**Exhibit 2(b)(5)**

 

**DESARROLLADORA HOMEX, S.A.B. DE C.V.,**

 

**The SUBSIDIARY GUARANTORS Party Hereto**

 

 

**AND**

 

**THE BANK OF NEW YORK MELLON,**

 

**as TRUSTEE**

 

 

**9.500% SENIOR GUARANTEED NOTES DUE 2019**

 

**INDENTURE**

 

 

**Dated as of December 11, 2009**

 

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**TABLE OF CONTENTS**

 
| ** **                                  | ** **                                           | **Page** |
|---------------------------------------------|------------------------------------------------------|----------|
|                                        |                                                 |     |
| ARTICLE I                              |
| DEFINITIONS AND  INCORPORATION BY REFERENCE |
|                                        |
| Section 1.1                            | Definitions                                          | 1        |
| Section 1.2                            | Incorporation  by Reference of Trust Indenture Act   | 32       |
| Section 1.3                            | Rules of  Construction                          | 33       |
|                                        |                                                 |     |
| ARTICLE II                             |
| THE NOTES                                   |
|                                        |
| Section 2.1                            | Form and  Dating                                | 33       |
| Section 2.2                            | Execution  and Authentication                        | 34       |
| Section 2.3                            | Registrar  and Paying Agent                          | 35       |
| Section 2.4                            | Paying  Agent to Hold Money in Trust                 | 35       |
| Section 2.5                            | Holder  Lists                                        | 36       |
| Section 2.6                            | Global  Note Provisions                              | 36       |
| Section 2.7                            | Legends                                              | 37       |
| Section 2.8                            | Transfer  and Exchange                               | 37       |
| Section 2.9                            | Mutilated,  Destroyed, Lost or Stolen Notes          | 40       |
| Section 2.10                           | Temporary  Notes                                     | 41       |
| Section 2.11                           | Cancellation                                         | 41       |
| Section 2.12                           | Defaulted  Interest                                  | 41       |
| Section 2.13                           | Additional  Notes                                    | 42       |
|                                        |                                                 |     |
| ARTICLE III                            |
| COVENANTS                                   |
|                                        |
| Section 3.1                            | Payment  of Notes                                    | 43       |
| Section 3.2                            | Maintenance  of Office or Agency                     | 44       |
| Section 3.3                            | Corporate  Existence                                 | 44       |
| Section 3.4                            | Payment  of Taxes                                    | 44       |
| Section 3.5                            | Compliance  Certificate                              | 44       |
| Section 3.6                            | Further  Instruments and Acts                        | 45       |
| Section 3.7                            | Waiver  of Stay, Extension or Usury Laws             | 45       |
| Section 3.8                            | Change  of Control                                   | 45       |
| Section 3.9                            | Limitation  on Incurrence of Additional Indebtedness | 46       |
| Section 3.10                           | Limitation  on Guarantees                            | 49       |
| Section 3.11                           | Limitation  on Restricted Payments                   | 49       |

 

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**TABLE OF CONTENTS**

(continued)

 
| ** **                    | ** **                                                                       | **Page** |
|-------------------------------|----------------------------------------------------------------------------------|----------|
|                          |                                                                             |     |
| Section 3.12             | Limitation  on Asset Sales and Sales of Subsidiary Stock                         | 53       |
| Section 3.13             | Limitation  on Designation of Unrestricted Subsidiaries                          | 56       |
| Section 3.14             | Limitation  on Dividends; Payment Restrictions Affecting Restricted Subsidiaries | 57       |
| Section 3.15             | Limitation  on Layered Indebtedness                                              | 59       |
| Section 3.16             | Limitation  on Liens                                                             | 59       |
| Section 3.17             | Limitation  on Transactions with Affiliates                                      | 60       |
| Section 3.18             | Conduct  of Business                                                             | 61       |
| Section 3.19             | Reports  to Holders                                                              | 61       |
| Section 3.20             | Listing                                                                          | 62       |
| Section 3.21             | Payment  of Additional Amounts                                                   | 63       |
| Section 3.22             | Suspension  of Covenants                                                         | 65       |
|                          |                                                                             |     |
| ARTICLE IV               |
| SURVIVING ENTITY              |
|                          |
| Section 4.1              | Merger,  Consolidation and Sale of Assets                                        | 66       |
|                          |                                                                             |     |
| ARTICLE V                |
| OPTIONAL REDEMPTION OF  NOTES |
|                          |
| Section 5.1              | Optional  Redemption                                                             | 69       |
| Section 5.2              | Election  to Redeem                                                              | 69       |
| Section 5.3              | Notice  of Redemption                                                            | 69       |
| Section 5.4              | Selection  of Notes to Be Redeemed in Part                                       | 70       |
| Section 5.5              | Deposit  of Redemption Price                                                     | 71       |
| Section 5.6              | Notes  Payable on Redemption Date                                                | 71       |
| Section 5.7              | Unredeemed  Portions of Partially Redeemed Note                                  | 71       |
|                          |                                                                             |     |
| ARTICLE VI               |
| DEFAULTS AND REMEDIES         |
|                          |
| Section 6.1              | Events  of Default                                                               | 71       |
| Section 6.2              | Acceleration                                                                     | 72       |
| Section 6.3              | Other  Remedies                                                                  | 73       |
| Section 6.4              | Waiver  of Past Defaults                                                         | 73       |
| Section 6.5              | Control  by Majority                                                             | 73       |
| Section 6.6              | Limitation  on Suits                                                             | 74       |
| Section 6.7              | Rights  of Holders to Receive Payment                                            | 74       |

 

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**TABLE OF CONTENTS**

(continued)

 
|                                |                                               | **Page**   |
|-------------------------------------|----------------------------------------------------|------------|
|                                |                                               | ** ** |
| Section 6.8                    | Collection  Suit by Trustee                        | 74         |
| Section 6.9                    | Trustee  May File Proofs of Claim, etc.       | 74         |
| Section 6.10                   | Priorities                                         | 75         |
| Section 6.11                   | Undertaking  for Costs                             | 75         |
|                                |                                               |       |
| ARTICLE VII                    |
| TRUSTEE                             |
|                                |
| Section 7.1                    | Duties  of Trustee                                 | 76         |
| Section 7.2                    | Rights  of Trustee                                 | 77         |
| Section 7.3                    | Individual  Rights of Trustee                      | 79         |
| Section 7.4                    | Trustee’s  Disclaimer                         | 79         |
| Section 7.5                    | Notice  of Defaults                                | 79         |
| Section 7.6                    | Reports  by Trustee to Holders                     | 79         |
| Section 7.7                    | Compensation  and Indemnity                        | 80         |
| Section 7.8                    | Replacement  of Trustee                            | 81         |
| Section 7.9                    | Successor  Trustee by Merger                       | 81         |
| Section 7.10                   | Eligibility;  Disqualification                     | 82         |
| Section 7.11                   | Preferential  Collection of Claims Against Company | 82         |
| Section 7.12                   | Appointment  of Co-Trustee                         | 82         |
| Section 7.13                   | Luxembourg  Paying Agent                           | 83         |
|                                |                                               |       |
| ARTICLE VIII                   |
| DEFEASANCE; DISCHARGE OF  INDENTURE |
|                                |                                               |
| Section 8.1                    | Legal  Defeasance and Covenant Defeasance          | 83         |
| Section 8.2                    | Conditions  to Defeasance                          | 84         |
| Section 8.3                    | Application  of Trust Money                        | 86         |
| Section 8.4                    | Repayment  to Company                              | 86         |
| Section 8.5                    | Indemnity  for U.S. Government Obligations         | 86         |
| Section 8.6                    | Reinstatement                                      | 87         |
| Section 8.7                    | Satisfaction  and Discharge                        | 87         |
|                                |                                               |       |
| ARTICLE IX                     |
| AMENDMENTS                          |
|                                |
| Section 9.1                    | Without  Consent of Holders                        | 87         |
| Section 9.2                    | With  Consent of Holders                           | 89         |
| Section 9.3                    | Revocation  and Effect of Consents and Waivers     | 90         |

 

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**TABLE OF CONTENTS**

(continued)

 
|               |                                                         | **Page** |
|--------------------|--------------------------------------------------------------|----------|
|               |                                                         |     |
| Section 9.4   | Notation  on or Exchange of Notes                            | 90       |
| Section 9.5   | Trustee  to Sign Amendments and Supplements                  | 91       |
|               |                                                         |     |
| ARTICLE X     |
| NOTE GUARANTEES    |
|               |                                                         |
| Section 10.1  | Note  Guarantees                                             | 91       |
| Section 10.2  | Limitation  on Liability; Termination, Release and Discharge | 93       |
| Section 10.3  | Right  of Contribution                                       | 94       |
| Section 10.4  | No  Subrogation                                              | 94       |
| Section 10.5  | Additional  Note Guarantees                                  | 94       |
|               |                                                         |     |
| ARTICLE XI    |
| MISCELLANEOUS      |
|               |                                                         |     |
| Section 11.1  | Notices                                                      | 95       |
| Section 11.2  | Communication  by Holders with Other Holders                 | 96       |
| Section 11.3  | Certificate  and Opinion as to Conditions Precedent          | 96       |
| Section 11.4  | Statements  Required in Certificate or Opinion               | 96       |
| Section 11.5  | Rules by  Trustee, Paying Agent and Registrar           | 97       |
| Section 11.6  | Legal  Holidays                                              | 97       |
| Section 11.7  | Governing  Law, etc.                                         | 97       |
| Section 11.8  | No  Recourse Against Others                                  | 98       |
| Section 11.9  | Successors                                                   | 99       |
| Section 11.10 | Duplicate  and Counterpart Originals                         | 99       |
| Section 11.11 | Severability                                                 | 99       |
| Section 11.12 | Currency  Indemnity                                          | 99       |
| Section 11.13 | Table  of Contents; Headings                                 | 100      |

 

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| **EXHIBIT A** | ** ** | **FORM OF NOTE**                                                    |
|--------------------|------------|--------------------------------------------------------------------------|
|               |       |                                                                     |
| **EXHIBIT B** | ** ** | **FORM OF CERTIFICATE FOR TRANSFER TO QIB**                         |
|               |       |                                                                     |
| **EXHIBIT C** | ** ** | **FORM OF CERTIFICATE FOR TRANSFER PURSUANT TO  REGULATION S** |
|               |       |                                                                     |
| **EXHIBIT D** | ** ** | **FORM OF CERTIFICATE FOR TRANSFER PURSUANT TO  RULE 144**     |
|               |       |                                                                     |
| **EXHIBIT E** | ** ** | **FORM OF SUPPLEMENTAL INDENTURE FOR ADDITIONAL  NOTE GUARANTEE**   |
|               |       |                                                                     |
| **EXHIBIT F** | ** ** | **FORM OF FREE TRANSFERABILITY CERTIFICATE**                        |

 

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INDENTURE,dated as of December 11, 2009, between Desarrolladora Homex, S.A.B. deC.V., a limited liability public company with variable capital (*sociedad anónima bursátil de capital variable*)organized and existing under the laws of the United Mexican States (the “Company”),the Subsidiary Guarantors party hereto, and The Bank of New York Mellon (the “Trustee”),as Trustee.

 

Eachparty agrees as follows for the benefit of the other parties and for the equaland ratable benefit of the Holders of the Company’s 9.500% Senior GuaranteedNotes due December 11, 2019 issued hereunder.

 

ARTICLE I

 

DEFINITIONS ANDINCORPORATION BY REFERENCE

 

Section 1.1                                      Definitions.

 

“AcquiredIndebtedness” means Indebtedness of a Person or any of its Subsidiariesexisting at the time such Person becomes a Restricted Subsidiary or at the timeit merges or consolidates with the Company or any of its RestrictedSubsidiaries or is assumed in connection with the acquisition of assets fromsuch Person.  Such Indebtedness will bedeemed to have been Incurred at the time such Person becomes a RestrictedSubsidiary or at the time it merges or consolidates with the Company or aRestricted Subsidiary or at the time such Indebtedness is assumed in connectionwith the acquisition of assets from such Person.

 

“AdditionalAmounts” has the meaning assigned to it in Section 3.21.

 

“AdditionalNote Board Resolutions” means resolutions duly adopted by the Board ofDirectors of the Company and delivered to the Trustee in an Officers’Certificate providing for the issuance of Additional Notes.

 

“AdditionalNote Guarantee” has the meaning assigned to it in Section 10.5.

 

“AdditionalSubsidiary Guarantor” has the meaning assigned to it in Section 10.5.

 

“AdditionalNote Supplemental Indenture” means a supplement to this Indenture dulyexecuted and delivered by the Company, each Subsidiary Guarantor and theTrustee pursuant to Article IX providing for the issuance ofAdditional Notes.

 

“AdditionalNotes” means the Company’s 9.500% Senior Guaranteed Notes due December 11,2019 originally issued after the Issue Date pursuant to Section 2.13,including any replacement Notes as specified in the relevant Additional NoteBoard Resolutions or Additional Note Supplemental Indenture issued therefor inaccordance with this Indenture.

 

“Affiliate”means, with respect to any specified Person, any other Person who directly orindirectly through one or more intermediaries controls, or is controlled by, oris under common control with, such specified Person.  The term “control” means the possession,directly or indirectly, of the power to direct or cause the direction of themanagement and policies of a Person, whether through the ownership of votingsecurities, by contract or otherwise. For 

 

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purposesof this definition, the terms “controlling,” “controlled by” and “under commoncontrol with” have correlative meanings.

 

“AgentMembers” has the meaning assigned to it in Section 2.6(b).

 

“AssetAcquisition” means:

 

(a)                                  an Investmentby the Company or any Restricted Subsidiary in any other Person pursuant towhich such Person will become a Restricted Subsidiary, or will be merged withor into the Company or any Restricted Subsidiary;

 

(b)                                 the acquisitionby the Company or any Restricted Subsidiary of the assets of any Person (otherthan a Subsidiary of the Company) which constitute all or substantially all ofthe assets of such Person or comprises any division or line of business of suchPerson or any other properties or assets of such Person other than in theordinary course of business; or

 

(c)                                  any Revocationwith respect to an Unrestricted Subsidiary.

 

“AssetSale” means any direct or indirect sale, disposition, issuance, conveyance,transfer, lease, assignment or other transfer, including a Sale and LeasebackTransaction (each, a “disposition”) by the Company or any Restricted Subsidiaryof:

 

(a)                                  any CapitalStock of any Restricted Subsidiary (but not Capital Stock of the Company); or

 

(b)                                 any property orassets (other than cash or Cash Equivalents or Capital Stock of the Company) ofthe Company or any Restricted Subsidiary.

 

Notwithstandingthe preceding, the following items will not be deemed to be Asset Sales:

 

(1)                                  the disposition of all orsubstantially all of the assets of the Company and its Restricted Subsidiariesas permitted under Section 4.1;

 

(2)                                  sales of homes and land inthe ordinary course of business;

 

(3)                                  land, infrastructure andother properties donated to communities in connection with construction anddevelopment of housing complexes by the Company or its Restricted Subsidiariesin the ordinary course of business consistent with past practice;

 

(4)                                  sales, leases, conveyancesor other dispositions, including, without limitation, exchanges or swaps ofreal estate, for the development of the Company’s or any of its RestrictedSubsidiaries’ projects in the ordinary course of business;

 

(5)                                  sales, leases,sale-leasebacks or other dispositions of amenities, model homes and otherimprovements at the Company’s or its Restricted Subsidiaries’ projects in theordinary course of business;

 

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(6)                                  for purposes of Section 3.12only, the making of a Restricted Payment permitted under Section 3.11or any Permitted Investment;

 

(7)                                  a disposition to the Companyor a Restricted Subsidiary, including a Person that is or will become aRestricted Subsidiary immediately after the disposition;

 

(8)                                  any single transaction orseries of related transactions that involves assets or Capital Stock of aRestricted Subsidiary having a Fair Market Value of less thanUS$5 million;

 

(9)                                  a transfer of assets betweenor among the Company and any of its Restricted Subsidiaries;

 

(10)                            an issuance or sale ofCapital Stock by a Restricted Subsidiary of the Company to the Company or anyof its Restricted Subsidiaries;

 

(11)                            a disposition of accountsreceivable in connection with a Receivables Transaction;

 

(12)                            any sale or otherdisposition of damaged, worn-out, obsolete or no longer useful assets orproperties in the ordinary course of business;

 

(13)                            any sale of assets receivedby the Company or any of its Restricted Subsidiaries upon the foreclosure on aLien in the ordinary course of business; and

 

(14)                            the good faith surrender orwaiver of contract rights, tort claims or statutory rights in connection with asettlement.

 

“AssetSale Offer” has the meaning assigned to it in Section 3.12.

 

“AssetSale Offer Amount” has the meaning assigned to it in Section 3.12.

 

“AssetSale Offer Notice” means notice of an Asset Sale Offer made pursuant to Section 3.12,which shall be mailed first class, postage prepaid, to each record Holder as shownon the Note Register within 20 days following the 365th day after the receiptof Net Cash Proceeds of any Asset Sale, with a copy to the Trustee which noticeshall govern the terms of the Asset Sale Offer, and shall state:

 

(1)                                  the circumstances of theAsset Sale or Sales, the Net Cash Proceeds of which are included in the AssetSale Offer, that an Asset Sale Offer is being made pursuant to Section 3.12,and that all Notes that are timely tendered will be accepted for payment;

 

(2)                                  the Asset Sale Offer Amountand the Asset Sale Offer Payment Date;

 

(3)                                  that any Notes or portionsthereof not tendered or accepted for payment will continue to accrue interest;

 

(4)                                  that, unless the Companydefaults in the payment of the Asset Sale Offer Amount with respect thereto,all Notes or portions thereof accepted for payment pursuant to the Asset SaleOffer shall cease to accrue interest from and after the Asset Sale OfferPayment Date;

 

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(5)                                  that any Holder electing tohave any Notes or portions thereof purchased pursuant to the Asset Sale Offerwill be required to surrender such Notes, with the form entitled “Option ofHolder to Elect Purchase” on the reverse of such Notes completed, to the PayingAgent at the address specified in the notice prior to the close of business onthe third Business Day preceding the Asset Sale Offer Payment Date;

 

(6)                                  that any Holder shall beentitled to withdraw such election if the Paying Agent receives, not later thanthe close of business on the second Business Day preceding the Asset Sale OfferPayment Date, a facsimile transmission or letter, setting forth the name of theHolder, the principal amount of Notes delivered for purchase, and a statementthat such Holder is withdrawing such Holder’s election to have such Notes orportions thereof purchased pursuant to the Asset Sale Offer;

 

(7)                                  that any Holder electing tohave Notes purchased pursuant to the Asset Sale Offer must specify theprincipal amount that is being tendered for purchase, which principal amountmust be US$1,000 or an integral multiple thereof;

 

(8)                                  that any Holder ofCertificated Notes whose Certificated Notes are being purchased only in partwill be issued new Certificated Notes equal in principal amount to the unpurchasedportion of the Certificated Note or Notes surrendered, which unpurchasedportion will be equal in principal amount to US$1,000 or an integral multiplethereof;

 

(9)                                  that the Trustee will returnto the Holder of a Global Note that is being purchased in part, such GlobalNote with a notation on the schedule of increases or decreases thereofadjusting the principal amount thereof to be equal to the unpurchased portionof such Global Note; and

 

(10)                            any other informationreasonably necessary to enable any Holder to tender Notes and to have suchNotes purchased pursuant to Section 3.12.

 

“AssetSale Offer Payment Date” shall be a Business Day no earlier than 30 daysnor later than 60 days from the date the Asset Sale Offer Notice is mailed(other than as may be required by law).

 

“AssetSale Transaction” means any Asset Sale and, whether or not constituting anAsset Sale, (1) any sale or other disposition of Capital Stock,(2) any Designation with respect to an Unrestricted Subsidiary and(3) any sale or other disposition of property or assets excluded from thedefinition of Asset Sale by clause (2) of that definition.

 

“AuthenticatingAgent” has the meaning assigned to it in Section 2.2(d).

 

“AuthorizedAgent” has the meaning assigned to it in Section 11.7(c).

 

“BankruptcyLaw” means Title 11, U.S. Code or any similar Federal, state ornon-U.S. law for the relief of debtors, including the Mexican Ley de ConcursosMercantiles.

 

“Bankruptcy Law Event of Default” means:

 

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(1)                                  the entry by a court ofcompetent jurisdiction of:  (i) adecree or order for relief in respect of any Bankruptcy Party in an involuntarycase or proceeding under any Bankruptcy Law or (ii) a decree or order(A) adjudging any Bankruptcy Party a bankrupt or insolvent,(B) approving as properly filed a petition seeking reorganization,arrangement, adjustment or composition of, or in respect of, any BankruptcyParty under any Bankruptcy Law, (C) appointing a Custodian of anyBankruptcy Party or of any substantial part of the property of any BankruptcyParty, or (D) ordering the winding-up or liquidation of the affairs of anyBankruptcy Party, and in each case, the continuance of any such decree or orderfor relief or any such other decree or order unstayed and in effect for aperiod of 60 consecutive calendar days; or

 

(2)                                  (i) the commencement byany Bankruptcy Party of a voluntary case or proceeding under any Bankruptcy Lawor of any other case or proceeding to be adjudicated a bankrupt or insolvent,(ii) the consent by any Bankruptcy Party to the entry of a decree or orderfor relief in respect of any Bankruptcy Party in an involuntary case orproceeding under any Bankruptcy Law or to the commencement of any bankruptcy orinsolvency case or proceeding against any Bankruptcy Party, (iii) thefiling by any Bankruptcy Party of a petition or answer or consent seekingreorganization or relief under any Bankruptcy Law, (iv) the consent by anyBankruptcy Party to the filing of such petition or to the appointment of ortaking possession by a Custodian of any Bankruptcy Party or of any substantialpart of the Property of any Bankruptcy Party, (v) the making by anyBankruptcy Party of an assignment for the benefit of creditors, (vi) theadmission by any Bankruptcy Party in writing of its inability to pay its debtsgenerally as they become due, or (vii) the approval by stockholders of anyBankruptcy Party of any plan or proposal for the liquidation or dissolution ofany Bankruptcy Party, or (viii) the taking of corporate action by anyBankruptcy Party in furtherance of any action referred to in clauses (i) —(vii) above.

 

“BankruptcyParty” means the Company or any of its Restricted Subsidiaries.

 

“Boardof Directors” means, as to any Person, the board of directors, managementcommittee or similar governing body of such Person or any duly authorizedcommittee thereof.

 

“BoardResolution” means, with respect to any Person, a copy of a resolutioncertified by the Secretary or an Assistant Secretary of such Person to have beenduly adopted by the Board of Directors of such Person and to be in full forceand effect on the date of such certification, and delivered to the Trustee.

 

“BusinessDay” means a day other than a Saturday, Sunday or other day on whichcommercial banking institutions are authorized or required by law to close inNew York City or Mexico.

 

“CapitalizedLease Obligations” means, as to any Person, the obligations of such Personunder a lease that are required to be classified and accounted for as capitallease obligations under MFRS.  Forpurposes of this definition, the amount of such obligations at any date shallbe the capitalized amount of such obligations at such date, determined inaccordance with MFRS.

 

“CapitalStock” means:

 

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(1)                                  with respect to any Personthat is a corporation, any and all shares, interests, participations or otherequivalents (however designated and whether or not voting) of corporate stock,including each class of Common Stock and Preferred Stock of such Person;

 

(2)                                  with respect to any Personthat is not a corporation, any and all partnership or other equity or ownershipinterests of such Person; and

 

(3)                                  any warrants, rights oroptions to purchase any of the instruments or interests referred to inclause (1) or (2) above.

 

“CashEquivalents” means:

 

(1)                                  marketable directobligations issued by, or unconditionally guaranteed by, the United Statesgovernment or issued by any agency thereof and backed by the full faith andcredit of the United States, in each case maturing within one year from thedate of acquisition thereof;

 

(2)                                  *Certificadosde la Tesoreria de la Federación* (Cetes) or *Bonos de Desarrollo del Gobierno Federal*(Bondes), in each case, issued by the government of Mexico and maturing notlater than one year after the acquisition thereof;

 

(3)                                  marketable directobligations issued by any state of the United States of America or anypolitical subdivision of any such state or any public instrumentality thereofmaturing within one year from the date of acquisition thereof and, at the timeof acquisition, having one of the two highest ratings obtainable from eitherS&P or Moody’s or any successor thereto;

 

(4)                                  commercial paper maturing nomore than one year from the date of creation thereof and, at the time ofacquisition, having a rating of at least A-1 from S&P or at least P-1 fromMoody’s;

 

(5)                                  demand deposits,certificates of deposit, time deposits or bankers’ acceptances maturing withinone year from the date of acquisition thereof issued by (a) any bankorganized under the laws of the United States of America or any state thereofor the District of Columbia, (b) any U.S. branch of anon-U.S. bank having at the date of acquisition thereof combined capital andsurplus of not less than US$500 million, or (c) in the case ofMexican peso deposits, any of the five top-rated banks (as evaluated by aninternationally recognized rating agency) organized under the laws of Mexico;

 

(6)                                  repurchase obligations witha term of not more than seven days for underlying securities of the typesdescribed in clause (1) above entered into with any bank meeting thequalifications specified in clause (5) above; and

 

(7)                                  investments in money marketfunds which invest substantially all of their assets in securities of the typesdescribed in clauses (1) through (6) above.

 

“CertificatedNote” means any Note issued in fully-registered certificated form (otherthan a Global Note), which shall be substantially in the form of Exhibit A,with appropriate legends as specified in Section 2.7 and Exhibit A.

 

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“Changeof Control” means the occurrence of one or more of the following events:

 

(1)                                  any Person or Group otherthan the Permitted Holders is or becomes the beneficial owner (as definedbelow), directly or indirectly, in the aggregate of more than 50% of the totalvoting power of the Voting Stock of the Company (including a Surviving Entity,if applicable);

 

(2)                                  during any period of twoconsecutive years, individuals who at the beginning of such period constitutedthe Board of Directors of the Company, together with any new directors whoseelection by such Board of Directors or whose nomination for election by theshareholders of the Company was approved by a vote of a majority of thedirectors of the Company then still in office who were either directors at thebeginning of such period or whose election or nomination for election waspreviously so approved, cease for any reason to constitute a majority of the Boardof Directors of the Company then in office;

 

(3)                                  the Company consolidateswith, or merges with or into, another Person, or the Company sells, conveys,assigns, transfers, leases or otherwise disposes of all or substantially all ofthe assets of the Company, determined on a consolidated basis, to any Person,other than a transaction where the Person or Persons that, immediately prior tosuch transaction “beneficially owned” the outstanding Voting Stock of theCompany are, by virtue of such prior ownership, or Permitted Holders are, the “beneficialowners” in the aggregate of a majority of the total voting power of the thenoutstanding Voting Stock of the surviving or transferee person (or if suchsurviving or transferee Person is a direct or indirect wholly-owned subsidiaryof another Person, such Person who is the ultimate parent entity), in each casewhether or not such transaction is otherwise in compliance with this Indenture;or

 

(4)                                  the approval by the holdersof Capital Stock of the Company of any plan or proposal for the liquidation ordissolution of the Company, whether or not otherwise in compliance with theprovisions of this Indenture.

 

Forpurposes of this definition:

 

(a)                                  “beneficialowner” shall have the meaning specified in Rules 13d-3 and 13d-5 under theExchange Act, except that any Person or Group shall be deemed to have “beneficialownership” of all securities that such Person or Group has the right toacquire, whether such right is exercisable immediately, only after the passageof time or, except in the case of the Permitted Holders, upon the occurrence ofa subsequent condition.

 

(b)                                 “Person” and “Group”shall have the meanings for “person” and “group” as used in Sections 13(d) and14(d) of the Exchange Act; and

 

(c)                                  the PermittedHolders or any other Person or Group shall be deemed to beneficially own anyVoting Stock of a corporation held by any other corporation (the “parentcorporation”) so long as the Permitted Holders or such other Person or Group,as the case may be, beneficially own, directly or indirectly, in the aggregateat least 50% of the voting power of the Voting Stock of the parent corporationand no other Person or Group beneficially owns an equal or greater amount ofthe Voting Stock of the parent corporation.

 

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“Changeof Control Notice” means notice of a Change of Control Offer made pursuantto Section 3.8, which shall be (i) mailed first-class, postageprepaid, to each record Holder as shown on the Note Register within 30 daysfollowing the date upon which a Change of Control occurred, with a copy to theTrustee, and (ii) published in a newspaper having a general circulation inLuxembourg (which is expected to be the *LuxemburgerWort*), which notice shall govern the terms of the Change of ControlOffer and shall state:

 

(1)                                  that a Change of Control hasoccurred, the circumstances or events causing such Change of Control and that aChange of Control Offer is being made pursuant to Section 3.8 ,and that all Notes that are timely tendered will be accepted for payment;

 

(2)                                  the Change of ControlPayment, and the Change of Control Payment Date;

 

(3)                                  that any Notes or portionsthereof not tendered or accepted for payment will continue to accrue interest;

 

(4)                                  that, unless the Companydefaults in the payment of the Change of Control Payment with respect thereto,all Notes or portions thereof accepted for payment pursuant to the Change ofControl Offer shall cease to accrue interest from and after the Change ofControl Payment Date;

 

(5)                                  that any Holder electing tohave any Notes or portions thereof purchased pursuant to a Change of ControlOffer will be required to tender such Notes, with the form entitled “Option ofHolder to Elect Purchase” on the reverse of such Notes completed, to the PayingAgent at the address specified in the notice prior to the close of business onthe third Business Day preceding the Change of Control Payment Date;

 

(6)                                  that any Holder shall beentitled to withdraw such election if the Paying Agent receives, not later thanthe close of business on the second Business Day preceding the Change ofControl Payment Date, a facsimile transmission or letter, setting forth thename of the Holder, the principal amount of Notes delivered for purchase, and astatement that such Holder is withdrawing such Holder’s election to have suchNotes or portions thereof purchased pursuant to the Change of Control Offer;

 

(7)                                  that any Holder electing tohave Notes purchased pursuant to the Change of Control Offer must specify the principalamount that is being tendered for purchase, which principal amount must beUS$1,000 or an integral multiple thereof;

 

(8)                                  that any Holder ofCertificated Notes whose Certificated Notes are being purchased only in partwill be issued new Certificated Notes equal in principal amount to theunpurchased portion of the Certificated Note or Notes surrendered, whichunpurchased portion will be equal in principal amount to US$1,000 or anintegral multiple thereof;

 

(9)                                  that the Trustee will returnto the Holder of a Global Note that is being purchased in part, such GlobalNote with a notation on Schedule A thereof adjusting the principal amountthereof to be equal to the unpurchased portion of such Global Note;

 

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(10)                            that, in the event thatHolders of not less than 95% of the aggregate principal amount of theoutstanding Notes accept a Change of Control Offer and the Company or thirdparty purchases all of the Notes held by such Holders, the Company will havethe right, upon prior notice, to redeem all of the Notes that remainoutstanding in accordance with Section 3.8(e); and

 

(11)                            any other informationnecessary to enable any Holder to tender Notes and to have such Notes purchasedpursuant to Section 3.8.

 

“Changeof Control Offer” has the meaning assigned to it in Section 3.8.

 

“Changeof Control Payment” has the meaning assigned to it in Section 3.8.

 

“Changeof Control Payment Date” shall be a Business Day no earlier than 30 daysnor later than 60 days subsequent to the date on which the Change of ControlNotice is mailed (other than as may be required by law);

 

“ClearstreamLuxembourg” means Clearstream Banking, société anonyme, or the successor toits securities clearance and settlement operations.

 

“Code”means the Internal Revenue Code of 1986, as amended.

 

“Commodity Agreement”**means anycommodity or raw material futures contract, commodity or raw materials option,or any other agreement designed to protect against or manage exposure tofluctuations in commodity or raw materials prices.

 

“CommonStock” of any Person means any and all shares, interests or otherparticipations in, and other equivalents (however designated and whether votingor non-voting) of such Person’s common equity interests, whether outstanding onthe Issue Date or issued after the Issue Date, and includes, withoutlimitation, all series and classes of such common equity interests.

 

“Company”means the party named as such in the introductory paragraph to this Indentureand its successors and assigns, including any Surviving Entity.

 

“CompanyOrder” has the meaning assigned to it in Section 2.2(c).

 

“ConsolidatedEBITDA” means, for any Person for any period, Consolidated Net Income forsuch Person for such period, plus the following, without duplication, to theextent deducted or added in calculating such Consolidated Net Income:

 

(1)                                  Consolidated Income TaxExpense for such Person for such period;

 

(2)                                  Consolidated InterestExpense for such Person for such period;

 

(3)                                  Consolidated Non-cashCharges for such Person for such period;

 

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(4)                                  net after-tax losses fromAsset Sale Transactions or abandonments or reserves relating thereto for suchperiod;

 

(5)                                  any income or loss fromdiscontinued operations;

 

*less* (x) all non-cash credits and gainsincreasing Consolidated Net Income for such Person for such period, other thanany items which represent the reversal in such period of any accrual of, orcash reserve for, anticipated charges in any prior period where such accrual orreserve is no longer required under MFRS and (y) all cash payments made bysuch Person and its Subsidiaries (Restricted Subsidiaries in the case of theCompany) during such period relating to non-cash charges that were added backin determining Consolidated EBITDA in any prior period.

 

Notwithstandingthe foregoing, the items specified in clauses (1) and (3) abovefor any Subsidiary (Restricted Subsidiary in the case of the Company) shall beadded to Consolidated Net Income in calculating Consolidated EBITDA for anyperiod:

 

(a)                                  in proportionto the percentage of the total Capital Stock of such Subsidiary (RestrictedSubsidiary in the case of the Company) held directly or indirectly by suchPerson at the date of determination, and

 

(b)                                 to the extentthat a corresponding amount would be permitted at the date of determination tobe distributed to such Person by such Subsidiary (Restricted Subsidiary in thecase of the Company) pursuant to its charter and bylaws and each law, regulation,agreement or judgment applicable to such distribution.

 

“ConsolidatedFixed Charge Coverage Ratio” means, for any Person as of any date ofdetermination, the ratio of the aggregate amount of Consolidated EBITDA of suchPerson for the four most recent full fiscal quarters for which financialstatements are available ending prior to the date of such determination (the “FourQuarter Period”) to Consolidated Fixed Charges for such Person for such FourQuarter Period.  For purposes of thisdefinition, “Consolidated EBITDA” and “Consolidated Fixed Charges” will becalculated after giving effect on a pro forma basis in accordance withRegulation S-X under the Securities Act for the period of such calculation to:

 

(1)                                  the Incurrence or repaymentor redemption of any Indebtedness (including Acquired Indebtedness) of suchPerson or any of its Subsidiaries (Restricted Subsidiaries in the case of theCompany), and the application of the proceeds thereof, including the Incurrenceof any Indebtedness (including Acquired Indebtedness), and the application ofthe proceeds thereof, giving rise to the need to make such determination,occurring during such Four Quarter Period or at any time subsequent to the lastday of such Four Quarter Period and on or prior to such date of determination,to the extent, in the case of an Incurrence, such Indebtedness is outstandingon the date of determination, as if such Incurrence and the application of theproceeds thereof, repayment or redemption occurred on the first day of such FourQuarter Period; and

 

(2)                                  any Asset Sale Transactionor Asset Acquisition by such Person or any of its Subsidiaries (RestrictedSubsidiaries, in the case of the Company), including any Asset Sale Transactionor Asset Acquisition giving rise to the need to make such determinationoccurring 

 

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duringthe Four Quarter Period or at any time subsequent to the last day of the FourQuarter Period and on or prior to such date of determination, as if such AssetSale Transaction or Asset Acquisition occurred on the first day of the FourQuarter Period.

 

Furthermore,in calculating “Consolidated Fixed Charges” for purposes of determining thedenominator (but not the numerator) of this “Consolidated Fixed Charge CoverageRatio,”

 

(a)                                  interest onoutstanding Indebtedness determined on a fluctuating basis as of the date ofdetermination and which will continue to be so determined thereafter shall bedeemed to have accrued at a fixed rate per annum equal to the rate of intereston such Indebtedness in effect on such date of determination;

 

(b)                                 if interest onany Indebtedness actually Incurred on such date of determination may optionallybe determined at an interest rate based upon a factor of a prime or similarrate, a eurocurrency interbank offered rate, or other rates, then the interestrate in effect on such date of determination shall be deemed to have been ineffect during the Four Quarter Period;

 

(c)                                  notwithstandingclause (a) above, interest on Indebtedness determined on afluctuating basis, to the extent such interest is covered by HedgingObligations, shall be deemed to accrue at the rate per annum resulting aftergiving effect to the operation of such agreements;

 

(d)                                 interest on aCapital Lease Obligation shall be deemed to accrue at an interest ratereasonably determined by a responsible financial or accounting officer of theCompany to be the rate of interest implicit in such Capital Lease Obligation inaccordance with MFRS; and

 

(e)                                  for purposes ofmaking the computation referred to above, interest on any Indebtedness under arevolving credit facility computed on a pro forma basis shall be computed basedupon the average daily balance of such Indebtedness during the applicableperiod.

 

“ConsolidatedFixed Charges” means, for any Person for any period, the sum, withoutduplication, of:

 

(1)                                  Consolidated InterestExpense for such Person for such period,

 

*plus*

 

(2)                                  the amount of all cash andnon-cash dividend payments on any series of Preferred Stock or DisqualifiedCapital Stock of such Person (other than dividends paid in Qualified CapitalStock) or any Subsidiary of such Person (Restricted Subsidiary in the case ofthe Company) paid, accrued or scheduled to be paid or accrued during suchperiod, excluding dividend payments on Preferred Stock or Disqualified CapitalStock paid, accrued or scheduled to be paid to such Person or anotherSubsidiary (Restricted Subsidiary in the case of the Company).

 

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“ConsolidatedIncome Tax Expense” means, with respect to any Person for any period, theprovision for U.S. federal, state, local and non-U.S. income taxespayable by such Person and its Subsidiaries (Restricted Subsidiaries in thecase of the Company) for such period as determined on a consolidated basis inaccordance with MFRS.

