**Exhibit 2(b)(7)**

 

 

US$22,896,000

 

LOAN AGREEMENT

 

Dated as of October 16,2009

 

by and between

 

GRUMA, S.A.B. deC.V.,as the Borrower,

 

and

 

STANDARD CHARTERED BANK,as Lender

 

 

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**TABLE OF CONTENTS**

 
|        |                                                                                      | **Page** |
|-------------|-------------------------------------------------------------------------------------------|----------|
|        |                                                                                      |     |
| ARTICLE I   | DEFINITIONS                                                                               | 1        |
|        |                                                                                      |     |
| 1.01.       | Certain Defined Terms                                                                     | 1        |
| 1.02.       | Other Interpretive  Provisions                                                            | 31       |
| 1.03.       | Accounting Principles                                                                     | 32       |
|        |                                                                                      |     |
| ARTICLE II  | THE  LOAN                                                                                 | 32       |
|        |                                                                                      |     |
| 2.01.       | The Loan                                                                                  | 32       |
| 2.02.       | Evidence of  Indebtedness                                                                 | 33       |
| 2.03.       | Procedure for Making of  Loan                                                             | 33       |
| 2.04.       | Voluntary Prepayments                                                                     | 33       |
| 2.05.       | Mandatory Prepayments                                                                     | 34       |
| 2.06.       | Repayment of the Loan                                                                     | 36       |
| 2.07.       | Interest                                                                                  | 37       |
| 2.08.       | Computation of Interest  and Fees                                                         | 38       |
| 2.09.       | Payments by the Company                                                                   | 38       |
| 2.10.       | Promise to Pay                                                                            | 38       |
|        |                                                                                      |     |
| ARTICLE III | TAXES,  YIELD PROTECTION AND ILLEGALITY                                                   | 39       |
|        |                                                                                      |     |
| 3.01.       | Taxes                                                                                     | 39       |
| 3.02.       | Illegality                                                                                | 40       |
| 3.03.       | Inability to Determine  Rates                                                             | 41       |
| 3.04.       | Increased Costs and  Reduction of Return                                                  | 41       |
| 3.05.       | Funding Losses                                                                            | 42       |
| 3.06.       | Reserves on Loan                                                                          | 42       |
| 3.07.       | Certificates of the  Lender                                                               | 43       |
| 3.08.       | Change of Lending  Office                                                                 | 43       |
| 3.09.       | Substitution of Lender                                                                    | 43       |
| 3.10.       | Survival                                                                                  | 44       |
|        |                                                                                      |     |
| ARTICLE IV  | CONDITIONS  PRECEDENT                                                                     | 44       |
|        |                                                                                      |     |
| 4.01.       | Conditions to Closing  Date                                                               | 44       |
|        |                                                                                      |     |
| ARTICLE  V  | REPRESENTATIONS  AND WARRANTIES                                                           | 48       |
|        |                                                                                      |     |
| 5.01.       | Corporate Existence and  Power                                                            | 48       |
| 5.02.       | Corporate  Authorization; No Contravention                                                | 49       |
| 5.03.       | No Additional  Authorizations                                                             | 49       |
| 5.04.       | Binding Effect                                                                            | 49       |
| 5.05.       | Litigation                                                                                | 49       |
| 5.06.       | Financial Information;  No Material Adverse Effect; No Default; No Contingent Liabilities | 50       |
| 5.07.       | Pari Passu                                                                                | 50       |
| 5.08.       | Taxes                                                                                     | 50       |
| 5.09.       | Environmental Matters                                                                     | 51       |

 

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**TABLE OF CONTENTS**

(continued)

 
|         |                                                                                          | **Page** |
|--------------|-----------------------------------------------------------------------------------------------|----------|
|         |                                                                                          |     |
| 5.10.        | Compliance with Social  Security Legislation, Etc.                                            | 51       |
| 5.11.        | Assets; Patents; Licenses; Insurance; Etc.                                                    | 52       |
| 5.12.        | Subsidiaries                                                                                  | 52       |
| 5.13.        | Commercial Acts                                                                               | 52       |
| 5.14.        | Proper Legal Form                                                                             | 53       |
| 5.15.        | Full Disclosure                                                                               | 53       |
| 5.16.        | Investment Company Act                                                                        | 53       |
| 5.17.        | Margin Regulations                                                                            | 54       |
| 5.18.        | ERISA Compliance; Labor  Matters                                                              | 54       |
| 5.19.        | Anti-Terrorism Laws                                                                           | 55       |
| 5.20.        | Existing Indebtedness  and Reporto Contracts                                                  | 56       |
| 5.21.        | Hedging Policy                                                                                | 57       |
| 5.22.        | Collateral and  Guaranties Relating to Company Indebtedness                                   | 57       |
|         |                                                                                          |     |
| ARTICLE  VI  | AFFIRMATIVE  COVENANTS                                                                        | 57       |
|         |                                                                                          |     |
| 6.01.        | Financial Statements  and Other Information                                                   | 57       |
| 6.02.        | Notice of Other Events                                                                        | 61       |
| 6.03.        | Maintenance of  Existence; Conduct of Business                                                | 62       |
| 6.04.        | Insurance                                                                                     | 62       |
| 6.05.        | Maintenance of  Governmental Approvals                                                        | 62       |
| 6.06.        | Use of Proceeds                                                                               | 63       |
| 6.07.        | Payment of Obligations                                                                        | 63       |
| 6.08.        | Ranking; Priority                                                                             | 63       |
| 6.09.        | Compliance with Laws                                                                          | 63       |
| 6.10.        | Maintenance of Books  and Records                                                             | 64       |
| 6.11.        | Intercompany Indebtedness                                                                     | 64       |
| 6.12.        | Further Assurances                                                                            | 65       |
|         |                                                                                          |     |
| ARTICLE  VII | NEGATIVE  COVENANTS                                                                           | 65       |
|         |                                                                                          |     |
| 7.01.        | Negative Pledge                                                                               | 65       |
| 7.02.        | Investments                                                                                   | 67       |
| 7.03.        | Mergers,  Consolidations, Sales and Leases                                                    | 69       |
| 7.04.        | Restricted Payments                                                                           | 70       |
| 7.05.        | Other Agreements                                                                              | 70       |
| 7.06.        | Burdensome Agreements                                                                         | 71       |
| 7.07.        | Transactions with  Affiliates; Arm’s Length Transactions                                 | 71       |
| 7.08.        | No Subsidiary  Guarantees of Certain Indebtedness                                             | 71       |
| 7.09.        | Interest Coverage Ratio                                                                       | 71       |
| 7.10.        | Leverage Ratio                                                                                | 72       |
| 7.11.        | Limitations on Changes  to Constituent Documents, Indebtedness, Corporate Existence, Business | 72       |
| 7.12.        | Fundamental Changes,  Limitations on Asset Sales, Asset Exchanges and Acquisitions            | 73       |

 

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**TABLE OF CONTENTS**

(continued)

 
|          |                                                  | **Page** |
|---------------|-------------------------------------------------------|----------|
|          |                                                  |     |
| 7.13.         | Limitations on Sale  Lease-Back Transactions          | 74       |
| 7.14.         | Limitations on Capital  Expenditures                  | 74       |
| 7.15.         | Limitations on  Voluntary Prepayments of Indebtedness | 75       |
| 7.16.         | Limitations on  Incurrence of Additional Indebtedness | 75       |
| 7.17.         | Limitations on ERISA  Deficiencies                    | 77       |
| 7.18.         | Limitations on Hedging                                | 77       |
| 7.19.         | Intercompany  Indebtedness                            | 78       |
| 7.20.         | Material Subsidiaries                                 | 79       |
| 7.21.         | Reporto Contracts                                     | 79       |
| 7.22.         | Equity Issuances                                      | 79       |
|          |                                                  |     |
| ARTICLE  VIII | EVENTS  OF DEFAULT                                    | 80       |
|          |                                                  |     |
| 8.01.         | Events of Default                                     | 80       |
| 8.02.         | Remedies                                              | 82       |
| 8.03.         | Rights Not Exclusive                                  | 83       |
|          |                                                  |     |
| ARTICLE  IX   | MISCELLANEOUS                                         | 83       |
|          |                                                  |     |
| 9.01.         | Amendments and Waivers                                | 83       |
| 9.02.         | Notices                                               | 83       |
| 9.03.         | No Waiver; Cumulative  Remedies                       | 84       |
| 9.04.         | Costs and Expenses                                    | 84       |
| 9.05.         | Indemnification by the  Company                       | 85       |
| 9.06.         | Payments Set Aside                                    | 85       |
| 9.07.         | Successors and Assigns                                | 86       |
| 9.08.         | Assignments,  Participations, Etc.                    | 86       |
| 9.09.         | Confidentiality                                       | 88       |
| 9.10.         | Set-off                                               | 88       |
| 9.11.         | Notification of  Addresses, Lending Offices, Etc.     | 89       |
| 9.12.         | Counterparts                                          | 89       |
| 9.13.         | Severability                                          | 89       |
| 9.14.         | Governing Law                                         | 89       |
| 9.15.         | Consent to Jurisdiction;  Waiver of Jury Trial        | 89       |
| 9.16.         | Waiver of Immunity                                    | 90       |
| 9.17.         | Payment in US Dollars;  Judgment Currency             | 90       |
| 9.18.         | Change to IFRS                                        | 91       |

