent Practice" shall mean, at a particular time, either (i) any of the
practices, methods and acts engaged in or approved by a significant portion of
the competitive automotive manufacturing industry operating in the United States
at such time, but, in any event, a standard of care and usage no less than that
which the Company and its Affiliates would apply with respect to other units,
equipment and facilities similar to any Unit, Equipment or the Facility owned,
leased or operated by them or (ii) with respect to any matter to which the
practices referred to in clause (i) do not apply, any of the practices, methods
and acts that, in the exercise of reasonable judgment in light of the facts
known at the time the decision was made, could have been expected to accomplish
the desired result at a reasonable cost consistent with good competitive
automotive business practices, reliability, safety and expedition. "Prudent
Practice" is not intended to be the optimum practice, method or act to the
exclusion of all others, but rather to be a spectrum of possible practices,
methods or acts having due regard for, among other things, manufacturers'
warranties, the requirements of insurance policies and the requirements of
governmental bodies of competent jurisdiction.
"Purchase Documentation" shall have the meaning set forth in Section 3.3
of the Construction Agency Agreement.
"Purchase Documents" shall mean each ▇▇▇▇ of sale, invoice, purchase
agreement, purchase order, import documents, patent and license and warranty
assignment or agreement, that evidences, in whole or in part, title to or rights
to any Unit, the Equipment and/or the Facility.
"Rating Agencies" shall mean S&P and Moody's or, if at the time the rating
of any such Rating Agency is required such Rating Agency no longer provides the
relevant rating (other than as a result of the rated Person choosing not to have
such rating), such other rating agency of national recognition.
"Recourse Obligation" shall have the meaning specified in Section
5.1(c)(i)(B)(2) of the Construction Agency Agreement.
"Release" shall mean the actual or threatened release, deposit, disposal
or leakage of any Hazardous Material at, into, upon, from or under any land,
water or air, or otherwise into the indoor or outdoor environment or within any
structure, or real property, including by means of burial, disposal, discharge,
emission, injection, spillage, leakage, seepage, leaching, dumping, pumping,
pouring, escaping, emptying, placement or otherwise.
"Requested Funding Date" shall have the meaning specified in Section
3.1(a) of the Construction Agency Agreement.
"Required Amount" shall mean 20% of total Project Costs funded by Advances
made by the Owner on or before the date of the Advance to be made pursuant to
the applicable Funding Request.
"Schedule" shall have the meaning set forth in the Lease.
"Site" shall mean that certain tract or parcel of real immovable property
situated in Hermosillo, Sonora, Mexico, as more fully described on Exhibit A to
the Site Lease.
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"Site Lease" shall mean the Lease Agreement, dated as of December 19,
2003, by and between the Site Lessor and the Site Lessee, as assignee of ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇ Automotive Company de Mexico, S.A. de C.V.
"Site Lessee" shall mean the Company, as Tenant, of the Site, under the
Site Lease.
"Site Lessor" shall mean Santa ▇▇▇▇▇ Industrial Partners, L.P., a Delaware
limited partnership, as site lessor of the Leased Premises under the Site Lease.
"Soft Costs" shall mean all Project Costs which are related to the
delivery and installation costs incurred with respect to any Unit, the Equipment
or the Facility; provided that the amount of Project Costs allocated to Soft
Costs shall not exceed 25% of the total Project Costs allocated to Units or
other tangible personal property.
"Software" shall have the meaning set forth in Section 3.2 of the
Construction Agency Agreement.
"S&P" shall mean Standard & Poor's Ratings Services (a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.) and its successors and assigns.
"Stock Pledge" shall mean the Stock Pledge Agreement dated as of the date
of the Construction Agency Agreement, between ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Automotive
Company de Mexico, S.A. de C.V., as pledgor, and GE Capital De Mexico, S. de ▇.
▇. de C.V., as pledgee.
"Successor" shall have the meaning set forth in Section 4.1(xi) of the
Construction Agency Agreement.
"Tax" or "Taxes" shall have the meaning specified in Section 7.1(b) of the
Construction Agency Agreement.
"Tax Benefits" shall have the meaning specified in Section 7.1(c) of the
Construction Agency Agreement.
"Third Party Contract" shall have the meaning set forth in Section 2.1(c)
of the Construction Agency Agreement.
"Transaction Expenses" shall mean the following costs and expenses
incurred in connection with the negotiation, due diligence and consummation of
the transactions contemplated by the Operative Documents on the Construction
Closing Date and through and including the Basic Term Commencement Date (as
defined in the Lease), including, without limitation:
(i) the Commitment Fee, the cost of the Construction Closing
Appraisals, all costs and fees, including filing and recording fees and
recording, transfer, mortgage, intangible and similar Taxes in connection
with the execution and delivery, filing and recording of the Site Lease,
any other Operative Document or Project Document and any other document
required to be filed or recorded pursuant to the provisions of the
Operative Documents or the Project Documents and any Uniform Commercial
Code or
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Mexico Public Registry of Commerce filing fees in respect of the
perfection of any security interests created by the Operative Documents or
as otherwise reasonably required by the Owner;
(ii) all costs and fees, including filing and recording fees and
recording, transfer, mortgage, intangible and similar Taxes in connection
with the execution and delivery, filing and recording the Lease or the
Site Lease and any other document required to be filed or recorded
pursuant to the provisions of the Lease or the Site Lease;
(iii) the fees and expenses of the Engineering Consultant, the
Environmental Consultant, the Appraisers and any other consultants
retained by the Owner;
(iv) the reasonable legal fees, expenses and disbursements of
counsel to the Owner and the Lessor;
(v) at the Company's option, up to U.S.$150,000 for the reasonable
legal fees, expenses and disbursements of counsel to the Company (other
than those relating to the negotiation, preparation, execution and
delivery of the Lease and the Site Lease);
(vi) reasonable out-of-pocket costs and expenses of GECMG; and
(vii) any other reasonable, documented out-of-pocket expenses of the
Owner relating to the Lease and the Site Lease approved by the Company and
(B) all other reasonable, documented out-of-pocket expenses of the Owner
approved by the Company.
"Unit" shall mean each piece of tangible personal property set forth in
the Construction Budget and purchased by or on behalf of Owner and to be leased
by Owner under the Lease, including any related Schedule.
"United States" or "U.S." shall mean the United States of America.
"Vendor" shall mean any Person (including the Company and its Affiliates)
who holds legal title to an Unit or the Equipment.
"Yield Period" shall mean, with respect to any Advance, (i) initially, the
period beginning on (and including) the date on which such Advance is made and
ending on the day one month thereafter (or, if such subsequent month has no
numerically corresponding calendar day, on the next succeeding LIBOR Business
Day) and (ii) thereafter, each period commencing on the first day after the end
of the next preceding Yield Period applicable to such Advance and ending on the
day one month thereafter (or, if such month has no numerically corresponding
calendar day, on the next succeeding LIBOR Business Day); provided, however,
that all of the foregoing provisions relating to Yield Periods are subject to
the following:
(A) if any Yield Period would otherwise end on a day that is not a LIBOR
Business Day, such Yield Period shall be extended to the next succeeding LIBOR
Business Day (unless the result of such extension would be to carry such Yield
Period into another calendar month, in which case such Yield Period shall end on
the immediately preceding LIBOR Business Day);
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(B) no Yield Period may end later than the Lease Commencement Date; and
(C) any Yield Period that 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 Yield Period) shall end on the last
LIBOR Business Day of the calendar month at the end of such Yield Period.
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