 

“ConsolidatedInterest Expense” means, for any Person for any period, the sum of, withoutduplication determined on a consolidated basis in accordance with MFRS:

 

(1)                                  the aggregate of cash andnon-cash interest expense of such Person and its Subsidiaries (RestrictedSubsidiaries in the case of the Company) for such period determined on aconsolidated basis in accordance with MFRS, including, without limitation(whether or not interest expense in accordance with MFRS):

 

(a)                                  anyamortization or accretion of debt discount or any interest paid on Indebtednessof such Person and its Subsidiaries (Restricted Subsidiaries in the case of theCompany) in the form of additional Indebtedness,

 

(b)                                 any amortizationof deferred financing costs,

 

(c)                                  the net costsunder Hedging Obligations (but excluding amortization of fees),

 

(d)                                 all capitalizedinterest,

 

(e)                                  the interestportion of any deferred payment obligation,

 

(f)                                    commissions,discounts and other fees and charges Incurred in respect of letters of creditor bankers’ acceptances, and

 

(g)                                 any interestexpense paid in respect of Indebtedness of another Person that is Guaranteed bysuch Person or one of its Subsidiaries (Restricted Subsidiaries in the case ofthe Company) or secured by a Lien on the assets of such Person or one of itsSubsidiaries (Restricted Subsidiaries in the case of the Company); and

 

(2)                                  the interest component ofCapitalized Lease Obligations paid, accrued and/or scheduled to be paid or accruedby such Person and its Subsidiaries (Restricted Subsidiaries in the case of theCompany) during such period.

 

“ConsolidatedNet Income” means, with respect to any Person for any period, the aggregatenet income (or loss) of such Person and its Subsidiaries (after deducting (oradding) the portion of such net income (or loss) attributable to minorityinterests in Subsidiaries of such Person) for such period on a consolidatedbasis, determined in accordance with MFRS; *provided*,that there shall be excluded therefrom to the extent reflected in suchaggregate net income (loss):

 

(1)                                  net after-tax gains orlosses from Asset Sale Transactions or abandonments or reserves relatingthereto;

 

(2)                                  net after-tax itemsclassified as extraordinary gains or losses;

 

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(3)                                  the net income (but notloss) of any Person, other than such Person and any Subsidiary of such Person(Restricted Subsidiary in the case of the Company); except that, solely forpurposes of calculating Consolidated Net Income pursuant to Section 3.11(a)(3) only,Consolidated Net Income of the Company will include the Company’s proportionateshare of the net income of:

 

(a)                                  any Personacquired in a “pooling of interests” transaction accrued prior to the date itbecomes a Restricted Subsidiary or is merged or consolidated with the Companyor any Restricted Subsidiary; or

 

(b)                                 a SurvivingEntity prior to assuming the Company’s obligations under this Indenture and theNotes pursuant to Section 4.1;

 

(4)                                  the net income (but notloss) of any Subsidiary of such Person (Restricted Subsidiary in the case ofthe Company) to the extent that (and only so long as) a corresponding amountcould not be distributed to such Person at the date of determination as aresult of any restriction pursuant to the constituent documents of suchSubsidiary (Restricted Subsidiary in the case of the Company) or any law,regulation, agreement or judgment applicable to any such distribution;

 

(5)                                  any increase (but notdecrease) in net income attributable to minority interests in any Subsidiary(Restricted Subsidiary in the case of the Company);

 

(6)                                  any gain (or loss) fromforeign exchange translation or change in net monetary position;

 

(7)                                  any gains or losses (lessall fees and expenses or charges relating thereto) attributable to the earlyextinguishment of Indebtedness and Hedging Obligations; and

 

(8)                                  the cumulative effect ofchanges in accounting principles.

 

“ConsolidatedNet Worth” means, for any Person at any time, the consolidated stockholders’equity of such Person at such time, determined on a consolidated basis inaccordance with MFRS, less (without duplication) amounts attributable toDisqualified Capital Stock of such Person.

 

“ConsolidatedNon-cash Charges” means, for any Person for any period, the aggregatedepreciation, amortization and other non-cash expenses or losses of such Personand its Subsidiaries (Restricted Subsidiaries in the case of the Company) forsuch period, determined on a consolidated basis in accordance with MFRS(excluding any such charge which constitutes an accrual of or a reserve forcash charges for any future period or the amortization of a prepaid cashexpense paid in a prior period).

 

“ConsolidatedTangible Assets” means, for any Person at any time, the total consolidatedassets of such Person and its Subsidiaries (Restricted Subsidiaries in the caseof the Company) as set forth on the balance sheet as of the most recent fiscalquarter of such Person, prepared in accordance with MFRS, less (i) IntangibleAssets and (ii) any assets securing Non-Recourse Indebtedness.

 

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“ConsolidatedTangible Net Worth” means, for any Person at any time, the Consolidated NetWorth of such Person at such time, less the amount of Intangible Assetsreflected on the consolidated balance sheet of such Person at such time.

 

“CorporateTrust Office” means the principal office of the Trustee at which at anytime its corporate trust business shall be administered, which office at thedate hereof is located at 101 Barclay Street, 4 East, New York, NY 10286, Fax(212) 815-5802, Attention: Global Finance Americas, or such other address asthe Trustee may designate from time to time by notice to the Holders and theCompany, or the principal corporate trust office of any successor Trustee (orsuch other address as such successor Trustee may designate from time to time bynotice to the Holders and the Company).

 

“CovenantDefeasance” has the meaning assigned to it in Section 8.1(c).

 

“CreditFacilities” means one or more debt facilities, commercial paper facilitiesor Debt Issuances, in each case with banks, investment banks, insurancecompanies, mutual funds and/or other institutional lenders or institutionalinvestors providing for revolving credit loans, term loans, letters of creditor Debt Issuances, in each case, as amended, extended, renewed, restated,Refinanced (including, Refinancing with Debt Issuances), supplemented orotherwise modified (in whole or in part, and without limitation as to amount,terms, conditions, covenants and other provisions) from time to time.

 

“CurrencyAgreement” means, in respect of any Person, any foreign exchange contract,currency swap agreement or other similar agreement as to which such Person is aparty designed to hedge foreign currency risk of such Person.

 

“Custodian”means any receiver, trustee, assignee, liquidator, *conciliador*, *síndico*,sequestrator or similar official under any Bankruptcy Law.

 

“DebtIssuances” means, with respect to the Company or any Restricted Subsidiary,one or more issuances after the Issue Date of Indebtedness evidenced by notes,debentures, bonds or other similar securities or instruments.

 

“Default”means an event or condition the occurrence of which is, or with the lapse oftime or the giving of notice or both would be, an Event of Default.

 

“DefaultedInterest” has the meaning assigned to it in paragraph 1 of the Form ofReverse Side of Note contained in Exhibit A.

 

“Designation”and “Designation Amount” have the meanings set forth in Section 3.13.

 

“DisqualifiedCapital Stock” means that portion of any Capital Stock which, by its terms(or by the terms of any security into which it is convertible or for which itis exchangeable at the option of the holder thereof), or upon the happening ofany event, matures or is mandatorily redeemable, pursuant to a sinking fundobligation or otherwise, or is redeemable at the sole option of the holderthereof, in any case, on or prior to the final maturity date of the Notes; *provided*, *however*,**that any variable portion of the Company’s Capital Stockshall not

 

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constituteDisqualified Stock and any Capital Stock that would not constitute DisqualifiedStock but for provisions thereof giving holders thereof the right to requiresuch Person to purchase or redeem such Capital Stock upon the occurrence of an “assetsale” or “change of control” occurring prior to the final maturity of the Notesshall not constitute Disqualified Stock if:

 

(1)                                  the “asset sale” or “changeof control” provisions applicable to such Capital Stock are no more favorableto the holders of such Capital Stock than the terms applicable to the Notes anddescribed under Section 3.8 and Section 3.12; and

 

(2)                                  any such requirement onlybecomes operative after compliance with such terms applicable to the Notes,including the purchase of any Notes tendered pursuant thereto.

 

Theamount of any Disqualified Capital Stock shall be equal to the greater of itsvoluntary or involuntary liquidation preference and its maximum fixedrepurchase price, but excluding accrued dividends, if any.  The amount of any Disqualified Stock thatdoes not have a fixed redemption, repayment or repurchase price shall becalculated in accordance with the terms of such Disqualified Stock as if suchDisqualified Stock were redeemed, repaid or repurchased on any date on whichthe amount of such Disqualified Stock is to be determined hereunder; *provided*, *however*,**that if such Disqualified Stock could not be required to beredeemed, repaid or repurchased at the time of such determination, theredemption, repayment or repurchase price shall be the book value of suchDisqualified Stock as reflected in the most recent financial statements of suchPerson.

 

“DistributionCompliance Period” means, in respect of any Regulation S Global Note,the 40 consecutive days beginning on and including the later of (a) theday on which any Notes represented thereby are offered to persons other thandistributors (as defined in Regulation S under the Securities Act)pursuant to Regulation S and (b) the issue date for such Notes.

 

“DTC”means The Depository Trust Company, its nominees and their respectivesuccessors and assigns, or such other depositary institution hereinafterappointed by the Company that is a clearing agency registered under theExchange Act.

 

“EquityOffering” has the meaning set forth under Section 5 of Exhibit A.

 

“Euroclear”means Euroclear S.A./N.V., as operator of the Euroclear System, or itssuccessor in such capacity.

 

“Eventof Default” has the meaning assigned to it in Section 6.1.

 

“ExchangeAct” means the Securities Exchange Act of 1934, as amended, or anysuccessor statute or statutes thereto.

 

“FairMarket Value” means, with respect to any asset, the price (after deductingany liabilities relating to such assets) which could be negotiated in an arm’s-lengthfree market transaction, for cash, between a willing seller and a willing andable buyer, neither of which is under any compulsion to complete thetransaction; *provided*, that theFair Market Value of any 

 

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suchasset or assets will be determined conclusively by the Board of Directors ofthe Company acting in good faith, and will be evidenced by a Board Resolution.

 

“FourQuarter Period” has the meaning set forth in the definition of ConsolidatedFixed Charge Coverage Ratio above.

 

“GlobalNote” means any Note issued in fully-registered certificated form to DTC(or its nominee), as depositary for the beneficial owners thereof, which shallbe substantially in the form of Exhibit A, with appropriate legendsas specified in Section 2.7 and Exhibit A.

 

“Guarantee”means any obligation, contingent or otherwise, of any Person directly orindirectly guaranteeing any Indebtedness of any other Person:

 

(1)                                  to purchase or pay, oradvance or supply funds for the purchase or payment of, such Indebtedness ofsuch other Person, whether arising by virtue of partnership arrangements, or byagreement to keep-well, to purchase assets, goods, securities or services, totake-or-pay, or to maintain financial statement conditions or otherwise, or

 

(2)                                  entered into for purposes ofassuring in any other manner the obligee of such Indebtedness of the paymentthereof or to protect such obligee against loss in respect thereof, in whole orin part,

 

*provided*, that “Guarantee” will notinclude endorsements for collection or deposit in the ordinary course ofbusiness.  “Guarantee” used as a verb hasa corresponding meaning.

 

“HedgingObligations” means the obligations of any Person pursuant to any InterestRate Agreement, Currency Agreement or Commodity Agreement.

 

“Holder”means the Person in whose name a Note is registered in the Note Register.

 

“Incur”means, with respect to any Indebtedness or other obligation of any Person, tocreate, issue, incur (including by conversion, exchange or otherwise), assume, Guaranteeor otherwise become liable in respect of such Indebtedness or other obligationon the balance sheet of such Person (and “Incurrence,” “Incurred” and “Incurring”will have meanings correlative to the preceding).

 

“Indebtedness”means with respect to any Person, without duplication:

 

(1)                                  the principal amount (or, ifless, the accreted value) of all obligations of such Person for borrowed money;

 

(2)                                  the principal amount (or, ifless, the accreted value) of all obligations of such Person evidenced by bonds,debentures, notes or other similar instruments;

 

(3)                                  all Capitalized LeaseObligations of such Person;

 

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(4)                                  all obligations of suchPerson issued or assumed as the deferred purchase price of property, allconditional sale obligations and all obligations under any title retentionagreement (but excluding trade accounts payable and other accrued liabilitiesarising in the ordinary course of business that are not overdue by 180 days ormore or are being contested in good faith by appropriate proceedings promptlyinstituted and diligently conducted);

 

(5)                                  all letters of credit,banker’s acceptances or similar credit transactions, including reimbursementobligations in respect thereof;

 

(6)                                  Guarantees and othercontingent obligations of such Person in respect of Indebtedness referred to inclauses (1) through (5) above and clauses (8) through (10) below;

 

(7)                                  all Indebtedness of anyother Person of the type referred to in clauses (1) through (6) whichis secured by any Lien on any property or asset of such Person, the amount ofsuch Indebtedness being deemed to be the lesser of the Fair Market Value ofsuch property or asset or the amount of the Indebtedness so secured;

 

(8)                                  all obligations underHedging Obligations of such Person;

 

(9)                                  to the extent not otherwiseincluded in this definition, the Receivables Transaction Amount outstandingrelating to any Receivables Transaction; and

 

(10)                            all Disqualified CapitalStock issued by such Person.

 

Forthe avoidance of doubt, the recognition and acknowledgement by the Company orany Restricted Subsidiary of its obligation to make payment of a trade payablearising in the ordinary course of business to a bank following the sale andassignment thereof pursuant to the terms of Supplier Factoring Facilities shallnot be Indebtedness.

 

“Indenture”means this Indenture as amended or supplemented from time to time, includingthe Exhibits hereto.

 

“IndependentFinancial**Advisor” means anaccounting firm, appraisal firm, investment banking firm or consultant ofinternationally recognized standing that is, in the judgment of the Company’sBoard of Directors, qualified to perform the task for which it has been engagedand which is independent in connection with the relevant transaction.

 

“IntangibleAssets” means with respect to any Person all unamortized debt discount andexpense, unamortized deferred charges, goodwill, patents, trademarks, servicemarks, trade names, copyrights and all other items which would be treated as intangibleson the consolidated balance sheet of such Person prepared in accordance withMFRS.

 

“InterestPayment Date” means the stated due date of an installment of interest onthe Notes as specified in the Form of Face of Note contained in Exhibit A.

 

“InterestRate Agreement” of any Person means any interest rate protection agreement(including, without limitation, interest rate swaps, caps, floors, collars,derivative 

 

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instrumentsand similar agreements) and/or other types of hedging agreements designed tohedge interest rate risk of such Person.

 

“Investment”means, with respect to any Person, any:

 

(1)                                  direct or indirect loan,advance or other extension of credit (including, without limitation, a Guarantee)to any other Person,

 

(2)                                  capital contribution to (bymeans of any transfer of cash or other property to others or any payment forproperty or services for the account or use of others) any other Person, or

 

(3)                                  any purchase or acquisitionby such Person of any Capital Stock, bonds, notes, debentures or othersecurities or evidences of Indebtedness issued by, any other Person.

 

“Investment”will exclude accounts receivable or deposits arising in the ordinary course ofbusiness.  “Invest,” “Investing” and “Invested”will have corresponding meanings.

 

Forpurposes of Section 3.11, the Company shall be deemed to have madean “Investment” in an Unrestricted Subsidiary at the time of its Designation,which shall be valued at the Fair Market Value of the sum of the net assets ofsuch Unrestricted Subsidiary at the time of its Designation and the amount ofany Indebtedness of such Unrestricted Subsidiary or owed to the Company or anyRestricted Subsidiary immediately following such Designation.  Any property transferred to or from anUnrestricted Subsidiary shall be valued at its Fair Market Value at the time ofsuch transfer.  If the Company or anyRestricted Subsidiary sells or otherwise disposes of any Capital Stock of aRestricted Subsidiary (including any issuance and sale of Capital Stock by aRestricted Subsidiary) such that, after giving effect to any such sale ordisposition, such Restricted Subsidiary would cease to be a Subsidiary of theCompany, the Company shall be deemed to have made an Investment on the date ofany such sale or disposition equal to sum of the Fair Market Value of theCapital Stock of such former Restricted Subsidiary held by the Company or anyRestricted Subsidiary immediately following such sale or other disposition andthe amount of any Indebtedness of such former Restricted Subsidiary Guaranteedby the Company or any Restricted Subsidiary or owed to the Company or any otherRestricted Subsidiary immediately following such sale or other disposition.

 

“InvestmentGrade Rating” means a rating equal to or higher than (i) Baa3 (or theequivalent) by Moody’s or (ii) BBB- (or the equivalent) by S&P, or, ifeither such entity ceases to rate the Notes for reasons outside of the controlof the Issuer, the equivalent investment grade credit rating from any otherRating Agency.

 

“InvestmentReturn” means, in respect of any Investment (other than a PermittedInvestment) made after the Issue Date by the Company or any RestrictedSubsidiary:

 

(1)                                  the proceeds in cash and theFair Market Value of property other than cash received by the Company or anyRestricted Subsidiary upon the sale, liquidation or repayment of suchInvestment or, in the case of a Guarantee, the amount of the Guarantee upon theunconditional release of the Company and its Restricted Subsidiaries in full,less any payments previously made by the Company or any Restricted Subsidiaryin respect of such Guarantee;

 

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(2)                                  in the case of theRevocation of the Designation of an Unrestricted Subsidiary, an amount equal tothe lesser of:

 

(a)                                  the Company’sInvestment in such Unrestricted Subsidiary at the time of such Revocation;

 

(b)                                 that portion ofthe Fair Market Value of the net assets of such Unrestricted Subsidiary at thetime of Revocation that is proportionate to the Company’s equity interest insuch Unrestricted Subsidiary at the time of Revocation; and

 

(c)                                  the DesignationAmount with respect to such Unrestricted Subsidiary upon its Designation whichwas treated as a Restricted Payment; and

 

(3)                                  in the event the Company orany Restricted Subsidiary makes any Investment in a Person that, as a result ofor in connection with such Investment, becomes a Restricted Subsidiary, theFair Market Value of the Investment of the Company and its RestrictedSubsidiaries in such Person,

 

inthe case of each of (1), (2) and (3), up to the amount of such Investmentthat was treated as a Restricted Payment under Section 3.11 lessthe amount of any previous Investment Return in respect of such Investment.

 

“IssueDate” means December 11, 2019.

 

“IssueDate Notes” means the US$250,000,000 aggregate principal amount of Notesoriginally issued on the Issue Date, and any replacement Notes issued thereforin accordance with this Indenture.

 

“LegalDefeasance” has the meaning assigned to it in Section 8.1(b).

 

“LegalHoliday” has the meaning assigned to it in Section 11.6.

 

“Lien”means any lien, mortgage, deed of trust, pledge, security interest, charge orencumbrance of any kind (including any conditional sale or other titleretention agreement, any lease in the nature thereof and any agreement to giveany security interest); *provided*that the lessee in respect of a Capitalized Lease Obligation or Sale andLeaseback Transaction will be deemed to have Incurred a Lien on the propertyleased thereunder.

 

“Luxembourg”means the Grand Duchy of Luxembourg.

 

“LuxembourgPaying Agent” means The Bank of New York Mellon (Luxembourg) S.A. untilsuch party resigns or is removed by the Company from such role, *provided that*, if such party is replacedby a successor in accordance with the terms of this Indenture, “LuxembourgPaying Agent” shall thereafter mean such successor.

 

“MFRS”means Mexican Financial Reporting Standards that are in effect as of the IssueDate.

 

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“MaturityDate” means December 11, 2019.

 

“Moody’s”means Moody’s Investors Service, Inc. and its successors and assigns.

 

“NetCash Proceeds” means, with respect to any Asset Sale, the proceeds in theform of cash or Cash Equivalents, including payments in respect of deferredpayment obligations when received in the form of cash or Cash Equivalentsreceived by the Company or any of its Restricted Subsidiaries from such AssetSale, net of:

 

(1)                                  reasonable out-of-pocketexpenses and fees relating to such Asset Sale (including, without limitation,legal, accounting and investment banking fees and sales commissions);

 

(2)                                  taxes paid or payable inrespect of such Asset Sale after taking into account any reduction inconsolidated tax liability due to available tax credits or deductions and anytax sharing arrangements;

 

(3)                                  repayment of Indebtednesssecured by a Lien permitted under this Indenture that is required to be repaidin connection with such Asset Sale; and

 

(4)                                  appropriate amounts to beprovided by the Company or any Restricted Subsidiary, as the case may be, as areserve, in accordance with MFRS, against any liabilities associated with suchAsset Sale and retained by the Company or any Restricted Subsidiary, as thecase may be, after such Asset Sale, including, without limitation, pension andother post-employment benefit liabilities, liabilities related to environmentalmatters and liabilities under any indemnification obligations associated withsuch Asset Sale, but excluding any reserves with respect to Indebtedness.

 

“Non-RecourseIndebtedness” with respect to any Person means Indebtedness of such Personfor which (1) the sole legal recourse for collection of principal andinterest on such Indebtedness is against the specific property identified inthe instruments evidencing or securing such Indebtedness and such property wasacquired with the proceeds of such Indebtedness or such Indebtedness wasincurred within 365 days after the acquisition or construction of such propertyand (2) no other assets of such Person may be realized upon in collectionof principal or interest on such Indebtedness.

 

“Non-U.S.Person” means a person who is not a U.S. person, as defined inRegulation S.

 

“NoteCustodian” means the custodian with respect to any Global Note appointed byDTC, or any successor Person thereto, and shall initially be the Trustee.

 

“NoteGuarantee” means the guarantee of the Company’s Obligations under thisIndenture and the Notes by a Restricted Subsidiary pursuant to Article X.

 

“NoteRegister” has the meaning assigned to it in Section 2.3(a).

 

“Notes”means any of the Company’s 9.500% Senior Guaranteed Notes due December 11,2019 issued and authenticated pursuant to this Indenture.

 

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“Obligations”means, with respect to any Indebtedness, any principal, interest (including,without limitation, Post-Petition Interest), penalties, fees, indemnifications,reimbursements, damages, and other liabilities payable under the documentationgoverning such Indebtedness, including in the case of the Notes and the NoteGuarantees, this Indenture.

 

“Officer”means, when used in connection with any action to be taken by the Company or aSubsidiary Guarantor, as the case may be, the Chairman of the Board, the ChiefExecutive Officer, the President, the Chief Financial Officer, any VicePresident, the Treasurer, the Controller, the Secretary of the Company or suchSubsidiary Guarantor, as the case may be, or any other representative with fullpower and authority to represent and act on behalf of the Company or suchSubsidiary Guarantor, as the case may be.

 

“Officers’Certificate” means, when used in connection with any action to be taken bythe Company or a Subsidiary Guarantor, as the case may be, a certificate signedby two Officers or by an Officer and either an Assistant Treasurer or anAssistant Secretary of the Company or such Subsidiary Guarantor, as the casemay be and delivered to the Trustee.

 

“Opinionof Counsel”**means a writtenopinion of counsel, who may be an employee of or counsel for the Company(except as otherwise provided in this Indenture) and which opinion shall bereasonably acceptable to the Trustee.

 

“Outstanding”means, as of the date of determination, all Notes theretofore authenticated anddelivered under this Indenture, *except*:

 

(i)                                     Notestheretofore canceled by the Trustee or delivered to the Trustee forcancellation;

 

(ii)                                  Notes, orportions thereof, for the payment, redemption or, in the case of an Asset SaleOffer or Change of Control Offer, purchase of which money in the necessaryamount has been theretofor deposited with the Trustee or any Paying Agent(other than the Company, a Subsidiary Guarantor or an Affiliate of the Company)in trust or set aside and segregated in trust by the Company, a SubsidiaryGuarantor or an Affiliate of the Company (if the Company, a SubsidiaryGuarantor or such Affiliate of the Company is acting as Paying Agent) for theHolders of such Notes; *provided*that,if Notes (or portions thereof) are to be redeemed or purchased, notice of suchredemption or purchase has been duly given pursuant to this Indenture orprovision therefor satisfactory to the Trustee has been made;

 

(iii)                               Notes whichhave been surrendered pursuant to Section 2.9 or in exchange for orin lieu of which other Notes have been authenticated and delivered pursuant tothis Indenture, other than any such Notes in respect of which there shall havebeen presented to the Trustee proof satisfactory to it that such Notes are heldby a bona fide**purchaser in whosehands such Notes are valid obligations of the Company; and

 

(iv)                              solely to theextent provided in Article VIII, Notes which are subject to LegalDefeasance or Covenant Defeasance as provided in Article VIII;

 

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*provided, however*,**that in determining whether the Holders of the requisiteaggregate principal amount of the Outstanding Notes have given any request,demand, authorization, direction, notice, consent or waiver hereunder, Notesowned by the Company or any other obligor upon the Notes or any Affiliate ofthe Company or of such other obligor shall be disregarded and deemed not to beOutstanding, except that, in determining whether the Trustee shall be protectedin relying upon any such request, demand, authorization, direction, notice,consent or waiver, only Notes which a Trust Officer of the Trustee actuallyknows to be so owned shall be so disregarded. Notes so owned which have been pledged in good faith may be regarded asOutstanding if the pledgee establishes to the satisfaction of the Trustee thepledgee’s right so to act with respect to such Notes and that the pledgee isnot the Company or any other obligor upon the Notes or any Affiliate of theCompany or of such other obligor.

 

“PayingAgent” has the meaning assigned to it in Section 2.3(a).

 

“PermittedAcquisition Indebtedness” means Indebtedness of the Company or any of itsRestricted Subsidiaries to the extent such Indebtedness was Indebtedness of (i) aSubsidiary prior to the date on which such Subsidiary became a RestrictedSubsidiary or (ii) a Person that was merged or amalgamated into theCompany or a Restricted Subsidiary, *provided*that on the date such Subsidiary became a Restricted Subsidiary or the datesuch Person was merged and amalgamated into the Company or a RestrictedSubsidiary, as applicable, after giving pro forma effect thereto, (a) theCompany, would be permitted to incur at least US$1.00 of additionalIndebtedness pursuant to Section 3.9(a), or (b) theConsolidated Fixed Charge Coverage Ratio of the Company and the RestrictedSubsidiaries would be greater than the Consolidated Fixed Charge Coverage Ratioimmediately prior to such transaction.

 

“PermittedBusiness” means the business or businesses conducted by the Company and itsRestricted Subsidiaries as of the Issue Date and any business ancillary orcomplementary thereto.

 

“PermittedHolders” means (i) any member of the Board of Directors of the Companyon the Issue Date, (ii) a parent, brother or sister of any of theindividuals named in clause (i), (iii) the spouse or a former spouseof any individual named in clause (i) or (ii), (iv) the linealdescendants of any person named in clauses (i) through (iii) andthe spouse or a former spouse of any such lineal descendant, (v) theestate or any guardian, custodian or other legal representative of anyindividual named in clauses (i) through (iv), (vi) any trustestablished principally for the benefit of any one or more of the individualsnamed in clauses (i) through (v), and (vii) any Person in amajority of the equity interests are owned, directly or indirectly, by any oneor more of the Persons named in clauses (i) through (vi).

 

“PermittedIndebtedness” has the meaning set forth in Section 3.9.

 

“PermittedInvestments” means:

 

(1)                                  Investments by the Companyor any Restricted Subsidiary in any Person that is, or that result in anyPerson becoming, immediately after such Investment, a Restricted Subsidiary orconstituting a merger or consolidation of such Person into the Company or withor into a 

 

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RestrictedSubsidiary, except for a Guarantee of Indebtedness of a Restricted Subsidiarythat is not a Subsidiary Guarantor;

 

(2)                                  Investments by anyRestricted Subsidiary in the Company;

 

(3)                                  Investments in cash and CashEquivalents;

 

(4)                                  any extension, modificationor renewal of any Investments existing as of the Issue Date (but notInvestments involving additional advances, contributions or other investmentsof cash or property or other increases thereof, other than as a result of theaccrual or accretion of interest or original issue discount or payment-in-kindpursuant to the terms of such Investment as of the Issue Date);

 

(5)                                  Investments permittedpursuant to Section 3.17(b)(2) and Section 3.17(b)(5);

 

(6)                                  Investments received as aresult of the bankruptcy or reorganization of any Person or taken in settlementof or other resolution of claims or disputes, and, in each case, extensions,modifications and renewals thereof;

 

(7)                                  Investments made by theCompany or its Restricted Subsidiaries as a result of non-cash considerationpermitted to be received in connection with an Asset Sale under Section 3.12.

 

(8)                                  Investments in the form ofHedging Obligations permitted under Section 3.9(b)(5);

 

(9)                                  Investments in a Personengaged in a Permitted Business not to exceed 10% of Consolidated TangibleAssets of the Company and its Restricted Subsidiaries at any one timeoutstanding;

 

(10)                            receivables owing to theCompany or any Restricted Subsidiary if created or acquired in the ordinarycourse of business and payable or dischargeable in accordance with customarytrade terms;

 

(11)                            payroll, travel,entertainment, relocation and similar advances to cover matters that areexpected at the time of such advances ultimately to be treated as expenses foraccounting purposes and that are made in the ordinary course of business;

 

(12)                            loans or advances toemployees made in the ordinary course of business consistent with pastpractices of the Company or such Restricted Subsidiary;

 

(13)                            cash deposits with banksmade in the ordinary course of business of the Company and its RestrictedSubsidiaries, consistent with past practice, to secure payment of trade payablesunder Supplier Factoring Facilities;

 

(14)                            Investments in any Person tothe extent such Investments consist of prepaid expenses, negotiable instrumentsheld for collection and lease, utility and workers’ 

 

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compensation,performance and other similar deposits made in the ordinary course of businessby the Company or any Restricted Subsidiary;

 

(15)                            Investments in a ReceivablesEntity in connection with a Receivables Transaction; *provided* that such Investment in any such Person is in theform of any equity interest or interests in receivables and related assetsgenerated by the Company or any Restricted Subsidiary and transferred to suchPerson in connection with a Receivables Transaction; and

 

(16)                            any receivables or loanstaken by the Company or its Restricted Subsidiaries in connection with the saleof homes, land, amenities and other improvements in the ordinary course ofbusiness consistent with past practice.

 

*provided*, *however*, that with respect to any Investment, the Companymay, in its sole discretion, allocate all or any portion of any Investment andlater re-allocate all or any portion of any Investment to, one or more of theabove clauses (1) through (16) so that the entire Investment would bePermitted Investment.

 

“PermittedLiens” means any of the following:

 

(1)                                  statutory Liens of landlordsand Liens of carriers, warehousemen, mechanics, suppliers, materialmen,repairmen and other Liens imposed by law incurred in the ordinary course ofbusiness for sums not yet delinquent or being contested in good faith;

 

(2)                                  Liens Incurred or depositsmade in the ordinary course of business in connection with workers’compensation, unemployment insurance and other types of social security,including any Lien securing letters of credit issued in the ordinary course ofbusiness consistent with past practice in connection therewith, or to securethe performance of tenders, statutory obligations, surety and appeal bonds,bids, leases, government performance and return-of-money bonds and othersimilar obligations (exclusive of obligations for the payment of borrowedmoney);

 

(3)                                  Liens upon specific items ofinventory or other goods and proceeds of any Person securing such Person’sobligations in respect of bankers’ acceptances issued or created for theaccount of such Person to facilitate the purchase, shipment or storage of suchinventory or other goods;

 

(4)                                  Liens securing reimbursementobligations with respect to commercial letters of credit which encumber documentsand other property relating to such letters of credit and products and proceedsthereof;

 

(5)                                  Liens encumbering depositsmade to secure obligations arising from statutory, regulatory, contractual, orwarranty requirements of the Company or a Restricted Subsidiary, includingrights of offset and set-off;

 

(6)                                  Liens securing HedgingObligations that relate to Indebtedness that is Incurred in accordance with Section 3.9and that are secured by the same assets as secure such Hedging Obligations;

 

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(7)                                  Liens existing on the IssueDate and Liens to secure any Refinancing Indebtedness which is Incurred toRefinance any Indebtedness below which has been secured by a Lien permittedunder Section 3.16 (other than pursuant to clauses (9) or (10) below)and which Indebtedness has been Incurred in accordance with Section 3.9;*provided*, that such new Liens:

 

(a)                                  are no lessfavorable to the Holders of Notes and are not more favorable to the lienholderswith respect to such Liens than the Liens in respect of the Indebtedness beingRefinanced and

 

(b)                                 do not extendto any property or assets other than the property or assets securing theIndebtedness Refinanced by such Refinancing Indebtedness;

 

(8)                                  Liens securing AcquiredIndebtedness Incurred in accordance with Section 3.9 not incurredin connection with, or in anticipation or contemplation of, the relevantacquisition, merger or consolidation; *provided*,that

 

(a)                                  such Lienssecured such Acquired Indebtedness at the time of and prior to the Incurrenceof such Acquired Indebtedness by the Company or a Restricted Subsidiary andwere not granted in connection with, or in anticipation of the Incurrence ofsuch Acquired Indebtedness by the Company or a Restricted Subsidiary and

 

(b)                                 such Liens donot extend to or cover any property of the Company or any Restricted Subsidiaryother than the property that secured the Acquired Indebtedness prior to thetime such Indebtedness became Acquired Indebtedness of the Company or aRestricted Subsidiary and are no more favorable to the lienholders than theLiens securing the Acquired Indebtedness prior to the Incurrence of suchAcquired Indebtedness by the Company or a Restricted Subsidiary;

 

(9)                                  purchase money Lienssecuring Purchase Money Indebtedness or Capitalized Lease Obligations Incurredto finance the acquisition or leasing of property of the Company or aRestricted Subsidiary used in a Permitted Business; *provided*, that:

 

(a)                                  the relatedPurchase Money Indebtedness does not exceed the cost of such property and shallnot be secured by any property of the Company or any Restricted Subsidiaryother than the property so acquired, and

 

(b)                                 the Liensecuring such Indebtedness will be created within 365 days of such acquisition;

 

(10)                            Liens securing an amount ofIndebtedness under Credit Facilities outstanding at any one time not to exceedthe greater of (x) US$100 million and (y) 10% of the ConsolidatedTangible Assets of the Company at such time;

 

(11)                            any pledge or deposit ofcash or property in conjunction with obtaining surety and performance bonds andletters of credit required to engage in constructing on-site and off-siteimprovements required by municipalities or other governmental authorities inthe ordinary course of business;

 

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(12)                            Liens in favor of customsand revenue authorities arising as a matter of law to secure payment of customsduties in connection with the importation of goods;

 

(13)                            Liens encumbering customaryinitial deposits and margin deposits, and other Liens that are customary in theindustry and incurred in the ordinary course of business securing Indebtednessunder Hedging Obligation and forward contracts, options, futures contracts,futures options or similar agreements or arrangement designed to protect theCompany and its Restricted Subsidiaries from fluctuations in the price ofcommodities;

 

(14)                            Liens for taxes, assessmentsor governmental charges or claims that are not yet delinquent or that are beingcontested in good faith by appropriate proceedings promptly instituted anddiligently concluded; *provided*that any reserve or other appropriate provision as is required in conformitywith MFRS has been made therefor;

 

(15)                            licenses of intellectualproperty in the ordinary course of business;

 

(16)                            Liens to secure a defeasancetrust;

 

(17)                            easements, rights of way,zoning and similar restrictions, reservations, restrictions or encumbrances inrespect of real property or title defects that were not incurred in connectionwith Indebtedness and that do not in the aggregate materially adversely affectthe value of said properties (as such properties are used by the Company or itsRestricted Subsidiaries) or materially impair their use in the operation of thebusiness of the Company and its Restricted Subsidiaries;

 

(18)                            Liens arising fromprecautionary Uniform Commercial Code financing statement filingsregarding operating leases entered into by the Company or any of its RestrictedSubsidiaries in the ordinary course of business;

 

(19)                            judgment Liens not givingrise to an Event of Default so long as any appropriate legal proceedings thatmay have been duly initiated for the review of such judgment shall not havebeen finally terminated or the period within which such legal proceedings maybe initiated shall not have expired;

 

(20)                            Liens on Capital Stock of anUnrestricted Subsidiary that secure Indebtedness or other obligations of suchUnrestricted Subsidiary; or

 

(21)                            Liens on accounts receivableor related assets incurred in connection with a Receivables Transaction.

 

“Person”means an individual, partnership, limited partnership, corporation, company,limited liability company, unincorporated organization, trust or joint venture,or a governmental agency or political subdivision thereof.

 

“Post-PetitionInterest” means all interest accrued or accruing after the commencement ofany insolvency or liquidation proceeding (and interest that would accrue butfor the commencement of any insolvency or liquidation proceeding) in accordancewith and at the contract rate (including, without limitation, any rateapplicable upon default) specified in the 

 

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agreementor instrument creating, evidencing or governing any Indebtedness, whether ornot, pursuant to applicable law or otherwise, the claim for such interest isallowed as a claim in such insolvency or liquidation proceeding.

 

“PreferredStock” of any Person means any Capital Stock of such Person that haspreferential rights over any other Capital Stock of such Person with respect todividends, distributions or redemptions or upon liquidation.

 

“PrivatePlacement Legend” has the meaning assigned to it in Section 2.7(c).

 

“PurchaseMoney Indebtedness” means Indebtedness Incurred for the purpose offinancing all or any part of the purchase price, or other cost of constructionor improvement of any property; *provided*,that the aggregate principal amount of such Indebtedness does not exceed thelesser of the Fair Market Value of such property or such purchase price orcost, including any Refinancing of such Indebtedness that does not increase theaggregate principal amount (or accreted amount, if less) thereof as of the dateof Refinancing.

 

“QIB”means any “qualified institutional buyer” (as defined in Rule 144A).

 

“QualifiedCapital Stock” means any Capital Stock that is not Disqualified CapitalStock and any warrants, rights or options to purchase or acquire Capital Stockthat is not Disqualified Capital Stock that are not convertible into orexchangeable into Disqualified Capital Stock.

 

“RatingAgencies” means S&P and Moody’s.

 

“RecordDate” has the meaning assigned to it in the Form of Face of Notecontained in Exhibit A.

 

“ReceivablesEntity” means a Person in which the Company or any Restricted Subsidiarymakes an Investment and:

 

(1)                                  to which the Company or anyRestricted Subsidiary transfers receivables and related assets in connectionwith a Receivables Transaction;

 

(2)                                  which engages in noactivities other than in connection with the Receivables Transaction;

 

(3)                                  no portion of theIndebtedness or any other obligations (contingent or otherwise) of which:

 

(a)                                  is guaranteedby the Company or any Restricted Subsidiary (excluding guarantees ofObligations (other than the principal of, and interest on, Indebtedness)pursuant to Standard Securitization Undertakings);

 

(b)                                 is recourse toor obligates the Company or any Restricted Subsidiary in any way other thanpursuant to Standard Securitization Undertakings; or

 

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(c)                                  subjects anyproperty or asset of the Company or any Restricted Subsidiary, directly orindirectly, contingently or otherwise, to the satisfaction thereof, other thanpursuant to Standard Securitization Undertakings;

 

(4)                                  with which neither theCompany nor any Restricted Subsidiary has any material contract, agreement,arrangement or understanding (except in connection with a ReceivablesTransaction) other than on terms no less favorable to the Company or suchRestricted Subsidiary than those that might be obtained at the time fromPersons that are not Affiliates of the Company, other than fees payable in theordinary course of business in connection with servicing receivables; and

 

(5)                                  to which neither the Companynor any Restricted Subsidiary has any obligation to maintain or preserve suchentity’s financial condition or cause such entity to achieve certain levels ofoperating results.