 

iii

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| Schedule  1.01(b) | -      | Existing Material  Subsidiaries                                                       |
|-------------------|--------|---------------------------------------------------------------------------------------|
| Schedule  1.01(c) | -      | Intercompany Revolving  Facilities                                                    |
| Schedule  5.05    | -      | Pending Litigation                                                                    |
| Schedule  5.06(c) | -      | Existing Material  Adverse Effects                                                    |
| Schedule  5.06(e) | -      | Material Contingent  Liabilities, Forward or Long-Term Commitments, Unrealized Losses |
| Schedule  5.09    | -      | Environmental Matters                                                                 |
| Schedule  5.11(d) | -      | Existing Sale  Lease-Back Transactions                                                |
| Schedule  5.12(a) | -      | Subsidiaries                                                                          |
| Schedule  5.12(b) | -      | Restrictive Subsidiary  Agreements                                                    |
| Schedule  5.20(a) | -      | Existing Indebtedness                                                                 |
| Schedule  5.20(b) | -      | Existing Intercompany  Indebtedness                                                   |
| Schedule  5.20(c) | -      | Existing Hedging  Agreements                                                          |
| Schedule  5.20(d) | -      | Existing Reporto  Contracts                                                           |
| Schedule  7.01    | -      | Existing Liens                                                                        |
| Schedule  7.02    | -      | Existing Investments                                                                  |
| Schedule  9.02    | -      | Notices                                                                               |
|              |   |                                                                                  |
| Exhibit A    | -      | Form of Promissory  Note                                                         |
| Exhibit B-1  | -      | Form of Quarterly  Compliance Certificate                                        |
| Exhibit B-2  | -      | Form of Annual  Compliance Certificate                                           |
| Exhibit C    | -      | Form of Assignment  and Acceptance                                               |
| Exhibit D    | -      | Form of Opinion of  Special Mexican Counsel to the Company                       |
| Exhibit E-1  | -      | Form of Opinion of  Special US Counsel to the Company                            |
| Exhibit E-2  | -      | Form of Opinion of  General Counsel to the Company                               |
| Exhibit F    |   | Form of  Intercompany Trust Agreement                                            |
| Exhibit G    | -      | Form of Notice of  Borrowing                                                     |
| Exhibit H    | -      | Form of Hedging  Policy                                                          |
| Exhibit I    |   | Form of  Intercompany Subordination Agreement                                    |

 

iv

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LOAN AGREEMENT

 

This LOAN AGREEMENT is entered into as of October 16, 2009, by andbetween GRUMA, S.A.B. de C.V., a *sociedadanónima bursátil de capital variable* organized under the laws of Mexico(together with its successors, the “Company”), and Standard CharteredBank, a bank organized under the laws of England (together with its successorsand assigns, the “Lender”).  Allcapitalized terms used but not otherwise defined have the meaning given to themin Section 1.01 (*Definitions*).

 

WHEREAS, pursuant to the Confirmation, the Company incurred theTerminated Derivative Obligation to Standard Chartered Bank Latin America B.V.(“SCLA”);

 

WHEREAS, the Company has requested that the Initial Lender, anaffiliate of SCLA, make or extend credit to the Company in the form of theLoan, to satisfy the Terminated Derivative Obligation in an aggregate principalamount of US$22,896,000; and

 

WHEREAS, the Lender is prepared, on the terms and subject to the conditionshereinafter set forth (including Article IV), to make or extend suchcredit in the form of the Loan to the Company;

 

NOW, THEREFORE, in consideration of the mutual agreements, provisionsand covenants contained herein, the parties hereto agree as follows:

 

ARTICLEIDEFINITIONS

 

1.01.        CertainDefined Terms.  As used in thisAgreement and in any Schedules and Exhibits to this Agreement, the followingcapitalized terms have the following meanings:

 

“Acquisition Pro Forma” has the meaning set forth in Section 7.12(b)(vii)(B)(1) (*Fundamental Changes, Limitations on Asset Sales,Asset Exchanges and Acquisitions*).

 

“Administrative Questionnaire” means an administrative detailsform completed by the Lender.

 

“Advisor Fee Letters” means the (a) the Fee ReimbursementLetter, dated July 30, 2009, between the Company and CGSH, and (c) theFee Reimbursement Letter, dated September 14, 2009, between the Companyand White & Case S.C, in each case pursuant to which the Companyagreed to pay each Advisor for professional services and to reimburse suchAdvisor’s expenses as provided in each such Advisor Fee Letter.

 

“Advisors” means each of CGSH and White & Case S.C.

 

“Affected Lender” has the meaning specified in Section 3.02(a) (*Illegality*).

 

“Affiliate” means, as to any Person, any other Person that,directly or indirectly, is in control of, is controlled by or is under commoncontrol with such Person or is a director or Officer of such Person**.**

 

1

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“Agreement” means this Loan Agreement, as from time to timeamended, supplemented, restated or otherwise modified.

 

“Agreement Value” means, for each Hedging Agreement, on any dateof determination, the amount, if any, that would be payable by the Company orany of its Subsidiaries to the counterparty in such Hedging Agreement inaccordance with the terms of such Hedging Agreement, after taking into accountthe effect of any legally enforceable netting agreement relating to suchHedging Agreement (which, for the avoidance of doubt, shall net any amountsowed to the counterparty against any collateral consisting of cash or CashEquivalent Investments that was posted for the benefit of the counterparty inaccordance with such Hedging Agreement), as if (i) such Hedging Agreementwas being terminated early on such date of determination, (ii) both theCompany or Subsidiary and the counterparty were the “Affected Parties” and (iii) thehedge counterparty was the sole party determining such payment amount.  Any Agreement Value with respect to a HedgingAgreement shall be determined by the counterparty in such Hedging Agreement andprovided by such counterparty to the Company, or, if such counterparty does notdetermine the Agreement Value, the Agreement Value shall be calculated by theCompany and certified to such counterparty and the Lender.

 

“Alternate Base Rate” means, for any day, a fluctuating rate ofinterest per annum equal to the higher of (a) the rate of interest mostrecently announced by the Lender as its “prime rate” and (b) the FederalFunds Rate most recently determined by the Lender plus one half of one percent(0.50%).  The “prime rate” is a rate setby the Lender based upon various factors, including the Lender’s costs anddesired return, general economic conditions and other factors, and is used as areference point for pricing some loans, which may be priced at, above, or belowsuch announced rate.  Any change in suchrate announced by the Lender shall take effect at the opening of business onthe day specified in the public announcement of such change.

 

“Alternate Process Agent” has the meaning specified in Section 9.15(d) (*Consent to Jurisdiction; Waiver of Jury Trial*).

 

“Annual Compliance Certificate” means a certificatesubstantially in the form of Exhibit B-2.

 

“Anti-Terrorism Laws” has the meaning specified in Section 5.19(a) (*Anti-Terrorism Laws*).

 

“Applicable Margin” means from (and including) the date hereof,through the date on which all outstanding amounts hereof are paid, a percentageper annum equal to 2.875%.

 

“Asset Sale” shall have the meaning ascribed to such term in theMajor Derivative Counterparty Loan, as of the date hereof.

 

“Assignee” has the meaning specified in Section 9.08(a) (*Assignments, Participations, Etc.*).

 

“Assignment and Acceptance” has the meaning specified in Section 9.08(a) (*Assignments, Participations, Etc.*).

 

2

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“Attorney Costs” means and includes all reasonable anddocumented fees and disbursements of any law firm or other external counsel, and, without duplication, the reasonableallocated cost of internal legalservices and all reasonable and documented disbursements of internal counsel.

 

“Attributable Debt” means, withrespect to a Sale Lease-Back Transaction, as of the date of determination, thegreater of (a) the fair market value of the Property being sold ortransferred and (b) the present value (discounted at the interest rateimplicit in the terms of the lease, compounded annually) of the totalobligations of the lessee for rental payments during the remaining term of thelease included in such transaction (including any period for which such leasehas been extended).

 

“Available Excess Cash Amount” means,with respect to any Excess Cash Year, the amount of Excess Cash (if any) fromsuch Excess Cash Year that is not required to be applied to the mandatoryrepayment of Mandatory Prepayment Indebtedness thereunder.

 

“Bancomext Loan” means the loan provided pursuant to the *Contrato de Apertura de Crédito Simple*,dated on or prior to the date hereof, as amended from time to time inaccordance with the provisions of this Agreement, between the Company and BancoNacional de Comercio Exterior, S.N.C.

 

“Bancomext-Gimsa Loan” means the US$30,000,000 loan providedpursuant to the Contrato de Aperatura de Crédito Simple dated as of April 3,2009, between Gimsa and Banco Nacional de Comercio Exterior, S.N.C.

 

“Bank of America Facility” means the Credit Agreement, dated asof October 30, 2006, by and among Bank of America N.A., as AdministrativeAgent, the Documentation Agent and L/C Issuer party thereto, the other lendersparty thereto and Gruma Corp.