 

“ReceivablesTransaction” means any securitization, factoring, discounting or similarfinancing transaction or series of transactions that may be entered into by theCompany or any of its Restricted Subsidiaries in the ordinary course ofbusiness pursuant to which the Company or any of its Restricted Subsidiariesmay sell, convey or otherwise transfer to any Person (including a ReceivablesEntity), or may grant a security interest in, any receivables (whether nowexisting or arising in the future) of the Company or any of its RestrictedSubsidiaries, and any assets related thereto, including all collateral securingsuch receivables, all contracts and all guarantees or other obligations inrespect of such receivables, the proceeds of such receivables and other assetswhich are customarily transferred, or in respect of which security interestsare customarily granted, in connection with securitization, factoring ordiscounting involving receivables.

 

“ReceivablesTransaction Amount” means the amount of obligations outstanding under thelegal documents entered into as part of a Receivables Transaction on any dateof determination that would be characterized as principal if such ReceivablesTransaction were structured as a secured lending transaction rather than apurchase.

 

“RedemptionDate” means, with respect to any redemption of Notes, the date fixed forsuch redemption pursuant to this Indenture and the Notes.

 

“Refinance”means, in respect of any Indebtedness, to issue any Indebtedness in exchangefor or to refinance, replace, defease or refund such Indebtedness in whole orin part.  “Refinanced” and “Refinancing”will have correlative meanings.

 

“RefinancingIndebtedness” means Indebtedness of the Company or any RestrictedSubsidiary issued to Refinance any other Indebtedness of the Company or aRestricted Subsidiary so long as:

 

(1)                                  the aggregate principalamount (or initial accreted value, if applicable) of such new Indebtedness asof the date of such proposed Refinancing does not exceed the aggregateprincipal amount (or initial accreted value, if applicable) of the Indebtednessbeing Refinanced (plus the amount of any premium required to be paid under theterms of the instrument governing 

 

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suchIndebtedness and the amount of reasonable expenses incurred by the Company inconnection with such Refinancing);

 

(2)                                  such new Indebtedness has:

 

(a)                                  a WeightedAverage Life to Maturity that is equal to or greater than the Weighted AverageLife to Maturity of the Indebtedness being Refinanced, and

 

(b)                                 a finalmaturity that is equal to or later than the final maturity of the Indebtednessbeing Refinanced; and

 

(3)                                  if the Indebtedness beingRefinanced is:

 

(a)                                  Indebtedness ofthe Company, then such Refinancing Indebtedness will be Indebtedness of theCompany and/or a Subsidiary Guarantor,

 

(b)                                 Indebtedness ofa Subsidiary Guarantor, then such Refinancing Indebtedness will be Indebtednessof the Company and/or such Subsidiary Guarantor, and

 

(c)                                  SubordinatedIndebtedness, then such Refinancing Indebtedness shall be subordinate to theNotes or the relevant Note Guarantee, if applicable, at least to the sameextent and in the same manner as the Indebtedness being Refinanced.

 

“Registrar”has the meaning assigned to it in Section 2.3(a).

 

“Regulation S”means Regulation S under the Securities Act or any successor regulation.

 

“Regulation SGlobal Note” has the meaning assigned to it in Section 2.1(e).

 

“ResaleRestriction Termination Date” means, for any Restricted Note (or beneficialinterest therein), one year (or such other period specified inRule 144(d)) from the Issue Date or, if any Additional Notes that areRestricted Notes have been issued before the Resale Registration TerminationDate for any Restricted Notes, from the latest such original issue date of suchAdditional Notes.

 

“RestrictedNote” means any Issue Date Note (or beneficial interest therein) or anyAdditional Note (or beneficial interest therein) not originally issued and soldpursuant to an effective registration statement under the Securities Act, untilsuch time as:

 

(i)                                     the ResaleRestriction Termination Date therefor has passed;

 

(ii)                                  such Note is aRegulation S Global Note and the Distribution Compliance Period thereforhas terminated; or

 

(iii)                               the PrivatePlacement Legend therefor has otherwise been removed pursuant to Section 2.8(d) or,in the case of a beneficial interest in a Global Note, such 

 

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beneficial interest has beenexchanged for an interest in a Global Note not bearing a Private PlacementLegend.

 

“RestrictedPayment” has the meaning set forth in Section 3.11(a).

 

“RestrictedSubsidiary” means any Subsidiary of the Company, which, at the time ofdetermination, is not an Unrestricted Subsidiary.

 

“ReversionDate” has the meaning set forth under Section 3.22(b).

 

“Revocation”has the meaning set forth under Section 3.13(b).

 

“Rule 144”means Rule 144 under the Securities Act (or any successor rule).

 

“Rule 144A”means Rule 144A under the Securities Act (or any successor rule).

 

“Rule 144AGlobal Note” has the meaning assigned to it in Section 2.1(d).

 

“S&P”means Standard & Poor’s Ratings Services and its successors andassigns.

 

“Saleand Leaseback Transaction” means any direct or indirect arrangement withany Person or to which any such Person is a party providing for the leasing tothe Company or a Restricted Subsidiary of any property, whether owned by theCompany or any Restricted Subsidiary at the Issue Date or later acquired, whichhas been or is to be sold or transferred by the Company or such RestrictedSubsidiary to such Person or to any other Person by whom funds have been or areto be advanced on the security of such Property.

 

“SEC”means the Securities and Exchange Commission.

 

“SecuritiesAct” means the Securities Act of 1933, as amended.

 

“SeniorIndebtedness” means the Notes and the Note Guarantees and any otherIndebtedness of the Company or any Subsidiary Guarantor that ranks equal inright of payment with the Notes or the relevant Note Guarantee, as the case maybe.

 

“SignificantSubsidiary” means a Subsidiary of the Company constituting a “SignificantSubsidiary” of the Company in accordance with Rule 1-02(w) ofRegulation S-X under the Securities Act in effect on the date hereof.

 

“SpecialRecord Date” has the meaning assigned to it in Section 2.12(a).

 

“StandardSecuritization Undertakings” means representations, warranties, covenantsand indemnities entered into by the Company or any Restricted Subsidiary, whichare reasonably customary in securitization of receivables transactions.

 

“StatedMaturity” means, with respect to any security, the date specified in suchsecurity as the fixed date on which the final payment of principal of suchsecurity is due and payable, including pursuant to any mandatory redemptionprovision (but excluding any provision 

 

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providingfor the repurchase of such security at the option of the holder thereof uponthe happening of any contingency unless such contingency has occurred).

 

“SubordinatedIndebtedness” means, with respect to the Company or any SubsidiaryGuarantor, any Indebtedness of the Company or such Subsidiary Guarantor, as thecase may be which is expressly subordinated in right of payment to the Notes orthe relevant Note Guarantee, as the case may be.

 

“Subsidiary” means, with respect to anyPerson, any other Person of which such Person owns, directly or indirectly,more than 50% of the voting power of the other Person’s outstanding VotingStock.

 

“SubsidiaryGuarantor” means any Restricted Subsidiary which provides a Note Guaranteepursuant to this Indenture until such time as its Note Guarantee is released inaccordance with this Indenture.

 

“SupplierFactoring Facilities” means supplier factoring facilities established byMexican banks pursuant to (i) the Convenio Denominado Cadenas ProductivasPara el Desarollo de Proveedores Por Medios Electrónicos or (ii) the AAAHomex Trust, Nacional Financiera, S.N.C., as trustee, established on May 12,2003, in each case as in effect on the Issue Date and as amended from time totime on terms similar to those in effect on the Issue Date, which provide forthe sale and assignment from time to time by suppliers on a discounted basis ofthen existing trade payables of the Company and its Restricted Subsidiaries,and any similar supplier factoring facilities supplementing or replacing suchexisting facilities; *provided*that any funds disbursed under such facilities shall be solely in considerationfor the sale and assignment of then existing trade payables of the Company andits Restricted Subsidiaries generated in the ordinary course of business.

 

“SurvivingEntity” has the meaning assigned to it in Section 4.1(a).

 

“Taxes”has the meaning assigned to it in Section 3.21.

 

“TaxingAuthority” has the meaning assigned to it in Section 3.21.

 

“TIA”or “Trust Indenture Act” means the U.S. Trust Indenture Act of 1939, asamended, as in effect on the date of this Indenture (except as otherwiseprovided in this Indenture).

 

“Trustee”means the party named as such in the introductory paragraph of this Indentureuntil a successor replaces it in accordance with the terms of this Indentureand, thereafter, means the successor.

 

“TrustOfficer” means, when used with respect to the Trustee, any officer withinthe corporate trust department of the Trustee, including any vice president,assistant vice president, assistant secretary, assistant treasurer, trustofficer or any other officer of the Trustee who customarily performs functionssimilar to those performed by the Persons who at the time shall be suchofficers, respectively, or to whom any corporate trust matter is referredbecause of 

 

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suchperson’s knowledge of and familiarity with the particular subject and who shallhave direct responsibility for the administration of this Indenture.

 

“UnrestrictedSubsidiary” means any Subsidiary of the Company Designated as such pursuantto Section 3.13.  Any suchDesignation may be revoked by a Board Resolution of the Company, subject to theprovisions of Section 3.13.

 

“U.S. GovernmentObligations” means direct obligations (or certificates representing anownership interest in such obligations) of the United States of America(including any agency or instrumentality thereof) for the payment of which thefull faith and credit of the United States of America is pledged and which arenot callable or redeemable at the issuer’s option.

 

“U.S.Legal Tender” means such coin or currency of the United States of Americaas at the time of payment shall be legal tender for the payment of public andprivate debts.

 

“VotingStock” with respect to any Person, means securities of any class of CapitalStock of such Person entitling the holders thereof (whether at all times oronly so long as no senior class of stock has voting power by reason of anycontingency) to vote in the election of members of the Board of Directors (orequivalent governing body) of such Person.

 

“WeightedAverage Life to Maturity” means, when applied to any Indebtedness at anydate, the number of years (calculated to the nearest one-twelfth) obtained bydividing:

 

(1)                                  the then outstandingaggregate principal amount or liquidation preference, as the case may be, ofsuch Indebtedness into

 

(2)                                  the sum of the productsobtained by multiplying:

 

(a)                                  the amount ofeach then remaining installment, sinking fund, serial maturity or otherrequired payment of principal or liquidation preference, as the case may be,including payment at final maturity, in respect thereof, by

 

(b)                                 the number ofyears (calculated to the nearest one-twelfth) which will elapse between suchdate and the making of such payment.

 

“Wholly-OwnedSubsidiary” means, for any Person, any Subsidiary (Restricted Subsidiary inthe case of the Company) of which all the outstanding Capital Stock (otherthan, in the case of a Subsidiary not organized in the United States, directors’qualifying shares or an immaterial amount of shares required to be owned byother Persons pursuant to applicable law) is owned by such Person or any otherPerson that satisfies this definition in respect of such Person.

 

Section 1.2                                      Incorporationby Reference of Trust Indenture Act.  If any provision of this Indenture limits,qualifies or conflicts with the duties that would be imposed by any ofSections 310 to 317 of the TIA through operation of Section 318(c) thereofon any person if this Indenture were qualified under the TIA, such imposedduties shall control.

 

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“obligor”on the indenture securities means the Company and any other obligor on theindenture securities.

 

All other TIA terms used in this Indenturethat are defined by the TIA, defined in the TIA by reference to another statuteor defined by Rules or Regulations of the SEC have the meanings assignedto them by such definitions.

 

Section 1.3                                      Rules ofConstruction.  Unless thecontext otherwise requires:

 

(1)          a term has the meaningassigned to it;

 

(2)          an accounting term nototherwise defined has the meaning assigned to it in accordance with MFRS;

 

(3)          “or” is not exclusive;

 

(4)          “including” means includingwithout limitation;

 

(5)          words in the singularinclude the plural and words in the plural include the singular;

 

(6)          references to the payment ofprincipal of the Notes shall include applicable premium, if any.

 

(7)          references to payments onthe Notes shall include Additional Amounts.

 

ARTICLE II

 

THE NOTES

 

Section 2.1                                      Form andDating.

 

(a)                                  The Issue DateNotes are being originally offered and sold by the Company pursuant to aPurchase Agreement, dated as of December 8, 2009, between the Company, theSubsidiary Guarantors party hereto, Credit Suisse Securities (USA) LLC and HSBCSecurities (USA) Inc.  The Notes will beissued in fully-registered certificated form without coupon, and only indenominations of US$2,000 and integral multiples of US$1,000 in excessthereof.  The Notes and the Trustee’scertificate of authentication shall be substantially in the form of Exhibit A.

 

(b)                                 The terms andprovisions of the Notes, the form of which is in Exhibit A, shallconstitute, and are hereby expressly made, a part of this Indenture, and, tothe extent applicable, the Company, the Subsidiary Guarantors and the Trustee,by their execution and delivery of this Indenture expressly agree to such termsand provisions and to be bound thereby. Except as otherwise expressly permitted in this Indenture, all Notesshall be identical in all respects. Notwithstanding any differences among them, all Notes issued under thisIndenture shall vote and consent together on all matters as one class.

 

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(c)                                  The Notes mayhave notations, legends or endorsements as specified in Section 2.7or as otherwise required by law, stock exchange rule or DTC rule orusage.  The Company and the Trustee shallapprove the form of the Notes and any notation, legend or endorsement onthem.  Each Note shall be dated the dateof its authentication.

 

(d)                                 Notesoriginally offered and sold to QIBs in reliance on Rule 144A will beissued in the form of one or more permanent Global Notes (each, a “Rule 144AGlobal Note”).

 

(e)                                  Notesoriginally offered and sold outside the United States of America will be issuedin the form of one or more permanent Global Notes (each, a “Regulation SGlobal Note”).

 

Section 2.2                                      Execution andAuthentication.

 

(a)                                  Two Officers,one of whom shall be the Chairman of the Board, the President, the ChiefExecutive Officer or the Chief Financial Officer of the Company, shall sign theNotes for the Company by manual or facsimile signature.  If an Officer whose signature is on a Note nolonger holds that office or is no longer a representative with full power andauthority to represent and act on behalf of the Company or a SubsidiaryGuarantor, as the case may be, at the time the Trustee authenticates the Note,the Note shall be valid nevertheless.

 

(b)                                 A Note shallnot be valid until an authorized signatory of the Trustee manuallyauthenticates the Note.  The signature ofthe Trustee on a Note shall be conclusive evidence that such Note has been dulyand validly authenticated and issued under this Indenture.

 

(c)                                  At any time andfrom time to time after the execution and delivery of this Indenture, theTrustee shall authenticate and make available for delivery Notes upon a writtenorder of the Company signed by two Officers or by an Officer and either anAssistant Treasurer or an Assistant Secretary of the Company (the “CompanyOrder”).  A Company Order shallspecify the amount of the Notes to be authenticated and the date on which theoriginal issue of Notes is to be authenticated.

 

(d)                                 The Trustee mayappoint an agent (the “Authenticating Agent”) reasonably acceptable tothe Company to authenticate the Notes. Unless limited by the terms of such appointment, any such AuthenticatingAgent may authenticate Notes whenever the Trustee may do so.  Each reference in this Indenture toauthentication by the Trustee includes authentication by the AuthenticatingAgent.

 

(e)                                  In case aSurviving Entity has executed an indenture supplemental hereto with the Trusteepursuant to Article IV, any of the Notes authenticated or deliveredprior to such transaction may, from time to time, at the request of theSurviving Entity, be exchanged for other Notes executed in the name of theSurviving Entity with such changes in phraseology and form as may beappropriate, but otherwise identical to the Notes surrendered for such exchangeand of like principal amount; and the Trustee, upon Company Order of theSurviving Entity, shall authenticate and deliver Notes as specified in suchorder for the purpose of such exchange. If Notes shall at any time be authenticated and delivered in any newname of a Surviving Entity pursuant to this Section 2.2 in exchangeor substitution for or upon registration of transfer of any Notes, suchSurviving Entity, at the option of the Holders but without expense to them,shall

 

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provide for the exchange of all Notes at the timeOutstanding for Notes authenticated and delivered in such new name.

 

Section 2.3                                      Registrar andPaying Agent.

 

(a)                                  The Companyshall maintain an office or agency in the Borough of Manhattan, City of New York,and, so long as the Notes are listed on the Luxembourg Stock Exchange, and the rules ofthe Luxembourg Stock Exchange so require, in Luxembourg, where Notes may bepresented or surrendered for registration of transfer or for exchange (the “Registrar”),where Notes may be presented for payment (the “Paying Agent”) and forthe service of notices and demands to or upon the Company in respect of theNotes and this Indenture.  The Registrarshall keep a register of the Notes and of their transfer and exchange (the “NoteRegister”).  The Company may have oneor more co-Registrars and one or more additional paying agents.  The term “Paying Agent” includes anyadditional paying agent.

 

(b)                                 The Companyshall enter into an appropriate agency agreement with any Registrar, PayingAgent or co-Registrar not a party to this Indenture.  The agreement shall implement the provisionsof this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of eachsuch agent.  If the Company fails tomaintain a Registrar or Paying Agent, the Trustee shall act as such and shallbe entitled to appropriate compensation therefor pursuant to Section 7.7.  The Company or any Subsidiary Guarantor mayact as Paying Agent, Registrar, co-Registrar or transfer agent.

 

(c)                                  The Companyinitially appoints the Corporate Trust Office, as Registrar, Paying Agent andagent for service of demands and notices in connection with the Notes and thisIndenture, until such time as another Person is appointed as such.

 

(d)                                 The Company maychange the Paying Agent and the Registrar without notice to Holders.

 

Section 2.4                                      Paying Agent toHold Money in Trust.  The Companyshall require each Paying Agent (other than the Trustee) to agree in writingthat such Paying Agent shall hold in trust for the benefit of Holders or theTrustee all money held by such Paying Agent for the payment of principal of orinterest on the Notes and shall notify the Trustee in writing of any Default bythe Company or any Subsidiary Guarantor in making any such payment.  If the Company or any Subsidiary Guarantor oran Affiliate of the Company or any Subsidiary Guarantor acts as Paying Agent,it shall segregate the money held by it as Paying Agent and hold it as aseparate trust fund.  The Company at anytime may require a Paying Agent (other than the Trustee) to pay all money heldby it to the Trustee, and to account for any funds disbursed by such PayingAgent.  Upon complying with this Section 2.4,the Paying Agent (if other than the Company or a Subsidiary Guarantor) shallhave no further liability for the money delivered to the Trustee.  Upon any proceeding under any Bankruptcy Lawwith respect to the Company or any Subsidiary Guarantor or any Affiliate of theCompany or any Subsidiary Guarantor, if the Company, a Subsidiary Guarantor orsuch Affiliate is then acting as Paying Agent, the Trustee shall replace theCompany, such Subsidiary Guarantor or such Affiliate as Paying Agent.

 

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Section 2.5                                      Holder Lists.  The Trustee shall preserve in as current aform as is reasonably practicable the most recent list available to it of thenames and addresses of Holders.  If theTrustee is not the Registrar, or to the extent otherwise required under the TIA,the Company shall furnish to the Trustee, in writing at least seven BusinessDays before each Interest Payment Date and at such other times as the Trusteemay request in writing, a list in such form and as of such date as the Trusteemay reasonably require of the names and addresses of Holders.

 

Section 2.6                                      Global NoteProvisions.

 

(a)                                  Each GlobalNote initially shall: (i) be registered in the name of DTC or the nomineeof DTC, (ii) be delivered to the Note Custodian, and (iii) bear theappropriate legend, as set forth in Section 2.7 and Exhibit A.  Any Global Note may be represented by morethan one certificate.  The aggregateprincipal amount of each Global Note may from time to time be increased ordecreased by adjustments made on the records of the Note Custodian, as providedin this Indenture.

 

(b)                                 Members of, orparticipants in, DTC (“Agent Members”) shall have no rights under thisIndenture with respect to any Global Note held on their behalf by DTC or by theNote Custodian under such Global Note, and DTC may be treated by the Company,the Trustee, the Paying Agent and the Registrar and any of their agents as theabsolute owner of such Global Note for all purposes whatsoever.  Notwithstanding the foregoing, nothing hereinshall prevent the Company, the Trustee, the Paying Agent or the Registrar orany of their agents from giving effect to any written certification, proxy orother authorization furnished by DTC or impair, as between DTC and its AgentMembers, the operation of customary practices of DTC governing the exercise ofthe rights of an owner of a beneficial interest in any Global Note.  The registered Holder of a Global Note maygrant proxies and otherwise authorize any person, including Agent Members and personsthat may hold interests through Agent Members, to take any action that a Holderis entitled to take under this Indenture or the Notes.

 

(c)                                  Except asprovided below, owners of beneficial interests in Global Notes will not beentitled to receive Certificated Notes. Certificated Notes shall be issued to all owners of beneficial interestsin a Global Note in exchange for such interests if:

 

(i)                                     DTC notifiesthe Company that it is unwilling or unable to continue as depositary for suchGlobal Note or DTC ceases to be a clearing agency registered under the ExchangeAct, at a time when DTC is required to be so registered in order to act asdepositary, and in each case a successor depositary is not appointed by theCompany within 90 days of such notice,

 

(ii)                                  the Companyexecutes and delivers to the Trustee and Registrar an Officers’ Certificatestating that such Global Note shall be so exchangeable, or

 

(iii)                               an Event ofDefault has occurred and is continuing and the Registrar has received a requestfrom DTC.

 

Inconnection with the exchange of an entire Global Note for Certificated Notespursuant to this paragraph (c), such Global Note shall be deemed to besurrendered to the Trustee for 

 

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cancellation,and the Company shall execute, and upon Company Order the Trustee shallauthenticate and deliver, to each beneficial owner identified by DTC inexchange for its beneficial interest in such Global Note, an equal aggregateprincipal amount of Certificated Notes of authorized denominations.

 

Section 2.7                                      Legends.

 

(a)                                  Each GlobalNote shall bear the legend specified therefor in Exhibit A on theface thereof.

 

(b)                                 Upon receipt ofthe Company’s instruction substantially in the form of Exhibit Fhereto and signed by an Officer of the Company, the Trustee shall confirm (i) thatthe legend referenced in clause (a) of this Section 2.7 (other thanthe first three paragraphs thereof) shall be deemed removed, as specified in Exhibit Ahereto and (ii) the CUSIP number for the Global Notes shall be deemed tobe replaced with an unrestricted CUSIP number as specified in Exhibit Ahereto.

 

(c)                                  Each RestrictedNote shall bear the private placement legend specified therefor in Exhibit Aon the face thereof (the “Private Placement Legend”).

 

Section 2.8                                      Transfer andExchange.

 

(a)                                  The followingprovisions shall apply with respect to any proposed transfer of an interest ina Rule 144A Global Note that is a Restricted Note: If (1) the ownerof a beneficial interest in a Rule 144A Global Note wishes to transfersuch interest (or portion thereof) to a Non-U.S. Person pursuant toRegulation S and (2) such Non-U.S. Person wishes to hold its interestin the Notes through a beneficial interest in the Regulation S GlobalNote, (x) upon receipt by the Note Custodian and Registrar of:

 

(A)                              instructionsfrom the Holder of the Rule 144A Global Note directing the Note Custodianand Registrar to credit or cause to be credited a beneficial interest in theRegulation S Global Note equal to the principal amount of the beneficialinterest in the Rule 144A Global Note to be transferred, and

 

(B)                                a certificatein the form of Exhibit C from the transferor,

 

and(y) subject to the rules and procedures of DTC, the Note Custodianand Registrar shall increase the Regulation S Global Note and decrease theRule 144A Global Note by such amount in accordance with the foregoing.

 

(b)                                 If the owner ofan interest in a Regulation S Global Note wishes to transfer such interest(or any portion thereof) to a QIB pursuant to Rule 144A prior to theexpiration of the Distribution Compliance Period therefor, (x) uponreceipt by the Note Custodian and Registrar of:

 

(A)                              instructionsfrom the Holder of the Regulation S Global Note directing the NoteCustodian and Registrar to credit or cause to be credited a 

 

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beneficial interest in theRule 144A Global Note equal to the principal amount of the beneficialinterest in the Regulation S Global Note to be transferred, and

 

(B)                                a certificatein the form of Exhibit B duly executed by the transferor,

 

and(y) in accordance with the rules and procedures of DTC, the NoteCustodian and Registrar shall increase the Rule 144A Global Note anddecrease the Regulation S Global Note by such amount in accordance withthe foregoing.

 

(c)                                  Other Transfers.  Any transfer of Restricted Notes notdescribed above (other than a transfer of a beneficial interest in a GlobalNote that does not involve an exchange of such interest for a Certificated Noteor a beneficial interest in another Global Note, which must be effected inaccordance with applicable law and the rules and procedures of DTC, but isnot subject to any procedure required by this Indenture) shall be made onlyupon receipt by the Registrar of such opinions of counsel, certificates and/orother information reasonably required by and satisfactory to it in order toensure compliance with the Securities Act or in accordance with paragraph (d) ofthis Section 2.8.

 

(d)                                 Use and Removalof Private Placement Legends.  Upon the transfer, exchange or replacement ofNotes (or beneficial interests in a Global Note) not bearing (or not requiredto bear upon such transfer, exchange or replacement) a Private PlacementLegend, the Note Custodian and Registrar shall exchange such Notes (orbeneficial interests) for beneficial interests in a Global Note (orCertificated Notes if they have been issued pursuant to Section 2.6(c))that does not bear a Private Placement Legend. Upon the transfer, exchange or replacement of Notes (or beneficialinterests in a Global Note) bearing a Private Placement Legend, the NoteCustodian and Registrar shall deliver only Notes (or beneficial interests in aGlobal Note) that bear a Private Placement Legend unless:

 

(i)                                     such Notes (orbeneficial interests) are transferred pursuant to Rule 144 upon deliveryto the Registrar of a certificate of the transferor in the form of Exhibit Dand an Opinion of Counsel reasonably satisfactory to the Registrar;

 

(ii)                                  such Notes (orbeneficial interests) are transferred, replaced or exchanged after the ResaleRestriction Termination Date therefor; or

 

(iii)                               in connectionwith such transfer, exchange or replacement the Registrar shall have receivedan Opinion of Counsel and other evidence reasonably satisfactory to it to theeffect that neither such Private Placement Legend nor the related restrictionson transfer are required in order to maintain compliance with the provisions ofthe Securities Act.

 

ThePrivate Placement Legend on any Note shall be removed at the request of theHolder on or after the Resale Restriction Termination Date therefor.  The Holder of a Global Note may exchange aninterest therein for an equivalent interest in a Global Note not bearing aPrivate Placement Legend (other than a Regulation S Global Note) upon transferof such interest pursuant to any of clauses (i) through (iii) ofthis paragraph (d).  The Companyshall deliver to 

 

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theTrustee an Officers’ Certificate promptly upon effectiveness, withdrawal orsuspension of any Registration Statement.

 

(e)                                  Consolidationof Global Notes and Exchange of Certificated Notes for Beneficial Interests inGlobal Notes.

 

(i)                                     Nothing in thisIndenture shall provide for the consolidation of any Notes with any other Notesto the extent that they constitute, as determined pursuant to an Opinion ofCounsel, different classes of securities for U.S. federal income tax purposes.

 

(f)                                    Retention ofDocuments.  TheRegistrar shall retain copies of all letters, notices and other written communicationsreceived pursuant to this Article II.  The Company shall have the right to inspectand make copies of all such letters, notices or other written communications atany reasonable time upon the giving of reasonable written notice to the Registrar.

 

(g)                                 Execution,Authentication of Notes, etc.

 

(i)                                     Subject to theother provisions of this Section 2.8, when Notes are presented tothe Registrar or a co-Registrar with a request to register the transfer of suchNotes or to exchange such Notes for an equal principal amount of Notes of otherauthorized denominations, the Registrar or co-Registrar shall register thetransfer or make the exchange as requested if its requirements for suchtransaction are met; *provided*that any Notes presented or surrendered for registration of transfer orexchange shall be duly endorsed or accompanied by a written instrument oftransfer in form satisfactory to the Registrar or co-Registrar, duly executedby the Holder thereof or his attorney duly authorized in writing.  To permit registrations of transfers andexchanges and subject to the other terms and conditions of this Article II,the Company will execute and upon Company Order the Trustee will authenticateCertificated Notes and Global Notes at the Registrar’s or co-Registrar’srequest.

 

(ii)                                  No servicecharge shall be made to a Holder for any registration of transfer or exchange,but the Company may require payment of a sum sufficient to cover any transfertax, assessments, or similar governmental charge payable in connectiontherewith (other than any such transfer taxes, assessments or similargovernmental charges payable upon exchange or transfer pursuant to Section 3.8,Section 3.12, Section 4.1 or Section 8.5.

 

(iii)                               The Registraror co-Registrar shall not be required to register the transfer of or exchangeof any Note for a period beginning: (1) 15 days before the mailing of a notice of an offer torepurchase or redeem Notes and ending at the close of business on the day ofsuch mailing or (2) 15 days before an Interest Payment Date and ending onsuch Interest Payment Date.

 

(iv)                              Prior to thedue presentation for registration of transfer of any Note, the Company, theTrustee, the Paying Agent, the Registrar or any co-Registrar may deem and treatthe person in whose name a Note is registered as the absolute owner of suchNote for the purpose of receiving payment of principal of and interest on suchNote 

 

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and for all other purposeswhatsoever, whether or not such Note is overdue, and none of the Company, theTrustee, the Paying Agent, the Registrar or any co-Registrar shall be affectedby notice to the contrary.

 

(v)                                 All Notesissued upon any transfer or exchange pursuant to the terms of this Indentureshall evidence the same debt and shall be entitled to the same benefits underthis Indenture as the Notes surrendered upon such transfer or exchange.

 

(h)                                 No Obligationof the Trustee.

 

(i)                                     The Trusteeshall have no responsibility or obligation to any beneficial owner of aninterest in a Global Note, a member of, or a participant in, DTC or otherPerson with respect to the accuracy of the records of DTC or its nominee or ofany participant or member thereof, with respect to any ownership interest inthe Notes or with respect to the delivery to any participant, member,beneficial owner or other Person (other than DTC) of any notice (including anynotice of redemption) or the payment of any amount or delivery of any Notes (orother security or property) under or with respect to such Notes.  All notices and communications to be given tothe Holders and all payments to be made to Holders in respect of the Notesshall be given or made only to or upon the order of the registered Holders(which shall be DTC or its nominee in the case of a Global Note).  The rights of beneficial owners in any GlobalNote shall be exercised only through DTC subject to the applicable rules andprocedures of DTC.  The Trustee may relyand shall be fully protected in relying upon information furnished by DTC withrespect to its members, participants and any beneficial owners.

 

(ii)                                  The Trusteeshall have no obligation or duty to monitor, determine or inquire as tocompliance with any restrictions on transfer imposed under this Indenture orunder applicable law with respect to any transfer of any interest in any Note(including any transfers between or among DTC participants, members orbeneficial owners in any Global Note) other than to require delivery of suchcertificates and other documentation or evidence as are expressly required by,and to do so if and when expressly required by, the terms of this Indenture,and to examine the same to determine substantial compliance as to form with theexpress requirements hereof.

 

Section 2.9                                      Mutilated,Destroyed, Lost or Stolen Notes.

 

(a)                                  If a mutilatedNote is surrendered to the Registrar or if the Holder of a Note claims that theNote has been lost, destroyed or wrongfully taken, the Company shall executeand upon Company Order the Trustee shall authenticate a replacement Note if therequirements of Section 8-405 of the Uniform Commercial Code are met andthe Holder satisfies any other reasonable requirements of the Trustee.  If required by the Trustee or the Company, suchHolder shall furnish an affidavit of loss and indemnity bond sufficient in thejudgment of the Company and the Trustee to protect the Company, the Trustee,the Paying Agent, the Registrar and any co-Registrar from any loss that any ofthem may suffer if a Note is replaced, and, in the absence of notice to theCompany or the Trustee that such Note has been acquired by a protectedpurchaser, the Company shall execute and upon Company Order the Trustee shallauthenticate and make available for delivery, in exchange for any suchmutilated Note or in lieu 

 

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of any such destroyed, lost or stolen Note, a newNote of like tenor and principal amount, bearing a number not contemporaneouslyOutstanding.

 

(b)                                 Upon theissuance of any new Note under this Section 2.9, the Company mayrequire the payment of a sum sufficient to cover any tax or other governmentalcharge that may be imposed in relation thereto and any other expenses(including the fees and expenses of the Trustee) in connection therewith.

 

(c)                                  Every new Noteissued pursuant to this Section 2.9 in exchange for any mutilatedNote, or in lieu of any destroyed, lost or stolen Note, shall constitute anoriginal additional contractual obligation of the Company, any SubsidiaryGuarantor and any other obligor upon the Notes, whether or not the mutilated,destroyed, lost or stolen Note shall be at any time enforceable by anyone, andshall be entitled to all benefits of this Indenture equally and proportionatelywith any and all other Notes duly issued hereunder.

 

Section 2.10                                Temporary Notes.  Until definitive Notes are ready fordelivery, the Company may execute and upon Company Order the Trustee willauthenticate temporary Notes.  TemporaryNotes will be substantially in the form of definitive Notes but may havevariations that the Company considers appropriate for temporary Notes.  Without unreasonable delay, the Company willprepare and execute and upon Company Order the Trustee will authenticatedefinitive Notes.  After the preparationof definitive Notes, the temporary Notes will be exchangeable for definitiveNotes upon surrender of the temporary Notes at any office or agency maintainedby the Company for that purpose and such exchange shall be without charge tothe Holder.  Upon surrender forcancellation of any one or more temporary Notes, the Company will execute andupon Company Order the Trustee will authenticate and make available fordelivery in exchange therefor one or more definitive Notes representing anequal principal amount of Notes.  Untilso exchanged, the Holder of temporary Notes shall in all respects be entitledto the same benefits under this Indenture as a Holder of definitive Notes.

 

Section 2.11                                Cancellation.  The Company at any time may deliver Notes tothe Trustee for cancellation.  TheRegistrar and the Paying Agent shall forward to the Trustee any Notessurrendered to them for registration of transfer, exchange or payment.  The Trustee and no one else shall cancel anddispose of cancelled Notes in accordance with its policy of disposal or returnto the Company all Notes surrendered for registration of transfer, exchange,payment or cancellation.  The Company maynot issue new Notes to replace Notes it has paid or delivered to the Trusteefor cancellation for any reason other than in connection with a transfer orexchange upon Company Order.

 

Section 2.12                                DefaultedInterest.  When anyinstallment of interest becomes Defaulted Interest, such installment shallforthwith cease to be payable to the Holders in whose names the Notes were registeredon the Record Date applicable to such installment of interest.  Defaulted Interest (including any interest onsuch Defaulted Interest) may be paid by the Company, at its election, asprovided in Section 2.12(a) or (b).

 

(a)                                  The Company mayelect to make payment of any Defaulted Interest (including any interest on suchDefaulted Interest) to the Holders in whose names the Notes are registered atthe close of business on a special record date for the payment of suchDefaulted 

 

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Interest (a “Special Record Date”), whichshall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount ofDefaulted Interest proposed to be paid and the date of the proposed payment,and at the same time the Company shall deposit with the Trustee an amount ofmoney equal to the aggregate amount proposed to be paid in respect of suchDefaulted Interest or shall make arrangements satisfactory to the Trustee forsuch deposit prior to the date of the proposed payment, such money whendeposited to be held in trust for the benefit of the Holders entitled to suchDefaulted Interest as provided in this Section 2.12(a).  Thereupon the Trustee shall fix a SpecialRecord Date for the payment of such Defaulted Interest, which shall be not morethan 15 calendar days and not less than ten calendar days prior to the date ofthe proposed payment and not less than ten calendar days after the receipt bythe Trustee of the notice of the proposed payment.  The Trustee shall promptly notify the Companyof such Special Record Date and, in the name and at the expense of the Company,shall cause notice of the proposed payment of such Defaulted Interest and theSpecial Record Date therefor to be sent, first-class mail, postage prepaid, toeach Holder at such Holder’s address as it appears in the registration books ofthe Registrar, not less than ten calendar days prior to such Special RecordDate.  Notice of the proposed payment ofsuch Defaulted Interest and the Special Record Date therefor having been mailedas aforesaid, such Defaulted Interest shall be paid to the Holders in whosenames the Notes are registered at the close of business on such Special RecordDate and shall no longer be payable pursuant to Section 2.12(b).

 

(b)                                 Alternatively,the Company may make payment of any Defaulted Interest (including any intereston such Defaulted Interest) in any other lawful manner not inconsistent withthe requirements of any securities exchange on which the Notes may be listed,and upon such notice as may be required by such exchange, if, after noticegiven by the Company to the Trustee of the proposed payment pursuant to this Section 2.12(b),such manner of payment shall be deemed practicable by the Trustee.

 

Section 2.13                                AdditionalNotes.  The Company may, from time totime, subject to compliance with any other applicable provisions of thisIndenture, without the consent of the Holders, create and issue pursuant tothis Indenture Additional Notes having terms and conditions set forth in Exhibit Aidentical to those of the other Outstanding Notes, except that AdditionalNotes:

 

(i)                                     may have adifferent issue date from other Outstanding Notes;

 

(ii)                                  may have adifferent amount of interest payable on the first Interest Payment Date afterissuance than is payable on other Outstanding Notes;

 

(iii)                               may have termsspecified in the Additional Note Board Resolution or Additional NoteSupplemental Indenture for such Additional Notes making appropriate adjustmentsto this Article II and Exhibit A (and relateddefinitions) applicable to such Additional Notes in order to conform to andensure compliance with the Securities Act (or other applicable securities laws)and any registration rights or similar agreement applicable to such AdditionalNotes, which are not adverse in any material respect to the Holder of anyOutstanding Notes (other than such Additional Notes); and

 

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(iv)                              may be entitledto liquidated damages not applicable to other Outstanding Notes and may not beentitled to such liquidated damages applicable to other Outstanding Notes.

 

*provided*, that no adjustmentpursuant to this Section 2.13 shall cause such Additional Notes toconstitute, a different class of securities than the Issue Date Notes for U.S.federal income tax purposes except for Additional Notes that have a separateCUSIP number from other Outstanding Notes.

 

ARTICLE III

 

COVENANTS

 

Section 3.1                                      Payment ofNotes.

 

(a)                                  (1)                                  The Companyshall pay the principal of and interest (including Defaulted Interest) on theNotes in U.S. Legal Tender on the dates and in the manner provided in the Notesand in this Indenture.  Prior to11:00 a.m. New York City time on each Interest Payment Date and theMaturity Date, the Company shall deposit with the Paying Agent in immediatelyavailable funds U.S. Legal Tender sufficient to make cash payments due on suchInterest Payment Date or Maturity Date, as the case may be.  If the Company, a Subsidiary Guarantor or anAffiliate of the Company or a Subsidiary Guarantor is acting as Paying Agent,the Company, such Subsidiary Guarantor or such Affiliate shall, prior to11:00 a.m. New York City time on each Interest Payment Date and theMaturity Date, segregate and hold in trust U.S. Legal Tender sufficient to makecash payments due on such Interest Payment Date or Maturity Date, as the casemay be.  Principal and interest shall beconsidered paid on the date due if on such date the Trustee or the Paying Agent(other than the Company, a Subsidiary Guarantor or an Affiliate of the Companyor a Subsidiary Guarantor) holds in accordance with this Indenture U.S. LegalTender designated for and sufficient to pay all principal and interest then dueand the Trustee or the Paying Agent, as the case may be, is not prohibited frompaying such money to the Holders on that date pursuant to the terms of thisIndenture.  Notwithstanding theforegoing, the Company may elect to make the payments of interest by checkmailed to the registered Holders at their registered addresses.

 

(2)                                  If a Holder ofUS$10.0 million or more in aggregate principal amount of Notes has given wiretransfer instructions to the Company at least 10 Business Days prior to theInterest Payment Date or the Maturity Date, the Company shall make allprincipal, premium and interest payments on those Notes in accordance with suchinstructions.

 

(b)                                 Notwithstandinganything to the contrary contained in this Indenture, the Company may, to theextent it is required to do so by law, deduct or withhold income or othersimilar taxes imposed by the United States of America from principal orinterest payments hereunder.

 

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Section 3.2                                      Maintenance ofOffice or Agency.

 

(a)                                  The Companyshall maintain each office or agency required under Section 2.3.  The Company will give prompt written noticeto the Trustee of any change in the location of any such office or agency.  If at any time the Company shall fail tomaintain any such required office or agency or shall fail to furnish theTrustee with the address thereof, such presentations, surrenders, notices anddemands may be made or served at the Corporate Trust Office, and the Companyhereby appoints the Trustee as its agent to receive all such presentations, surrenders,notices and demands.

 

(b)                                 The Company mayalso from time to time designate one or more other offices or agencies (in oroutside of The City of New York) where the Notes may be presented orsurrendered for any or all such purposes and may from time to time rescind anysuch designation; *provided, however*,that no such designation or rescission shall in any manner relieve the Companyof its obligation to maintain an office or agency in The City of New York or,so long as the Notes are listed on the Euro MTF, the alternative market of theLuxembourg Stock Exchange and the rules of the Luxembourg Stock Exchangeso require, in Luxembourg, for such purposes. The Company will give prompt written notice to the Trustee of any suchdesignation or rescission and any change in the location of any such otheroffice or agency.

 

Section 3.3                                      CorporateExistence.  Subject to Article IV,the Company will do or cause to be done all things necessary to preserve andkeep in full force and effect its corporate existence.

 

Section 3.4                                      Payment ofTaxes.  The Company will pay ordischarge or cause to be paid or discharged, before the same shall becomedelinquent, all taxes, assessments and governmental charges levied or imposedupon the Company or any Restricted Subsidiary or for which it or any of themare otherwise liable, or upon the income, profits or property of the Company orany Restricted Subsidiary; *provided, however*,that the Company shall not be required to pay or discharge or cause to be paidor discharged any such tax, assessment or charge whose amount, applicability orvalidity is being contested in good faith by appropriate proceedings and forwhich appropriate reserves, if necessary (in the good faith judgment ofmanagement of the Company), are being maintained in accordance with MFRS orwhere the failure to effect such payment will not be disadvantageous to theHolders.

 

Section 3.5                                      ComplianceCertificate.

 

TheCompany and each Subsidiary Guarantor shall deliver to the Trustee within 105days after the end of each fiscal year of the Company an Officers’ Certificatethat complies with TIA § 314(a)(4) stating that in the course of theperformance by the signers of their duties as Officers of the Company or suchSubsidiary Guarantor, as the case may be, they would normally have knowledge ofany Default or Event of Default and whether or not the signers know of anyDefault or Event of Default that occurred during the previous fiscal year.  If they do, the certificate shall describethe Default or Event of Default, its status and what action the Company or suchSubsidiary Guarantor is taking or proposes to take with respect thereto.  The Company and the Subsidiary Guarantorsalso shall comply with any other applicable requirements of TIA§ 314(a)(4).

 

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Section 3.6                                      FurtherInstruments and Acts.  The Companyand each Subsidiary Guarantor will execute and deliver such further instrumentsand do such further acts as may be reasonably necessary or proper or as theTrustee may reasonably request to carry out more effectively the purpose ofthis Indenture.

 

Section 3.7                                      Waiver of Stay,Extension or Usury Laws.  TheCompany and each Subsidiary Guarantor covenants (to the fullest extentpermitted by applicable law) that it will not at any time insist upon, plead, orin any manner whatsoever claim or take the benefit or advantage of, any stay orextension law or any usury law or other law that would prohibit or forgive theCompany or such Subsidiary Guarantor from paying all or any portion of theprincipal of or interest on the Notes as contemplated herein, wherever enacted,now or at any time hereafter in force, or which may affect the covenants or theperformance of this Indenture.  TheCompany and each Subsidiary Guarantor hereby expressly waives (to the fullest extentpermitted by applicable law) all benefit or advantage of any such law, andcovenants that it will not hinder, delay or impede the execution of any powerherein granted to the Trustee, but will suffer and permit the execution ofevery such power as though no such law had been enacted.

 

Section 3.8                                      Change ofControl.

 

(a)                                  Upon theoccurrence of a Change of Control, the Company shall be required, if requestedby any Holders, to purchase all or a portion (in integral multiples ofUS$1,000) of the Holder’s Notes at a purchase price equal to 101% of theprincipal amount thereof, plus accrued and unpaid interest thereon through thedate of purchase (the “Change of Control Payment”).

 

(b)                                 On the Changeof Control Payment Date, the Company shall, to the extent lawful:

 

(1)          accept for payment all Notesor portions thereof properly tendered and not withdrawn pursuant to the Changeof Control Offer;

 

(2)          deposit with the PayingAgent funds in an amount equal to the Change of Control Payment in respect ofall Notes or portions thereof so tendered; and

 

(3)          deliver or cause to bedelivered to the Trustee the Notes so accepted together with an Officers’Certificate stating the aggregate principal amount of Notes or portions thereofbeing purchased by the Company.

 

(c)                                  If only aportion of a Note is purchased pursuant to a Change of Control Offer, a newNote in a principal amount equal to the portion thereof not purchased shall beissued in the name of the Holder thereof upon cancellation of the original Note(or appropriate adjustments to the amount and beneficial interests in a GlobalNote will be made, as appropriate).

 

(d)                                 The Companyshall not be required to make a Change of Control Offer upon a Change ofControl if:

 

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(1)          a third party makes theChange of Control Offer in the manner, at the times and otherwise in compliancewith the requirements set forth in this Indenture applicable to a Change ofControl Offer made by the Company and purchases all Notes properly tendered andnot withdrawn under the Change of Control Offer, or

 

(2)          notice of redemption hasbeen given pursuant to Section 5.3 hereof, unless and until thereis a default in payment of the applicable redemption price.

 

(e)                                  In the eventthat Holders of not less than 95% of the aggregate principal amount of theoutstanding Notes accept a Change of Control Offer and the Company or a thirdparty purchases all of the Notes held by such Holders, the Company shall havethe right, on not less than 30 nor more than 60 days’ prior notice, given notmore than 30 days following the purchase pursuant to the Change of ControlOffer described above, to redeem all of the Notes that remain outstandingfollowing such purchase at a purchase price equal to the Change of ControlPayment plus, to the extent not included in the Change of Control Payment,accrued and unpaid interest, if any, on the Notes that remain outstanding, tothe date of redemption (subject to the right of Holders on the relevant recorddate to receive interest due on the relevant interest payment date).

 

(f)                                    The Companyshall comply with the requirements of Rule 14e-1 under the Exchange Actand any other applicable securities laws and regulations in connection with thepurchase of Notes in connection with a Change of Control Offer.  To the extent that the provisions of anysecurities laws or regulations conflict with this Section 3.8, theCompany shall comply with the applicable securities laws and regulations andwill not be deemed to have breached its obligations under this Indenture bydoing so.

 

Section 3.9                                      Limitation onIncurrence of Additional Indebtedness.

 

(a)                                  The Companyshall not, and shall not cause or permit any of its Restricted Subsidiaries to,directly or indirectly, Incur any Indebtedness, including AcquiredIndebtedness, except that:

 

(1)          the Company and anySubsidiary Guarantor may Incur Indebtedness, including Acquired Indebtedness,and

 

(2)          any Restricted Subsidiarymay Incur Acquired Indebtedness not Incurred in connection with, or in anticipationor contemplation of, the relevant acquisition, merger or consolidation,

 

if,at the time of and immediately after giving pro forma effect to the Incurrencethereof and the application of the proceeds therefrom, the Consolidated FixedCharge Coverage Ratio of the Company is greater than 2.25 to 1.0.

 

(b)                                 Notwithstandingclause (a) above, the Company and its Restricted Subsidiaries, asapplicable, may Incur the following Indebtedness (“Permitted Indebtedness”):

 

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(1)          Indebtedness in respect ofthe Notes excluding Additional Notes;

 

(2)          Guarantees by any SubsidiaryGuarantor of Indebtedness of the Company or any other Subsidiary Guarantorpermitted hereunder *provided*,that if any such Guarantee is of Subordinated Indebtedness, then the NoteGuarantee of such Subsidiary Guarantor shall be senior to such SubsidiaryGuarantor’s Guarantee of such Subordinated Indebtedness;

 

(3)          Indebtedness Incurred by theCompany or any Subsidiary Guarantor under Credit Facilities in an aggregateprincipal amount at any time outstanding not to exceed the greater of(x) US$100 million or (y) 10% of Consolidated Tangible Assets;

 

(4)          other Indebtedness of theCompany and its Restricted Subsidiaries outstanding on the Issue Date, otherthan Indebtedness otherwise specified under any of the other clauses of thisdefinition of Permitted Indebtedness;

 

(5)          Hedging Obligations enteredinto by the Company and its Restricted Subsidiaries in the ordinary course ofbusiness and not for speculative purposes;

 

(6)          intercompany Indebtednessbetween the Company and any Restricted Subsidiary or between any RestrictedSubsidiaries; *provided*that:

 

(x)                                   if the Companyor any Subsidiary Guarantor is the obligor on such Indebtedness and the payeeis not the Company or any Subsidiary Guarantor, such Indebtedness must beexpressly subordinated to the prior payment in full of all obligations underthe Notes and this Indenture, in the case of the Company, or such SubsidiaryGuarantor’s Note Guarantee, in the case of any such Subsidiary Guarantor, and

 

(y)                                 in the eventthat at any time any such Indebtedness ceases to be held by the Company or aRestricted Subsidiary, such Indebtedness shall be deemed to be Incurred and notpermitted by this clause (6) at the time such event occurs;

 

(7)          Indebtedness of the Companyor any of its Restricted Subsidiaries arising from the honoring by a bank orother financial institution of a check, draft or similar instrumentinadvertently (including daylight overdrafts paid in full by the close ofbusiness on the day such overdraft was Incurred) drawn against insufficientfunds in the ordinary course of business; *provided*,that such Indebtedness is extinguished within five business days of Incurrence;

 

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(8)          Indebtedness of the Companyor any of its Restricted Subsidiaries represented by letters of credit for theaccount of the Company or any Restricted Subsidiary, as the case may be, inorder to provide security for workers’ compensation claims, payment obligationsin connection with self-insurance or similar requirements in the ordinarycourse of business;

 

(9)          Indebtedness of the Companyor any Restricted Subsidiary represented by Capitalized Lease Obligations orPurchase Money Indebtedness, in each case Incurred for the purpose of acquiringor financing all or any part of the purchase price or cost of construction orimprovement of property or equipment used in the business of the Company orsuch Restricted Subsidiary in an aggregate amount at any time not to exceed thegreater of (x) US$15 million or (y) 1.5% of Consolidated TangibleAssets;

 

(10)                            Indebtedness inrespect of bid, performance or surety bonds in the ordinary course of businessfor the account of the Company or any of its Restricted Subsidiaries, includingGuarantees or obligations of the Company or any Restricted Subsidiary withrespect to letters of credit supporting such bid, performance or suretyobligations (in each case other than for the payment of borrowed money);

 

(11)                            RefinancingIndebtedness in respect of:

 

(x)                                   Indebtedness(other than Indebtedness owed to the Company or any Subsidiary of the Company)Incurred pursuant to clause (a) above (it being understood that noIndebtedness outstanding on the Issue Date is Incurred pursuant to suchclause (a) above), or

 

(y)                                 IndebtednessIncurred pursuant to clause (b)(1), (b)(4) (excluding Indebtednessoutstanding on the Issue Date deemed to be incurred under clause (b)(3) aboveor Indebtedness owed to the Company or a Subsidiary of the Company) or (b)(12)of this Section;

 

(12)                            PermittedAcquisition Indebtedness in an aggregate principal amount not to exceed thegreater of (x) US$175 million and (y) 17.5% of Consolidated TangibleAssets at any one time outstanding; and

 

(13)                            AdditionalIndebtedness of the Company or any Restricted Subsidiary in an aggregateprincipal amount not to exceed US$15 million at any one time outstanding (whichamount may, but need not, be Incurred, in whole or in part, under Credit Facilities).

 

(c)                                  For purposes ofdetermining compliance with, and the outstanding principal amount of, anyparticular Indebtedness Incurred pursuant to and in compliance with 

 

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this Section 3.9, the amount ofIndebtedness issued at a price that is less than the principal amount thereofshall be equal to the amount of the liability in respect thereof determined inaccordance with MFRS.  Accrual ofinterest, the accretion or amortization of original issue discount, the paymentof regularly scheduled interest in the form of additional Indebtedness of thesame instrument or the payment of regularly scheduled dividends on DisqualifiedCapital Stock in the form of additional Disqualified Capital Stock with the sameterms shall not be deemed to be an Incurrence of Indebtedness for purposes ofthis Section 3.9; *provided*that any such outstanding additional Indebtedness or Disqualified Capital Stockpaid in respect of Indebtedness Incurred pursuant to any provision of Section 3.9(b) shallbe counted as Indebtedness outstanding thereunder for purposes of any futureIncurrence under such provision.  Forpurposes of determining compliance with this Section 3.9, in theevent that an item of proposed Indebtedness meets the criteria of more than oneof the categories under clauses (1) through (13) of Section 3.9(b),or is entitled to be incurred pursuant to Section 3.9(a) hereof,the Company shall be permitted to classify such item of Indebtedness on thedate of its incurrence and shall only be required to include the amount andtype of the above clauses, although the Company may divide and classify an itemof Indebtedness in one or more of the types of Indebtedness and may laterre-divide or reclassify all or a portion of such item of Indebtedness in anymanner that complies with this Section 3.9.  Notwithstanding any other provision of this Section 3.9,the maximum amount of Indebtedness that the Issuer or any Restricted Subsidiarymay incur under this Section 3.9 shall not be deemed to be exceededas a result solely of fluctuations in exchange rates or currency values.

 

Section 3.10                                Limitation onGuarantees.  The Companyshall not permit any Restricted Subsidiary of the Company that is not aSubsidiary Guarantor to Guarantee any Indebtedness of the Company or to secureany Indebtedness of the Company with a Lien on the assets of such RestrictedSubsidiary, unless contemporaneously therewith (or prior thereto) effectiveprovision is made to Guarantee or secure the Notes on an equal and ratablebasis with such Guarantee or Lien for so long as such Guarantee or Lien remainseffective, and in an amount equal to the amount of Indebtedness so Guaranteedor secured.  Any Guarantee by any suchRestricted Subsidiary of Subordinated Indebtedness of the Company will besubordinated and junior in right of payment to the contemporaneous Guarantee ofthe Notes by such Restricted Subsidiary.

 

Section 3.11                                Limitation onRestricted Payments.

 

(a)                                  The Companyshall not, and shall not cause or permit any of its Restricted Subsidiaries to,directly or indirectly, take any of the following actions (each, a “RestrictedPayment”):

 

(1)          declare or pay any dividendor return of capital or make any distribution on or in respect of shares ofCapital Stock of the Company or any Restricted Subsidiary to holders of suchCapital Stock, other than:

 

(x)                                   dividends ordistributions payable in Qualified Capital Stock of the Company,

 

(y)                                 dividends ordistributions payable to the Company and/or a Restricted Subsidiary, or

 

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(z)                                   dividends,distributions or returns of capital made on a *prorata* basis to the Company and its Restricted Subsidiaries, on theone hand, and minority holders of Capital Stock of a Restricted Subsidiary, onthe other hand (or on a less than *pro rata*basisto any minority holder);

 

(2)          purchase, redeem orotherwise acquire or retire for value:

 

(x)                                   any CapitalStock of the Company, or

 

(y)                                 any Capital Stock of anyRestricted Subsidiary held by an Affiliate of the Company (other than aRestricted Subsidiary) or any Preferred Stock of a Restricted Subsidiary,except for Capital Stock held by the Company or a Restricted Subsidiary orpurchases, redemptions, acquisitions or retirements for value of Capital Stockon a *pro rata* basis from theCompany and/or any Restricted Subsidiaries, on the one hand, and minorityholders of Capital Stock of a Restricted Subsidiary, on the other hand,according to their respective percentage ownership of the Capital Stock of suchRestricted Subsidiary;

 

(3)          make any principal paymenton, purchase, defease, redeem, prepay, decrease or otherwise acquire or retirefor value, prior to any scheduled final maturity, scheduled repayment orscheduled sinking fund payment, as the case may be, any SubordinatedIndebtedness (excluding (x) any intercompany Indebtedness between or amongthe Company and/or any Restricted Subsidiaries or (y) the purchase,repurchase or other acquisition of Indebtedness that is contractually subordinateto the Notes or any Note Guarantee, as the case may be, purchased inanticipation of satisfying a sinking fund obligation, principal installment orfinal maturity, in each case within one year of such date of purchase,repurchase or acquisition); or

 

(4)          make any Investment (otherthan Permitted Investments);

 

if at the time of the Restricted Payment andimmediately after giving effect thereto:

 

(A)                              a Default or anEvent of Default shall have occurred and be continuing;

 

(B)                                the Company isnot able to Incur at least US$1.00 of additional Indebtedness pursuant to Section 3.9(a);or

 

(C)                                the aggregateamount (the amount expended for these purposes, if other than in cash, beingthe Fair Market Value of the relevant property) of the proposed RestrictedPayment and all other Restricted Payments made subsequent to the Issue Date upto the date thereof, shall exceed the sum of:

 

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(i)                                     50% ofcumulative Consolidated Net Income of the Company or, if such cumulative ConsolidatedNet Income of the Company is a loss, minus 100% of the loss, accrued during theperiod, treated as one accounting period, beginning on the fiscal quarterbeginning January 1, 2010 to the end of the most recent fiscal quarter forwhich consolidated financial information of the Company is available; *plus*

 

(ii)                                  100% of theaggregate net cash proceeds received by the Company from any Person from any:

 

(1)                                  contribution tothe equity capital of the Company not representing an interest in DisqualifiedCapital Stock or issuance and sale of Qualified Capital Stock of the Company,in each case, subsequent to the Issue Date, or

 

(2)                                  issuance andsale subsequent to the Issue Date (and, in the case of Indebtedness of aRestricted Subsidiary, at such time as it was a Restricted Subsidiary) of anyIndebtedness of the Company or any Restricted Subsidiary that has beenconverted into or exchanged for Qualified Capital Stock of the Company,

 

excluding, in each case, any net cash proceeds:

 

(x)                                   received from a Subsidiaryof the Company;

 

(y)                                 used to redeem Notes inaccordance with the provisions in Exhibit A under the heading “OptionalRedemption Upon Equity Offerings”; or

 

(z)                                   applied in accordance with Section 3.11(b)(2) or(3) below; *plus*

 

(iii)                               any InvestmentReturn; *plus*

 

(iv)                              US$15 million.

 

(b)                                 Notwithstandingthe subsection (a) above, this Section 3.11 does not prohibit:

 

(1)          the payment of any dividendor the consummation of any irrevocable redemption of Subordinated Indebtednesswithin 60 days after the date of declaration of such dividend or giving of theredemption notice, as the case may be, if the dividend or redemption would havebeen permitted on the date of declaration or notice pursuant to the precedingparagraph; *provided* that suchredemption shall be included (without duplication for the declaration) in thecalculation of the amount of Restricted Payments;

 

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(2)          the acquisition of anyshares of Capital Stock of the Company,

 

(x)                                          in exchange for QualifiedCapital Stock of the Company, or

 

(y)                                        through the application ofthe net proceeds received by the Company from a substantially concurrent saleof Qualified Capital Stock of the Company or a contribution to the equitycapital of the Company not representing an interest in Disqualified CapitalStock, in each case not received from a Subsidiary of the Company;

 

*provided*, that the value of any suchQualified Capital Stock issued in exchange for such acquired Capital Stock andany such proceeds shall be excluded from Section 3.11(a)(C)(ii) above(and were not included therein at any time);

 

(3)          the voluntary prepayment,purchase, defeasance, redemption or other acquisition or retirement for valueof any Subordinated Indebtedness solely in exchange for, or through theapplication of net proceeds of a substantially concurrent sale, other than to aSubsidiary of the Company, of:

 

(x)                                   Qualified Capital Stock ofthe Company, or

 

(y)                                 Refinancing Indebtedness forsuch Subordinated Indebtedness;

 

*provided*,**that the value of any Qualified Capital Stock issued inexchange for Subordinated Indebtedness and any net proceeds referred to aboveshall be excluded from Section 3.11(a)(C)(ii) above (and werenot included therein at any time);

 

(4)          if no Default or Event ofDefault shall have occurred and be continuing, repurchases by the Company ofCommon Stock of the Company or options, warrants or other securitiesexercisable or convertible into Common Stock of the Company from any current orformer employees, officers, directors or consultants of the Company or any ofits Subsidiaries or their authorized representatives upon the death, disabilityor termination of employment or directorship of such employees, officers ordirectors, or the termination of retention of any such consultants, in anamount not to exceed US$5 million in any calendar year (with unused amounts inany calendar year being permitted to be carried over into succeeding calendaryears) plus the cash proceeds of key man life insurance policies received bythe Company and its Restricted Subsidiaries;

 

(5)          the repurchase of CapitalStock deemed to occur upon the exercise of stock options or warrants to theextent such Capital Stock 

 

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represents a portion of theexercise price of those stock options or warrants;

 

(6)          the declaration and paymentof regularly scheduled or accrued dividends or distributions to holders of anyclass or series of Disqualified Capital Stock of the Company or any RestrictedSubsidiary issued on or after the Issue Date in accordance with Section 3.9(a);

 

(7)          upon the occurrence of aChange of Control and within 60 days after the completion of the offer torepurchase the Notes pursuant to Section 3.8, any repurchase,redemption or other acquisition or retirement for value of any SubordinatedIndebtedness of the Company or any Subsidiary Guarantor required pursuant tothe terms thereof as a result of such Change of Control; *provided*that (A) the terms of suchpurchase or redemption are substantially similar in all material respects tothe comparable provision included herein, and (B) at the time of suchpurchase or redemption no Default or Event of Default shall have occurred andbe continuing (or would result therefrom); and

 

(8)          if no Default or Event ofDefault shall have occurred and be continuing, the purchase by the Company offractional shares arising out of stock dividends, splits or combinations orbusiness combinations.

 

Indetermining the aggregate amount of Restricted Payments made subsequent to theIssue Date, amounts expended pursuant to clauses (1) (withoutduplication for the declaration of the relevant dividend), (4) and (7) ofparagraph (b) of this Section 3.11 shall be included in suchcalculation and amounts expended pursuant to clauses (2), (3),(5),(6), and (8) above shall not be included in such calculation.

 

Section 3.12                                Limitation onAsset Sales and Sales of Subsidiary Stock.

 

(a)                                  The Companyshall not, and shall not permit any of its Restricted Subsidiaries to,consummate an Asset Sale unless:

 

(1)          the Company or theapplicable Restricted Subsidiary, as the case may be, receives consideration atthe time of the Asset Sale at least equal to the Fair Market Value of theassets or Capital Stock sold or otherwise disposed of, and

 

(2)          at least 75% of theconsideration received for the assets or Capital Stock sold by the Company orthe Restricted Subsidiary, as the case may be, in the Asset Sale shall be inthe form of cash or Cash Equivalents received at the time of such Asset Sale; *provided* that each of the following willbe deemed to be cash:

 

(x)                                   any securities,notes or other obligations received by the Company or any such RestrictedSubsidiary from such transferee that are converted by the Company or suchRestricted 

 

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Subsidiary into cash or Cash Equivalents within 120days of the receipt thereof (subject to ordinary settlement periods), to theextent of the cash or Cash Equivalents received in that conversion; and

 

(y)                                 any CapitalStock of a Person engaged in a Permitted Business that will become, uponpurchase, a Restricted Subsidiary or assets (other than current assets asdetermined in accordance with MFRS or Capital Stock) to be used by the Companyor any Restricted Subsidiary in a Permitted Business;

 

*provided,*that amounts received pursuant to clauses (x) and(y) shall not be deemed to constitute Net Cash Proceeds for purposes ofmaking an Asset Sale Offer.

 

(b)                                 The Company orsuch Restricted Subsidiary, as the case may be, may apply the Net Cash Proceedsof any such Asset Sale within 365 days thereof to:

 

(1)          repay any SeniorIndebtedness of the Company or a Restricted Subsidiary or Indebtedness of anyRestricted Subsidiary that is not a Subsidiary Guarantor (including, in eachcase without limitation, Capital Lease Obligations), or

 

(2)          make capital expenditures ina Permitted Business, or

 

(3)          to purchase

 

(x)                                   assets (otherthan current assets as determined in accordance with MFRS or Capital Stock) tobe used by the Company or any Restricted Subsidiary in a Permitted Business, or

 

(y)                                 all orsubstantially all of the assets of, or any Capital Stock of, a Person engagedin a Permitted Business if, after giving effect to any such acquisition ofCapital Stock, the Permitted Business is or becomes a Restricted Subsidiary,

 

from a Person other than theCompany and its Restricted Subsidiaries;

 

*provided* that in the cases ofclauses (x) and (y) the Company will have complied with itsobligations if it enters into a binding commitment to acquire such assets orsuch Capital Stock within 365 days after receipt of such Net Cash Proceeds; *provided* further that such bindingcommitment shall be subject only to customary conditions and that suchacquisition is consummated within six months from the date of signing suchbinding commitment.

 

(c)                                  To the extentall or a portion of the Net Cash Proceeds of any Asset Sale are not appliedwithin the 365 days of the Asset Sale as described in Section 3.12(b)(1),(2) and  (3), the Company shallmake an offer to purchase Notes (the “Asset Sale Offer”), at a purchase priceequal to 100% of the principal amount of the Notes to be purchased, plusaccrued and

 

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unpaid interest thereon, to the date of purchase(the “Asset Sale Offer Amount”).  TheCompany shall purchase pursuant to an Asset Sale Offer from all tenderingHolders on a *pro rata* basis, and,at the Company’s option, on a *pro rata*basis with the holders of any other Senior Indebtedness with similar provisionsrequiring the Company to offer to purchase the other Senior Indebtedness withthe proceeds of Asset Sales, that principal amount (or accreted value in thecase of Indebtedness issued with original issue discount) of Notes and theother Senior Indebtedness to be purchased equal to such unapplied Net CashProceeds.  The Company may satisfy itsobligations under this Section 3.12 with respect to the Net CashProceeds of an Asset Sale by making an Asset Sale Offer prior to the expirationof the relevant 365-day period.

 

(d)                                 The purchase ofNotes pursuant to an Asset Sale Offer shall occur on a date not less than 20business days following the date thereof, or any longer period as may berequired by law, nor more than 45 days following the 365th day following theAsset Sale.  The Company may, however,defer an Asset Sale Offer until there is an aggregate amount of unapplied NetCash Proceeds from one or more Asset Sales equal to or in excess ofUS$15 million.  At that time, theentire amount of unapplied Net Cash Proceeds, and not just the amount in excessof US$15 million, shall be applied as required pursuant to this Section 3.12.  Pending application in accordance with this Section 3.12,Net Cash Proceeds shall be applied to temporarily reduce revolving creditborrowings that can be reborrowed or Invested in Cash Equivalents.

 

(e)                                  Upon receivingthe Asset Sale Offer Notice, Holders may elect to tender their Notes in wholeor in part in integral multiples of US$1,000 in exchange for cash.

 

(f)                                    On the AssetSale Offer Payment Date, the Company shall, to the extent lawful:

 

(1)          accept for payment all Notesor portions thereof properly tendered pursuant to the Asset Sale Offer;

 

(2)          deposit with the Paying Agentfunds in an amount equal to the Asset Sale Offer Amount in respect of all Notesor portions thereof so tendered; and

 

(3)          deliver or cause to bedelivered to the Trustee the Notes so accepted together with an Officers’Certificate stating the aggregate principal amount of Notes or portions thereofbeing purchased by the Company.

 

(g)                                 To the extentHolders of Notes and holders of other Senior Indebtedness, if any, which arethe subject of an Asset Sale Offer properly tender and do not withdraw Notes orthe other Senior Indebtedness in an aggregate amount exceeding the amount ofunapplied Net Cash Proceeds, the Company shall purchase the Notes and the otherSenior Indebtedness on a *pro rata*basis (based on amounts tendered).  Ifonly a portion of a Note is purchased pursuant to an Asset Sale Offer, a newNote in a principal amount equal to the portion thereof not purchased will beissued in the name of the Holder thereof upon cancellation of the original Note(or appropriate adjustments to the amount and beneficial interests in a globalnote will be made, as 

 

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appropriate). Notes (or portions thereof) purchased pursuant to an Asset Sale Offershall be cancelled and cannot be reissued.

 

(h)                                 The Company shallcomply with the requirements of Rule 14e-1 under the Exchange Act and anyother applicable securities laws in connection with the purchase of Notespursuant to an Asset Sale Offer.  To theextent that the provisions of any applicable securities laws or regulationsconflict with this Section 3.12, the Company shall comply withthose laws and regulations and shall not be deemed to have breached itsobligations under this Section 3.12 by doing so.

 

(i)                                     Upon completionof an Asset Sale Offer, the amount of Net Cash Proceeds will be reset atzero.  Accordingly, to the extent thatthe aggregate amount of Notes and other Indebtedness tendered pursuant to anAsset Sale Offer is less than the aggregate amount of unapplied Net CashProceeds, the Company and its Restricted Subsidiaries may use any remaining NetCash Proceeds for any purpose not otherwise prohibited hereby.

 

(j)                                     In the event ofthe transfer of substantially all (but not all) of the property and assets ofthe Company and its Restricted Subsidiaries as an entirety to a Person in atransaction permitted under Section 4.1, the Surviving Entity shallbe deemed to have sold the properties and assets of the Company and itsRestricted Subsidiaries not so transferred for purposes of this Section 3.12,and shall comply with the provisions of this covenant with respect to thedeemed sale as if it were an Asset Sale. In addition, the Fair Market Value of properties and assets of theCompany or its Restricted Subsidiaries so deemed to be sold shall be deemed tobe Net Cash Proceeds for purposes of this Section 3.12.

 

(k)                                  If at any timeany non-cash consideration received by the Company or any RestrictedSubsidiary, as the case may be, in connection with any Asset Sale is convertedinto or sold or otherwise disposed of for cash (other than interest receivedwith respect to any non-cash consideration), the conversion or dispositionshall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceedsthereof shall be applied in accordance with this Section 3.12****within 365 days of conversion ordisposition.

 

Section 3.13                                Limitation onDesignation of Unrestricted Subsidiaries.

 

(a)                                  The Company maydesignate after the Issue Date any Subsidiary of the Company as an “UnrestrictedSubsidiary” under this Indenture (a “Designation”) only if:

 

(1)                                  no Default orEvent of Default shall have occurred and be continuing at the time of or aftergiving effect to such Designation and any transactions between the Company orany of its Restricted Subsidiaries and such Unrestricted Subsidiary are incompliance with Section 3.17;

 

(2)                                  at the time ofand after giving effect to such Designation, the Company could Incur US$1.00 ofadditional Indebtedness pursuant to Section 3.9(a);

 

(3)                                  the Companywould be permitted to make an Investment at the time of Designation (assumingthe effectiveness of such Designation and treating 

 

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such Designation as an Investment at the time ofDesignation) as a Restricted Payment pursuant to Section 3.11(a) oras a Permitted Investment in an amount (the “Designation Amount”) equalto the amount of the Company’s Investment in such Subsidiary on such date, and

 

(4)                                  at the time ofsuch Designation, neither the Company nor any Restricted Subsidiary will:

 

(1)                                  provide creditsupport for, subject any of its property or assets (other than the CapitalStock of any Unrestricted Subsidiary) to the satisfaction of, or Guarantee, anyIndebtedness of such Subsidiary (including any undertaking, agreement orinstrument evidencing such Indebtedness);

 

(2)                                  be directly orindirectly liable for any Indebtedness of such Subsidiary; or

 

(3)                                  be directly orindirectly liable for any Indebtedness which provides that the holder thereofmay (upon notice, lapse of time or both) declare a default thereon or cause thepayment thereof to be accelerated or payable prior to its final scheduledmaturity upon the occurrence of a default with respect to any Indebtedness ofsuch Subsidiary, except for any non-recourse Guarantee given solely to supportthe pledge by the Company or any Restricted Subsidiary of the Capital Stock ofsuch Subsidiary.

 

(b)                                 The Company mayrevoke any Designation of a Subsidiary as an Unrestricted Subsidiary (a “Revocation”)only if:

 

(1)                                  No Default orEvent of Default shall have occurred and be continuing at the time of and aftergiving effect to such Revocation; and

 

(2)                                  all Liens andIndebtedness of such Unrestricted Subsidiary outstanding immediately followingsuch Revocation would, if Incurred at such time, have been permitted to beIncurred for all purposes of this Indenture.

 

(c)                                  The Designationof a Subsidiary of the Company as an Unrestricted Subsidiary shall be deemed toinclude the Designation of all of the Subsidiaries of such Subsidiary.  All Designations and Revocations must beevidenced by resolutions of the Board of Directors of the Company, delivered tothe Trustee certifying compliance with the preceding provisions.

 

Section 3.14                                Limitation onDividends; Payment Restrictions Affecting Restricted Subsidiaries.

 

(a)                                  Except asprovided in paragraph (b) of this Section 3.14, theCompany shall not, and shall not cause or permit any of its RestrictedSubsidiaries to, directly or indirectly, create or otherwise cause or permit toexist or become effective any encumbrance or restriction on the ability of anyRestricted Subsidiary to:

 

(1)          pay dividends or make anyother distributions on or in respect of its Capital Stock to the Company or anyother Restricted Subsidiary or 

 

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pay any Indebtedness owed tothe Company or any other Restricted Subsidiary;

 

(2)          make loans or advances to,or Guarantee any Indebtedness or other obligations of, or make any Investmentin, the Company or any other Restricted Subsidiary; or

 

(3)          transfer any of its propertyor assets to the Company or any other Restricted Subsidiary.

 

(b)                                 Paragraph (a) ofthis Section 3.14 shall not apply to encumbrances or restrictionsexisting under or by reason of:

 

(1)          applicable law rule,regulation or order;

 

(2)          this Indenture, the Notesand the Note Guarantees;

 

(3)          the terms of anyIndebtedness outstanding on the Issue Date, and any amendment, modification,restatement, renewal, restructuring, replacement or refinancing thereof; *provided*, that any amendment,modification, restatement, renewal, restructuring, replacement or refinancingis not materially more restrictive, taken as a whole, with respect to suchencumbrances or restrictions than those in existence on the Issue Date;

 

(4)          customary non-assignmentprovisions of any contract and customary provisions restricting assignment orsubletting in any lease governing a leasehold interest of any RestrictedSubsidiary, or any customary restriction on the ability of a RestrictedSubsidiary to dividend, distribute or otherwise transfer any asset whichsecures Indebtedness secured by a Lien, in each case permitted to be Incurredhereunder;

 

(5)          any instrument governingAcquired Indebtedness not Incurred in connection with, or in anticipation orcontemplation of, the relevant acquisition, merger or consolidation, whichencumbrance or restriction is not applicable to any Person, or the propertiesor assets of any Person, other than the Person or the properties or assets ofthe Person so acquired;

 

(6)          restrictions with respect toa Restricted Subsidiary of the Company imposed pursuant to a binding agreementwhich has been entered into for the sale or disposition of Capital Stock orassets of such Restricted Subsidiary; *provided*,that such restrictions apply solely to the Capital Stock or assets of suchRestricted Subsidiary being sold;

 

(7)          customary restrictionsimposed on the transfer of copyrighted or patented materials;

 

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(8)          an agreement governingIndebtedness of the Company or any Restricted Subsidiaries permitted to beIncurred subsequent to the date hereof in accordance with Section 3.9;*provided* that the provisionsrelating to such encumbrance or restriction contained in such agreement are nomore restrictive than those contained in the agreement referred to in Section 3.14(b)(3) above;

 

(9)          purchase money obligationsfor property (including Capital Stock) acquired in the ordinary course ofbusiness and Capital Lease Obligations that impose restrictions on the propertypurchased or leased of the nature described in Section 3.14(a)(3) above;

 

(10)    Liens permitted to beincurred under Section 3.16 that limits the right of the debtor todispose of the assets securing such Indebtedness;

 

(11)    provisions limiting thepayment of dividends in the organizational documents, shareholders’ agreements,joint venture agreements or similar documents of, or related to, RestrictedSubsidiaries that are not Wholly Owned Subsidiaries and which have been enteredinto with the approval of the Company’s Board of Directors;

 

(12)    restrictions on cashdeposited with banks in the ordinary course of business consistent with pastpractice to secure trade payable obligations and guarantees of such tradepayable obligations of the Company and its Restricted Subsidiaries underSupplier Factoring Facilities; or

 

(13)    restrictions customarilygranted in connection with securitization, factoring or discounting involvingreceivables that are imposed in connection with a Receivables Transaction.

 

Section 3.15                                Limitation onLayered Indebtedness.  The Companyshall not, and shall not permit any Subsidiary Guarantor to, directly orindirectly, Incur any Indebtedness that is subordinate in right of paymentto any other Senior Indebtedness, unless such Indebtedness is expresslysubordinate in right of payment to the Notes or, in the case of a SubsidiaryGuarantor, its Note Guarantee to the same extent and on the same terms as suchIndebtedness is subordinate to such other Indebtedness.

 

Section 3.16                                Limitation onLiens.