 

“Banorte Shares” means the shares of capital stock of GrupoFinanciero Banorte S.A.B. de C.V. owned by the Company and its Subsidiaries.

 

“BBVA Loan” means the loans provided pursuant to theUS$197,000,000 Loan Agreement, dated on or about the date hereof, as amendedfrom time to time, by and among the Company, BBVA Securities Inc., BBVABancomer S.A., Institución de Banca Múltiple, Grupo Financiero BBVA Bancomer,and the several lenders party thereto.

 

“Breakage Event” has the meaning specified in Section 3.05(a) (*Funding Losses*).

 

“Business Day” means any day other than a Saturday, Sunday orday on which commercial banks in New York City, New York, London, England orMexico City, Mexico are authorized or required by law to close; provided,however, with respect only to any determination of LIBOR, the term“Business Day” shall also exclude any day on which banks are not open fordealings in US Dollar deposits in the London interbank market.

 

“CapEx Report” has the meaning specified in Section 6.01(c)(iv) (*Financial Statements and Other Information*).

 

3

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“Capital Adequacy Regulation” means any general guideline,request or directive of any central bank or other Governmental Authority, orany other law rule or regulation, whether or not having the force of law,in each case, regarding capital adequacy of any bank or of any corporationcontrolling a bank.

 

“Capital Expenditures”means, for any period, without duplication, anyexpenditures or written commitments of the Company and its Subsidiaries (otherthan Subsidiaries that are part of the Venezuelan Division) (a) for fixed or capital assets (including renewals, improvements, replacements,repairs and maintenance)that, in accordance with Mexican GAAP, are (or should be) classified as capitalexpendituresand that are (or should be) set forth ina consolidated statement of cash flows of the Company for such period preparedin accordance with Mexican GAAP and (b) pursuant to Capital LeaseObligations of the Company and its Consolidated Subsidiaries during suchperiod; provided that the term “Capital Expenditures” shall not includeany expenditures made with (i) the portion of Net Cash Proceeds of anAsset Sale that is invested in the Company’s Core Business in accordance withand as permitted by Section 2.05(a) (*MandatoryPrepayments*) or (ii) that portion of the Net Cash Proceeds of aCasualty Event that are used to Restore the affected Properties during theReinvestment Period in accordance with and as permitted by Section 2.05(b) (*Mandatory Prepayments*).

 

“CapitalLease Obligations” of any Person means the obligations of suchPerson to pay rent or other amounts under any lease of (or other arrangementconveying the right to use) real or personal property, or a combinationthereof, which obligations are required to be classified and accounted for ascapital leases on a balance sheet of such Person under Mexican GAAP (or, in thecase of Persons organized under laws of any other jurisdiction, the applicableGAAP therein), and the amount of such obligations shall be the capitalizedamount thereof determined in accordance with Mexican GAAP (or, in the case of Personsorganized under laws of any other jurisdiction, the applicable GAAP therein).

 

“Cash Equivalent Investment” means, at any time:

 

(a)           any directobligation of (or unconditionally guaranteed by) the United States of Americaor a state thereof, any OECD country or other foreign government in ajurisdiction in which the Company or any of its Subsidiaries currently has orcould have operations (or any agency or political subdivision thereof, to theextent such obligations are supported by the full faith and credit of theUnited States of America or a statethereof, any OECD country or other foreign government in a jurisdiction inwhich the Company or any of its Subsidiaries currently has or could haveoperations) maturing not more than one year after such time; and

 

(b)           any insured certificate of deposit, time deposit or bankers acceptance,maturing not more than one year after its date of issuance, which is issued byany commercial bank that is a lender or a member of the US Federal Revenue System, is organized under the laws of theUnited States or any State (or the District of Columbia) thereof and has (x) acredit rating of A2 or higher from Moody’s or A or higher from S&P and (y) acombined capital and surplus greater than US$500,000,000.

 

“Casualty Certificate” means, with respect to a Casualty Event,a certificate signed by a Senior Officer of the Company stating that within theReinvestment Period, all or a portion of 

 

4

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any Net Cash Proceeds received as a result of such Casualty Event (butin no event more than (i) US$10,000,000 (or the US Dollar Equivalentthereof) without the consent of the holders of more than 50% of the thenaggregate oustanting principal amount of the Major Derivative Counterparty Loanand (ii) US$55,000,000 (or the US Dollar Equivalent thereof)) shall beused to Restore any Properties in respect of which such Net Cash Proceeds werepaid (which certificate shall set forth in reasonable detail an estimate of theNet Cash Proceeds to be so expended).

 

“Casualty Event” shall have the meaning ascribed to such term inthe Major Derivative Counterparty Loan, as of the date hereof.

 

“Central America Division” means Gruma Centroamerica LLC andGruma de Guatemala S.A. together with each of their respective direct andindirect Subsidiaries.

 

“CGSH” means Cleary Gottlieb Steen and Hamilton LLP, special NewYork counsel to the Initial Lender.

 

“Change in Control” means the occurrence of anyof the following: (a) Mr. Roberto Gonzalez Barrera, his familymembers (including his former spouse, his siblings and other linealdescendants, estates and heirs, or any trust or other investment vehicle forthe primary benefit of any such Person or their respective family members orheirs) (collectively the “Controlling Stockholder”) shall fail to own,directly or indirectly, beneficially and of record, shares (or AmericanDepositary Receipts representing shares) representing at least 35% of theaggregate ordinary voting power and economic rights represented by the issuedand outstanding capital stock of the Company; (b) the ControllingStockholder shall cease to have the unconditional right (including the rightwithout the consent or approval of any other Person), or shall fail, tonominate a majority of the board of directors of the Company and the chairmanof the board of directors of the Company; or (c) any change in control (orsimilar event, however denominated) with respect to the Company shall occurunder and as defined in any indenture or agreement in respect of Indebtednessto which the Company or any of its Subsidiaries is a party.

 

“Closing Date” means the date on which all conditions precedentset forth in Article IV (*ConditionsPrecedent*) are satisfied or waived in writing by the Lender.

 

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

 

“Collateral Agency and Intercreditor Agreement” means theCollateral Agency and Intercreditor Agreement, dated as of the Closing Date, byand among the Collateral Agent, Deutsche Bank Trust Company Americas in itscapacity as administrative agent for the Major Derivative Counterparties, BBVABancomer, S.A., Institución de Banca Múltiple, Grupo Financiero BBVA Bancomerin its capacity as administrative agent for the lenders under the BBVA Loan,and solely with respect to certain sections thereof, the Company.

 

“Collateral Agent” has the meaning specified in the CollateralAgency and Intercreditor Agreement.

 

“Company” has the meaning specified in the introductory clausehereto.

 

5

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“Company Refinancing Indebtedness”means Indebtedness incurred to Refinance the Other Prepayment Indebtedness orthe Bancomext Loan.

 

“Confirmation” means the termination transaction entered into onJuly 8, 2009 between the Company and SCLA pursuant to which the TerminatedDerivative Obligation between the Company and SCLA arose.

 

“Consolidated EBITDA” means, for anyMeasurement Period, for the Company and its Consolidated Subsidiaries, anamount equal to (a) the sum, without duplication, of (i) consolidatedoperating income (determined in accordance with Mexican GAAP) for suchMeasurement Period, (ii) the amount of depreciation and amortizationexpense deducted during such Measurement Period in determining suchconsolidated operating income, (iii) any other non-cash expenses deductedduring such Measurement Period in determining such consolidated operatingincome of the Company and its Consolidated Subsidiaries for such MeasurementPeriod, (iv) any cash dividends or other cash distributions or paymentsreceived from Grupo Financiero Banorte S.A.B. de C.V. during such MeasurementPeriod, and (v) any cash dividends or other cash distributions or paymentsreceived (directly or indirectly) from the Venezuelan Subsidiaries during suchMeasurement Period *minus* (b) thesum, without duplication, of (i) Venezuelan EBITDA for such MeasurementPeriod, (ii) any other non-cash income included in the calculation ofconsolidated operating income of the Company and its Consolidated Subsidiariesfor such Measurement Period, and (iii) any cash payments made to anySubsidiary that is part of the Venezuelan Division during such MeasurementPeriod; provided that in making theforegoing calculations (other than in respect of the calculation of ExcessCash), pro forma effect will be given to the acquisition or Disposition ofPersons, divisions or lines of businesses by the Company or any Subsidiary (other than any Subsidiarythat is part of the Venezuelan Division) of the Company that haveoccurred since the beginning of such Measurement Period as if such events hadoccurred, and, in the case of any Disposition, the proceeds thereof applied, ineach case including any incurrence or assumption of Indebtedness in connectiontherewith, on the first day of such Measurement Period.

 

“Consolidated Interest Charges” means, for any MeasurementPeriod, the Interest Charges of the Company and its Consolidated Subsidiariesdetermined on a consolidated basis; provided that Consolidated InterestCharges shall not include any Interest Charges incurred by the VenezuelanDivision with respect to Venezuelan Non-Recourse Indebtedness.

 

“Consolidated Subsidiary” means (i) with respect to theCompany, any Subsidiary or other entity the accounts of which would, underMexican GAAP, be consolidated with those of the Company in the consolidatedfinancial statements of the Company, and (ii) at any date with respect toany other Person, any Subsidiary or other entity the accounts of which would beconsolidated with those of such Person in the consolidated financial statementsof such Person as of such date.