 

(a)                                  The Companyshall not, and shall not cause or permit any of its Restricted Subsidiaries to,directly or indirectly, Incur any Liens of any kind (except for PermittedLiens) against or upon any of their respective properties or assets, whetherowned on the Issue Date or acquired after the Issue Date, or any proceedstherefrom, to secure any Indebtedness or trade payables unlesscontemporaneously therewith effective provision is made:

 

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(1)          in the case of the Companyor any Restricted Subsidiary other than a Subsidiary Guarantor, to secure theNotes and all other amounts due hereunder; and

 

(2)          in the case of a SubsidiaryGuarantor, to secure such Subsidiary Guarantor’s Note Guarantee and all otheramounts due hereunder;

 

ineach case, equally and ratably with such Indebtedness or other obligation (or,in the event that such Indebtedness is subordinated in right of payment to theNotes or such Note Guarantee, as the case may be, prior to such Indebtedness orother obligation) with a Lien on the same properties and assets securing suchIndebtedness or other obligation for so long as such Indebtedness or otherobligation is secured by such Lien.

 

Section 3.17                                Limitation onTransactions with Affiliates.

 

(a)                                  The Companyshall not, and shall not permit any of its Restricted Subsidiaries to, directlyor indirectly, enter into any transaction or series of related transactions(including, without limitation, the purchase, sale, lease or exchange of anyproperty or the rendering of any service) with, or for the benefit of, any ofits Affiliates (each an “Affiliate Transaction”), unless:

 

(1)          the terms of such AffiliateTransaction are no less favorable than those that could reasonably be expectedto be obtained in a comparable transaction at such time on an arm’s-lengthbasis from a Person that is not an Affiliate of the Company;

 

(2)          in the event that suchAffiliate Transaction involves aggregate payments, or transfers of property orservices with a Fair Market Value, in excess of US$5 million, the terms ofsuch Affiliate Transaction will be approved by a majority of the members of theBoard of Directors of the Company (including a majority of the disinterestedmembers thereof), the approval to be evidenced by a Board Resolution statingthat the Board of Directors has determined that such transaction complies withthe preceding provisions; and

 

(3)          in the event that suchAffiliate Transaction involves aggregate payments, or transfers of property orservices with a Fair Market Value, in excess of US$25 million, the Companywill, prior to the consummation thereof, obtain a favorable opinion as to thefairness of such Affiliate Transaction to the Company and the relevantRestricted Subsidiary (if any) from a financial point of view from anIndependent Financial Advisor and file the same with the Trustee.

 

(b)                                 The provisionsof Section 3.17(a) above will not apply to:

 

(1)          Affiliate Transactions withor among the Company and any Restricted Subsidiary or between or amongRestricted Subsidiaries;

 

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(2)          reasonable fees andcompensation paid to, and any indemnity provided on behalf of, officers,directors, employees, consultants or agents of the Company or any RestrictedSubsidiary as determined in good faith by the Company’s Board of Directors;

 

(3)          Affiliate Transactionsundertaken pursuant to any contractual obligations or rights in existence onthe Issue Date and any amendment, modification or replacement of such agreement(so long as such amendment, modification or replacement is not materially moredisadvantageous to the Holders of the Notes, taken as a whole, than theoriginal agreement as in effect on the Issue Date);

 

(4)          any Restricted Payments madein compliance with Section 3.11 or any Permitted Investments;

 

(5)          loans and advances toofficers, directors and employees of the Company or any Restricted Subsidiaryfor travel, entertainment, moving and other relocation expenses, in each casemade in the ordinary course of business and not exceeding US$2.5 millionoutstanding at any one time; and

 

(6)          any issuance of CapitalStock (other than Disqualified Stock) of the Company to Affiliates of theCompany or to any director, officer, employee or consultant of the Company, andthe granting and performance of registration rights.

 

Section 3.18                                Conduct ofBusiness.  The Companyand its Restricted Subsidiaries shall not engage in any business other than aPermitted Business.

 

Section 3.19                                Reports toHolders.

 

(a)                                  If the Companyis

 

(i)                                     required tofile with the SEC information, documents, or reports pursuant toSection 13 or Section 15(d) of the Exchange Act, it shalldeliver to the Trustee:

 

(A)                              annual reportson Form 20-F (or any successor form) containing the information requiredto be contained therein (or such successor form) within the time periodrequired under the rules of the SEC for the filing of Form 20-F (orany successor form) by foreign private issuers subject thereto, and

 

(B)                                reports onForm 6-K (or any successor form) including, whether or not required,unaudited quarterly financial statements (which shall include at least abalance sheet, income statement and cash flow statement along with otherfinancial information and a discussion of results in each case with asubstantially similar level of information in all material respects as providedby the Company 

 

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in its Form 6-K for thethird quarter of 2009, within 45 days after the end of each of the first threefiscal quarters of each fiscal year, or

 

(ii)                                  not required tofile with the SEC, information, documents, or reports pursuant to Section 13or Section 15(d) of the Exchange Act, then it will deliver to theTrustee, in accordance with rules and regulations prescribed from time totime by the SEC, such of the supplementary and periodic information, documentsand reports which may be required by Section 13 of the Exchange Act inrespect of a security listed and registered on a national securities exchangeas may be prescribed from time to time in such rules and regulations;provided, however, that if the Company files with the SEC, information,documents, or reports by virtue of its being subject to the requirements of Section 12,Section 13 or Section 15(d) of the Exchange Act and its duty tofile with the SEC, such information, documents or reports is subsequentlysuspended or terminated, then the Company shall deliver to the Trustee, in lieuof the information, documents or reports previously filed with the SEC, suchinformation, documents and reports in the English language that the Company isrequired to make public pursuant to Rule 12g3-2(b) under the ExchangeAct.

 

(b)                                 If MFRS arematerially different, for purposes of calculations under the Indenture, thanMexican Financial Reporting Standards used for purposes of the financialstatements provided pursuant to Section 3.19(a)(i) or (ii), nolater than when due under Section 3.19(a)(i) or (ii),respectively, the Company will deliver to the Trustee (x) a description ofthe differences between accounting principles in the financial statementsprovided pursuant to Section 3.19(a)(i) or (ii) and thefinancial statements used for calculations under the Indenture, and (y) anunaudited quantitative reconciliation of revenues, Consolidated EBITDA,Consolidated Net Income, and the Consolidated Fixed Charge Coverage Ratio, and,after any Reversion Date has occurred, cumulative Consolidated Net Income sinceJanuary 1, 2010.

 

(c)                                  At any timewhen the Company is not subject to or is not current in its reportingobligations under Section 3.19(a)(i) or (ii), the Companyshall make available, upon request, to any holder and any prospective purchaserof Notes the information required pursuant to Rule 144A(d)(4) underthe Securities Act.

 

(d)                                 So long as theNotes are listed on Euro MTF, the alternative market of the Luxembourg StockExchange, the Company shall make available the information specified in Section 3.19(c) atthe specified office of the Luxembourg Paying Agent for the Notes.

 

Section 3.20                                Listing.

 

(a)                                  In the eventthat the Notes are listed on Euro MTF, the alternative market of the LuxembourgStock Exchange, the Company shall use its reasonable best efforts to maintainsuch listing; *provided*that if,as a result of the European Union regulated market amended Directive 2001/34/EC(the “Transparency Directive”) or any legislation implementing the TransparencyDirective the Company could be required to publish financial information eithermore regularly than it otherwise would be required to or according toaccounting principles which are materially different from the accountingprinciples which the Company would otherwise use to prepare its publishedfinancial information, the Company may delist the 

 

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Notes from the Euro MTF in accordance with the rules ofthe Luxembourg Stock Exchange and seek an alternative admission to listing,trading and/or quotation for the Note on a different section of the LuxembourgStock Exchange or by such other listing authority, stock exchange and/orquotation system inside or outside the European Union as the Company mayreasonably decide.

 

(b)                                 From and afterthe date the Notes are listed on the Euro MTF, the alternative market of theLuxembourg Stock Exchange, and so long as it is required by the rules ofsuch exchange, all notices to the Holders will be published in English inaccordance with Section 11.1(b).

 

Section 3.21                                Payment ofAdditional Amounts.

 

(a)                                  The Company andthe Subsidiary Guarantors shall pay to holders of the Notes all additionalamounts (“Additional Amounts”) that may be necessary so that every netpayment of interest (including any premium paid upon redemption of the Notes)or principal to the Holder shall not be less than the amount provided for inthe Notes.  The term “net payment” meansthe amount the Company or its paying agent pay the Holder after deducting orwithholding an amount for or on account of any present or future taxes, duties,assessments or other governmental charges (“Taxes”) imposed with respectto that payment by a Mexican taxing authority (“Taxing Authority”).

 

(b)                                 The Company andthe Subsidiary Guarantors shall not pay additional amounts to any Holder for orsolely on account of any of the following:

 

(1)                                  any taxes,duties, assessments or other governmental charges imposed solely because at anytime there is or was a connection between the Holder or beneficial owner of theNote and Mexico (or any political subdivision or territory or possessionthereof), including such Holder or beneficial owner (i) being or havingbeen a citizen or resident thereof, (ii) maintaining or having maintainedan office, permanent establishment, or branch subject to taxation therein, or (iii) beingor having been present or engaged in a trade or business therein (other thanthe mere receipt of a payment or the ownership or holding of a Note),

 

(2)                                  any estate,inheritance, gift, transfer or similar tax, assessment or other governmentalcharge imposed with respect to the Notes,

 

(3)                                  any taxes,duties, assessments or other governmental charges imposed solely because theHolder or any other person fails to comply with any certification,identification, information, documentation or other reporting requirementconcerning the nationality, residence, identity or connection with Mexico (orany political subdivision or territory or possession thereof) of the Holder orany beneficial owner of the Note, if compliance is required by statute,regulation, officially published administrative practice of the taxingjurisdiction or by an applicable income tax treaty, which is in effect to whichMexico is a party, as a precondition to exemption from, or reduction in therate of, the tax, 

 

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assessment or other governmental charge and we havegiven the Holders at least 30 days’ notice that Holders will be requiredto provide such information and identification;

 

(4)                                  any tax, duty,assessment or other governmental charge payable otherwise than by deduction orwithholding from payments on the Notes,

 

(5)                                  any taxes,duties, assessments or other governmental charges with respect to such Notepresented for payment more than 30 days after the date on which thepayment became due and payable or the date on which payment thereof is dulyprovided for and notice thereof given to Holders, whichever occurs later,except to the extent that the holders of such Note would have been entitled tosuch additional amounts on presenting such Note for payment on any date duringsuch 30 day period, and

 

(6)                                  any payment onthe Note to a Holder that is a fiduciary or partnership or a person other thanthe sole beneficial owner of any such payment, to the extent that a beneficiaryor settlor with respect to such fiduciary, a member of such a partnership orthe beneficial owner of the payment would not have been entitled to theadditional amounts had the beneficiary, settlor, member or beneficial ownerbeen the holder of the Note.

 

(c)                                  (1)                                  The limitationson the Company’s and Subsidiary Guarantors’ obligations to pay AdditionalAmounts set forth in Section 3.21(b)(3) above shall not apply:

 

(i)                                     if theprovision of information, documentation or other evidence described in such Section 3.21(b)(3) wouldbe materially more onerous, in form, in procedure or in the substance ofinformation disclosed, to a Holder or beneficial owner of a Note, taking intoaccount any relevant differences between U.S. and Mexican law, regulationor administrative practice, than comparable information or other reportingrequirements imposed under U.S. tax law (including the UnitedStates-Mexico income tax treaty), regulation (including proposedregulations) and administrative practice.

 

(ii)                                  unless (A) theprovision of the information, documentation or other evidence described in suchSection 3.21(b)(3) becomes expressly required by theapplicable Mexican statutes, regulations and administrative practices and theCompany cannot obtain such information, documentation or other evidence on itsown through reasonable diligence, and (B) the Company otherwise would notmeet the requirements for application of the reduced Mexican tax rate.

 

(iii)                               if theprovisions of Article 195, Section II, subsection a) of the MexicanIncome Tax Law (or a substitute equivalent provision) are not complied with bythe Company or any Subsidiary Guarantor, and a higher withholding tax wouldapply.

 

(2)                                  In addition,such Section 3.21(b)(3) does not require, and shall not beconstrued to require that any person, including any non-Mexican pension fund,retirement fund or financial institution, register with the Ministry of

 

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Finance and Public Credit to establish eligibilityfor an exemption from, or a reduction of, Mexican withholding tax.

 

(d)                                 Upon request,the Company and the Subsidiary Guarantors shall provide the Trustee withdocumentation satisfactory to the Trustee evidencing the payment of Mexicantaxes in respect of which we have paid any Additional Amount.  The Company shall make copies of suchdocumentation available to the Holders of the Notes or the Paying Agent uponrequest.

 

(e)                                  In the eventthat Additional Amounts actually paid with respect to the Notes pursuant tothis Section 3.21 are based on rates of deduction or withholding ofwithholding taxes in excess of the appropriate rate applicable to the Holder ofsuch Notes, and as a result thereof such Holder is entitled to make a claim fora refund or credit of such excess from the authority imposing such withholdingtax, then such Holder shall, by accepting such Notes, be deemed to haveassigned and transferred all right, title and interest to any such claim for arefund or credit of such excess to the Company. However, by making such assignment, the Holder makes no representationor warranty that the Company will be entitled to receive such claim for arefund or credit and incurs no other obligation with respect thereto.

 

(f)                                    In the event ofany merger or other transaction described and permitted under Section 4.1,then all references to Mexico, Mexican law or regulations, and Mexican taxingauthorities under this Section 3.21 (other than Section 3.21(c)(1))and under Article V and Section 5 of Exhibit Ashall be deemed to also include the United States and any political subdivisiontherein or thereof, United States law or regulations, and any taxing authorityof the United States or any political subdivision therein or thereof,respectively.

 

Section 3.22                                Suspension ofCovenants.

 

(a)                                  During anyperiod of time that (i) the Notes have Investment Grade Ratings from bothRating Agencies and (ii) no Default or Event of Default has occurred andis continuing (the occurrence of the events described in the foregoing clauses (i) and(ii) being collectively referred to as a “Covenant Suspension Event”), theCompany and its Restricted Subsidiaries will not be subject to Sections 3.8,3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15,3.17, 3.18, 3.19(b) and 4.1(a)(2) (collectively,the “Suspended Covenants”).

 

(b)                                 In the eventthat the Company and its Restricted Subsidiaries are not subject to theSuspended Covenants for any period of time as a result of the foregoing, and onany subsequent date (the “Reversion Date”) one of the Rating Agencieswithdraws its Investment Grade Rating or downgrades its rating assigned to theNotes below an Investment Grade Rating, then the Company and its RestrictedSubsidiaries will thereafter again be subject to the Suspended Covenants.  The period of time between the SuspensionDate and the Reversion Date is referred to as the “Suspension Period.”  Notwithstanding that the Suspended Covenantsmay be reinstated, no Default or Event of Default will be deemed to haveoccurred as a result of a failure to comply with the Suspended Covenants duringthe Suspension Period (or upon termination of the Suspension Period or afterthat time based solely on events that occurred during the Suspension Period).

 

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(c)                                  On theReversion Date, all Indebtedness incurred during the Suspension Period will beclassified to have been incurred pursuant to Section 3.9(a) orSection 3.9(b) (to the extent such Indebtedness would bepermitted to be incurred thereunder as of the Reversion Date and after givingeffect to Indebtedness incurred prior to the Suspension Period and outstandingon the Reversion Date).  To the extentsuch Indebtedness would not be so permitted to be incurred pursuant to Section 3.9(a) orSection 3.9(b), such Indebtedness will be deemed to have beenoutstanding on the Issue Date, so that it is classified as permitted under Section 3.9(b)(4).  Calculations made after the Reversion Date ofthe amount available to be made as Restricted Payments under Section 3.11will be made as though Section 3.11 had been in effect since theIssue Date and throughout the Suspension Period.

 

ARTICLE IV

 

SURVIVING ENTITY

 

Section 4.1                                      Merger,Consolidation and Sale of Assets.

 

(a)                                  The Companyshall not, in a single transaction or series of related transactions,consolidate or merge with or into any Person (whether or not the Company is thesurviving or continuing Person), or sell, assign, transfer, lease, convey orotherwise dispose of (or cause or permit any Restricted Subsidiary to sell,assign, transfer, lease, convey or otherwise dispose of) all or substantiallyall of the Company’s properties and assets (determined on a consolidated basisfor the Company and its Restricted Subsidiaries), to any Person unless:

 

(1)                                  either:

 

(i)                                     the Companyshall be the surviving or continuing corporation, or

 

(ii)                                  the Person (ifother than the Company) formed by such consolidation or into which the Companyis merged or the Person which acquires by sale, assignment, transfer, lease,conveyance or other disposition the properties and assets of the Company and ofthe Company’s Restricted Subsidiaries substantially as an entirety (the “SurvivingEntity”):

 

(A)                              shall be acorporation, organized and validly existing under the laws of Mexico or theUnited States of America, any State thereof or the District of Columbia, and

 

(B)                                shall expresslyassume, by supplemental indenture (in form and substance satisfactory to theTrustee), executed and delivered to the Trustee, the due and punctual paymentof the principal of, and premium, if any, and interest on all of the Notes andthe performance and observance of every covenant of the Notes and thisIndenture on the part of the Company to be performed or observed;

 

(2)                              immediatelyafter giving effect to such transaction and the assumption contemplated by Section (a)(1)(ii)(B) ofthis Section 4.1 (including giving effect on a pro forma basis toany Indebtedness, including any Acquired Indebtedness, Incurred or 

 

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anticipated to be Incurred in connection with or inrespect of such transaction), the Company or such Surviving Entity, as the casemay be:

 

(i)                                     will be able toIncur at least US$1.00 of additional Indebtedness pursuant to Section 3.9(a),or

 

(ii)                                  will have aConsolidated Fixed Charge Coverage Ratio of not less than the ConsolidatedFixed Charge Coverage Ratio of the Company and its Restricted Subsidiariesimmediately prior to such transaction;

 

providedthat provisions of the subsection (2)(i) above shall not apply to:

 

(A)                              any transfer ofthe properties or assets of a Restricted Subsidiary to the Company or to aSubsidiary Guarantor;

 

(B)                                any merger of aRestricted Subsidiary into the Company or a Subsidiary Guarantor; or

 

(C)                                any merger ofthe Company into a Wholly Owned Subsidiary of the Company created for thepurpose of holding the Capital Stock of the Company;

 

solong as, in each case the Indebtedness of the Company and its RestrictedSubsidiaries taken as a whole is not increased thereby.

 

(3)                              immediatelybefore and immediately after giving effect to such transaction and theassumption contemplated by Section (a)(1)(ii)(B) of this Section 4.1(including, without limitation, giving effect on a pro forma basis to anyIndebtedness, including any Acquired Indebtedness, Incurred or anticipatedto be Incurred and any Lien granted in connection with or in respect of thetransaction), no Default or Event of Default shall have occurred or becontinuing;

 

(4)                              each SubsidiaryGuarantor (including Persons that become Subsidiary Guarantors as a result ofthe transaction) has confirmed by supplemental indenture that its NoteGuarantee will apply for the Obligations of the Surviving Entity in respect ofthis Indenture and the Notes;

 

(5)                              if the Companyis organized under Mexican law and merges with a corporation, or the SurvivingEntity is, organized under the laws of the United States, any State thereof orthe District of Columbia or the Company is organized under the laws of theUnited States, any State thereof or the District of Columbia and merges with acorporation, or the Surviving Entity is, organized under the laws of Mexico,the Company or the Surviving Entity will have delivered to the Trustee anOpinion of Counsel from each of Mexico and the United States to the effectthat, as applicable:

 

(i)                                     the holders ofthe Notes will not recognize income, gain or loss for U.S. or Mexican incometax purposes as a result of the transaction and will be taxed in the holder’s homejurisdiction in the same manner and on the same amounts (assuming 

 

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solely for this purpose that no Additional Amountsare regarded to be paid on the Notes) and at the same times as would have beenthe case if the transaction had not occurred,

 

(ii)                                  any payment ofinterest or principal under or relating to the Notes or any Note Guaranteeswill****be paid in compliance withany requirements under Section 3.21, and

 

(iii)                               no other taxeson income, including capital gains, will be payable by holders of the Notesunder the laws of Mexico or the United States relating to the acquisition,ownership or disposition of the Notes, including the receipt of interest orprincipal thereon; *provided*thatthe holder does not use or hold, and is not deemed to use or hold the Notes incarrying on a business in Mexico or the United States, and

 

(6)                              the Company orthe Surviving Entity has delivered to the Trustee an Officers’ Certificate andan Opinion of Counsel, each stating that the consolidation, merger, sale,assignment, transfer, lease, conveyance or other disposition and, if requiredin connection with such transaction, the supplemental indenture, comply withthe applicable provisions of this Indenture and that all conditions precedentherein relating to the transaction have been satisfied.

 

(b)                                 For purposes ofthis Section 4.1, the transfer (by lease, assignment, sale orotherwise, in a single transaction or series of transactions) of all orsubstantially all of the properties or assets of one or more RestrictedSubsidiaries of the Company, the Capital Stock of which constitutes all orsubstantially all of the properties and assets of the Company (determined on aconsolidated basis for the Company and its Restricted Subsidiaries), shall bedeemed to be the transfer of all or substantially all of the properties andassets of the Company.

 

(c)                                  Upon anyconsolidation, combination or merger or any transfer of all or substantiallyall of the properties and assets of the Company and its Restricted Subsidiariesin accordance with this Section 4.1, in which the Company is notthe continuing corporation, the Surviving Entity formed by such consolidationor into which the Company is merged or to which such conveyance, lease or transferis made will succeed to, and be substituted for, and may exercise every rightand power of, the Company under this Indenture and the Notes with the sameeffect as if such Surviving Entity had been named as such.  For the avoidance of doubt, compliance withthis Section 4.1 will not affect the obligations of the Company(including a Surviving Entity, if applicable) under Section 3.8, ifapplicable.

 

(d)                                 Each SubsidiaryGuarantor shall not, and the Company shall not cause or permit any SubsidiaryGuarantor to, consolidate with or merge into, or sell or dispose of all orsubstantially all of its assets to, any Person (other than the Company) that isnot a Subsidiary Guarantor unless:

 

(1)          such Person (if such Personis the surviving entity) assumes all of the obligations of such SubsidiaryGuarantor in respect of its Note Guarantee by executing a supplementalindenture and providing the Trustee with an Officers’ Certificate and Opinionof Counsel, and such transaction is otherwise in compliance herewith;

 

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(2)          such Note Guarantee is to bereleased as provided under Section 10.2 or

 

(3)          such sale or otherdisposition of substantially all of such Subsidiary Guarantor’s assets is madein accordance with Section 3.12.

 

ARTICLE V

 

OPTIONAL REDEMPTION OF NOTES

 

Section 5.1                                      OptionalRedemption.  The Companymay redeem the Notes, as a whole or from time to time in part, subject to theconditions and at the redemption prices specified in the form of Notes in Exhibit A.

 

Section 5.2                                      Election toRedeem.  The Company shall evidence itselection to redeem any Notes pursuant to Section 5.1 by a BoardResolution.

 

Section 5.3                                      Notice ofRedemption.

 

(a)                                  The Companyshall give or cause the Trustee to give notice of redemption, in the mannerprovided for in Section 11.1, not less than 30 nor more than 60days prior to the Redemption Date by first-class mail, postage prepaid, to eachHolder of Notes to be redeemed at its registered address.  If the Company itself gives the notice, itshall also deliver a copy to the Trustee.

 

(b)                                 If either(i) the Company is not redeeming all Outstanding Notes, or (ii) theCompany elects to have the Trustee give notice of redemption, then the Companyshall deliver to the Trustee, at least 45 days prior to the Redemption Date(unless the Trustee is satisfied with a shorter period), an Officers’Certificate requesting that the Trustee select the Notes to be redeemed and/orgive notice of redemption and setting forth the information required by paragraph (c) ofthis Section 5.3 (with the exception of the identification of theparticular Notes, or portions of the particular Notes, to be redeemed in thecase of a partial redemption).  If theCompany elects to have the Trustee give notice of redemption, the Trustee shallgive the notice in the name of the Company and at the Company’s expense.

 

(c)                                  All notices ofredemption shall state:

 

(1)          the Redemption Date,

 

(2)          the redemption price and theamount of any accrued interest payable as provided in Section 5.6,

 

(3)          whether or not the Companyis redeeming all Outstanding Notes,

 

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(4)          if the Company is notredeeming all Outstanding Notes, the aggregate principal amount of Notes thatthe Company is redeeming and the aggregate principal amount of Notes that willbe Outstanding after the partial redemption, as well as the identification ofthe particular Notes, or portions of the particular Notes, that the Company isredeeming,

 

(5)          if the Company is redeemingonly part of a Note, the notice that relates to that Note shall state that onand after the Redemption Date, upon surrender of that Note, the Holder willreceive, without charge, a new Note or Notes of authorized denominations forthe principal amount of the Note remaining unredeemed,

 

(6)          that on the Redemption Datethe redemption price and any accrued interest payable to the Redemption Date asprovided in Section 5.6 will become due and payable in respect ofeach Note, or the portion of each Note, to be redeemed, and, unless the Companydefaults in making the redemption payment, that interest on each Note, or theportion of each Note, to be redeemed, will cease to accrue on and after theRedemption Date,

 

(7)          the place or places where aHolder must surrender the Holder’s Notes for payment of the redemption price,and

 

(8)          the CUSIP or ISIN number, ifany, listed in the notice or printed on the Notes, and that no representationis made as to the accuracy or correctness of such CUSIP or ISIN number.

 

Section 5.4                                      Selection ofNotes to Be Redeemed in Part.

 

(a)                                  If the Companyis not redeeming all Outstanding Notes, the Trustee shall select the Notes tobe redeemed in compliance with the requirements of the principal nationalsecurities exchange, if any, on which the Notes are listed or, if the Notes arenot then listed on a national securities exchange, on a *pro rata* basis, by lot or any other methodas the Trustee shall deem fair and appropriate (subject to the procedures ofDTC); *provided, however*, that ifa partial redemption is made with the proceeds of a Equity Offering, selectionof the Notes, or portions of the Notes, for redemption shall, subject to thisSection, be made by the Trustee only on a *prorata* basis or on as nearly a *prorata*basis as is practicable (subject to the procedures of DTC),unless that method is otherwise prohibited. The Trustee shall make the selection from the Outstanding Notes notpreviously called for redemption.  TheTrustee shall promptly notify the Company in writing of the Notes selected forredemption and, in the case of any Notes selected for partial redemption, theprincipal amount of the Notes to be redeemed. In the event of a partial redemption by lot, the Trustee shall selectthe particular Notes to be redeemed not less than 30 nor more than 60 daysprior to the relevant Redemption Date from the Outstanding Notes not previouslycalled for redemption.  The Company mayredeem Notes in denominations of US$1,000 only in whole.  The Trustee may select for redemptionportions (equal to US$1,000 or any integral multiple of US$1,000) of theprincipal of Notes that have denominations larger than US$1,000.

 

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(b)                                 For allpurposes of this Indenture, unless the context otherwise requires, allprovisions relating to redemption of Notes shall relate, in the case of anyNote redeemed or to be redeemed only in part, to the portion of the principalamount of that Note which has been or is to be redeemed.

 

Section 5.5                                      Deposit ofRedemption Price.  Prior to10:00 a.m. New York City time on the relevant Redemption Date, the Companyshall deposit with the Trustee or with a Paying Agent (or, if the Company isacting as Paying Agent, segregate and hold in trust as provided in Section 2.4)an amount of money in immediately available funds sufficient to pay theredemption price of, and accrued interest on, all the Notes that the Company isredeeming on that date.

 

Section 5.6                                      Notes Payableon Redemption Date.  If theCompany, or the Trustee on behalf of the Company, gives notice of redemption inaccordance with this Article V, the Notes, or the portions ofNotes, called for redemption, shall, on the Redemption Date, become due andpayable at the redemption price specified in the notice (together with accruedinterest, if any, to the Redemption Date), and from and after the RedemptionDate (unless the Company shall default in the payment of the redemption priceand accrued interest) the Notes or the portions of Notes shall cease to bearinterest.  Upon surrender of any Note forredemption in accordance with the notice, the Company shall pay the Notes atthe redemption price, together with accrued interest, if any, to the RedemptionDate (subject to the rights of Holders of record on the relevant record date toreceive interest due on the relevant Interest Payment Date).  If the Company shall fail to pay any Notecalled for redemption upon its surrender for redemption, the principal shall,until paid, bear interest from the Redemption Date at the rate borne by theNotes.

 

Section 5.7                                      UnredeemedPortions of Partially Redeemed Note.  Upon surrender of a Note that is to beredeemed in part, the Company shall execute, and the Trustee shall authenticateand make available for delivery to the Holder of the Note at the expense of theCompany, a new Note or Notes, of any authorized denomination as requested bythe Holder, in an aggregate principal amount equal to, and in exchange for, theunredeemed portion of the principal of the Note surrendered, *provided* that each new Note will be in aprincipal amount of US$2,000 or integral multiple of US$1,000.

 

ARTICLE VI

 

DEFAULTS AND REMEDIES

 

Section 6.1                                      Events ofDefault.

 

(a)                                  Each of thefollowing is an “Event of Default”:

 

(1)                                  default in thepayment when due of the principal of or premium, if any, on any Notes,including the failure to make a required payment to purchase Notes tenderedpursuant to an optional redemption, Change of Control Offer or an Asset SaleOffer;

 

(2)                                  default for 30days or more in the payment when due of interest, Additional Amounts orliquidated damages, if any, on any Notes;

 

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(3)                                  the failure toperform or comply with any of the provisions described under Section 4.1;

 

(4)                                  the failure bythe Company or any Restricted Subsidiary to comply with any other covenant oragreement contained herein or in the Notes for 45 days or more after writtennotice to the Company from the Trustee or the Holders of at least 25% inaggregate principal amount of the outstanding Notes;

 

(5)                                  default by theCompany or any Restricted Subsidiary under any Indebtedness which:

 

(1)                                  is caused by afailure to pay principal of or premium, if any, or interest on suchIndebtedness prior to the expiration of any applicable grace period provided insuch Indebtedness on the date of such default; or

 

(2)                                  results in theacceleration of such Indebtedness prior to its stated maturity;

 

and the principal or accreted amount of Indebtednesscovered by (i) or (ii) at the relevant time, aggregates US$15 millionor more;

 

(6)                                  failure by theCompany or any of its Restricted Subsidiaries to pay one or more finaljudgments against any of them, aggregating US$15 million or more, whichjudgment(s) are not paid, discharged or stayed for a period of60 days or more;

 

(7)                                  a BankruptcyLaw Event of Default; or

 

(8)                                  except aspermitted herein, any Note Guarantee is held to be unenforceable or invalid ina judicial proceeding or ceases for any reason to be in full force and effector any Subsidiary Guarantor, or any Person acting on behalf of any SubsidiaryGuarantor, denies or disaffirms such Subsidiary Guarantor’s obligations underits Note Guarantee.

 

(b)                                 The Companyshall deliver to the Trustee upon becoming aware of any Default or Event ofDefault written notice of events which would constitute such Default or Eventof Default, their status and what action the Company is taking or proposes totake in respect thereof.

 

Section 6.2                                      Acceleration.

 

(a)                                  If an Event ofDefault (other than an Event of Default specified in Section 6.1(a)(7) abovewith respect to the Company) shall occur and be continuing, the Trustee or theHolders of at least 25% in principal amount of outstanding Notes may declarethe unpaid principal of (and premium, if any) and accrued and unpaid intereston all the Notes to be immediately due and payable by notice in writing to theCompany and the Trustee specifying the Event of Default and that it is a“notice of acceleration.”  If an Event ofDefault specified in Section 6.1(a)(7) above occurs withrespect to the Company, then the unpaid principal of (and 

 

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premium, if any) and accrued and unpaid interest onall the Notes shall become immediately due and payable without any declarationor other act on the part of the Trustee or any Holder.

 

(b)                                 At any timeafter a declaration of acceleration with respect to the Notes as described in Section 6.2(a),the Holders of a majority in principal amount of the Notes may rescind andcancel such declaration and its consequences:

 

(1)                                  if therescission would not conflict with any judgment or decree;

 

(2)                                  if all existingEvents of Default have been cured or waived, except nonpayment of principal orinterest that has become due solely because of the acceleration;

 

(3)                                  to the extentthe payment of such interest is lawful, interest on overdue installments ofinterest and overdue principal, which has become due otherwise than by suchdeclaration of acceleration, has been paid; and

 

(4)                                  if the Companyhas paid the Trustee its reasonable compensation and reimbursed the Trustee forits reasonable expenses (including the fees and expenses of its counsel),disbursements and advances.

 

Norescission shall affect any subsequent Default or impair any rights relatingthereto.

 

Section 6.3                                      Other Remedies.

 

(a)                                  If an Event ofDefault occurs and is continuing, the Trustee may pursue any available remedyto collect the payment of principal of and interest on the Notes or to enforcethe performance of any provision of the Notes or this Indenture.

 

(b)                                 The Trustee maymaintain a proceeding even if it does not possess any of the Notes or does notproduce any of them in the proceeding.  Adelay or omission by the Trustee or any Holder in exercising any right or remedyaccruing upon an Event of Default shall not impair the right or remedy orconstitute a waiver of or acquiescence in the Event of Default.  No remedy is exclusive of any otherremedy.  All available remedies arecumulative to the extent permitted by law.

 

Section 6.4                                      Waiver of PastDefaults.  The Holdersof a majority in principal amount of the Notes may waive any existing Defaultor Event of Default hereunder, and its consequences, except a default in thepayment of the principal of, premium, if any, or interest on any Notes.

 

Section 6.5                                      Control byMajority.  Subject tothe provisions of this Indenture and applicable law, the Holders of a majorityin aggregate principal amount of the outstanding Notes may direct the time,method and place of conducting any proceeding for any remedy available to theTrustee or of exercising any trust or power conferred on the Trustee.

 

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Section 6.6                                      Limitation onSuits.

 

(a)                                  No Holder ofany Notes shall have any right to institute any proceeding with respect heretoor for any remedy hereunder, unless:

 

(1)                                  such Holdergives to the Trustee written notice of a continuing Event of Default;

 

(2)                                  Holders of atleast 25% in principal amount of the then outstanding Notes make a writtenrequest to pursue the remedy;

 

(3)                                  such Holders ofthe Notes provide to the Trustee satisfactory indemnity;

 

(4)                                  the Trusteedoes not comply within 60 days; and

 

(5)                                  during such 60day period the Holders of a majority in principal amount of the outstandingNotes do not give the Trustee a written direction which, in the opinion of theTrustee, is inconsistent with the request;

 

*provided*, that a Holder of a Notemay institute suit for enforcement of payment of the principal of and premium,if any, or interest on such Note on or after the respective due dates expressedin such Note.

 

Section 6.7                                      Rights ofHolders to Receive Payment.  Notwithstanding any other provision hereof(including, without limitation, Section 6.6), the right of anyHolder to receive payment of principal of or interest on the Notes held by suchHolder, on or after the respective due dates, Redemption Dates or repurchasedate expressed herein or the Notes, or to bring suit for the enforcement of anysuch payment on or after such respective dates, shall not be impaired oraffected without the consent of such Holder.

 

Section 6.8                                      Collection Suitby Trustee.  If an Eventof Default specified in Section 6.1(a)(1) and Section 6.1(a)(2) occursand is continuing, the Trustee may recover judgment in its own name and astrustee of an express trust against the Company and each Subsidiary Guarantorfor the whole amount then due and owing (together with applicable interest onany overdue principal and, to the extent lawful, interest on overdue interest)and the amounts provided for in Section 7.7.  Subject to all provisions hereof andapplicable law, the Holders of a majority in aggregate principal amount of thethen outstanding Notes have the right to direct the time, method and place ofconducting any proceeding for any remedy available to the Trustee or exercisingany trust or power conferred on the Trustee.

 

Section 6.9                                      Trustee May FileProofs of Claim, etc.

 

(a)                                  The Trustee may(irrespective of whether the principal of the Notes is then due):

 

(1)                                  file suchproofs of claim and other papers or documents as may be necessary or advisablein order to have the claims of the Trustee and the Holders under this Indentureand the Notes allowed in any bankruptcy, insolvency, liquidation or otherjudicial proceedings relative to the Company, any Subsidiary

 

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Guarantor or any Subsidiary of the Company or theirrespective creditors or properties; and

 

(2)                                  collect andreceive any moneys or other property payable or deliverable in respect of anysuch claims and distribute them in accordance with this Indenture.

 

Anyreceiver, trustee, liquidator, sequestrator (or other similar official) in anysuch proceeding is hereby authorized by each Holder to make such payments tothe Trustee and, in the event that the Trustee shall consent to the making ofsuch payments directly to the Holders, to pay to the Trustee any amount due toit for the reasonable compensation, expenses, taxes, disbursements and advancesof the Trustee, its agent and counsel, and any other amounts due to the Trusteepursuant to Section 7.7.

 

(b)                                 Nothing in thisIndenture shall be deemed to authorize the Trustee to authorize or consent toor accept or adopt on behalf of any Holder any plan of reorganization,arrangement, adjustment or composition affecting the Notes or the rights of anyHolder thereof, or to authorize the Trustee to vote in respect of the claim ofany Holder in any such proceeding.

 

Section 6.10                                Priorities.  If the Trustee collects any money or propertypursuant to this Article VI, it shall pay out the money or propertyin the following order:

 

FIRST:  to the Trustee foramounts due under Section 7.7;

 

SECOND:  if the Holders proceedagainst the Company directly without the Trustee in accordance with thisIndenture, to Holders for their collection costs;

 

THIRD:  to Holders for amounts dueand unpaid on the Notes for principal and interest, ratably, without preferenceor priority of any kind, according to the amounts due and payable on the Notesfor principal and interest, respectively; and

 

FOURTH:  to the Company or, tothe extent the Trustee collects any amount pursuant to Article Xfrom any Subsidiary Guarantor, to such Subsidiary Guarantor, or to such partyas a court of competent jurisdiction shall direct.

 

TheTrustee may, upon notice to the Company, fix a record date and payment date forany payment to Holders pursuant to this Section 6.10.

 

Section 6.11                                Undertaking forCosts.  In any suit for theenforcement of any right or remedy under this Indenture or in any suit againstthe Trustee for any action taken or omitted by it as Trustee, a court in itsdiscretion may require the filing by any party litigant in the suit of anundertaking to pay the costs of the suit, and the court in its discretion mayassess reasonable costs, including reasonable attorneys’ fees, against anyparty litigant in the suit, having due regard to the merits and good faith ofthe claims or defenses made by the party litigant.  This Section 6.11 does not applyto a suit by the Trustee, a suit by the Company, a suit by a Holder pursuant toSection 6.7 or a suit by Holders of more than 10% in principalamount of Outstanding Notes.

 

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ARTICLE VII

 

TRUSTEE

 

Section 7.1                                      Duties ofTrustee.

 

(a)                                  If a Default oran Event of Default has occurred and is continuing, the Trustee shall exercisethe rights and powers vested in it by this Indenture and use the same degree ofcare and skill in their exercise as a prudent man would exercise or use underthe circumstances in the conduct of his own affairs.

 

(b)                                 Except duringthe continuance of a Default or an Event of Default:

 

(1)          the Trustee undertakes toperform such duties and only such duties as are specifically set forth in thisIndenture and no implied covenants or obligations shall be read into thisIndenture against the Trustee; and

 

(2)          in the absence of bad faithon its part, the Trustee may conclusively rely, as to the truth of thestatements and the correctness of the opinions expressed therein, uponcertificates or opinions furnished to the Trustee and conforming to therequirements of this Indenture.  However,in the case of any such certificates or opinions which by any provisions hereofare specifically required to be furnished to the Trustee, the Trustee shallexamine such certificates and opinions to determine whether or not they conformto the requirements of this Indenture.

 

(c)                                  The Trustee maynot be relieved from liability for its own negligent action, its own negligentfailure to act or its own willful misconduct, except that:

 

(1)          this paragraph (c) doesnot limit the effect of paragraph (b) of this Section 7.1;

 

(2)          the Trustee shall not beliable for any error of judgment made in good faith by a Trust Officer unlessit is proved that the Trustee was negligent in ascertaining the pertinentfacts; and

 

(3)          the Trustee shall not beliable with respect to any action it takes or omits to take in good faith inaccordance with a direction received by it pursuant to Section 6.2,Section 6.5 or Section 6.8.

 

(d)                                 The Trusteeshall not be liable for interest on any money received by it except as theTrustee may agree in writing with the Company.

 

(e)                                  Money held intrust by the Trustee need not be segregated from other funds except to theextent required by law.

 

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(f)                                    No provisionhereof shall require the Trustee to expend or risk its own funds or otherwiseincur financial liability in the performance of any of its duties hereunder orin the exercise of any of its rights or powers, if it shall have reasonablegrounds to believe that repayment of such funds or adequate indemnity againstsuch risk or liability is not reasonably assured to it.

 

(g)                                 Every provisionof this Indenture relating to the conduct or affecting the liability of oraffording protection to the Trustee shall be subject to the provisions of this Article VII.

 

(h)                                 Unlessotherwise specifically provided in this Indenture, any demand, request,direction or notice from the Company shall be sufficient if signed by anOfficer of the Company.

 

(i)                                     The Trusteeshall be under no obligation to exercise any of the rights or powers vested init by this Indenture at the request, order or direction of any of the Holdersunless such Holders shall have offered to the Trustee reasonable security orindemnity against the costs, expenses (including reasonable attorneys’ fees andexpenses) and liabilities that might be incurred by it in compliance with suchrequest or direction.

 

Section 7.2                                      Rights ofTrustee.  Subject to Section 7.1:

 

(a)                                  The Trustee mayrely on any document reasonably believed by it to be genuine and to have beensigned or presented by the proper person. The Trustee need not investigate any fact or matter stated in thedocument.

 

(b)                                 Before theTrustee acts or refrains from acting at the direction of the Company or anySubsidiary Guarantor, it may require an Officers’ Certificate or an Opinion ofCounsel.  The Trustee shall not be liablefor any action it takes or omits to take in good faith in reliance on anOfficers’ Certificate or Opinion of Counsel.

 

(c)                                  The Trustee mayact through its attorneys and agents and shall not be responsible for themisconduct or negligence of any attorney or agent appointed with due care.

 

(d)                                 The Trusteeshall not be liable for any action it takes or omits to take in good faith whichit believes to be authorized or within its rights or powers, subject to Section 7.1(c).

 

(e)                                  The Trustee mayconsult with counsel of its selection, and the advice or opinion of counselwith respect to legal matters relating to this Indenture and the Notes shall befull and complete authorization and protection from liability in respect to anyaction taken, omitted or suffered by it hereunder in good faith and inaccordance with the advice or opinion of such counsel.

 

(f)                                    If the Trusteeshall determine, it shall be entitled to examine the books, records andpremises of the Company, personally or by agent or attorney.

 

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(g)                                 The Trusteeshall not be deemed to have notice of any Default or Event of Default (otherthan payment default under Section 6.1 (a)(1) or (2)) unless aTrust Officer of the Trustee has actual knowledge thereof or unless writtennotice of any event which is in fact such a default is received by the Trusteeat the Corporate Trust Office of the Trustee, and such notice references theNotes and this Indenture.

 

(h)                                 The rights,privileges, protections, immunities and benefits given to the Trustee,including, without limitation, its right to be indemnified, are extended to,and shall be enforceable by, the Trustee in each of its capacities hereunder,and to each agent, custodian and other Person employed to act hereunder.

 

(i)                                     The Trustee mayrequest that the Company deliver an Officers’ Certificate setting forth thenames of individuals and/or titles of officers authorized at such time to takespecified actions pursuant to this Indenture, which Officers’ Certificate maybe signed by any person authorized to sign an Officers’ Certificate, includingany person specified as so authorized in any such certificate previouslydelivered and not superseded.

 

(j)                                     The Trusteemakes no representation as to the validity or sufficiency of this Indenture, ofany offering materials or of the Notes. The Trustee shall not be accountable for the use or application by theCompany of the Notes or of the proceeds thereof.

 

(k)                                  The Trusteeshall not be liable with respect to any action taken or omitted to be taken byit with respect to Notes in good faith in accordance with the direction of theHolders of not less than a majority in aggregate principal amount Outstandingof the Notes relating to the time, method and place of conducting anyproceeding for any remedy available to the Trustee, or exercising any trust orpower conferred upon the Trustee, under this Indenture.

 

(l)                                     Anything inthis Indenture to the contrary notwithstanding, in no event shall the Trusteeor any Agent be liable under or in connection with this Indenture for indirect,special, incidental, punitive or consequential losses or damages of any kind whatsoever,including but not limited to lost profits, whether or not foreseeable, even ifthe Trustee or such Agent has been advised of the possibility thereof andregardless of the form of action in which such damages are sought.

 

(m)                               The Trusteeshall not be deemed to have notice of any Event of Default with respect to a Series ofNotes unless a Responsible Officer of the Trustee has actual knowledge thereofor unless written notice of any event which is in fact such a default isreceived by the Trustee at the Corporate Trust Office of the Trustee.

 

(n)                                 Notwithstandingany provision herein to the contrary, in no event shall the Trustee be liablefor any failure or delay in the performance of its obligations under thisIndenture because of circumstances beyond its control, including, but notlimited to, acts of God, flood, war (whether declared or undeclared),terrorism, fire, riot, strikes or work stoppages for any reason, embargo,government action, including any laws, ordinances, regulations or the like whichrestrict or prohibit the providing of the services contemplated by thisIndenture, inability to obtain material, equipment, communications or computerfacilities, or the failure of equipment 

 

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or interruption of communications or computerfacilities, and other causes beyond its control whether or not of the sameclass or kind as specifically named above.

 

(o)                                 Neither theCompany nor any Agent shall have any responsibility or obligation to anybeneficial owner of an interest in a global note, a member of, or a participantin, DTC or other person with respect to the accuracy of the records of DTC orits nominee of any participant or member thereof, with respect to any ownershipinterest in the Notes or with respect to the delivery to any participant,member, beneficial owner or other person (other than DTC) of any notice(including any notice of redemption) or the payment of any amount or deliveryof any Notes (or other security or property) under or with respect to suchNotes.  All notices and communications tobe given to the Holders and all payments to be made to Holders in respect ofthe Notes shall be given or made only to or upon the order of the registeredHolders (which shall be DTC or its nominee in the case of a global note).  The rights of beneficial owners in any globalnot shall be exercised only through DTC subject to the applicable rules andprocedures of DTC.  The Company and eachAgent may rely and shall be fully protected in relying upon informationfurnished by DTC with respect to its members, participants and any beneficialowners.

 

(p)                                 No agent shallbe under any obligation or have any duty to (i) monitor compliance with orwith respect to securities or tax laws (including but not limited to any UnitedStates federal or state or other securities or tax laws, or (ii) except asspecifically provided herein, obtain documentation on any transfers orexchanges of the Notes.

 

Section 7.3                                      IndividualRights of Trustee.  The Trusteein its individual or any other capacity may become the owner or pledgee ofNotes and may otherwise deal with the Company, the Subsidiary Guarantors or anyof their Affiliates with the same rights it would have if it were notTrustee.  Any Paying Agent, Registrar orco-Registrar may do the same with like rights. However, the Trustee must comply with Section 7.10 and Section 7.11.

 

Section 7.4                                      Trustee’sDisclaimer.  The Trusteeshall not be responsible for and makes no representation as to the validity oradequacy of this Indenture or the Notes or the Note Guarantees, it shall not beaccountable for the Company’s use of the proceeds from the Notes, and it shallnot be responsible for any statement of the Company in this Indenture or in anydocument issued in connection with the sale of the Notes or in the Notes otherthan the Trustee’s certificate of authentication.

 

Section 7.5                                      Notice ofDefaults.  If aDefault or Event of Default occurs and is continuing and if it is a paymentdefault or a Trust Officer has actual knowledge thereof, or has receivedwritten notice thereof pursuant to 7.3(g) above the Trustee shall mail toeach Holder notice of the Default or Event of Default within 90 days after theoccurrence thereof.  Except in the caseof a Default or Event of Default in the payment of principal of, premium, ifany, or interest on any Note, the Trustee may withhold the notice if and solong as its Trust Officer in good faith determines that withholding the noticeis in the interests of the Holders.

 

Section 7.6                                      Reports byTrustee to Holders.  The Trusteeshall comply with TIA § 313.  TheCompany agrees to notify promptly the Trustee whenever the Notes become listedon any stock exchange and of any delisting thereof.

 

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Section 7.7                                      Compensationand Indemnity.

 

(a)                                  The Companyshall pay to the Trustee from time to time reasonable compensation for itsacceptance of this Indenture and services hereunder as the Company and theTrustee shall from time to time agree in writing.  The Company shall pay the reasonable fees andexpenses of the Trustee’s counsel incurred in the review, negotiation anddelivery of this Indenture and related documentation, and in connection withany amendments or supplements hereto. The Trustee’s compensation shall not be limited by any law oncompensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonableout-of-pocket expenses incurred or made by it, including costs of collection,costs of preparing and reviewing reports, certificates and other documents,costs of preparation and mailing of notices to Holders and reasonable fees andexpenses of counsel retained by the Trustee, in addition to the compensationfor its services.  Such expenses shallinclude the reasonable compensation and expenses, disbursements and advances ofthe Trustee’s agents, counsel, accountants and experts.

 

(b)                                 The Company andthe Subsidiary Guarantors shall jointly and severally indemnify the Trusteeagainst any and all loss, liability or expense (including reasonable attorneys’fees and expenses) incurred by it without negligence, willful misconduct or badfaith on its part in connection with the acceptance and administration of thistrust and the performance of its duties hereunder, including the costs andexpenses of enforcing this Indenture (including this Section 7.7)and of defending itself against any claims (whether asserted by any Holder, theCompany, any Subsidiary Guarantor or otherwise).  The Trustee shall notify the Company promptlyof any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve theCompany of its obligations hereunder. The Company shall defend the claim and the Trustee may have separatecounsel and the Company shall pay the fees and expenses of such counsel, *provided* that the Company shall not berequired to pay such fees and expenses if it assumes the Trustee’s defense,and, the Company’s counsel is reasonably acceptable to the Trustee, in thereasonable judgment of outside counsel to the Trustee, there is no conflict ofinterest or potential conflict of interest between the Company and the Trusteein connection with such defense.  TheCompany need not reimburse any expense or indemnify against any loss, liabilityor expense incurred by the Trustee through the Trustee’s own negligence,willful misconduct or bad faith, as determined by a competent court ofappropriate jurisdiction in a final, non-appealable judgment.

 

(c)                                  To secure theCompany’s payment obligations in this Section 7.7, the Trusteeshall have a lien prior to the Notes on all money or property held or collectedby the Trustee other than money or property held in trust to pay principal ofand interest on particular Notes.  TheTrustee’s right to receive payment of any amounts due under this Section 7.7shall not be subordinate to any other liability or Indebtedness of the Company.

 

(d)                                 The Company’spayment obligations pursuant to this Section 7.7 shall survive thedischarge of this Indenture and the resignation or removal of the Trustee.  When the Trustee incurs expenses after theoccurrence of a Bankruptcy Law Event of Default, the expenses are intended toconstitute expenses of administration under any Bankruptcy Law; *provided, however*, that this shall notaffect the Trustee’s rights as set forth in this Section 7.7 or Section 6.10.

 

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Section 7.8                                      Replacement ofTrustee.

 

(a)                                  The Trustee mayresign at any time by so notifying the Company. The Holders of a majority in principal amount of the Outstanding Notesmay remove the Trustee by so notifying the Trustee and may appoint a successorTrustee reasonably acceptable to the Company. The Company shall remove the Trustee if:

 

(1)          the Trustee fails to complywith Section 7.10;

 

(2)          the Trustee is adjudgedbankrupt or insolvent;

 

(3)          a receiver or other publicofficer takes charge of the Trustee or its property; or

 

(4)          the Trustee otherwisebecomes incapable of acting.

 

(b)                                 If the Trusteeresigns or is removed by the Company or by the Holders of a majority inprincipal amount of the Outstanding Notes and such Holders do not reasonablypromptly appoint a successor Trustee, or if a vacancy exists in the office ofthe Trustee for any reason (the Trustee in such event being referred to hereinas the retiring Trustee), the Company shall promptly appoint a successorTrustee.

 

(c)                                  A successorTrustee shall deliver a written acceptance of its appointment to the retiringTrustee and to the Company.  Thereuponthe resignation or removal of the retiring Trustee shall become effective, andthe successor Trustee shall have all the rights, powers and duties of theTrustee under this Indenture.  Thesuccessor Trustee shall mail a notice of its succession to Holders.  The retiring Trustee shall promptly transferall property held by it as Trustee to the successor Trustee, subject to thelien provided for in Section 7.7.

 

(d)                                 If a successorTrustee does not take office within 30 days after the retiring Trustee resignsor is removed, the retiring Trustee or the Holders of 10% in principal amountof the Outstanding Notes may petition, at the Company’s expense, any court ofcompetent jurisdiction for the appointment of a successor Trustee.

 

(e)                                  If the Trusteefails to comply with Section 7.10, any Holder may petition anycourt of competent jurisdiction for the removal of the Trustee and theappointment of a successor Trustee.

 

(f)                                    Notwithstandingthe replacement of the Trustee pursuant to this Section 7.8, theCompany’s obligations under Section 7.7 shall continue for thebenefit of the retiring Trustee.

 

Section 7.9                                      SuccessorTrustee by Merger.

 

(a)                                  If the Trusteeconsolidates with, merges or converts into, or transfers all or substantiallyall its corporate trust business (including this transaction) or assets to,another corporation or banking association, the resulting, surviving ortransferee corporation without any further act shall be the successor Trustee.

 

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(b)                                 In case at thetime such successor or successors to the Trustee shall succeed to the trustscreated by this Indenture, any of the Notes shall have been authenticated butnot delivered, any such successor to the Trustee may adopt the certificate ofauthentication of any predecessor trustee, and deliver such Notes soauthenticated; and in case at that time any of the Notes shall not have beenauthenticated, any successor to the Trustee may authenticate such Notes eitherin the name of any predecessor hereunder or in the name of the successor to theTrustee; and in all such cases such certificates shall have the full forcewhich it is anywhere in the Notes or in this Indenture provided that thecertificate of the Trustee shall have.

 

Section 7.10                                Eligibility;Disqualification.  The Trusteeshall at all times satisfy the requirements of TIA § 310(a).  The Trustee shall have a combined capital andsurplus of at least US$150 million as set forth in its most recent publishedannual report of condition.  The Trusteeshall comply with TIA § 310(b); *provided,however*, that there shall be excluded from the operation of TIA§ 310(b)(1) any indenture or indentures under which other securitiesor certificates of interest or participation in other securities of the Companyare outstanding if the requirements for such exclusion set forth in TIA§ 310(b)(1) are met.

 

Section 7.11                                PreferentialCollection of Claims Against Company.  The Trustee shall comply with TIA§ 311(a), excluding any creditor relationship listed in TIA § 311(b).  A Trustee who has resigned or been removedshall be subject to TIA § 311(a) to the extent indicated.

 

Section 7.12                                Appointment ofCo-Trustee.

 

(a)                                  Notwithstandingany other provisions in this Indenture, at any time, solely for the purpose ofmeeting the legal requirements of any jurisdiction, the Trustee shall have thepower and may execute and deliver all instruments necessary to appoint one ormore Persons to act as separate trustee or trustees or as co-trustee orco-trustees, and to vest in such Person or Persons, in such capacity andsubject to the other provisions of this Indenture, such powers, duties,obligations and rights as the Trustee may consider necessary or desirable.  No co-trustee hereunder shall be required tomeet the terms of eligibility as a successor trustee under this Indenture andno notice to Holders of Notes of the appointment of a separate trustee orco-trustee shall be required under this Indenture.

 

(b)                                 Every separatetrustee or co-trustee shall, to the extent permitted by law, be appointed andact subject to the following provisions and conditions:

 

(i)                                     all rights,powers, duties and obligations conferred or imposed upon the Trustee shall beconferred or imposed upon and exercised or performed by the Trustee and suchseparate trustee or co-trustee jointly (it being understood that such separatetrustee or co-trustee is not authorized to act separately without the Trusteejoining in such act), except to the extent that under any law of anyjurisdiction in which any particular act or acts are to be performed theTrustee shall be incompetent or unqualified to perform such act or acts, inwhich event such rights, powers, duties and obligations shall be exercised andperformed singly by such co-trustee, but solely at the direction of theTrustee;

 

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(ii)                                  no trusteehereunder shall be personally liable by reason of any act or omission of anyother trustee hereunder; and

 

(iii)                               the Trustee mayat any time accept the resignation of or remove any separate trustee orco-trustee.

 

(c)                                  Any notice,request or other writing given to the Trustee shall be deemed to have beengiven to each of the then separate trustees or co-trustees, as effectively asif given to each of them.  Everyinstrument appointing any separate trustee or co-trustee shall refer to thisIndenture and the conditions of this Article VII.  Each separate trustee or co-trustee, upon itsacceptance of the trusts conferred, shall be vested with the estates orproperty specified in its instrument of appointment, jointly with the Trustee,subject to all the provisions of this Indenture, specifically including everyprovision of this Indenture relating to the conduct of, affecting the liabilityof, or affording protection or rights (including the rights to compensation,reimbursement and indemnification hereunder) to, the Trustee.  Every such instrument shall be filed with theTrustee.

 

(d)                                 Any separatetrustee or co-trustee may at any time constitute the Trustee or its agent orattorney-in-fact with full power and authority, to the extent not prohibited bylaw, to do any lawful act under or in respect of this Indenture on its behalfand in its name.  If any separate trusteeor co-trustee shall die, become incapable of acting, resign or be removed, allof its estates, properties, rights, remedies and trusts shall vest in and beexercised by the Trustee, to the extent permitted by law, without theappointment of a new or successor trustee.

 

Section 7.13                                LuxembourgPaying Agent.  The rights,protections and immunities granted to the Trustee under this Article VIIshall apply *mutatis mutandis* tothe Luxembourg Paying Agent.

 

ARTICLE VIII

 

DEFEASANCE; DISCHARGE OFINDENTURE

 

Section 8.1                                      LegalDefeasance and Covenant Defeasance.

 

(a)                                  The Company may,at its option, at any time, elect to have either paragraph (b) or (c) ofthis Section 8.1 be applied to its obligations with respect to alloutstanding Notes and all obligations of the Subsidiary Guarantors under theNote Guarantees upon compliance with the conditions set forth in Section 8.2.

 

(b)                                 Upon theCompany’s exercise under paragraph (a) of this Section 8.1of the option applicable to this paragraph (b), the Company shall, subjectto the satisfaction of the conditions set forth in Section 8.2, bedeemed to have paid and discharged the entire indebtedness represented by theoutstanding Notes and Note Guarantees after the deposit specified in Section 8.2(a) (hereinafter,“Legal Defeasance”).  For thispurpose, Legal Defeasance means that the Company shall be deemed to have paidand discharged the entire Indebtedness represented by the Outstanding Notes,which shall thereafter be deemed to be Outstanding only for the purposes of Section 8.3and the other Sections of this Indenture referred to in clause (i) or (ii) ofthis paragraph (b), and to have satisfied all its other obligations under 

 

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such Notes and hereunder (and the Trustee, on demandof and at the expense of the Company, shall execute proper instrumentsacknowledging the same), except for the following provisions, which shallsurvive until otherwise terminated or discharged hereunder:

 

(i)                                     the rights ofHolders to receive payments in respect of the principal of, premium, if any,and interest on the Notes when such payments are due,

 

(ii)                                  the Company’sobligations with respect to such Notes concerning issuing temporary Notes,registration of Notes, mutilated, destroyed, lost or stolen Notes and themaintenance of an office or agency for payments,

 

(iii)                               the rights,powers, trusts, duties, immunities and indemnities of the Trustee hereunder andthe Company’s and the Subsidiary Guarantors’ obligations in connectiontherewith, and

 

(iv)                              this Article VIII.

 

Subjectto compliance with this Article VIII, the Company may exercise itsoption under this paragraph (b) notwithstanding the prior exercise ofits option under paragraph (c) of this Section 8.1.

 

(c)                                  Upon theCompany’s exercise under paragraph (a) of this Section 8.1of the option applicable to this paragraph (c), the Company may, at itsoption and at any time, elect to have its obligations and the obligations ofthe Subsidiary Guarantors, subject to the satisfaction of the applicableconditions set forth in Section 8.2, released from obligationsunder the covenants (including, without limitations contained in Sections 3.4,3.5, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17, 3.18, 3.19,3.20, 3.21, 3.22 and 4.1(a)(2) with respect to the Outstanding Noteson and after the date the conditions set forth below are satisfied(hereinafter, “Covenant Defeasance”), and the Notes shall thereafter bedeemed not Outstanding for the purposes of any direction, waiver, consent ordeclaration or act of Holders (and the consequences of any thereof) inconnection with such covenants, but shall continue to be Outstanding for allother purposes hereunder (it being understood that such Notes shall not bedeemed Outstanding for accounting purposes). For this purpose, such Covenant Defeasance means that, with respect tothe Outstanding Notes, the Company may omit to comply with and shall have noliability in respect of any term, condition or limitation set forth in any suchcovenant, whether directly or indirectly, by reason of any reference elsewhereherein to any such covenant or by reason of any reference in any such covenantto any other provision herein or in any other document and such omission tocomply shall not constitute a Default or an Event or Default with respect tothe Notes or the Note Guarantees under Section 6.1(a)(3) (exceptin respect of a failure to perform under or comply with Section 4.1(c),Section 6.1(a)(4) or Section 6.1(a)(5)), but,except as specified above, the remainder hereof and such Notes shall beunaffected thereby.

 

Section 8.2                                      Conditions toDefeasance.  The Companymay exercise its Legal Defeasance option or its Covenant Defeasance option onlyif:

 

(a)                                  the Company has irrevocablydeposited with the Trustee, in trust, for the benefit of the Holders cash inU.S. dollars, certain direct non-callable obligations of, or guaranteedby, the United States, or a combination thereof, in such amounts as will besufficient

 

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withoutreinvestment, in the opinion of a nationally recognized investment bank,appraisal firm or firm of independent public accountants, to pay the principalof, premium, if any, and interest (including Additional Amounts) on the Noteson the stated date for payment thereof or on the applicable redemption date, asthe case may be;

 

(b)                                 in the case of LegalDefeasance, the Company has delivered to the Trustee an Opinion of Counsel fromcounsel in the United States reasonably acceptable to the Trustee (subject tocustomary exceptions and exclusions) and independent of the Company to theeffect that:

 

(1)                                  the Company hasreceived from, or there has been published by, the Internal Revenue Service aruling; or

 

(2)                                  since the IssueDate, there has been a change in the applicable U.S. federal income taxlaw,

 

in either case to the effect that, and based thereonsuch Opinion of Counsel shall state that, the Holders will not recognizeincome, gain or loss for U.S. federal income tax purposes as a result ofsuch Legal Defeasance and will be subject to U.S. federal income tax onthe same amounts, in the same manner and at the same times as would have beenthe case if such Legal Defeasance had not occurred;

 

(c)                              in the case of CovenantDefeasance, the Company has delivered to the Trustee an Opinion of Counsel inthe United States reasonably acceptable to the Trustee (subject to customaryexceptions and exclusions) to the effect that the Holders will not recognizeincome, gain or loss for U.S. federal income tax purposes as a result ofsuch Covenant Defeasance and will be subject to U.S. federal income tax onthe same amounts, in the same manner and at the same times as would have beenthe case if such Covenant Defeasance had not occurred;

 

(d)                                 in the case of Legal Defeasanceor Covenant Defeasance, the Company has delivered to the Trustee:

 

(1)                                  an Opinion ofCounsel from counsel in Mexico reasonably acceptable to the Trustee (subject tocustomary exceptions and exclusions) and independent of the Company to theeffect that, based upon Mexican law then in effect, Holders will not recognizeincome, gain or loss for Mexican tax purposes, including withholding tax exceptfor withholding tax then payable on interest payments due, as a result of LegalDefeasance or Covenant Defeasance, as the case may be, and will be subject toMexican taxes on the same amounts and in the same manner and at the same timeas would have been the case if such Legal Defeasance or Covenant Defeasance, asthe case may be, had not occurred, or

 

(2)                                  a rulingdirected to the Trustee received from the tax authorities of Mexico to the sameeffect as the Opinion of Counsel described in clause (1) above;

 

(e)                                  no Default or Event ofDefault shall have occurred and be continuing on the date of the depositpursuant to Section 8.2(a) (except any Default or Event of Default 

 

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resultingfrom the failure to comply with Section 3.9 as a result of the borrowingof the funds required to effect such deposit);

 

(f)                                    the Trustee has received anOfficers’ Certificate stating that such Legal Defeasance or Covenant Defeasanceshall not result in a breach or violation of, or constitute a default underthis Indenture or any other material agreement or instrument to which the Companyor any of its Subsidiaries is a party or by which the Company or any of itsSubsidiaries is bound;

 

(g)                                 the Company has delivered tothe Trustee an Officers’ Certificate stating that the deposit was not made bythe Company with the intent of preferring the Holders over any other creditorsof the Company or any Subsidiary of the Company or with the intent ofdefeating, hindering, delaying or defrauding any other creditors of the Companyor others;

 

(h)                                 the Company has delivered tothe Trustee an Officers’ Certificate and an Opinion of Counsel from counselreasonably acceptable to the Trustee (subject to customary exceptions andexclusions) and independent of the Company, each stating that all conditionsprecedent provided for or relating to the Legal Defeasance or the CovenantDefeasance have been complied with; and

 

(i)                                     the Company has delivered tothe Trustee an Opinion of Counsel from counsel reasonably acceptable to theTrustee and independent of the Company to the effect that the trust funds willnot be subject to the effect of any applicable bankruptcy, insolvency,reorganization or similar laws affecting creditors’ rights generally.

 

Section 8.3                                      Application ofTrust Money.  The Trusteeshall hold in trust U.S. Legal Tender or U.S. Government Obligations depositedwith it pursuant to this Article VIII.  It shall apply the deposited money and theU.S. Legal Tender from U.S. Government Obligations through the Paying Agent andin accordance with this Indenture to the payment of principal of and intereston the Notes.

 

Section 8.4                                      Repayment toCompany.

 

(a)                                  The Trustee andthe Paying Agent shall promptly turn over to the Company upon request anyexcess money or securities held by them upon payment of all the obligationsunder this Indenture.

 

(b)                                 Subject to anyapplicable abandoned property law, the Trustee and the Paying Agent shall payto the Company upon request any money held by them for the payment of principalof or interest on the Notes that remains unclaimed for two years, and,thereafter, Holders entitled to the money must look to the Company for paymentas general creditors.

 

Section 8.5                                      Indemnity forU.S. Government Obligations.  The Company shall pay and shall indemnify theTrustee against any tax, fee or other charge imposed on or assessed againstdeposited U.S. Government Obligations or the principal and interest received onsuch U.S. Government Obligations.

 

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Section 8.6                                      Reinstatement.  If the Trustee or Paying Agent is unable toapply any U.S. Legal Tender or U.S. Government Obligations in accordance withthis Article VIII by reason of any legal proceeding or by reason of anyorder or judgment of any court or governmental authority enjoining, restrainingor otherwise prohibiting such application, the obligations of the Company underthis Indenture and the Notes shall be revived and reinstated as though nodeposit had occurred pursuant to this Article VIII until such time asthe Trustee or Paying Agent is permitted to apply all such U.S. Legal Tender orU.S. Government Obligations in accordance with this Article VIII; *provided, however*, that, if the Companyhas made any payment of principal of or interest on any Notes because of thereinstatement of its obligations, the Company shall be subrogated to the rightsof the Holders of such Notes to receive such payment from the U.S. Legal Tenderor U.S. Government Obligations held by the Trustee or Paying Agent.

 

Section 8.7                                      Satisfactionand Discharge.  ThisIndenture will be discharged and will cease to be of further effect (except asto surviving rights or registration of transfer or exchange of the Notes, asexpressly provided for herein) as to all Outstanding Notes when:

 

(a)                                  either:

 

(1)                                  all the Notestheretofor, authenticated and delivered (except lost, stolen or destroyed Noteswhich have been replaced or paid and Notes for whose payment money hastheretofore been deposited in trust or segregated and held in trust by theCompany and thereafter repaid to the Company or discharged from such trust) havebeen delivered to the Trustee for cancellation; or

 

(2)                                  all Notes nottheretofor delivered to the Trustee for cancellation have become due andpayable, and the Company has irrevocably deposited or caused to be depositedwith the Trustee funds or certain U.S. Government Obligations sufficientwithout reinvestment to pay and discharge the entire Indebtedness on the Notesnot theretofor delivered to the Trustee for cancellation, for principal of,premium, if any, and interest on the Notes to the date of deposit, togetherwith irrevocable instructions from the Company directing the Trustee to applysuch funds to the payment;

 

(b)                                 the Company has paid allother sums payable under this Indenture and the Notes by the Company; and

 

(c)                                  the Company has delivered tothe Trustee an Officers’ Certificate stating that all conditions precedentunder this Indenture relating to the satisfaction and discharge of thisIndenture have been complied with.

 

ARTICLE IX

 

AMENDMENTS

 

Section 9.1                                      Without Consentof Holders.

 

(a)                                  The Company,the Subsidiary Guarantors and the Trustee may amend this Indenture, the Notesor the Note Guarantees without notice to or consent of any Holder:

 

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(1)                                  to cure anyambiguity, omission, defect or inconsistency;

 

(2)                                  to provide forthe assumption by a Surviving Entity of the obligations of the Company underthe Notes or a Subsidiary Guarantor obligation under the Note Guarantee in thecase of a merger or consolidation or sale of all or substantially all of theCompany’s or such Subsidiary Guarantor’s assets, as applicable, to the extentpermitted under this Indenture;

 

(3)                                  to provide foruncertificated Notes in addition to or in place of certificated Notes; *provided, however*, that the uncertificatedNotes are issued in registered form for purposes of Section 163(f)of the Code;

 

(4)                                  to addguarantees with respect to the Notes or to secure the Notes;

 

(5)                                  to allow anySubsidiary Guarantor to execute a supplemental indenture and/or a NoteGuarantee with respect to the Notes and to release Note  Guarantors from the Note Guarantee inaccordance with the terms of this Indenture;

 

(6)                                  to add to thecovenants of the Company for the benefit of the Holders or to surrender anyright or power herein conferred upon the Company;

 

(7)                                  to comply withapplicable requirements of the SEC;

 

(8)                                  to conform thetext of this Indenture, the Note Guarantees or the Notes to any provision ofthe section “Description of Notes” in the Offering Circular to the extent thatsuch provision in such “Description of Notes” was intended to be a verbatimrecitation of a provision of this Indenture or the Notes or Note Guarantees;

 

(9)                                  to comply withthe requirements of any applicable securities depositary;

 

(10)                            to make anychange that provides any additional rights or benefits to the Holders or thatdoes not adversely affect the legal rights hereunder of any such Holder and toprovide for a successor Trustee in accordance with the terms hereof, tootherwise comply with any requirement hereof;

 

(11)                            to provide forthe issuance of Additional Notes as permitted by Section 2.2(c) and Section2.13, which will have terms substantially identical to the otherOutstanding Notes except as specified in Section 2.13, and which will betreated, together with any other Outstanding Notes, as a single issue ofsecurities;

 

(13)                            to provide fora successor Trustee in accordance with the terms of this Indenture;

 

(14)                            to otherwisecomply with any requirement of this Indenture; or

 

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(15)                            to make anyother changes which do not adversely affect the rights of any of the Holders inany material respect.

 

(b)                                 After anamendment under this Section 9.1 becomes effective, the Company shallmail to Holders a notice briefly describing such amendment.  The failure to give such notice to allHolders, or any defect therein, shall not impair or affect the validity of anamendment under this Section 9.1.

 

Section 9.2                                      With Consent ofHolders.

 

(a)                                  The Company,the Subsidiary Guarantors and the Trustee may amend this Indenture or the Noteswithout notice to any Holder but with the written consent of the Holders of atleast a majority in principal amount of the then Outstanding Notes (including,without limitation, consents obtained in connection with a purchase of, ortender offer or exchange offer for, Notes). However, without the consent of each Holder affected, an amendment maynot:

 

(1)          reduce the principal amountof Notes whose Holders must consent to an amendment supplement or waiver;

 

(2)          reduce the rate of or changeor have the effect of changing the time for payment of interest, includingDefaulted Interest, on any Notes;

 

(3)          reduce the principal of orchange or have the effect of changing the fixed maturity of any Notes, orchange the date on which any Notes may be subject to redemption, or reduce theredemption price therefor;

 

(4)          make any Notes payable inmoney other than that stated in the Notes;

 

(5)          make any change in theprovisions of this Indenture entitling each Holder to receive payment ofprincipal of, premium, if any, and interest on such Note on or after the duedate thereof or to bring suit to enforce such payment, or permitting Holders ofa majority in principal amount of Notes to waive Defaults or Events of Default;

 

(6)          amend, change or modify inany material respect any obligation of the Company to make and consummate aChange of Control Offer in respect of a Change of Control that has occurred ormake and consummate an Asset Sale Offer with respect to any Asset Sale thatthat has been consummated;

 

(7)          eliminate or modify in anymanner the obligations of a Subsidiary Guarantor with respect to its NoteGuarantee, which adversely affects Holders in any material respect, except ascontemplated in this Indenture;

 

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(8)          make any change to Section3.21 that adversely affects the rights of any Holder or amend the terms ofthe Notes in a way that would result in a loss of exemption from Taxes; or

 

(9)          make any change to theprovisions of this Indenture or the Notes that adversely affect the ranking ofthe Notes.

 

(b)                                 It shall not benecessary for the consent of the Holders under this Section 9.2 toapprove the particular form of any proposed amendment, supplement or waiver,but it shall be sufficient if such consent approves the substance thereof.  The Trustee will be entitled to rely on suchevidence as it deems appropriate, including solely on an Opinion of Counsel andOfficers’ Certificate, and shall have no liability whatsoever in reliance uponthe foregoing.

 

(c)                                  After anamendment, supplement or waiver under this Section 9.2 becomeseffective, the Company shall mail to Holders a notice briefly describing suchamendment, supplement or waiver.  Thefailure to give such notice to all Holders, or any defect therein, shall notimpair or affect the validity of an amendment, supplement or waiver under this Section9.2.

 

Section 9.3                                      Revocation andEffect of Consents and Waivers.

 

(a)                                  A consent to anamendment, supplement or waiver by a Holder of a Note shall bind the Holder andevery subsequent Holder of that Note or portion of the Note that evidences thesame debt as the consenting Holder’s Note, even if notation of the consent orwaiver is not made on the Note.  However,any such Holder or subsequent Holder may revoke the consent or waiver as tosuch Holder’s Note or portion of the Note if the Trustee receives the notice ofrevocation before the date the amendment, supplement or waiver becomeseffective.  After an amendment,supplement or waiver becomes effective, it shall bind every Holder, except asotherwise provided in this Article IX.  An amendment, supplement or waiver shallbecome effective upon receipt by the Trustee of the requisite number of writtenconsents under Section 9.2.

 

(b)                                 The Companymay, but shall not be obligated to, fix a record date, which need not be thedate provided in TIA § 316(c) to the extent it would otherwise beapplicable, for the purpose of determining the Holders entitled to give theirconsent or take any other action described above or required or permitted to betaken pursuant to this Indenture.  If arecord date is fixed, then notwithstanding the immediately preceding paragraph,those Persons who were Holders at such record date (or their duly designatedproxies), and only those Persons, shall be entitled to give such consent or torevoke any consent previously given or to take any such action, whether or notsuch Persons continue to be Holders after such record date.  No such consent shall be valid or effectivefor more than 90 days after such record date.

 

Section 9.4                                      Notation on orExchange of Notes.  If anamendment or supplement changes the terms of a Note, the Trustee may requirethe Holder of the Note to deliver it to the Trustee.  The Trustee may place an appropriate notationon the Note regarding the changed terms and return it to the Holder.  Alternatively, if the Company or the Trusteeso determines, the Company in exchange for the Note will execute and uponCompany Order the Trustee will 

 

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authenticate a new Note that reflects the changedterms.  Failure to make the appropriatenotation or to issue a new Note shall not affect the validity of such amendmentor supplement.

 

Section 9.5                                      Trustee to SignAmendments and Supplements.  The Trustee shall sign any amendment orsupplement authorized pursuant to this Article IX if the amendmentor supplement does not adversely affect the rights, duties, liabilities orimmunities of the Trustee.  If it does,the Trustee may but need not sign it.  Insigning such amendment or supplement the Trustee shall be entitled to receiveindemnity reasonably satisfactory to it and to receive, and (subject to Section7.1 and Section 7.2) shall be fully protected in relying upon, suchevidence as it deems appropriate, including, without limitation, solely on anOpinion of Counsel stating that such amendment or supplement is authorized orpermitted hereby.

 

ARTICLE X

 

NOTE GUARANTEES

 

Section 10.1                                Note Guarantees.