 

“Contractual Obligation” means, as to any Person, any provisionof any security issued by such Person or of any agreement, undertaking,contract, indenture, mortgage, deed of trust or other instrument, document oragreement to which such Person is a party or by which it or any of its Propertyis bound.

 

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“Control” means the possession, directly or indirectly, of thepower to direct or cause the direction of the management or policies of aPerson, whether through the ability to exercise voting power, by contract orotherwise.  “Controlling” and “Controlled”have meanings correlative thereto.

 

“Control Agreement” means the Control Agreement, dated on orabout the date hereof, by and between Gruma and the Initial Lender.

 

“Conversion Rate” means, as of anydate, the Peso/US Dollar exchange rate published by Banco de México in theFederal Official Gazette of Mexico (*DiarioOficial de la Federación*) as the rate “*para solventar obligaciones denominadas en moneda extranjera pagaderasen la República Mexicana*” as of such date (which rate is availableprior to 12:00 p.m. Mexico City time at http://www.banxico.org.mx/indicadores/fix.html (or any successor website thereto)); providedthat, if Banco de México ceases to publish such exchange rate, the ConversionRate shall equal the average of the Peso/ US Dollar exchange rates published byeither Bloomberg or Reuters (or the main offices of their subsidiaries locatedin Mexico, if not published by those institutions) on the relevant calculationdate.

 

“Core Business” means, with respect tothe Company and its Subsidiaries, (i) the production and distribution ofcorn flour, the production and distribution of tortillas and other relatedproducts, the production and distribution of wheat flour and any other food(including snacks) related business in which the Company and its Subsidiariesare engaged in, or may engage in, from time to time (for the purposes of thisdefinition, the “Food Business”) and (ii) businesses reasonablyancillary thereto, but only to the extent that such ancillary businesses are ofa nature, and of a size no greater than, reasonably necessary to serve orsupply the Food Business.

 

“Default” means any event or circumstance that, alone or with the giving of notice, the lapse of time, themaking of a determination, or any combination thereof, would (if not cured,waived or otherwise remedied during such time) constitute an Event of Default.

 

“Disposition” and correspondingly to “Dispose” means thesale, issuance, exchange, conveyance, assignment, license, other disposition(including any Sale Lease-Back Transaction) or other transfer (including by way of a merger or consolidation) ofany Property by any Person, including (i) any sale, issuance, exchange,conveyance, assignment, other disposition or other transfer of capital stock of any Person that was issuedand outstanding on the date of such sale, issuance, exchange, conveyance,assignment, other disposition or othertransfer and (ii) any sale, issuance, exchange, conveyance,assignment, license, other disposition orother transfer (including by way of a merger or consolidation) with orwithout recourse, of any notes or accounts receivable or any rights and claimsassociated therewith.

 

“Dollar Amount” means, at any date, with respect to anyMandatory Prepayment Indebtedness or Other Prepayment Indebtedness (i) denominatedin US Dollars, the outstanding principal amount of such Mandatory PrepaymentIndebtedness or Other Prepayment Indebtedness on such date, and (ii) denominatedin Pesos, the amount of US Dollars that would result from the conversion of thethen-outstanding principal amount of such Mandatory 

 

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Prepayment Indebtedness or Other Prepayment Indebtedness into USDollars at the Conversion Rate as of such date.

 

“EBITDA” means for any period of four(4) consecutive fiscal quarters, with respect to any Person, an amountequal to (a) the sum, without duplication, of (i) operating income(determined in accordance with the applicable GAAP) for such period,(ii) the amount of depreciation and amortization expense deducted duringsuch period in determining such operating income, (iii) any other non-cashexpenses deducted in determining such operating income during such period minus(b) any other non-cash income included in determining such operatingincome during such period.

 

“Environmental Laws” means all federal, national, state,provincial, departmental, municipal, local and foreign laws, including commonlaw, statutes, rules, regulations, treaties, ordinances,*normas técnicas* (technicalstandards) and codes, together with all orders, decrees, judgments, directives, orders (including consent orders) or injunctions issued, promulgated,approved or entered thereunder by any Governmental Authority havingjurisdiction over the Company, any of its Subsidiaries or their respectiveproperties, in each case relating to environmental or health and safetymatters.

 

“Equity Issuance” means any issuanceof capital stock of the Company or any Subsidiary in a primary offering by theCompany or such Subsidiary.

 

“ERISA” means the Employee Retirement Income Security Act of1974 as amended, and any successor statute thereto, as interpreted by therules, and regulations thereunder, all as the same may be in effect from timeto time.  References to sections of ERISAshall be construed also to refer to any successor sections.

 

“ERISA Affiliate” means any trade or business (whether or notincorporated) under common control with the Company within the meaning of Section 4001(a)(14)of ERISA, or any member of a group that includes the Company and that istreated as a single employer under Section 414(b) or (c) of theCode (and Sections 414(m) and (o) of the Code for purposes ofprovisions relating to Section 412 of the Code).

 

“ERISA Event” means any of the following: (a) a ReportableEvent with respect to a Pension Plan; (b) a withdrawal by the Company orany ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISAduring a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) ofERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) ofERISA; (c) a complete or partial withdrawal by the Company or any ERISAAffiliate from a Multiemployer Plan or notification that a Multiemployer Planis in reorganization; (d) the filing of a notice of intent to terminate aPlan under Section 4041 or 4041A of ERISA, or the commencement ofproceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) anevent or condition which might reasonably be expected to constitute groundsunder Section 4042 of ERISA for the termination of, or the appointment of,a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) theimposition of any liability under Title IV of ERISA (including as a result ofthe operation of Section 4069 or Section 4212 of ERISA), other thanPBGC premiums due but not delinquent under Section 4007 of ERISA, upon theCompany or any ERISA Affiliate.

 

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“Eurocurrency Liabilities” has the meaning specified in Section 3.06(*Reserves on Loan*).

 

“Event of Default” has the meaning specified in Section 8.01(*Events of Default*).

 

“Excess Cash” shall have the meaning ascribed to such term inthe Major Derivative Counterparty Loan, as of the date hereof.

 

“Excess Cash Year” means any Fiscal Year during which there isan amount of Excess Cash greater than zero.

 

“Excluded Taxes” means income, real property, franchise orsimilar taxes imposed on the Lender by a jurisdiction as a result of the Lenderbeing organized under the laws of such jurisdiction or being a resident of suchjurisdiction to which income under this Agreement is attributable or having apermanent establishment in such jurisdiction or its Lending Office beinglocated in such jurisdiction.

 

“Executive Order” has the meaning specified in Section 5.19(a) (*Anti-Terrorism Laws*).

 

“ExistingIndebtedness” means Indebtedness of the Company and its Subsidiaries thatwas outstanding on the date hereof and listed on Schedule 5.20(a) (*Existing Indebtedness*); providedthat Existing Indebtedness shall include the amount of any undrawn commitmentsunder the Bank of America Facility.

 

“ExistingIntercompany Indebtedness” means Intercompany Indebtedness that wasoutstanding as of September 30, 2009.

 

“ExistingOther Indebtedness” has the meaning specified in Section 5.20(a) (*Existing Indebtedness and Reporto Contracts*).

 

“ExistingVenezuelan Sale” means the sale of a 40% stake in Valores Mundiales, S.L.on the terms and subject to the conditions of the Purchase Agreement betweenRotch Energy Holdings N.V. and the Company, dated as of April 6, 2006,pursuant to which Rotch Energy Holdings N.V. agreed to pay the CompanyUS$39,600,000 through but excluding the Closing Date, and US$26,000,000thereafter.

 

“ExistingWorking Capital Indebtedness” has the meaning specified in Section 5.20(a) (*Existing Indebtedness**and Reporto Contracts*).

 

“ExistingSale Lease-Back Transactions” has the meaning specified in Section 5.11(d) (*Assets; Patents; Licenses; Insurance; Etc.*).

 

“Expropriate”means, with respect to any Property, to nationalize, seize or expropriate such Property, or,if such Property is a business, to assume control of the business andoperations of such Property by nationalization, seizure or expropriation.

 

“FederalFunds Rate” means, for any day, the rate per annum equal to the weightedaverage of the rates on overnight Federal funds transactions with members ofthe Federal Reserve System arranged by Federal funds brokers on such day, aspublished by the Federal 

 

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Reserve Bank on the Business Day nextsucceeding such day; provided that (a) if such day is not aBusiness Day, the Federal Funds Rate for such day shall be such rate on suchtransactions on the next preceding Business Day as so published on the nextsucceeding Business Day, and (b) if no such rate is so published on suchnext succeeding Business Day, the Federal Funds Rate for such day shall be theaverage rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%)charged to the Lender on such day on such transactions as determined by theLender.

 

“Fiscal Quarter” means a period of three (3) consecutivecalendar months ending on March 31, June 30, September 30 or December 31.

 

“Fiscal Year” means any period of twelve (12) consecutivecalendar months ending on December 31.