 

(a)                                  Each SubsidiaryGuarantor hereby fully, unconditionally and irrevocably guarantees, as primaryobligor and not merely as surety, jointly and severally with each otherSubsidiary Guarantor, to each Holder and the Trustee the full and punctual paymentwhen due, whether at maturity, by acceleration, by redemption or otherwise, ofthe Obligations (such guaranteed Obligations, the “Guaranteed Obligations”).  Each Subsidiary Guarantor further agrees (tothe extent permitted by law) that the Obligations may be extended or renewed,in whole or in part, without notice or further assent from it, and that it willremain bound under this Article X notwithstanding any extension orrenewal of any Obligation.  EachSubsidiary Guarantor hereby agrees to pay, in addition to the amounts statedabove, any and all expenses (including reasonable counsel fees and expenses)incurred by the Trustee or the Holders in enforcing any rights under any NoteGuarantee.

 

(b)                                 Each SubsidiaryGuarantor waives presentation to, demand of payment from and protest to theCompany of any of the Obligations and also waives notice of protest fornonpayment.  Each Subsidiary Guarantorwaives notice of any default under the Notes or the Obligations.  The obligations of each Subsidiary Guarantorhereunder shall not be affected by (i) the failure of any Holder to assertany claim or demand or to enforce any right or remedy against the Company orany other Person under this Indenture, the Notes or any other agreement orotherwise; (ii) any extension or renewal of any thereof; (iii) anyrescission, waiver, amendment or modification of any of the terms or provisionsof this Indenture, the Notes or any other agreement; (iv) the release ofany security held by any Holder or the Trustee for the Obligations or any ofthem; (v) the failure of any Holder to exercise any right or remedyagainst any other Subsidiary Guarantor; or (vi) any change in theownership of the Company.

 

(c)                                  Each SubsidiaryGuarantor further agrees that its Note Guarantee herein constitutes a guaranteeof payment when due (and not a guarantee of collection) and waives any right torequire that any resort be had by any Holder to any security held for paymentof the Obligations.

 

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(d)                                 Each of theSubsidiary Guarantors further expressly waives irrevocably and unconditionally:

 

(i)                                     Any right itmay have to first require any Holder to proceed against, initiate any actionsbefore a court of law or any other judge or authority, or enforce any otherrights or security or claim payment from the Company or any other Person(including any Subsidiary Guarantor or any other guarantor) before claimingfrom it under this Indenture;

 

(ii)                                  Any right towhich it may be entitled to have the assets of the Company or any other Person(including any Subsidiary Guarantor or any other guarantor) first be used,applied or depleted as payment of the Company’s or the Subsidiary Guarantors’obligations hereunder, prior to any amount being claimed from or paid by any ofthe Subsidiary Guarantors hereunder;

 

(iii)                               Any right towhich it may be entitled to have claims hereunder divided between theSubsidiary Guarantors;

 

(iv)                              To the extentapplicable, the benefits of *orden*,*excusión*,*división, quita*and *espera*and any right specified in articles 2814, 2815, 2817, 2818, 2819, 2820, 2821,2822, 2823, 2826, 2837, 2838, 2839, 2840, 2845, 2846, 2847 that are notexplicitly set forth herein because of Subsidiary Guarantor’s knowledge thereofand any other related or applicable articles of the *Código Civil Federal* of Mexico, and the *Código Civil* of each State of the MexicanRepublic and the Federal District of Mexico.

 

Theobligations assumed by each Subsidiary Guarantor hereunder shall not beaffected by the absence of judicial request of payment by a Holder to theCompany or by whether any such person takes timely action pursuant to articles2848 and 2849 of the *Código Civil Federal*ofMexico and its correlative articles in the *CódigoCivil* of each State of Mexico and the Federal District of Mexico andeach Subsidiary Guarantor hereby expressly waives the provisions of sucharticles.

 

(e)                                  The obligationsof each Subsidiary Guarantor hereunder shall not be subject to any reduction,limitation, impairment or termination for any reason (other than payment of theObligations in full), including any claim of waiver, release, surrender,alteration or compromise, and shall not be subject to any defense of setoff,counterclaim, recoupment or termination whatsoever or by reason of the invalidity,illegality or unenforceability of the Obligations or otherwise.  Without limiting the generality of theforegoing, the obligations of each Subsidiary Guarantor herein shall not bedischarged or impaired or otherwise affected by the failure of any Holder toassert any claim or demand or to enforce any remedy under this Indenture, theNotes or any other agreement, by any waiver or modification of any thereof, byany default, failure or delay, willful or otherwise, in the performance of theObligations, or by any other act or thing or omission or delay to do any otheract or thing which may or might in any manner or to any extent vary the risk ofsuch Subsidiary Guarantor or would otherwise operate as a discharge of suchSubsidiary Guarantor as a matter of law or equity.

 

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(f)                                    Each SubsidiaryGuarantor further agrees that its Note Guarantee herein shall continue to beeffective or be reinstated, as the case may be, if at any time payment, or anypart thereof, of principal of or interest on any of the Obligations isrescinded or must otherwise be restored by any Holder upon the bankruptcy orreorganization of the Company or otherwise.

 

(g)                                 In furtheranceof the foregoing and not in limitation of any other right which any Holder hasat law or in equity against each Subsidiary Guarantor by virtue hereof, uponthe failure of the Company to pay any of the Obligations when and as the sameshall become due, whether at maturity, by acceleration, by redemption orotherwise, each Subsidiary Guarantor hereby promises to and will, upon receiptof written demand by the Trustee, forthwith pay, or cause to be paid, in cash,to the Holders an amount equal to the sum of:

 

(i)                                     the unpaidamount of such Obligations then due and owing; and

 

(ii)                                  accrued andunpaid interest on such Obligations then due and owing (but only to the extentnot prohibited by law).

 

(h)                                 Each SubsidiaryGuarantor further agrees that, as between such Subsidiary Guarantor, on the onehand, and the Holders, on the other hand:

 

(i)                                     the maturity ofthe Obligations guaranteed hereby may be accelerated as provided in thisIndenture for the purposes of its Note Guarantee herein, notwithstanding anystay, injunction or other prohibition preventing such acceleration in respectof the Obligations guaranteed hereby; and

 

(ii)                                  in the event ofany such declaration of acceleration of such Obligations, such Obligations(whether or not due and payable) shall forthwith become due and payable by suchSubsidiary Guarantor for the purposes of its Note Guarantee.

 

Section 10.2                                Limitation onLiability; Termination, Release and Discharge.

 

(a)                                  The obligationsof each Subsidiary Guarantor hereunder will be limited to the maximum amount aswill, after giving effect to all other contingent and fixed liabilities of suchSubsidiary Guarantor and after giving effect to any collections from orpayments made by or on behalf of any other Subsidiary Guarantor in respect ofthe obligations of such other Subsidiary Guarantor under its Note Guarantee orpursuant to its contribution obligations under this Indenture, result in theObligations not constituting a fraudulent conveyance, fraudulent transfer orsimilar illegal transfer under applicable law.

 

(b)                                 Each SubsidiaryGuarantor will be released and relieved of its obligations under its NoteGuarantee in the event that:

 

i.                                          there is aLegal Defeasance or a Covenant Defeasance of the Notes pursuant to Section 8.1or Article VIII;

 

ii.                                   there is a sale or otherdisposition of Capital Stock of such Subsidiary Guarantor following which suchSubsidiary Guarantor is no longer a direct or indirect Subsidiary of theCompany;  or

 

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iii.                              such SubsidiaryGuarantor is designated as an Unrestricted Subsidiary in accordance with Section3.13;

 

*provided*, that the transaction iscarried out pursuant to and in accordance with all other applicable provisionshereof.

 

Section 10.3                                Right ofContribution.  EachSubsidiary Guarantor that makes a payment or distribution under a NoteGuarantee will be entitled to a contribution from each other SubsidiaryGuarantor in a pro rata amount, based on the net assets of each SubsidiaryGuarantor determined in accordance with MFRS. The provisions of this Section 10.3 shall in no respect limit theobligations and liabilities of each Subsidiary Guarantor to the Trustee and theHolders and each Subsidiary Guarantor shall remain liable to the Trustee andthe Holders for the full amount guaranteed by such Subsidiary Guarantor hereunder.

 

Section 10.4                                No Subrogation.  Each Subsidiary Guarantor agrees that itshall not be entitled to any right of subrogation in respect of any GuaranteedObligations until payment in full in cash or Cash Equivalents of allObligations.  If any amount shall be paidto any Subsidiary Guarantor on account of such subrogation rights at any timewhen all of the Obligations shall not have been paid in full in cash or CashEquivalents, such amount shall be held by such Subsidiary Guarantor in trustfor the Trustee and the Holders, segregated from other funds of such SubsidiaryGuarantor, and shall, forthwith upon receipt by such Subsidiary Guarantor, beturned over to the Trustee in the exact form received by such SubsidiaryGuarantor (duly endorsed by such Subsidiary Guarantor to the Trustee, ifrequired), to be applied against the Obligations.

 

Section 10.5                                Additional NoteGuarantees.

 

(a)                                  The Company covenants andagrees that, at any time after the date hereof any of the Company’sWholly-Owned Restricted Subsidiaries that is not at such time a SubsidiaryGuarantor becomes a Significant Subsidiary (including upon a Revocation of theDesignation of a Subsidiary as an Unrestricted Subsidiary), the Company shall,after becoming aware of such event, (i) promptly notify the Trustee inwriting of such event and (ii) cause such Wholly-Owned Restricted Subsidiary(an “Additional Subsidiary Guarantor”) concurrently to become aSubsidiary Guarantor on a senior basis (promptly following the determination inaccordance with the terms of this Indenture that such Restricted Subsidiary isa Wholly-Owned Subsidiary and a Significant Subsidiary) by executing aSupplemental Indenture substantially in the form of Exhibit E hereto andproviding the Trustee with an Officers’ Certificate and Opinion of Counsel andto comply in all respects with the provisions of this Indenture and the Notes,as applicable; *provided, however*,that each Additional Subsidiary Guarantor will be automatically andunconditionally released and discharged from its obligations under suchadditional note guarantee (“Additional Note Guarantee”) only inaccordance with  Section 10.2.

 

(b)                                 The Company shall, followingthe date hereof, conduct an investigation and make a determination no laterthan 90 days following the end of the first, second and third quarter of eachfiscal year, based on the financial information for the preceding quarter, andno later than 120 days following the end of each fiscal year, based on thefinancial information for the prior fiscal year, as to whether any Subsidiaryhas become a (i) Wholly-Owned Restricted Subsidiary and (ii) a SignificantSubsidiary.

 

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ARTICLE XI

 

MISCELLANEOUS

 

Section 11.1                                Notices.

 

(a)                                  Any notice orcommunication shall be in writing and delivered in person, by telecopy ormailed by first-class mail, postage prepaid, addressed as follows:

 

if to the Company and theSubsidiary Guarantors:

 

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

AndadorJavier Mina 891-B

ColoniaCentro Sinaloa

80200Culiacán, Sinaloa, México,

Attention:Roberto Carrillo Herrera

FaxNo.: +52 (55) 5203-8171 x102

 

with a copy to:

 

Milbank, Tweed, Hadley & McCloy LLP

OneChase Manhattan Plaza

NewYork, NY 10005-1413

U.S.A.

Attention:Michael Fitzgerald

FaxNo.: (212) 822-5224

 

if to the Trustee:             The Bank of New York MellonGlobal Finance Americas101 Barclay Street, 21 WestNew York, NY  10286Fax No.:  (212) 815-5802/5803

 

TheCompany or the Trustee by notice to the other may designate additional ordifferent addresses for subsequent notices or communications.

 

(b)                                 From and afterthe date the Notes are listed on the Euro MTF, the alternative market of theLuxembourg Stock Exchange and so long as it is required by the rules ofsuch exchange, all notices to Holders of Notes shall be published in English:

 

(1)                                  in a leadingnewspaper having a general circulation in Luxembourg (which is expected to bethe *Luxemburger Wort*); or

 

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(2)                                  if suchLuxembourg publication is not practicable, in one other leading Englishlanguage newspaper being published on each day in morning editions, whether ornot it shall be published in Saturday, Sunday or holiday editions.

 

(c)                                  Notices shallbe deemed to have been given on the date of publication as aforesaid in Section 11.1(b) or,if published on different dates, on the date of the first suchpublication.  In addition, notices shallbe mailed to holders of Notes at their registered addresses.

 

(d)                                 Any notice orcommunication mailed to a registered Holder shall be mailed to the Holder atthe Holder’s address as it appears on the registration books of the Registrarand shall be sufficiently given if so mailed within the time prescribed.

 

(e)                                  Failure to maila notice or communication to a Holder or any defect in it shall not affect itssufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, itis duly given, whether or not the addressee receives it.

 

(f)                                    Any notice orcommunication delivered to the Company under the provisions herein shallconstitute notice to the Subsidiary Guarantors.

 

Section 11.2                                Communicationby Holders with Other Holders.  Holders may communicate pursuant to TIA§ 312(b) with other Holders with respect to their rights under thisIndenture (including the Note Guarantees) or the Notes.  The Company, the Subsidiary Guarantors, theTrustee, the Registrar and anyone else shall have the protection of TIA §312(c).

 

Section 11.3                                Certificate andOpinion as to Conditions Precedent.  Upon any request or application by theCompany to the Trustee to take or refrain from taking any action under thisIndenture, the Company shall furnish to the Trustee:

 

(1)          an Officers’ Certificate inform and substance reasonably satisfactory to the Trustee stating that, in theopinion of the signers, all conditions precedent, if any, provided for in thisIndenture relating to the proposed action have been complied with; and

 

(2)          an Opinion of Counsel inform and substance reasonably satisfactory to the Trustee stating that, in theopinion of such counsel, all such conditions precedent have been complied with.

 

Section 11.4                                StatementsRequired in Certificate or Opinion.  Each certificate or opinion, including eachOfficers’ Certificate or Opinion of Counsel with respect to compliance with acovenant or condition provided for in this Indenture shall include:

 

(1)          a statement that theindividual making such certificate or opinion has read such covenant orcondition;

 

(2)          a brief statement as to thenature and scope of the examination or investigation upon which the statementsor opinions contained in such certificate or opinion are based;

 

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(3)          a statement that, in theopinion of such individual, he has made such examination or investigation as isnecessary to enable him to express an informed opinion as to whether or notsuch covenant or condition has been complied with; and

 

(4)          a statement as to whether ornot, in the opinion of such individual, such covenant or condition has beencomplied with.

 

Ingiving an Opinion of Counsel, counsel may rely as to factual matters on anOfficers’ Certificate or on certificates of public officials.

 

Section 11.5                                Rules byTrustee, Paying Agent and Registrar.  The Trustee may make reasonable rules foraction by, or a meeting of, Holders.  TheRegistrar and the Paying Agent may make reasonable rules for theirfunctions.

 

Section 11.6                                Legal Holidays.  A “Legal Holiday” is a Saturday, aSunday or other day on which commercial banking institutions are authorized orrequired to be closed in New York City and in Mexico.  If a payment date is a Legal Holiday, paymentshall be made on the next succeeding day that is not a Legal Holiday, and nointerest shall accrue for the intervening period.  If a regular record date is a Legal Holiday,the record date shall not be affected.

 

Section 11.7                                Governing Law, etc.

 

(a)                                  THIS INDENTURE(INCLUDING EACH NOTE GUARANTEE) AND THE NOTES SHALL BE GOVERNED BY, ANDCONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK BUT WITHOUTGIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THATTHE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIREDTHEREBY.  THE PARTIES HERETO EACH HEREBYWAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIMARISING OUT OF OR RELATING TO THIS INDENTURE, EACH NOTE GUARANTEE OR THE NOTESOR ANY TRANSACTION RELATED HERETO OR THERETO TO THE FULLEST EXTENT PERMITTED BYAPPLICABLE LAW.

 

(b)                                 Each of theparties hereto:

 

(i)                                     agrees that anysuit, action or proceeding against it arising out of or relating to thisIndenture (including the Note Guarantees) or the Notes, as the case may be, maybe instituted in any Federal or state court sitting in the Borough ofManhattan, The City of New York,

 

(ii)                                  waives to thefullest extent permitted by applicable law, any objection which it may now orhereafter have to the laying of venue of any such suit, action or proceeding,any claim that any suit, action or proceeding in such a court has been broughtin an inconvenient forum and any right to which it may be entitled on accountof place of residence or domicile,

 

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(iii)                               irrevocablysubmits to the jurisdiction of such courts in any suit, action or proceeding,

 

(iv)                              agrees thatfinal judgment in any such suit, action or proceeding brought in such a courtshall be conclusive and binding may be enforced in the courts of thejurisdiction of which it is subject by a suit upon judgment, and

 

(v)                                 agrees thatservice of process by mail to the addressed specified herein shall constitutepersonal service of such process on it in any such suit, action or proceeding.

 

(c)                                  The Company andthe Subsidiary Guarantors have appointed CT Corporation System with officescurrently at 111 Eighth Avenue, New York, New York  10011 as their authorized agent (the “AuthorizedAgent”) upon whom all writs, process and summonses may be served in anysuit, action or proceeding arising out of or based upon this Indenture or theNotes which may be instituted in any state or federal court in The City of NewYork, New York.  The Company and theSubsidiary Guarantors hereby represent and warrant that the Authorized Agenthas accepted such appointment and has agreed to act as said agent for serviceof process, and the Company and the Subsidiary Guarantors agree to take any andall action, including the filing of any and all documents, that may benecessary to continue each such appointment in full force and effect asaforesaid so long as the Notes remain outstanding.  The Company and the Subsidiary Guarantorsagree that the appointment of the Authorized Agent shall be irrevocable so longas any of the Notes remain outstanding or until the irrevocable appointment bythe Company and the Subsidiary Guarantors of a successor agent in The City ofNew York, New York as each of their authorized agent for such purpose and theacceptance of such appointment by such successor.  Service of process upon the Authorized Agentshall be deemed, in every respect, effective service of process upon theCompany and the Subsidiary Guarantors.

 

(d)                                 To the extentthat any of the Company and the Subsidiary Guarantors have or hereafter mayacquire any immunity (sovereign or otherwise) from any legal action, suit orproceeding, from jurisdiction of any court or from set-off or any legal process(whether service or notice, attachment in aid or otherwise) with respect toitself or any of its property, the Company and the Subsidiary Guarantors herebyirrevocably waive and agree not to plead or claim such immunity in respect oftheir obligations under this Indenture or the Notes.

 

(e)                                  Nothing in thisSection 11.7 shall affect the right of the Trustee or any Holder ofthe Notes to serve process in any other manner permitted by law.

 

Section 11.8                                No RecourseAgainst Others.  Anincorporator, director, officer, employee, stockholder or controlling person,as such, of the Company or any Subsidiary Guarantor shall not have anyliability for any obligations of the Company under the Notes, this Indenture orthe Note Guarantees or for any claim based on, in respect of or by reason ofsuch obligations or their creation.  Byaccepting a Note, each Holder shall waive and release all such liability.  The waiver and release shall be part of theconsideration for the issue of the Notes.

 

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Section 11.9                                Successors.  All agreements of the Company and theSubsidiary Guarantors in this Indenture and the Notes shall bind theirrespective successors.  All agreements ofthe Trustee in this Indenture shall bind its successors.

 

Section 11.10                          Duplicate andCounterpart Originals.  Theparties may sign any number of copies of this Indenture.  One signed copy is enough to prove thisIndenture.  This Indenture may beexecuted in any number of counterparts, each of which so executed shall be anoriginal, but all of them together represent the same agreement.

 

Section 11.11                          Severability.  In case any provision in this Indenture or inthe Notes shall be invalid, illegal or unenforceable, the validity, legalityand enforceability of the remaining provisions shall not in any way be affectedor impaired thereby.

 

Section 11.12                          CurrencyIndemnity

 

(a)                                  U.S. LegalTender is the sole currency of account and payment for all sums payable by theCompany or any Subsidiary Guarantor under or in connection with the Notes orthis Indenture, including damages.  Anyamount received or recovered in currency other than U.S. Legal Tender (whetheras a result of, or of the enforcement of, a judgment or order of a court of anyjurisdiction, in the winding-up or dissolution of the Company, any Subsidiaryor otherwise) by any Holder of the Notes in respect of any sum expressed to bedue to it from the Company or any Subsidiary Guarantor shall only constitute adischarge of them under the Notes and this Indenture to the extent of the U.S.Legal Tender amount which the recipient is able to purchase with the amount soreceived or recovered in that other currency on the date of that receipt orrecovery (or, if it is not practicable to make that purchase on that date, onthe first date on which it is practicable to do so).  If that U.S. Legal Tender amount is less thanthe U.S. Legal Tender amount expressed to be due to the recipient under theNotes or this Indenture, the Company and the Subsidiary Guarantors shalljointly and severally indemnify and hold harmless the recipient against anyloss sustained by it in making any such purchase.  In any event, the Company and the SubsidiaryGuarantors shall jointly and severally indemnify the Holder against the cost ofmaking any purchase of U.S. Legal Tender. For the purposes of this Section 11.12, it will besufficient for the Holder of a Note to certify in a satisfactory manner that itwould have suffered a loss had an actual purchase of U.S. Legal Tender beenmade with the amount received in that other currency on the date of receipt orrecovery (or, if a purchase of U.S. Legal Tender on such date had not beenpracticable, on the first date on which it would have been practicable) andthat the change of the purchase date was needed.

 

(b)                                 The indemnitiesof the Company and the Subsidiary Guarantors contained in this Section 11.12,to the extent permitted by law: (i) constitute a separate and independent obligation from the otherobligations of the Company and the Subsidiary Guarantors under this Indentureand the Notes; (ii) shall give rise to a separate and independent cause ofaction against the Company and the Subsidiary Guarantors; (iii) shallapply irrespective of any indulgence granted by any Holder of the Notes fromtime to time; and (iv) shall continue in full force and effect notwithstandingany other judgment, order, claim or proof for a liquidated amount in respect ofany sum due under the Notes.

 

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Section 11.13                          Table of Contents; Headings.  The table of contents and headings of theArticles and Sections of this Indenture have been inserted for convenience ofreference only, are not intended to be considered a part hereof and shall notmodify or restrict any of the terms or provisions hereof.

 

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**Indenture**

 

INWITNESS WHEREOF, the parties have caused this Indenture to be duly executed asof the date first written above.

 
|   | DESARROLLADORA HOMEX,                                   |
|--------|---------------------------------------------------------|
|   | S.A.B. DE C.V.                                          |
|   |                                                    |
|   |                                                    |
|   | By:                                                     |   |
|   |                                                    | Name: |
|   |                                                    | Title: |
|   |                                                    |
|   |                                                    |
|   | PROYECTOS INMOBILIARIOS DE  CULIACÁN, S.A. DE C.V. |
|   | as Subsidiary Guarantor                                 |
|   |                                                    |
|   |                                                    |
|   | By:                                                     |   |
|   |                                                    | Name: |
|   |                                                    | Title: |
|   |                                                    |
|   |                                                    |
|   | DESARROLLADORA DE CASAS  DEL NOROESTE, S.A. DE C.V.     |
|   | as Subsidiary Guarantor                                 |
|   |                                                    |
|   |                                                    |
|   | By:                                                     |   |
|   |                                                    | Name: |
|   |                                                    | Title: |
|   |                                                    |
|   |                                                    |
|   | CASAS BETA DEL CENTRO, S. DE R.L. DE C.V.               |
|   | as Subsidiary Guarantor                                 |
|   |                                                    |
|   |                                                    |
|   | By:                                                     |   |
|   |                                                    | Name: |
|   |                                                    | Title: |

 

----

 

 
|   | THE BANK OF NEW YORK MELLON |
|--------|-----------------------------|
|   | as Trustee                  |
|   |                        |
|   | By:                         |   |
|   |                        | Name: |
|   |                        | Title: |

 

 

Solely for the purposes of accepting theappointment of Luxembourg Paying Agent,together with the rights, protections and immunitiesgranted to the Trustee under Article VII, which shallapply *mutatis mutandis* to theLuxembourgPaying Agent,

 

 

The Bank of New York Mellon(Luxembourg) S.A.,as Luxembourg Paying Agent

 
| By:    |   |   |
|--------|--------|--------|
| Name:  |   |   |
| Title: |   |   |

 

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**EXHIBIT A**

 

FORM OF NOTE

 

“THISIS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE REFERRED TO HEREINAFTER.

 

UNLESSTHIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORYTRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FORREGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED ISREGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS ISREQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TOCEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZEDREPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OROTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNERHEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

TRANSFERSOF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TONOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE ANDTRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE INACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THEREVERSE HEREOF.”

 

*Include the following legend on all Notes that areRestricted Notes:*

 

THESECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACTOF 1933, AS AMENDED (THE ‘‘SECURITIES ACT’’), OR ANY STATE OR OTHER SECURITIESLAWS. NEITHER THIS GLOBAL NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BEOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSEDOF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPTFROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.THE HOLDER OF THIS GLOBAL NOTE BY ITS ACCEPTANCE HEREOF (1) REPRESENTSTHAT (A) IT IS A ‘‘QUALIFIED INSTITUTIONAL BUYER’’ (AS DEFINED IN RULE144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND ISACQUIRING THIS GLOBAL NOTE IN AN ‘‘OFFSHORE TRANSACTION’’ PURSUANT TO RULE 903OR 904 OF REGULATION S, (2) AGREES THAT IT WILL NOT OFFER, SELL OROTHERWISE TRANSFER THIS GLOBAL NOTE PRIOR TO THE RESALE RESTRICTION TERMINATIONDATE (AS DEFINED IN THE NEXT PARAGRAPH), EXCEPT (A) (I) TO A PERSON WHOTHE SELLER 

 

A-1

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REASONABLYBELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144AUNDER THE SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF AQUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION COMPLYING WITH RULE 144A, (II) INAN OFFSHORE TRANSACTION COMPLYING WITH THE REQUIREMENTS OF RULE 903 OR RULE 904OF REGULATION S UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTIONFROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IFAVAILABLE), AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OFTHE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS, AND (3) AGREESTHAT IT WILL GIVE TO EACH PERSON TO WHOM THIS GLOBAL NOTE IS TRANSFERRED ANOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS ‘‘OFFSHORETRANSACTION,’’ ‘‘UNITED STATES’’ AND ‘‘U.S. PERSON’’ HAVE THE RESPECTIVEMEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

** **

THERESALE RESTRICTION TERMINATION DATE WILL BE THE DATE:

 

(1) THATIS AT LEAST ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE HEREOF; AND (2) ONWHICH THE COMPANY INSTRUCTS THE TRUSTEE THAT THIS LEGEND (OTHER THAN THE FIRSTPARAGRAPH HEREOF) SHALL BE DEEMED REMOVED FROM THIS SECURITY, INACCORDANCE WITH THE PROCEDURES DESCRIBED IN THE INDENTURE RELATING TO THISSECURITY.*

 

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*This legend (other than the first three paragraphs hereof)(1) shall bedeemed removed from the face of this Security without further action of theCompany, the Trustee, or the holders of this Security at such time as theCompany instructs the Trustee to remove such legend pursuant to Section 2.7(b) ofthe Indenture.

 

*Include the following legend on all Regulation STemporary Global Notes:*

 

“PRIORTO EXPIRATION OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD (AS DEFINED INREGULATION S (“REGULATION S”) UNDER THE SECURITIES ACT OF 1933, ASAMENDED (THE “SECURITIES ACT”)), THIS GLOBAL NOTE MAY NOT BE OFFERED,SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES (AS DEFINED INREGULATION S) OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, A U.S.  PERSON (AS DEFINED IN REGULATION S),EXCEPT TO A PERSON REASONABLY BELIEVED TO BE A “QUALIFIED INSTITUTIONAL BUYER”(AS DEFINED IN RULE 144A (“RULE 144A”) UNDER THE SECURITIES ACT) IN A

 

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(1)  The referencedparagraphs are those that precede the private placement legend for all Notesthat are Restricted Notes.

 

A-2

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TRANSACTIONMEETING THE REQUIREMENTS OF RULE l44A AND THE INDENTURE.

** **

THISGLOBAL NOTE IS A TEMPORARY GLOBAL NOTE FOR PURPOSES OF REGULATION S UNDERSECURITIES ACT.  NEITHER THIS TEMPORARYGLOBAL NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD OR DELIVERED,EXCEPT AS PERMITTED ABOVE.

 

NOBENEFICIAL OWNERS OF THIS TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVEPAYMENT OF PRINCIPAL HEREOF OR INTEREST HEREON UNLESS THE REQUIREDCERTIFICATIONS HAVE BEEN DELIVERED PURSUANT TO THE TERMS OF THE INDENTURE.”

 

“IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILLDELIVER TO THE REGISTRAR SUCH OPINIONS OF COUNSEL, CERTIFICATES AND/OR OTHERINFORMATION AS IT MAY REASONABLY REQUIRE IN FORM REASONABLYSATISFACTORY TO IT AS PROVIDED FOR IN THE INDENTURE TO CONFIRM THAT THETRANSFER COMPLIED WITH THE FOREGOING RESTRICTIONS AS PROVIDED FOR IN THEINDENTURE.”

 

**FORM OF FACE OF NOTE**

 
| No. [      ] | Principal Amount  US$[                            ] |
|-------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

*[If theNote is a Global Note include the following two lines:*

as revised by the Schedule of Increases andDecreases in Global Note attached hereto]

 

CUSIP NO.                        *[If the Note is a Regulation S GlobalNote, delete the reference to CUSIP NO. and replace it with:*ISIN NO.                         ]

 

DesarrolladoraHomex, S.A.B. de C.V., a limited liability public company with variable capital(*sociedad anónima bursátil de capitalvariable*), promises to pay to[                      ],or registered assigns, the principal sum of[                                    ]Dollars [*If the Note is a Global Note, addthe following*, as revised by the Schedule of Increases and Decreasesin Global Note attached hereto], on December 11, 2019.

 
| Interest  Payment Dates: | June 11  and December 11 |
|--------------------------|------------------------------------|
|                     |                               |
| Record  Dates:           | June 1  and December 1   |

 

A-3

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Additionalprovisions of this Note are set forth on the other side of this Note.

 
|   | DESARROLLADORA HOMEX, |
|--------|-----------------------|
|   | S.A.B. DE C.V.        |
|   |                  |
|   |                  |
|   | By:                   |   |
|   | Name:                 |
|   | Title:                |

 

TRUSTEE’S CERTIFICATE OFAUTHENTICATION

 

TheBank of New York Mellon,as Trustee, certifiesthat this is one ofthe Notes referredto in the Indenture.

 
| By:                  |   |   |   |
|----------------------|--------|--------|--------|
| Authorized Signatory | Date:  |   |

 

A-4

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**FORM OF REVERSE SIDE OF NOTE**

 

**9.500% Senior Guaranteed Notes due December 11, 2019**

 

1.             Interest

 

DesarrolladoraHomex, S.A.B. de C.V., a limited liability public company with variable capital(*sociedad anónima bursátil de capitalvariable*)**(and itssuccessors and assigns under the Indenture hereinafter referred to, the “Company”),promises to pay interest on the principal amount of this Note at the rate perannum shown above.

 

TheCompany will pay interest semiannually in arrears on each Interest Payment Dateof each year commencing June 11, 2010. Interest on the Notes will accrue from the most recent date to whichinterest has been paid on the Notes or, if no interest has been paid, from December 11,2009.  The Company shall pay interest onoverdue principal (plus interest on such interest to the extent lawful), at therate borne by the Notes to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve30-day months.

 

TheCompany shall pay interest (including post-petition interest in any proceedingunder any Bankruptcy Law) on overdue principal and, to the extent such paymentsare lawful, interest on overdue installments of interest (“DefaultedInterest”) without regard to any applicable grace periods at the rate shownon this Note, as provided in the Indenture.

 

Allpayments made by the Company in respect of the Notes will be made free andclear of and without deduction or withholding for or on account of any Taxesimposed or levied by or on behalf of any Taxing Authority, unless suchwithholding or deduction is required by law or by the interpretation oradministration thereof.  In that event,the Company will pay to each Holder of the Notes Additional Amounts as providedin the Indenture subject to the limitations set forth in the Indenture.

 

2.             Method of Payment

 

Priorto 10:00 a.m. New York City time on the date on which any principal of orinterest on any Note is due and payable, the Company shall irrevocably depositwith the Trustee or the Paying Agent money sufficient to pay such principal and/orinterest.  The Company will pay interest(except Defaulted Interest) to the Persons who are registered Holders of Notesat the close of business on the Record Date preceding the Interest Payment Dateeven if Notes are canceled, repurchased or redeemed after the Record Date andon or before the relevant Interest Payment Date.  Holders must surrender Notes to a PayingAgent to collect principal payments.  TheCompany will pay principal and interest in U.S. Legal Tender.

 

Paymentsin respect of Notes represented by a Global Note (including principal andinterest) will be made by the transfer of immediately available funds to theaccounts specified by DTC.  The Companywill make all payments in respect of a Certificated Note (including principaland interest) by mailing a check to the registered address of each Holderthereof; *provided*, *however*, that payments on the Notes mayalso be made, in the case of a Holder of at least US$1,000,000 aggregateprincipal amount of Notes, by wire transfer to a U.S. dollar account maintainedby the payee with a bank in the United States if such Holder elects 

 

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paymentby wire transfer by giving written notice to the Trustee or the Paying Agent tosuch effect designating such account no later than 15 days immediatelypreceding the relevant due date for payment (or such other date as the Trusteemay accept in its discretion).

** **

3.             Paying Agent and Registrar

 

Initially,The Bank of New York Mellon (the “Trustee”) will act as Trustee, Paying Agentand Registrar.  The Company may appointand change any Paying Agent, Registrar or co-Registrar without notice to anyHolder.  The Company or any Subsidiary Guarantormay act as Paying Agent, Registrar or co-Registrar.

 

4.             Indenture

 

TheCompany issued the Notes under an Indenture, dated as of December 11, 2009(as it may be amended or supplemented from time to time in accordance with theterms thereof, the “Indenture”), between the Company, the Subsidiary Guarantorsand the Trustee.  The terms of the Notesinclude those stated in the Indenture and those made part of the indenture byreference to the TIA.  The Indenture isnot, and is not required to be, qualified under the applicable provisions ofthe TIA and does not incorporate by reference all provisions of the TIA.  Capitalized terms used herein and not definedherein have the meanings ascribed thereto in the Indenture.  The Notes are subject to all such terms, andHolders are referred to the Indenture and the TIA for a statement of thoseterms.  Each Holder by accepting a Note,agrees to be bound by all of the terms and provisions of the Indenture, asamended or supplemented from time to time.

 

TheNotes are general unsecured obligations of the Company.  Subject to the conditions set forth in theIndenture and without the consent of the Holders, the Company may issueAdditional Notes.  All Notes will betreated as a single class of securities under the Indenture.

 

TheIndenture imposes certain limitations on, among other things, the ability ofthe Company and its Subsidiaries to: Incur Additional Indebtedness, make Restricted Payments, incur Liens,make Asset Sales, enter into transactions with Affiliates, or consolidate ormerge or transfer or convey all or substantially all of the Company’s and itsSubsidiaries’ assets.

 

Toguarantee the due and punctual payment of the principal of and interest on theNotes and all other amounts payable by the Company under the Indenture and theNotes when and as the same shall be due and payable, whether at maturity, byacceleration or otherwise, according to the terms of the Notes and theIndenture, Proyectos Inmobiliarios de Culiacán, S.A. de C.V., Desarrolladora deCasas del Noroeste, S.A. de C.V. and Casas Beta del Centro, S. de R.L. de C.V.have unconditionally guaranteed (and each future Wholly-Owned RestrictedSubsidiary that becomes a Significant Subsidiary will unconditionallyguarantee), jointly and severally, such obligations pursuant to the terms ofthe Indenture.  Each Note Guarantee willbe subject to release as provided in the Indenture.  The obligations of each Subsidiary Guarantorin respect of its Note Guarantee will be limited to the maximum amount as will,after giving effect to all other contingent and fixed liabilities of such SubsidiaryGuarantor and after giving effect to any collections from or payments made byor on behalf of any other Subsidiary Guarantor in respect of the obligations ofsuch other Subsidiary Guarantor under its Note Guarantee or 

 

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pursuantto its contribution obligations under this Indenture, result in the obligationsof such Subsidiary Guarantor under its Note Guarantee not constituting afraudulent conveyance or fraudulent transfer under federal or state law.

 

5.             Redemption

 

*Optional Redemption*.  Except as stated below, the Company may notredeem the Notes prior to December 11, 2014.  The Company may redeem the Notes, at itsoption, in whole at any time or in part from time to time, on and after December 11,2014, at the following redemption prices, expressed as percentages of theprincipal amount thereof, if redeemed during the twelve-month period commencingon December 11 of any year set forth below:

 
| **Year**            | ** ** | **Percentage** | ** ** |
|---------------------|------------|----------------|------------|
| 2014                |       | 104.750        | %          |
| 2015                |       | 103.167        | %          |
| 2016                |       | 101.583        | %          |
| 2017 and thereafter |       | 100.000        | %          |

 

Priorto December 11, 2014, the Company will have the right, at its option, toredeem any of the Notes, in whole or in part, at any time or from time to timeprior to their maturity, on at least 30 days’ but not more than 60 days’notice, at a redemption price equal to the greater of (1) 100% of theprincipal amount of such Notes and (2) the sum of the present value ofeach remaining scheduled payment of principal and interest thereon (exclusiveof interest accrued to the date of redemption) discounted to the redemptiondate on a semi-annual basis (assuming a 360-day year consisting of twelve30-day months) at the Treasury Rate plus 50 basis points (the “Make-WholeAmount”), plus in each case accrued interest on the principal amount of theNotes to the date of redemption.

 

“TreasuryRate” means, with respect to any redemption date, the rate per annum equal tothe semi-annual equivalent yield to maturity or interpolated maturity (on a daycount basis) of the Comparable Treasury Issue, assuming a price for theComparable Treasury Issue (expressed as a percentage of its principal amount)equal to the Comparable Treasury Price for such redemption date.

 

“ComparableTreasury Issue” means the United States Treasury security or securitiesselected by an Independent Investment Banker as having an actual orinterpolated maturity comparable to the remaining term of the Notes to beredeemed that would be utilized, at the time of selection and in accordancewith customary financial practice, in pricing new issues of corporate debtsecurities of a comparable maturity to the remaining term of such Notes.

 

“IndependentInvestment Banker” means one of the Reference Treasury Dealers appointed by theCompany.

 

“ComparableTreasury Price” means, with respect to any redemption date (1) the averageof the Reference Treasury Dealer Quotations for such redemption date, afterexcluding the highest and lowest such Reference Treasury Dealer Quotation or (2) ifthe Trustee obtains fewer than four such Reference Treasury Dealer Quotations,the average of all such quotations.