 

“Foreign Financial Institution” means a bank or financialinstitution (i) registered in BookI (*Libro I*), Section 1 (*Sección 1*) of the Foreign Banks, FinancialEntities, Pension and Retirement Funds and Investment Funds Registry (*Registro de Bancos, Entidades de Financiamiento,Fondos de Pensiones y Jubilaciones y Fondos de Inversión del Extranjero*)maintained by Hacienda for purposes of Rule II.3.13.1 of the *ResoluciónMiscelánea Fiscal* for the year 2009 and Article 195-I ofthe *Ley delImpuesto Sobre la Renta* (or any successor provisions thereof),(ii) which is a resident (or, ifsuch entity is lending through a branch or agency, the principal office ofwhich is a resident) for tax purposes in a jurisdiction with which Mexico has entered into a treaty forthe avoidance of double-taxation which is in effect, and (iii) which is the effective beneficiary (*beneficiario efectivo*) of any interestpaid hereunder or under the Note.

 

“ForeignPension Plan” means any benefit plan, other than a Pension Plan orMultiemployer Plan, that under any Requirement of Law is required to be fundedthrough a trust or other funding vehicle other than a trust or funding vehiclemaintained exclusively by a Governmental Authority.

 

“Funding Losses” has the meaning specified in Section 3.05(a) (*Funding Losses*).

 

“GAAP” means generally accepted accounting practices.

 

“Gimsa” means Grupo Industrial Maseca, S.A.B. de C.V., a *sociedad anónima bursátil de capital variable*organized under the laws of Mexico.

 

“Gimsa Division” means Gimsa together with its direct andindirect Subsidiaries.

 

“Governmental Authority” means, with respect to any Person, anynation or government, any state, municipality, province or other political oradministrative subdivision thereof, any central bank (or similar monetary orregulatory authority) thereof, any entity or branch of power exercisingexecutive, legislative, judicial, regulatory or administrative functions of orpertaining to government, and any corporation or other entity exercising suchfunctions and owned or controlled, through stock or capital ownership orotherwiseby any of the foregoing, any arbitral bodies, or any self-regulatory organization,asserting jurisdictionover such Person.

 

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“Gruma Corp.” means Gruma Corporation, a corporation organizedunder the laws of Nevada.

 

“Gruma Corp. Division” means Gruma Corp. together with itsdirect and indirect Subsidiaries.

 

“Guaranty Obligation” means, as to any Person: (a) anyobligation, contingent or otherwise, of such Person guarantying or having theeconomic effect of guarantying any Indebtedness or other obligation payable orperformable by another Person (the “primary obligor”) in any manner, whetherdirectly or indirectly, and including an *aval*and any obligation of such Person, direct or indirect, (i) to purchase orpay (or advance or supply funds for the purchase or payment of) suchIndebtedness or other obligation, (ii) to purchase or lease property,securities or services for the purpose of assuring the obligee in respect ofsuch Indebtedness or other obligation of the payment or performance of suchIndebtedness or other obligation, (iii) to maintain working capital,equity capital or any other financial statement condition or liquidity of theprimary obligor so as to enable the primary obligor to pay such Indebtedness orother obligation, or (iv) entered into for the purpose of assuring in anyother manner the obligees in respect of such Indebtedness or other obligationof the payment or performance thereof or to protect such obligees against lossin respect thereof (in whole or in part); or (b) any Lien on any Propertyof such Person securing any Indebtedness or other obligation of any otherPerson, whether or not such Indebtedness or other obligation is assumed by suchPerson; provided that the term “Guaranty Obligation” shall not includeendorsements of instruments for deposit or collection in the Ordinary Course ofBusiness.  The amount of any GuarantyObligation shall be deemed to be an amount equal to the stated or determinableamount of the related primary obligation, or portion thereof, in respect ofwhich such Guaranty Obligation is made or, if not stated or determinable, themaximum reasonably anticipated liability in respect thereof as determined by theguarantying Person in good faith.

 

“Hedging Agreements” means any agreements or instruments inrespect of interest rate or currency swap, exchange or hedging transactions orother financial derivatives transactions.

 

“Hedging Policy” means the policy of the Company and itsSubsidiaries with respect to Hedging Agreements, a copy of which is attached asExhibit H, as amended from time to time with the approval of theBoard of Directors of the Company (or of a committee duly delegated by suchBoard of Directors comprised of two or more members thereof) in accordance withSection 7.18(b)(iii) (*Limitationson Hedging*).

 

“IFRS” means International Financial Reporting Standards asadopted by the International Accounting Standards Board.

 

“IFRS Amendments” has the meaning specified in Section 9.18 (*Change to IFRS*).

 

“IMSS” means the *InstitutoMexicano del Seguro Social*of Mexico.

 

“Indebtedness” of any Person means at any date, withoutduplication:

 

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(a)           any obligation ofsuch Person in respect of borrowed money or with respect to deposits of anykind (if any) and any obligation of such Person evidenced by bonds, notes,debentures or similar instruments;

 

(b)           any obligation ofsuch Person in respect of a lease, including Capital Lease Obligations, or hirepurchase contract, in each case, that would, under Mexican GAAP (or, in thecase of Persons organized under laws of any other jurisdiction, the applicableGAAP therein), be treated as a financial or capital lease, including all Attributable Debt of suchPerson in respect of Sale Lease-Back Transactions of such Person;

 

(c)           any obligation ofothers secured by (or for which the holder of such obligation has an existingright, contingent or otherwise to be secured by) a Lien on any Property of suchPerson, whether or not such obligation is assumed by such Person;

 

(d)           any obligations ofsuch Person to pay the deferred purchase price of Property or services if suchdeferral extends for a period in excess of sixty (60) days;

 

(e)           any GuarantyObligations of such Person which could require such Person to make a payment;

 

(f)            the Agreement Valueof any Hedging Agreements;

 

(g)           any obligations ofsuch Person upon which interest charges are paid or accrued or are customarilypaid or accrued;

 

(h)           any obligations ofsuch Person under conditional sale or other title retention agreements relatingto Property purchased by such Person;

 

(i)            any obligations ofsuch Person to purchase, redeem, retire, defease or otherwise make any payment(other than dividend payments by Subsidiaries of the Company made pursuant to Section 7.04(a) (*Restricted Payments*)) in respect of anycapital stock of such Person or any other Person or any warrants, rights oroptions to acquire such equity interests, valued, in the case of redeemablepreferred interests, at the greater of its voluntary or involuntary liquidationpreference plus accrued and unpaid dividends;

 

(j)            any obligations ofsuch Person as an account party in respect of letters of credit;

 

(k)           any obligations ofsuch Person in respect of bankers’ acceptances, bank guaranties, surety bondsand similar instruments; and

 

(l)            any Probable Bondsfor or in connection with liabilities arising from Proceedings in which suchPerson is involved;

 

provided, however, that the followingliabilities shall be explicitly excluded from the definition of the term“Indebtedness”:

 

(i)            trade accounts payable that are (x) lessthan sixty (60) days overdue or (y) being contested in good faith byappropriate proceedings and for which adequate reserves 

 

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have been provided in accordance with Mexican GAAP(or, in the case of Persons organized under laws of any other jurisdiction, theapplicable GAAP therein), in each case including any obligations in respect ofletters of credit (and any other similar guaranty instruments) that have beenissued in support of such trade accounts payable;

 

(ii)           operating expenses that accrue andbecome payable in the Ordinary Course of Business;

 

(iii)          customer advance payments and customerdeposits received in the Ordinary Course of Business;

 

(iv)          obligations for ad valorem taxes,value added taxes, or any other taxes or governmental charges; and

 

(v)           Reporto Contracts that are enteredinto in accordance with Section 7.21 (*ReportoContracts*) and any Guaranty Obligations in respect thereof.

 

“Indemnified Liabilities” has the meaning specified in Section 9.05(*Indemnification by the Company*).

 

“Indemnified Taxes” means Taxes imposed on or incurred by theLender with respect to any payment under any Loan Document other than ExcludedTaxes.

 

“Indemnitees” has the meaning specified in Section 9.05 (*Indemnification by the Company*).

 

“INFONAVIT” means *Instituto Nacional del Fondo de la Vivienda para losTrabajadores*of Mexico.

 

“Information” has the meaning specified in Section 9.09(a) (*Confidentiality*).

 

“Initial Lender” means Standard Chartered Bank.

 

“Intercompany Indebtedness” means any present or futureIndebtedness of the Company or any of its present or future Subsidiaries issuedto the Company or any of its other present or future Subsidiaries.

 

“Intercompany Indebtedness Capitalization”means any amount owed to any Intercompany Lender pursuant to an IntercompanyRevolving Facility being satisfied in any manner other than by payment of suchamount to such Intercompany Lender in immediately available funds pursuant tothe terms of such Intercompany Revolving Facility.

 

“Intercompany Lenders” means theCompany and any of its Subsidiaries that are lenders under the IntercompanyRevolving Facilities.

 

“Intercompany Revolving Facilities”means, as amended from time to time in accordance with this Agreement, theintercompany revolving facilities listed on Schedule 1.01(c) (*Intercompany Revolving Facilities*).

 

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“Intercompany Subordination Agreement” means the SubordinationAgreement, dated on or about the date hereof, by and among the Company and theIntercompany Lenders attached hereto as Exhibit I.

 

“Intercompany Trust Agreement” meansthe Irrevocable Administration Trust Agreement (*Contrato de Fideicomiso Irrevocable de Administración con Derechos deReversión*), substantially in the form of Exhibit F,pursuant to which all Intercompany Lenders’ (other than Subsidiaries in theGimsa Division) rights, title and interest in, to and under the IntercompanyRevolving Facilities (as amended), dated on or about the date hereof, aretransferred to the Trustee, as trustee, with The Bank of New York Mellon, as beneficiaryin the first place (*fideicomisario en primerlugar).*

 

“Interest Charges” means, with respect to any Person or Persons,and during any Measurement Period, the sum of (a) all interest, premiumpayments, debt discount, fees, charges and related expenses of such Person orPersons during such Measurement Period, in each case to the extent treated asinterest in accordance with Mexican GAAP, (b) any interest, premiumpayments, debt discount, fees, charges and related expenses in respect ofIndebtedness of such Person or Persons accruedor capitalized (whether or not actually paid during such MeasurementPeriod) plus the net amount payable (orminus the net amount receivable) under Hedging Agreements relating to suchinterest during such Measurement Period (whether or not actually paid orreceived during such Measurement Period), (c) the portion of rent expense of such Person or Personswith respect to such Measurement Periodunder capital or financial leases that is treated as interest inaccordance with Mexican GAAP, and(d) all direct or indirect dividends or other distributions paid duringsuch Measurement Period onaccount of any shares of any preferred stock of such Person, now or hereinafteroutstanding.

 

“Interest Coverage Ratio” means, as of the last day of anyFiscal Quarter, the ratio of (a) Consolidated EBITDA to (b) Consolidated Interest Charges, in each case determined for the relevant Measurement Period; provided that for the purposes ofcalculating the Interest Coverage Ratio, Consolidated EBITDA shall not includeany payments received by the Company from Subsidiaries in the VenezuelanDivision in respect of the sale of shares of capital stock of Subsidiaries inthe Venezuelan Division, Dispositions of Property by Subsidiaries in theVenezuelan Division and other nonrecurring extraordinary payments bySubsidiaries in the Venezuelan Division.

 

“Interest Payment Date” means the last day of each InterestPeriod.

 

“Interest Period” means the period commencing on the last day ofthe preceding Interest Period (or in the case of the first Interest Period, thedate on which the Loan is made) and ending on the numerically correspondingdate one (1) month thereafter; provided, however, that:

 

(a)           the first (1st) Interest Period shall be the period commencing onthe date the Loan is made and ending on November 21, 2009.

 

(b)           if any InterestPeriod would otherwise end on a day that is not a Business Day, that InterestPeriod shall be extended to the following Business Day unless the result ofsuch 

 

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extension would be to carry such Interest Period into another calendarmonth, in which event such Interest Period shall end on the next precedingBusiness Day;

 

(c)           any Interest Periodthat begins on the last Business Day of a calendar month (or on a day for whichthere is no numerically corresponding day in the calendar month in which suchInterest Period is to end) shall end on the last Business Day of the calendarmonth in which such Interest Period is to end; and

 

(d)           no Interest Periodshall extend beyond the Maturity Date.

 

“Investment” means, as to any Person, any acquisition orinvestment (whether for cash Property,services, securities or otherwise) by such Person, whether by means of(a) the purchase or other acquisition of capital stock, bonds, debenturesor other securities of another Person, including the receipt of any of the foregoing as consideration for theDisposition of Property or rendering services, (b) the making of a deposit with, or any direct or indirect loan, advance, extension of credit or capitalcontribution to, guaranty of or other contingent obligation with respect todebt or any other liability or obligations of, or purchase or other acquisitionof any other debt or equity participation or ownership or other interest in,another Person, including any partnership or joint venture interest in suchother Person, and the purchase ofProperty from another Person subject to an understanding or agreement,contingent or otherwise, to resell such Property to such Person,(c) the purchase or other acquisition (in one transaction or a series oftransactions) of all or asubstantial portion of the business or Property or other beneficial ownership of any other Person or (d) entering into aHedging Agreement.  For purposes ofcovenant compliance, the amount of any Investment shall be the amount actuallyinvested, without adjustment for subsequent increases or decreases in the valueof such Investment.

 

“IRS” meansthe United States Internal Revenue Service.

 

“IT Operating Lease” means an operating lease for informationtechnology equipment.

 

“Joint Venture Partner” means each of (i) Archer-Daniels-Midland, Inc.and its Affiliates, (ii) RFB Holdings de México, S.A. de C.V. and itsAffiliates and (iii) Rotch Energy Holdings, N.V. and its Affiliates.

 

“Latin American Divisions” means each of the Molinera Division,the Gimsa Division and the Central America Division.  For the avoidance of doubt, the LatinAmerican Divisions shall not include any Venezuelan Subsidiary.

 

“Lender” has the meaning specified in the introductory clausehereto, and includes each Substitute Lender and each Assignee that becomes aLender pursuant to Section 9.08 (*Assignments,Participations, Etc*.).

 

“Lender’s Payment Office” means the address for payments setforth on the signature pages hereto, or such other address as the Lendermay from time to time specify to the other parties hereto.

 

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“Lending Office” means, as to any Lender, the office or officesof such Lender specified as its “Lending Office” in the AdministrativeQuestionnaire, as from time to time amended, or such other office or offices assuch Lender may from time to time notify the Company.

 

“Leverage Ratio” means, on any date, the ratio of (a) TotalIndebtedness of the Company and its Consolidated Subsidiaries on such date to(b) Consolidated EBITDA of the Company and its Consolidated Subsidiariesdetermined for the Measurement Period ended on such date (or, if such date isnot the last day of a Fiscal Quarter, the last day of the most recent FiscalQuarter ended prior to such date); providedthat for the purposes of calculating the Leverage Ratio, Consolidated EBITDAshall not include any payments received by the Company from the Subsidiaries inthe Venezuelan Division in respect of the sale of shares of capital stock ofthe Subsidiaries in the Venezuelan Division, Dispositions of Property bySubsidiaries in the Venezuelan Division and other nonrecurring extraordinarypayments by Subsidiaries in the Venezuelan Division.

 

“LIBOR” means for any Interest Period with respect to any LIBORLoan:

 

(a)                                  the rate per annum (rounded to thenearest 1/100th of1%) equal to the rate determined by the Lender as the London interbank offeredrate on any page or other service that displays an average British BankersAssociation bbalibor for deposits in US Dollars with a term of or comparable toone month, determined as of approximately 11:00 a.m., London time, two (2) BusinessDays prior to the first day of such Interest Period (with respect to anyInterest Period, the “Determination Date”); or

 

(b)                                 if the rate referenced in the precedingclause (a) is not available, the rate per annum (rounded to the nearest1/100th of1%) determined by the Lender as the rate per annum that deposits in US Dollarsfor delivery on the first day of such Interest Period quoted by the Lender toprime banks in the London interbank market for deposits in US Dollars at approximately11:00 a.m. (London time) on the relevant Determination Date in an amountapproximately equal to the principal amount of the Loan to which such InterestPeriod is to apply and for a term of or comparable to one month.

 

“Lien” means with respect to any Property, (a) any securityinterest, mortgage, deed of trust, *fideicomiso*,pledge, usufruct, fiduciary transfer, charge or deposit arrangement,encumbrance, lien (statutory or other) or preferential arrangement (including asecuritization) of any kind or nature whatsoever in respect of any Propertythat has the practical effect of creating a security interest, (b) theinterest of a vendor or a lessor under any conditional sale agreement, capitallease or title retention agreement (or any financing lease having substantiallythe same economic effect as any of the foregoing) relating to such Property and(c) in addition, in the case of securities, any purchase option, call orsimilar right of a third party with respect to such securities.

 

“Loan” has the meaning specified in Section 2.01(a) (*The Loan*).

 

“Loan Documents” means this Agreement, the Note, theIntercompany Trust Agreement, the Intercompany Subordination Agreement and allother related agreements and documents issued or delivered hereunder or thereunderor pursuant hereto or thereto or in connection 

 

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herewith or therewith, in each case as such Loan Document may beamended, supplemented or otherwise modified from time to time.

 

“Major Derivative Counterparties” means each of (i) CreditSuisse, Cayman Islands Branch, (ii) Deutsche Bank AG, London Branch, (iii) JPMorganChase Bank N.A. and any of their respective successors and assigns and includeseach “Substitute Lender” and each “Assignee” that becomes a “Lender” (as suchterms are used in the Major Derivative Counterparty Loan) pursuant to the MajorDerivative Counterparty Loan.

 

“Major Derivative Counterparty Loan” means the loan provided tothe Company pursuant to the US$668,282,700 Senior Secured Loan Agreement, datedon or about the date hereof, as amended from time to time, by and among theCompany, Deutsche Bank Trust Company Americas, as Administrative Agent, TheBank of New York Mellon, as Collateral Agent, and the lenders party theretofrom time to time.

 

“Mandatory Prepayment Indebtedness” means the Major DerivativeCounterparty Loan and the BBVA Loan.