 

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“ReferenceTreasury Dealer” means Credit Suisse Securities (USA) LLC or HSBC Securities(USA) Inc. or their respective affiliates which are primary United Statesgovernment securities dealers and not less than two other leading primaryUnited States government securities dealers in New York City reasonablydesignated by the Company; *provided, however*,that if any of the foregoing shall cease to be a primary United Statesgovernment securities dealer in New York City (a “Primary Treasury Dealer”),the Company will substitute therefor another Primary Treasury Dealer.

 

“ReferenceTreasury Dealer Quotation” means, with respect to each Reference TreasuryDealer and any redemption date, the average, as determined by the Trustee, ofthe bid and asked price for the Comparable Treasury Issue (expressed in eachcase as a percentage of its principal amount) quoted in writing to the Trusteeby such Reference Treasury Dealer at 3:30 pm New York time on the thirdbusiness day preceding such redemption date.

 

*Optional Redemption upon Equity Offerings*.  At any time, or from time to time, on orprior to December 11, 2012 the Company may, at its option, use the netcash proceeds of one or more Equity Offerings to redeem in the aggregate up to35% of the aggregate principal amount of the Notes issued under the Indentureat a redemption price equal to 109.50% of the principal amount thereof; *provided*, that:

 

(1)                                  after giving effect to anysuch redemption at least 65% of the aggregate principal amount of the Notesissued under the Indenture remains outstanding; and

 

(2)                                  the Company shall make suchredemption not more than 90 days after the consummation of such EquityOffering.

 

“EquityOffering” means (i) an underwritten public offering of Qualified CapitalStock of the Company pursuant to a registration statement (other than aregistration statement filed on Form S-4 or S-8) filed with the SEC inaccordance with the Securities Act or in accordance with applicable Mexicanlaws, rules and regulations, (ii) a rights offering of QualifiedCapital Stock of the Company made generally to the holders of such QualifiedCapital Stock or (iii) any private placement of Qualified Capital Stock ofthe Company to any Person, in each case other than issuances upon exercise ofoptions by employees of the Company or any of its Subsidiaries.

 

*Optional Redemption for Changes in Withholding Taxes.*  If, as a result of any amendment to, orchange in, the laws (or any rules or regulations thereunder) of Mexico orany political subdivision or taxing authority or other instrumentality thereofor therein affecting taxation, or any amendment to or change in an officialinterpretation or application of such laws, rules or regulations, whichamendment to or change of such laws, rules or regulations becomeseffective on or after the date on which the Notes we are offering are issued(which, in the case of a merger, consolidation or other transaction permittedand described under Section 4.1 of the Indenture, shall be treatedfor this purpose as the date of such transaction), we have become obligated, orwill become obligated, in each case after taking all reasonable measures toavoid this requirement, to pay additional amounts in excess of thoseattributable to a Mexican withholding tax rate of 10% with respect to theNotes, then, at our option, all, but not less than all, of the Notes may beredeemed at any time on giving not less than 30 nor more than 60 days’ 

 

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notice,at a redemption price equal to 100% of the outstanding principal amount, plusaccrued and unpaid interest and any additional amounts due thereon up to butnot including the date of redemption; *provided*,*however*, that (1) no noticeof redemption for tax reasons may be given earlier than 90 days prior tothe earliest date on which we would be obligated to pay these additionalamounts if a payment on the Notes were then due and (2) at the time suchnotice of redemption is given such obligation to pay such additional amountsremains in effect.

 

Priorto the publication of any notice of redemption pursuant to this provision, theCompany will deliver to the Trustee:

 

·                  a certificate signed by oneof the Company’s duly authorized representatives stating that the Company isentitled to effect the redemption and setting forth a statement of factsshowing that the conditions precedent to the Company’s right to redeem haveoccurred, and

 

·                  an opinion of Mexican legalcounsel (which may be the Company’s counsel) of recognized standing to theeffect that the Company has or will become obligated to pay such additionalamounts as a result of such change or amendment.

 

Thisnotice, once delivered by the Company to the Trustee, will be irrevocable.

 

TheCompany will give notice to DTC pursuant to Section 5.3 of anyredemption the Company proposes to make at least 30 days (but not more than 60days) before the redemption date.

 

*Optional Redemption Procedures.*  In the event that less than all of the Notesare to be redeemed at any time, selection of Notes for redemption will be madeby the Trustee in compliance with the requirements of the principal nationalsecurities exchange, if any, on which Notes are listed or, if the Notes are notthen listed on a national securities exchange, on a *pro rata* basis, by lot or by any other method as the Trusteeshall deem fair and appropriate (subject to the procedures of DTC).  If a partial redemption is made with theproceeds of an Equity Offering, selection of the Notes or portions thereof forredemption will, subject to the preceding sentence, be made by the Trustee onlyon a *pro rata* basis or on asnearly a *pro rata* basis as ispracticable (subject to the procedures of DTC), unless the method is otherwiseprohibited.  No Notes of a principalamount of US$1,000 or less may be redeemed in part and Notes of a principalamount in excess of US$1,000 may be redeemed in part in multiples of US$1,000only.

 

Noticeof any redemption will be mailed by first-class mail, postage prepaid, at least30 but not more than 60 days before the redemption date to each Holder of Notesto be redeemed at its registered address. If Notes are to be redeemed in part only, the notice of redemption willstate the portion of the principal amount thereof to be redeemed.  For so long as the Notes are listed on EuroMTF, the alternative market of the Luxembourg Stock Exchange, the Company willcause notices of redemption also to be published as provided under Section 11.1.  A new Note in a principal amount equal to theunredeemed portion thereof (if any) will be issued in the name of the Holderthereof upon cancellation of the original Note (or 

 

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appropriateadjustments to the amount and beneficial interests in a Global Note will bemade, as appropriate).

 

TheCompany will pay the redemption price for any Note together with accrued andunpaid interest thereon through the date of redemption.  On and after the redemption date, interestwill cease to accrue on Notes or portions thereof called for redemption as longas the Company has deposited with the Paying Agent funds in satisfaction of theapplicable redemption price pursuant to the Indenture.  Upon redemption of any Notes by the Company,such redeemed Notes will be cancelled.

 

Inthe case of any partial redemption, selection of the Notes for redemption willbe made in accordance with Article V of the Indenture.  On and after the redemption date, interestwill cease to accrue on Notes or portions thereof called for redemption as longas the Company has deposited with the Paying Agent funds in satisfaction of theapplicable redemption price pursuant to the Indenture.

 

6.             Mandatory Repurchase Provisions

 

*Change Of Control Offer*.* *Upon the occurrence of a Change of Control, each Holder ofNotes will have the right to require that the Company purchase all or a portion(in integral multiples of US$1,000) of the Holder’s Notes at a purchase priceequal to 101% of the principal amountthereof, plus accrued and unpaid interest through the date of purchase.  Within 30 days following the date upon whichthe Change of Control occurred, the Company must make a Change of Control Offerpursuant to a Change of Control Notice and, so long as the Notes are listed onEuro MTF, the alternative market of the Luxembourg Stock Exchange, publish theChange of Control Offer in a newspaper having general circulation inLuxembourg.  As more fully described inthe Indenture, the Change of Control Notice shall state, among other things,the Change of Control Payment Date, which must be no earlier than 30 days norlater than 60 days from the date the notice is mailed, other than as may berequired by applicable law.

 

*Asset Sale Offer*.  The Indenture imposes certainlimitations on the ability of the Company and its Restricted Subsidiaries tomake Asset Sales.  In the event theproceeds from a permitted Asset Sale exceed certain amounts and are not appliedas specified in the Indenture, the Company will be required  to make an Asset Sale Offer to purchase tothe extent of such remaining proceeds each Holder’s Notes together with holdersof certain other Indebtedness at 100% of the principal amount thereof, plusaccrued interest (if any) to the Asset Sale Offer Payment Date, as more fullyset forth in the Indenture.

 

7.             Denominations; Transfer;Exchange

 

TheNotes are in fully registered form without coupons, and only in minimumdenominations of US$2,000 and integral multiples of US$1,000 in excessthereof.  A Holder may transfer orexchange Notes in accordance with the Indenture.  The Registrar may require a Holder, amongother things, to furnish appropriate endorsements or transfer documents and topay any taxes and fees required by law or permitted by the Indenture.  The Registrar need not register the transferof or exchange (i) any Notes selected for redemption (except, in the caseof a Note to be redeemed in part, the portion of the Note not to be redeemed)for a period beginning

 

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15days before the mailing of a notice of Notes to be redeemed and ending on thedate of such mailing or (ii) any Notes for a period beginning 15 daysbefore an interest payment date and ending on such interest payment date.

 

8.             Persons Deemed Owners

 

Theregistered holder of this Note may be treated as the owner of it for allpurposes.

 

9.             Unclaimed Money

 

Ifmoney for the payment of principal or interest remains unclaimed for two years,the Trustee or Paying Agent shall pay the money back to the Company at itsrequest unless an abandoned property law designates another Person.  After any such payment, Holders entitled tothe money must look only to the Company and not to the Trustee for payment.

 

10.           Discharge Prior to Redemption orMaturity

 

Subjectto certain conditions set forth in the Indenture, the Company at any time mayterminate some or all of its obligations under the Notes and the Indenture ifthe Company deposits with the Trustee U.S. Legal Tender or U.S. GovernmentObligations for the payment of principal of and interest on the Notes toredemption or maturity, as the case may be.

 

11.           Amendment, Waiver

 

(a)           (1)           Subjectto certain exceptions set forth in the Indenture, (i) the Indenture or theNotes may be amended or supplemented with the written consent of the Holders ofat least a majority in principal amount of the then Outstanding Notes and(ii) any default (other than with respect to nonpayment or in respect of aprovision that cannot be amended or supplemented without the written consent ofeach Holder affected) or noncompliance with any provision may be waived withthe written consent of the Holders of a majority in aggregate principal amountof the then Outstanding Notes.  Subjectto certain exceptions set forth in the Indenture, without the consent of anyHolder, the Company and the Trustee may amend or supplement the Indenture orthe Notes to, among other things, cure any ambiguity, omission, defect orinconsistency; or to provide for the assumption by a Surviving Entity of theobligations of the Company or a Subsidiary Guarantor obligation under the NoteGuarantee under the Notes in the case of a merger or consolidation or sale ofall on substantially all of the Company’s or such subsidiary Guarantor’sassets, as applicable, to the extent permitted under the Indenture; or providefor uncertificated Notes in addition to or in place of certificated Notes; *provided, however*, that the uncertificatedNotes are issued in registered form for purposes of Section 163(f) ofthe Code; or to add guarantees with respect to the Notes or to secure theNotes; or to allow any Subsidiary Guarantor to execute a supplemental indentureand/or a Note Guarantee with respect to the Notes and to release NoteGuarantors from the Note Guarantee in accordance with the terms of Article Xof the Indenture; or to add to the covenants of the Company for the benefit ofthe Holders or to surrender any right or power herein conferred upon theCompany; or to comply with applicable requirements of the SEC; or to conformthe text of this Indenture, the Note Guarantees or the Notes to any provisionof the section “Description of Notes” in the Offering Circular to the extentthat such provision in such “Description of Notes” 

 

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was intended to be a verbatim recitation of aprovision of this Indenture or the Notes or Note Guarantees; or to comply withthe requirements of any applicable securities depositary; or to make any changethat provides any additional rights or benefits to the Holders or that does notadversely affect the legal rights hereunder of any such Holder and to providefor a successor Trustee in accordance with the terms of the Indenture, tootherwise comply with any requirement of the Indenture; or to provide for theissuance of Additional Notes as permitted by Section 2.2(c) and Section 2.13of the Indenture, which will have terms substantially identical to the otherOutstanding Notes except as specified in Section 2.13 of theIndenture, and which will be treated, together with any other OutstandingNotes, as a single issue of securities; or to provide for a successor Trusteein accordance with the terms of the Indenture; or to otherwise comply with anyrequirement of this Indenture; or to make any other changes which do notadversely affect the rights of any of the Holders in any material respect.

 

12.           Defaults and Remedies

 

Ifan Event of Default occurs and is continuing, the Trustee or the Holders of atleast 25% in principal amount of the Notes may declare all the Notes to be dueand payable immediately.  Certain eventsof bankruptcy or insolvency are Events of Default which will result in theNotes being due and payable immediately upon the occurrence of such Events ofDefault.

 

Holdersmay not enforce the Indenture or the Notes except as provided in theIndenture.  The Trustee may refuse toenforce the Indenture or the Notes unless it receives reasonable indemnity orsecurity.  Subject to certainlimitations, Holders of a majority in principal amount of the Outstanding Notesmay direct the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders noticeof any continuing Default or Event of Default (except a Default or Event ofDefault in payment of principal or interest) if it determines that withholdingnotice is in their interest.

 

13.           Trustee Dealings with the Company

 

Subjectto certain limitations set forth in the Indenture, the Trustee under theIndenture, in its individual or any other capacity, may become the owner orpledgee of Notes and may otherwise deal with and collect obligations owed to itby the Company or its Affiliates and may otherwise deal with the Company or itsAffiliates with the same rights it would have if it were not Trustee.

 

14.           No Recourse Against Others

 

Anincorporator, director, officer, employee, stockholder or controlling person,as such, of the Company or any Subsidiary Guarantor shall not have anyliability for any obligations of the Company under the Notes, the Indenture orany Note Guarantee or for any claim based on, in respect of or by reason ofsuch obligations or their creation.  Byaccepting a Note, each Holder waives and releases all such liability.  The waiver and release are part of theconsideration for the issue of the Notes.

 

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15.           Authentication

 

ThisNote shall not be valid until an authorized signatory of the Trustee (or anauthenticating agent acting on its behalf) manually signs the certificate ofauthentication on the other side of this Note.

 

16.           Abbreviations

 

Customaryabbreviations may be used in the name of a Holder or an assignee, such as TENCOM (=tenants in common), TEN ENT (=tenants by the entirety), JT TEN (=jointtenants with rights of survivorship and not as tenants in common), CUST(=custodian) and U/G/M/A (=Uniform Gift to Minors Act).

 

17.           CUSIP or ISIN Numbers

 

Pursuantto a recommendation promulgated by the Committee on Uniform SecurityIdentification Procedures the Company has caused CUSIP or ISIN numbers to beprinted on the Notes and has directed the Trustee to use CUSIP or ISIN numbersin notices of redemption as a convenience to Holders.  No representation is made as to the accuracyof such numbers either as printed on the Notes or as contained in any notice ofredemption and reliance may be placed only on the other identification numbersplaced thereon.

 

18.           Governing Law

 

ThisNote shall be governed by, and construed in accordance with, the laws of theState of New York.

 

19.           Currency of Account; Conversion ofCurrency.

 

U.S.Legal Tender is the sole currency of account and payment for all sums payableby the Company and the Subsidiary Guarantors under or in connection with theNotes or the Indenture, including damages. The Company and the Subsidiary Guarantors will indemnify the Holders asprovided in respect of the conversion of currency relating to the Notes and theIndenture.

 

20.           Agent for Service; Submission toJurisdiction; Waiver of Immunities.

 

TheCompany and the Subsidiary Guarantors have agreed that any suit, action orproceeding against the Company brought by any Holder or the Trustee arising outof or based upon the Indenture or the Notes may be instituted in any state orfederal court in The City of New York, New York.  The Company and the Subsidiary Guarantorshave irrevocably submitted to the jurisdiction of such courts for such purposeand waived, to the fullest extent permitted by law, trial by jury, anyobjection they may now or hereafter have to the laying of venue of any suchproceeding, and any claim they may now or hereafter have that any proceeding inany such court is brought in an inconvenient forum and any right to which anyof them may be entitled, on account of place of residence or domicile.  The Company and the Subsidiary Guarantorshave appointed CT Corporation System with offices currently at 111 EighthAvenue, 13th Floor, New York, New York 10011, as each oftheir authorized agent upon whom all writs, process and 

 

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summonsesmay be served in any suit, action or proceeding arising out of or based uponthe Indenture or the Notes which may be instituted in any state or federalcourt in The City of New York, New York. To the extent that any of the Company and the Subsidiary Guarantors haveor hereafter may acquire any immunity (sovereign or otherwise) from any legalaction, suit or proceeding, from jurisdiction of any court or from set-off orany legal process (whether service or notice, attachment in aid or otherwise)with respect to themselves or any of their property, the Company and theSubsidiary Guarantors have irrevocably waived and agreed not to plead or claimsuch immunity in respect of their obligations under the Indenture or the Notes.

** **

TheCompany will furnish to any Holder upon written request and without charge tothe Holder a copy of the Indenture which has in it the text of this Note inlarger type.  Requests may be made to:

 

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

Gutemberg#219

ColoniaNueva Anzures

MiguelHidalgo, 11590

MexicoCity, Mexico

 

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**ASSIGNMENTFORM**

** **

Toassign this Note, fill in the form below:

 

Ior we assign and transfer this Note to

 

(Print or type assignee’sname, address and zip code)

 

(Insert assignee’s SocialSecurity or Tax I.D. Number)

 

andirrevocably appoint agent to transfer this Note on the books of theCompany.  The agent may substituteanother to act for him.

 
| Date: |   |   | Your Signature: |   |
|-------|--------|--------|-----------------|--------|

 
| Signature Guarantee: |                           |   |
|----------------------|--------------------------------|--------|
|                 | (Signature must be guaranteed) |   |

 
|   |
|--------|

Signexactly as your name appears on the other side of this Note.

 

Thesignature(s) should be guaranteed by an eligible guarantor institution(banks, stockbrokers, savings and loan associations and credit unions withmembership in an approved signature guarantee medallion program), pursuant toExchange Act Rule 17Ad-15.

 

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*[To be attached to Global Notes only:*

** **

SCHEDULE OF INCREASES ORDECREASES IN GLOBAL NOTE

 

The following increases or decreases in this GlobalNote have been made:

 
| **Date  of  Exchange** | ** ** | **Amount of  decrease in  Principal Amount  of this Global  Note** | ** ** | **Amount of  increase in  Principal Amount  of this Global  Note** | ** ** | **Principal Amount  of this Global  Note following  such decrease or  increase** | ** ** | **Signature of  authorized  signatory of   Trustee or Note  Custodian** |
|------------------------|------------|--------------------------------------------------------------------|------------|--------------------------------------------------------------------|------------|----------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------|
|                   |       |                                                               |       |                                                               |       |                                                                             |       |                                                                    |
|                   |       |                                                               |       |                                                               |       |                                                                             |       |                                                                    |
|                   |       |                                                               |       |                                                               |       |                                                                             |       |                                                                    |

 

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OPTION OF HOLDER TO ELECTPURCHASE

** **

Ifyou want to elect to have this Note purchased by the Company pursuant to Section 3.12or Section 3.8 of the Indenture, check either box:

 

|   | o**Section 3.12** | o**Section 3.8** |
|--------|------------------------|-----------------------|

 

Ifyou want to elect to have only part of this Note purchased by the Companypursuant to Section Section 3.12 or Section 3.8  of the Indenture, state the principal amount(which must be an integral multiple of US$1,000) that you want to havepurchased by the Company:  US$

 
| Date:                 |                                       |   | Your  Signature |   |   |
|-----------------------|--------------------------------------------|--------|-----------------|--------|--------|
|                  | (Sign  exactly as your name appears on the |
|                  | other  side of the Note)                   |
|                  |                                       |
|                  |                                       |
| Signature  Guarantee: |                                       |   |
|                  | (Signature  must be guaranteed)            |
|                       |                                            |        |                 |        |        |  |

 

Thesignature(s) should be guaranteed by an eligible guarantor institution(banks, stockbrokers, savings and loan associations and credit unions withmembership in an approved signature guarantee medallion program), pursuant toExchange Act Rule 17Ad-15.

 

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**EXHIBIT B**

 

FORM OF CERTIFICATE FOR TRANSFER TO QIB

 
|   | [Date] |
|--------|--------|

 

TheBank of New York Mellon

[Addressof Trustee]

 
|   | Re:    | 9.500% Senior Guaranteed Notes due December 11, 2019 (the  “Notes”) |
|--------|--------|------------------------------------------------------------------------------------|
|   |   | of Desarrolladora Homex, S.A.B. de C.V. (the “Company”)                  |

 

Ladiesand Gentlemen:

 

Referenceis hereby made to the Indenture, dated as of December 11, 2009 (as amendedand supplemented from time to time, the “Indenture”), between the Company, theSubsidiary Guarantors party thereto and The Bank of New York Mellon, asTrustee.  Capitalized terms used but notdefined herein shall have the meanings given them in the Indenture.

 

Thisletter relates toUS$                      aggregate principal amount of Notes [*in thecase of a transfer of an interest in a Regulation S Global Note: *which represents an interest in aRegulation S Global Note] beneficially owned by the undersigned (the “Transferor”)to effect the transfer of such Notes in exchange for an equivalent beneficialinterest in the Rule 144A Global Note.

 

Inconnection with such request, and with respect to such Notes, the Transferordoes hereby certify that such Notes are being transferred in accordance withRule 144A under the Securities Act of 1933, as amended (“Rule 144A”),to a transferee that the Transferor reasonably believes is purchasing the Notesfor its own account or an account with respect to which the transfereeexercises sole investment discretion, and the transferee, as well as any suchaccount, is a “qualified institutional buyer” within the meaning ofRule 144A, in a transaction meeting the requirements of Rule 144A andin accordance with applicable securities laws of any state of the United Statesor any other jurisdiction.

 

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Youand the Company are entitled to rely upon this letter and are irrevocablyauthorized to produce this letter or a copy hereof to any interested party inany administrative or legal proceedings or official inquiry with respect to thematters covered hereby.

 
|   | Very truly yours,    |   |
|--------|----------------------|--------|
|   |                 |   |
|   | [Name of Transferor] |   |
|   |                 |   |
|   | By:                  |   |   |
|   |                 |   |   |
|   |                 |   |
|   | Authorized Signature |   |

 

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**EXHIBIT C**

 

FORM OF CERTIFICATE FOR TRANSFERPURSUANT TO REGULATION S

 
|   | [Date] |
|--------|--------|

 

TheBank of New York Mellon

[Addressof Trustee]

 
|   | Re:    | 9.500% Senior Guaranteed Notes due December 11, 2019 (the  “Notes”) |
|--------|--------|------------------------------------------------------------------------------------|
|   |   | of Desarrolladora Homex, S.A.B. de C.V. (the “Company”)                  |

 

Ladiesand Gentlemen:

 

Referenceis hereby made to the Indenture, dated as of December 11, 2009 (as amendedand supplemented from time to time, the “Indenture”), between the Company, theSubsidiary Guarantors party thereto and The Bank of New York Mellon, asTrustee.  Capitalized terms used but notdefined herein shall have the meanings given them in the Indenture.

 

Inconnection with our proposed sale ofUS$                aggregate principal amount of the Notes [*inthe case of a transfer of an interest in a 144A Global Note:* which represent an interest in a 144A GlobalNote] beneficially owned by the undersigned (“Transferor”), we confirm thatsuch sale has been effected pursuant to and in accordance withRegulation S under the Securities Act of 1933, as amended (the “SecuritiesAct”), and, accordingly, we represent that:

 

(a)           the offer of theNotes was not made to a person in the United States;

 

(b)           either (i) atthe time the buy order was originated, the transferee was outside the UnitedStates or we and any person acting on our behalf reasonably believed that thetransferee was outside the United States or (ii) the transaction wasexecuted in, on or through the facilities of a designated off-shore securitiesmarket and neither we nor any person acting on our behalf knows that thetransaction has been pre-arranged with a buyer in the United States;

 

(c)           no directed sellingefforts have been made in the United States in contravention of therequirements of Rule 903(b) or Rule 904(b) ofRegulation S, as applicable;

 

(d)           the transaction isnot part of a plan or scheme to evade the registration requirements of theSecurities Act; and

 

(e)           we are thebeneficial owner of the principal amount of Notes being transferred.

 

Inaddition, if the sale is made during a Distribution Compliance Period and theprovisions of Rule 904(b)(1) or Rule 904(b)(2) ofRegulation S are applicable thereto, we 

 

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confirmthat such sale has been made in accordance with the applicable provisions ofRule 904(b)(1) or Rule 904(b)(2), as the case may be.

 

Youand the Company are entitled to rely upon this letter and are irrevocablyauthorized to produce this letter or a copy hereof to any interested party inany administrative or legal proceedings or official inquiry with respect to thematters covered hereby.  Terms used inthis letter have the meanings set forth in Regulation S.

 
|   | Very truly yours,    |   |
|--------|----------------------|--------|
|   |                 |   |
|   | [Name of Transferor] |   |
|   |                 |   |
|   | By:                  |   |   |
|   |                 |   |   |
|   |                 |   |
|   | Authorized Signature |   |

 

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**EXHIBIT D**

 

FORM OF CERTIFICATE FOR TRANSFERPURSUANT TO RULE 144

 
|   | [Date] |
|--------|--------|

 

TheBank of New York Mellon

[Addressof Trustee]

 
|   | Re:    | 9.500% Senior Guaranteed Notes due December 11, 2019 (the  “Notes”) |
|--------|--------|------------------------------------------------------------------------------------|
|   |   | of Desarrolladora Homex, S.A.B. de C.V. (the “Company”)                  |

 

Ladies and Gentlemen:

 

Referenceis hereby made to the Indenture, dated as of December 11, 2009 (as amendedand supplemented from time to time, the “Indenture”), between the Company, theSubsidiary Guarantors party thereto and The Bank of New York Mellon, asTrustee.  Capitalized terms used but notdefined herein shall have the meanings given them in the Indenture.

 

Inconnection with our proposed sale ofUS$                aggregate principal amount of the Notes [*inthe case of a transfer of an interest in a 144A Global Note:* which represent an interest in a 144A GlobalNote] beneficially owned by the undersigned (“Transferor”), we confirm thatsuch sale has been effected pursuant to and in accordance with Rule 144under the Securities Act.

 

Youand the Company are entitled to rely upon this letter and are irrevocablyauthorized to produce this letter or a copy hereof to any interested party inany administrative or legal proceedings or official inquiry with respect to thematters covered hereby.

 
|   | Very truly yours,    |   |
|--------|----------------------|--------|
|   |                 |   |
|   | [Name of Transferor] |   |
|   |                 |   |
|   | By:                  |   |   |
|   |                 |   |   |
|   |                 |   |
|   | Authorized Signature |   |

 

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**EXHIBIT E**

 

FORM OF SUPPLEMENTAL INDENTUREFOR ADDITIONAL NOTE GUARANTEE

 

ThisSupplemental Indenture, dated as of[                    ](this “Supplemental Indenture”), between [name of Additional SubsidiaryGuarantor], a[                ][corporation][limited liability company] (the “New Subsidiary Guarantor”),Desarrolladora Homex, S.A.B. de C.V., a limited liability public company withvariable capital (*sociedad anónima bursátilde capital variable*) organized and existing under the laws of theUnited Mexican States (together with its successors and assigns, the “Company”),each other Subsidiary Guarantor under the Indenture referred to below, and TheBank of New York Mellon, as Trustee under the Indenture referred to below.

 

W IT N E S S E T H:

 

WHEREAS,the Company and the Trustee have heretofore executed and delivered anIndenture, dated as of December 11, 2011 (as amended, supplemented, waivedor otherwise modified, the “Indenture”), providing for the issuance of9.500% Senior Guaranteed Notes due December 11, 2019 of the Company (the “Notes”);

 

WHEREAS,pursuant to Section 10.5 of the Indenture, the Company is requiredto cause each Wholly-Owned Restricted and Significant Subsidiary created oracquired by the Company to execute and deliver to the Trustee an AdditionalNote Guarantee pursuant to which such Wholly-Owned Restricted and SignificantSubsidiary will unconditionally guarantee, jointly and severally with the otherSubsidiary Guarantors, the Company’s full and prompt payment of the Obligations(as defined in the Indenture) in respect of the Indenture and the Notes; and

 

WHEREAS,pursuant to Section 10.1 of the Indenture, the Trustee, the Companyand the existing Subsidiary Guarantors are authorized to execute and deliverthis Supplemental Indenture to supplement the Indenture, without the consent ofany Holder;

 

NOW,THEREFORE, in consideration of the foregoing and for other good and valuableconsideration, the receipt of which is hereby acknowledged, the New SubsidiaryGuarantor, the Company, each other Subsidiary Guarantor and the Trusteemutually covenant and agree for the equal and ratable benefit of the holders ofthe Notes as follows:

 

ARTICLE IDEFINITIONS

 

Section 1.1.  Defined Terms.  Unless otherwise defined in this SupplementalIndenture, terms defined in the Indenture are used herein as therein defined.

 

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ARTICLE IIAGREEMENT TO BE BOUND; GUARANTEE

 

Section 2.1.  Agreement to be Bound.  The New Subsidiary Guarantor hereby becomes aparty to the Indenture as a Subsidiary Guarantor and as such will have all ofthe rights and be subject to all of the obligations and agreements of aSubsidiary Guarantor under the Indenture. The New Subsidiary Guarantor hereby agrees to be bound by all of theprovisions of the Indenture applicable to a Subsidiary Guarantor and to performall of the obligations and agreements of a Subsidiary Guarantor under theIndenture.

 

Section 2.2.  Guarantee.  The New Subsidiary Guarantor hereby fully,unconditionally and irrevocably guarantees, as primary obligor and not merelyas surety, jointly and severally with each other Subsidiary Guarantor, to eachHolder of the Notes and the Trustee, the full and punctual payment when due,whether at maturity, by acceleration, by redemption or otherwise, of theObligations, all as more fully set forth in Article X of theIndenture.

 

Section 2.3.  Waivers.  (a)  The New Subsidiary Guarantor herebywaives presentation to, demand of payment from and protest to the Company ofany of the Obligations and also waives notice of protest for nonpayment.  The New Subsidiary Guarantor waives notice ofany default under the Notes or the Obligations. The obligations of the New Subsidiary Guarantor hereunder shall not beaffected by (i) the failure of any Holder to assert any claim or demand orto enforce any right or remedy against the Company or any other Person underthis Indenture, the Notes or any other agreement or otherwise; (ii) anyextension or renewal of any thereof; (iii) any rescission, waiver,amendment or modification of any of the terms or provisions of this Indenture,the Notes or any other agreement; (iv) the release of any security held byany Holder or the Trustee for the Obligations or any of them; (v) thefailure of any Holder to exercise any right or remedy against any other SubsidiaryGuarantor; or (vi) any change in the ownership of the Company.

 

(b)           The New Subsidiary Guarantor further expressly waivesirrevocably and unconditionally:

 

(i)            Any right it may have to first require any Holder toproceed against, initiate any actions before a court of law or any other judgeor authority, or enforce any other rights or security or claim payment from theCompany or any other Person (including any Subsidiary Guarantor or any otherguarantor) before claiming from it under this Supplemental Indenture;

 

(ii)           Any right to which it may be entitled to have the assetsof the Company or any other Person (including any Subsidiary Guarantor or anyother guarantor) first be used, applied or depleted as payment of the Company’sor the Subsidiary Guarantors’ obligations under the Indenture, prior to anyamount being claimed from or paid by any of the Subsidiary Guarantorsthereunder;

 

(iii)          Any right to which it may be entitled to have claimshereunder divided between the Subsidiary Guarantors;

 

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(iv)          To the extent applicable, the benefits of *orden*, *excusión*,*división*, *quita* and *espera*and any right specified in articles 2814, 2815, 2817, 2818, 2819,2820, 2821, 2822, 2823, 2826, 2837, 2838, 2839, 2840, 2845, 2846, 2847 and anyother related or applicable articles that are not explicitly set forth hereinbecause of Subsidiary Guarantor’s knowledge thereof of the *Código Civil Federal* of Mexico and the *Código Civil*of each State of the MexicanRepublic and the Federal District of Mexico.

 

Theobligations assumed by each Subsidiary Guarantor hereunder and under theIndenture shall not be affected by the absence of judicial request of paymentby a Holder to the Company or by whether any such person takes timely actionpursuant to articles 2848 and 2849 of the *CódigoCivil Federal*of Mexico and its correlative articles in the *Código Civil* of each State of Mexico andthe Federal District of Mexico and each Subsidiary Guarantor hereby expresslywaives the provisions of such articles.

 

ARTICLE IIIMISCELLANEOUS

 

Section 3.1.  Notices.  Any notice or communication delivered to theCompany under the provisions of the Indenture shall constitute notice to theNew Subsidiary Guarantor.

 

Section 3.2.  Parties.  Nothing expressed or mentioned herein isintended or shall be construed to give any Person, firm or corporation, otherthan the Holders and the Trustee, any legal or equitable right, remedy or claimunder or in respect of this Supplemental Indenture or the Indenture or anyprovision herein or therein contained.

 

Section 3.3.  Governing Law, etc.  This Supplemental Indenture shall be governedby the provisions set forth in Section 11.7 of the Indenture.

 

Section 3.4.  Severability.  In case any provision in this SupplementalIndenture shall be invalid, illegal or unenforceable, the validity, legalityand enforceability of the remaining provisions shall not in any way be affectedor impaired thereby and such provision shall be ineffective only to the extentof such invalidity, illegality or unenforceability.

 

Section 3.5.  Ratification of Indenture; SupplementalIndenture Part of Indenture. Except as expressly amended hereby, the Indenture is in all respectsratified and confirmed and all the terms, conditions and provisions thereofshall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for allpurposes, and every holder of Notes heretofore or hereafter authenticated anddelivered shall be bound hereby.  TheTrustee makes no representation or warranty as to the validity or sufficiencyof this Supplemental Indenture.

 

Section 3.6.  Duplicate and Counterpart Originals.  The parties may sign any number of copies ofthis Supplemental Indenture.  One signedcopy is enough to prove this Supplemental Indenture.  This Supplemental Indenture may be executedin any number of counterparts, each of which so executed shall be an original,but all of them together represent the same agreement.

 

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Section 3.7.  Headings.  The headings of the Articles and Sections inthis Supplemental Indenture have been inserted for convenience of referenceonly, are not intended to be considered as a part hereof and shall not modifyor restrict any of the terms or provisions hereof.

 

INWITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture tobe duly executed as of the date first above written.

 
|                                                                                  | DESARROLLADORA HOMEX,               |
|---------------------------------------------------------------------------------------|-------------------------------------|
|                                                                                  | S.A.B. DE C.V.                      |
|                                                                                  |                                |
|                                                                                  |                                |
|                                                                                  | By:                                 |   |
|                                                                                  |                                | Name: |
|                                                                                  |                                | Title: |
|                                                                                  |                                |
|                                                                                  |                                |
|                                                                                  | [NAME OF NEW SUBSIDIARY GUARANTOR], |
|                                                                                  | as a Subsidiary Guarantor           |
|                                                                                  |                                |
|                                                                                  |                                |
|                                                                                  | By:                                 |   |
|                                                                                  |                                | Name: |
|                                                                                  |                                | Title: |
|                                                                                  |                                |
|                                                                                  |                                |
| **[Complete  the following signature block for each existing Subsidiary Guarantor:]** |
|                                                                                  |                                |
|                                                                                  |                                |
|                                                                                  | [NAME OF SUBSIDIARY GUARANTOR],     |
|                                                                                  | as a Subsidiary Guarantor           |
|                                                                                  |                                |
|                                                                                  | By:                                 |   |
|                                                                                  |                                | Name: |
|                                                                                  |                                | Title: |

 

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|   | PROYECTOS INMOBILIARIOS DE  CULIACÁN, S.A. DE S.V., |
|--------|----------------------------------------------------------|
|   | as Subsidiary Guarantor                                  |
|   |                                                     |
|   |                                                     |
|   | By:                                                      |   |
|   |                                                     | Name: |
|   |                                                     | Title: |
|   |                                                     |
|   |                                                     |
|   | DESARROLLADORA DE CASAS  DEL NOROESTE, S.A. DE C.V.,     |
|   | as Subsidiary Guarantor                                  |
|   |                                                     |
|   |                                                     |
|   | By:                                                      |   |
|   |                                                     | Name: |
|   |                                                     | Title: |
|   |                                                     |
|   |                                                     |
|   | CASAS BETA DEL CENTRO, S. DE R.L. de C.V.,               |
|   | as Subsidiary Guarantor                                  |
|   |                                                     |
|   |                                                     |
|   | By:                                                      |   |
|   |                                                     | Name: |
|   |                                                     | Title: |

 

E-5

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|   | THE BANK OF NEW YORK MELLON, |
|--------|------------------------------|
|   | as Trustee                   |
|   |                         |
|   | By:                          |   |
|   |                         | Name: |
|   |                         | Title: |

 

 

Solely for the purposes of accepting theappointment of Luxembourg Paying Agent,together with the rights, protections and immunitiesgranted to the Trustee under Article VII, which shallapply *mutatis mutandis* to theLuxembourgPaying Agent,

 

THE BANK OF NEW YORK MELLON(LUXEMBOURG), S.A.,as Luxembourg Paying Agent

 
| By:    |   |   |
|--------|--------|--------|
| Name:  |   |
| Title: |   |

 

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**EXHIBIT F**

 

FORM OF FREE TRANSFERABILITY CERTIFICATE

 
|   | [Date] |
|--------|--------|

 

TheBank of New York Mellon

 

[Addressof Trustee]

 
|   | Re:    | 9.500% Senior Guaranteed Notes due December 11, 2019 (the  “Notes”) |
|--------|--------|------------------------------------------------------------------------------------|
|   |   | of Desarrolladora Homex, S.A.B. de C.V. (the “Company”)                  |

 

Ladies and Gentlemen:

 

Referenceis hereby made to the Indenture, dated as of December 11, 2009 (as amendedand supplemented from time to time, the “Indenture”), between the Company, theSubsidiary Guarantors party thereto and The Bank of New York Mellon, asTrustee.  Capitalized terms used but notdefined herein shall have the meanings given them in the Indenture.

 

Whereasthe Notes have become freely tradable without restrictions by non-affiliates ofthe Company pursuant to Rule 144(b)(1) under the Securities Act of1933, as amended, in accordance with Section 2.7(b) of the Indenture,the Company hereby instructs you that:

 

(i)                                 the restrictivelegends referenced in Section 2.7(a) of the Indenture and set forthon the Securities (other than the first three paragraphs thereof) shall bedeemed removed from the Global Securities (as defined in the Indenture), inaccordance with the terms and conditions of the Securities and as provided inthe Indenture, without further action on the part of Holders; and

 

(ii)                              the restrictedCUSIP number for the Securities shall be deemed removed from the GlobalSecurities and replaced with the unrestricted CUSIP number set forth therein,in accordance with the terms and conditions of the Securities and as providedin the Indenture, without further action on the part of Holders.

 

Capitalizedterms used but not defined herein shall have the meanings set forth in theIndenture.

 
|   | Very  truly yours,    |
|--------|-----------------------|
|   |                  |
|   | DESARROLLADORA HOMEX, |
|   | S.A.B. DE C.V.        |
|   |                  |
|   | By:                   |   |
|   | Name:                 |
|   | Title:*               |

 

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*              The signatory must be an Officerof the Company.

 

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