 

“Material Adverse Effect” means any event, change, circumstance,condition, occurrence, effect, development or state of fact that, individuallyor together with any other event, change, circumstance, condition, occurrence,effect, development or state of fact, has had: (a) a material adversechange in, or a material adverse effect upon the operations, business, assets,liabilities (actual or contingent), obligations, rights, Property, condition(financial or otherwise) or operating results of the Company and itsSubsidiaries taken as a whole; (b) a material impairment of the ability ofthe Company to perform its obligations under any Loan Document to which it isor will be a party; (c) a material adverse effect upon the legality,validity, binding effect or enforceability against the Company of any LoanDocument to which it is or will be a party; or (d) a material impairmentof the rights and remedies of or benefits available to the Lender under anyLoan Document to which it is or will be a party.

 

“Material Operating Subsidiary” means each of Gimsa, Gruma Corp.and Molinera.

 

“Material Subsidiary” means:

 

(a)                                  the Material Operating Subsidiaries;

 

(b)                                 the Subsidiaries listed on Schedule 1.01(b) (*Existing Material Subsidiaries*);

 

(c)                                  at any time, any Subsidiary of theCompany that meets any of the following conditions:

 

(i)                                     the Company’s and its Subsidiaries’investments in or advances to such Subsidiary exceed 5% of the totalassets of the Company and its Consolidated Subsidiaries as of the end of theCompany’s most recently completed Fiscal Year;

 

(ii)                                  the Company’s and its Subsidiaries’proportionate share of the total assets (after intercompany eliminations) ofsuch Subsidiary exceeds 5% of the total assets of the 

 

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Company and itsConsolidated Subsidiaries as of the end of the Company’s most recentlycompleted Fiscal Year; or

 

(iii)                               the Company’s and its Subsidiaries’proportionate share of the earnings before income tax and employee statutoryprofit sharing of such Subsidiary exceeds 5% of such earnings of theCompany and its Consolidated Subsidiaries as of the end of the Company’s mostrecently completed Fiscal Year;

 

in each case as calculated by reference to the last audited orunaudited balance sheet or income statement prepared for such Subsidiary andthe then latest audited or unaudited consolidated balance sheet or incomestatement of the Company and its Subsidiaries;

 

(d)                                 any Subsidiary that the Company adds toSchedule 1.01(b) (*Existing MaterialSubsidiaries*) for purposes of compliance with Section 7.20 (*Material Subsidiaries*); and

 

(e)                                  in the case of clauses (a), (b) and (c) above,the direct and indirect Subsidiaries of such Subsidiaries.

 

“Maturity Date” means July 21, 2012, or if such day is nota Business Day, the next succeeding Business Day.

 

“Measurement Period” means any period of four (4) consecutiveFiscal Quarters of the Company, ending with the most recently completed FiscalQuarter, taken as one accounting period.

 

“Mexican GAAP” means, as applicable, (i) MexicanGenerally Accepted Accounting Principles (*Principios de ContabilidadGeneralmente Aceptados*) issued by the Mexican Accounting PrinciplesCommission of the Mexican Institute of Public Accountants effective until December 31,2005, (ii) the Mexican Financial Information Standards (*Normas de Información Financiera*) issued by the MexicanCouncil for the Research and Development of Financial Information Standards,effective from January 1, 2006, as amended from time to time, or (iii) IFRS as in effect as of January 1, 2012 or earlier should theCompany elect to apply them earlier than that date pursuant to Transitory Article Thirdof the January 27, 2009 amendments to the *Disposicionesde Carácter General Aplicables a las Emisoras de Valores y a OtrosParticipantes del Mercado de Valores* in effect from time to time inMexico.

 

“Mexican Pesos”, “Pesos” and “MXP$” means lawfulcurrency of Mexico.

 

“Mexico” means the United Mexican States.

 

“Ministry of Finance” means the Ministry of Finance and PublicCredit (*Secretaría de Hacienda y CréditoPúblico*) of Mexico.

 

“Minor Derivative Counterparties” means the Lender and the OtherMinor Derivative Counterparties, and includes each “Substitute Lender” and each“Assignee” that becomes a “Lender” pursuant to the Minor DerivativeCounterparty Loans.

 

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“Minor Derivative Counterparty Loans” means the Loan and theOther Minor Derivative Counterparty Loans.

 

“Molinera” meansMolinera de Mexico, S.A. de C.V., a *sociedadanónima de capital variable* organized under the laws of Mexico.

 

“Molinera Division” means Molinera together with its direct andindirect Subsidiaries.

 

“Moody’s” means Moody’s Investors Service, Inc. and itssuccessors.

 

“Multiemployer Plan” means any employee benefit plan of the typedescribed in Section 4001(a)(3) of ERISA, to which the Company or anyERISA Affiliate makes or is obligated to make contributions, or during thepreceding three calendar years, has made or been obligated to makecontributions.

 

“Net Cash Proceeds” means, with respect to any event:

 

(a) the cash proceeds received in respect of such event, including(i) any cash and cash equivalents received by way of deferred paymentpursuant to, or by monetization of, a note receivable or otherwise, and (ii) inthe case of a Casualty Event, insurance awards;

 

*minus*

 

(b) the sum, as applicable and without duplication, of (i) allreasonable and customary fees, underwriting discounts, commissions, premiumsand out-of-pocket expenses paid by the Company and its Subsidiaries to thirdparties (other than Affiliates) in connection with such event, (ii) in thecase of a Disposition of Property, the amount of all payments required to bemade by the Company and its Subsidiaries as a result of such event to repayIndebtedness (other than the Loan) secured by such Property or otherwise thatis required by the terms of such Indebtedness to be repaid as a result of suchDisposition, (iii) in the case of a Casualty Event, the aggregate amountof proceeds of business interruption insurance, and (iv) the amount of alltaxes required to be paid and reasonably expected to be paid in accordance withpast practice by the Company and its Subsidiaries in connection with suchevent, including, for the avoidance of doubt, any taxes required to be paid andreasonably expected to be paid in accordance with past practice by the Companyand its Subsidiaries in connection with the distribution of such cash proceedsfrom the Subsidiary that received such cash proceeds to the Company.

 

“Note” means a promissory note (*pagaré*)of the Company payable to a Lender, substantially in the form of Exhibit A(as such promissory note may be replaced from time to time), evidencing theIndebtedness of the Company to such Lender resulting from such Lender’s Loan,and also means all other promissory notes accepted from time to time insubstitution therefor.

 

“Notice of Borrowing” means a notice containing the informationspecified in Section 2.03(a) (*Procedurefor Making of Loan*) substantially in the form of Exhibit G.

 

“Obligations” means all advances, debts, liabilities,obligations, covenants and duties arising under any Loan Document owing by theCompany to the Lenderor any indemnified 

 

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person, whether direct or indirect (including those acquired byassignment), absolute or contingent, due or to become due, now existing orhereafter arising.

 

“OECD” means the Organization for Economic Cooperation andDevelopment.

 

“OFAC” has the meaning specified in Section 5.19(b)(v) (*Anti-Terrorism Laws*).

 

“Officer” means, with respect to the Company, a president,senior vice president, managing director, chief marketing officer, chiefadministrative officer, chief technology officer, chief corporate officer,director of corporate communications, chief procurement officer, secretary ofthe board, treasurer or principal financial officer, comptroller or principalaccounting officer of such Person, and any officer having substantially thesame authority and responsibility as any of the foregoing.  For the avoidance of doubt, the term “Officer”shall include all persons listed as officers of the Company in the Company’smost recent annual report filed on Form 20-F with the US Securities andExchange Commission.

 

“Ordinary Course of Business” means, with respect to a Person,the ordinary course of business consistent with past practice of such Person.

 

“Organizational Documents” means, with respect to a Person, eachof the organizational and/or constituent documents of such Person, in each caseincluding all amendments thereto, including the articles or certificateof incorporation or *acta constitutiva*and the by-laws or *estatutos sociales*,or equivalent documents,of such Person.

 

“Other Currency” has the meaning specified in Section 9.17(b) (*Payment in US Dollars; Judgment Currency*).

 

“Other Indebtedness” means Indebtedness of the Company and itsSubsidiaries other than Working Capital Indebtedness and IntercompanyIndebtedness.

 

“Other Minor Derivative Counterparties” means each of ABN AMROBank N.V., Barclays Bank PLC and BNP Paribas.

 

“Other Minor Derivative Counterparty Loans” means the loansprovided to the Company by each of the Other Minor Derivative Counterpartiespursuant to the loan agreements, dated on or about the date hereof, as amended,modified or supplemented from time to time.

 

“Other Prepayment Indebtedness” means the Minor DerivativeCounterparty Loans, the Major Derivative Counterparty Loan and the BBVA Loan.

 

“Other Prepayment Pro Rata Amount” means, as of any date, withrespect to any Other Prepayment Indebtedness, a fraction (expressed as adecimal, rounded to the second decimal place), the numerator of which is theaggregate Dollar Amount of such Other Prepayment Indebtedness as of such date,and the denominator of which is the sum of the aggregate Dollar Amount of allOther Prepayment Indebtedness on such date.

 

“Other Restructured Indebtedness” means the Major DerivativeCounterparty Loan, the Other Minor Derivative Counterparty Loans, the BBVA Loanand the Bancomext Loan.

 

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“Other Taxes” means, with respect to any Person, any present orfuture stamp, court or documentary taxes or any other excise or property taxes,or charges, imposts, duties, fees or similar levies which arise from anypayment made hereunder or any other Loan Document or from the execution,delivery or registration of, or otherwise with respect to, this Agreement orany other Loan Document and which are actually imposed, levied, collected orwithheld by any Governmental Authority.

 

“Participation” has the meaning specified in Section 9.08(e) (*Assignments, Participations, Etc*.).

 

“Participant” has the meaning specified in Section 9.08(e) (*Assignments, Participations, Etc*.).

 

“Patriot Act” has the meaning specified in Section 5.19(a) (*Anti-Terrorism Laws*).

 

“PBGC” means the Pension Benefit Guaranty Corporation referredto and defined in ERISA and any successor entity performing similar functions.

 

“Pension Plan” means any “employee pension benefit plan” (assuch term is defined in Section 3(2) of ERISA), other than aMultiemployer Plan, that is subject to Title IV of ERISA and is sponsored ormaintained by the Company or any ERISA Affiliate or to which the Company or anyERISA Affiliate contributes or has an obligation to contribute, or in the caseof a multiple employer plan (as described in Section 4064(a) ofERISA) has made contributions at any time during the immediately preceding fiveplan years.

 

“Permitted Acquisition” has themeaning specified in Section 7.12(b) (*Fundamental Changes, Limitations on Asset Sales, Asset Exchanges andAcquisitions*).

 

“Permitted Bancomext Guaranty” means theGuaranty Obligation of the Company in respect of the Bancomext-Gimsa Loan.

 

“Permitted Capital Expenditures Amount” meansan amount of Capital Expenditures on a consolidated basis that shall not exceedthe following amounts for each Fiscal Year specified:

 
| **Fiscal Year ending December 31,** | ** ** | **Permitted Capital Expenditures  Amount** | ** **  |
|------------------------------------------|------------|--------------------------------------------|-------------|
| 2009                                     |       | US$                                        | 80,000,000  |   |
| 2010                                     |       | US$                                        | 80,000,000  |   |
| 2011                                     |       | US$                                        | 120,000,000 |   |
| 2012                                     |       | US$                                        | 140,000,000 |   |

 

“Permitted Company Equity Issuance” has the meaning specified inSection 7.22(b) (*Equity Issuances*).

 

“Permitted Lien” has the meaning specified in Section 7.01(*Negative Pledge*).

 

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“Permitted New Capital Obligations” has the meaning specified inSection 7.16(g)(ii) (*Limitationson Incurrence of Additional Indebtedness*).

 

“Permitted New Indebtedness” has the meaning specified in Section 7.16(g) (*Limitations on Incurrence of Additional Indebtedness*).

 

“Permitted New Investment Amount” means, withrespect to any Fiscal Year following an Excess Cash Year, the lesser of (i) theAvailable Excess Cash Amount for such Excess Cash Year and (ii) US$50,000,000(or the US Dollar Equivalent thereof) in each of 2009, 2010 and 2011, andUS$100,000,000 (or the US Dollar Equivalent thereof) in 2012.

 

“Permitted New Working Capital Indebtedness” has the meaningspecified in Section 7.16(g)(ii) (*Limitationson Incurrence of Additional Indebtedness*).

 

“Permitted Prepayment Asset Sale” means any Asset Sale other than(a) the Existing Venezuelan Sale, (b) Asset Sales by any Subsidiarythat is part of the Venezuelan Division, to the extent such Subsidiary isprohibited by Venezuelan laws or regulations from transferring or paying suchNet Cash Proceeds out of Venezuela, and (c) Prohibited Collateral Sales.

 

“Permitted Refinancing Indebtedness” means Indebtedness incurredby the Company or its Subsidiaries to Refinance (i) the Other PrepaymentIndebtedness, (ii) the Bancomext Loan or (iii) Indebtedness ofSubsidiaries of the Company; provided that:

 

(a)                                  in the case of Company RefinancingIndebtedness:

 

(i)                                     the aggregate principal amountof such Company Refinancing Indebtednessas of the date that such Refinancing is consummated does not exceed theaggregate principal amount outstanding of the Indebtedness being Refinanced (plus the amountof any premium required to be paid under the terms of the instrument governingsuch Indebtedness being Refinanced);

 

(ii)                                  such Company Refinancing Indebtednesshas:

 

(A)                              a weighted average maturity that is equalto or greater than the weighted average maturity of (x) the Indebtednessbeing Refinanced and (y) the Loan, and

 

(B)                                a final maturity that is equal to orgreater than the final maturity of (x) the Indebtedness being Refinancedand (y) the Loan;

 

(iii)                               such Company Refinancing Indebtednessis Indebtedness of the Company;

 

(iv)                              if theIndebtedness being Refinanced is Subordinated Indebtedness, then such Company Refinancing Indebtednessshall be subordinate to the Loan and any other senior Indebtedness at least tothe same extent and in the same manner as the Indebtedness beingRefinanced;

 

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(v)                                 such Company Refinancing Indebtedness isincurred pursuant to (i) terms and pricing that reflect market terms andpricing for the Company and (ii) terms that are no less favorable to theCompany than the terms and conditions contained hereunder;

 

(vi)                              such Company Refinancing Indebtedness issecured, if at all, by the same collateral as, and to an extent no greaterthan, the Indebtedness being Refinanced, and if such Company RefinancingIndebtedness is incurred to Refinance the Mandatory Prepayment Indebtedness,such Company Refinancing Indebtedness is secured, if at all, on a *pari passu* basis with such RefinancedMandatory Prepayment Indebtedness, and pursuant to an amendment to theCollateral Agency and Intercreditor Agreement;

 

(vii)                           such Company Refinancing Indebtedness is not guaranteed by any of theCompany’s Subsidiaries;

 

(viii)                        all of the Net Cash Proceeds of suchCompany Refinancing Indebtedness are used to prepay the Indebtedness beingRefinanced (plus the amount of any premium required to be paidunder the terms of the instrument governing such Indebtedness being Refinanced) and any other Indebtedness that isrequired to be prepaid pursuant to Section 2.05(d) (*Mandatory Prepayments*) (and any breakagecosts in connection therewith) within five (5) Business Days of theincurrence of such Company Refinancing Indebtedness;

 

(ix) in thecase of Company Refinancing Indebtedness incurred to Refinance the MinorDerivative Counterparty Loans, such Company Refinancing Indebtedness consistsonly of unsecured Indebtedness raised in the debt capital markets;

 

(x)                                   in the case of Company Refinancing Indebtednessincurred to Refinance the Bancomext Loan:

 

(A)                              the aggregate amount of scheduledamortizations under such Company Refinancing Indebtedness on any date cannotexceed the aggregate amount of scheduled amortizations under the Bancomext Loanon such date;

 

(B)                                the interest rate for such CompanyRefinancing Indebtedness cannot be more than a rate equal to the sum of (i) the*Tasa de Interés Interbancaria de Equilibrioa 28 días* as published in the Diario Oficial de la Federación by theBanco de México, plus (ii) 5.00% per annum; and

 

(C)                                the tenor of such Company RefinancingIndebtedness cannot be less than the tenor of the Bancomext Loan; and

 

(b)                                 in the case of Indebtedness incurred toRefinance Indebtedness of a Subsidiary:

 

(i)                                     the aggregate principal amount (or initialaccreted value, if applicable) of such new Indebtedness as of the date that suchRefinancing is consummated does not exceed the aggregate principal amountoutstanding (or initial accreted value, if 

 

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applicable)of the Indebtedness being Refinanced (plus the amount of anypremium required to be paid under the terms of the instrument governing suchIndebtedness being Refinanced);

 

(ii)                                  such new Indebtedness has:

 

(A)                              a weighted average maturity that is equalto or greater than the weighted average maturity of the Indebtedness beingRefinanced, and

 

(B)                                a final maturity that is equal to orgreater than the final maturity of the Indebtedness being Refinanced;

 

(iii)                               such newIndebtedness is Indebtedness of such Subsidiary;

 

(iv)                              if theIndebtedness being Refinanced is Subordinated Indebtedness, then such newIndebtedness shall be subordinate to any senior Indebtedness at least to thesame extent and in the same manner as the Indebtedness being Refinanced;

 

(v)                                 such new Indebtedness is incurredpursuant to (i) terms and pricing that reflect market terms and pricingfor such Subsidiary and (ii) terms that are no less favorable to theSubsidiary than the terms and conditions hereunder;

 

(vi)                              such new Indebtedness is secured usingthe same collateral as, and to an extent no greater than, the Indebtednessbeing Refinanced;

 

(vii)                           such new Indebtedness, if guaranteed bythe Company or any Subsidiary, is guaranteed by the same Persons as, and to an extentno greater than, the Indebtedness being Refinanced; provided that thePermitted Bancomext Guaranty may not be extended or renewed; and

 

(viii)                        all of the Net Cash Proceeds of such newIndebtedness are used to prepay the Indebtedness being Refinanced (plus the amountof any premium required to be paid under the terms of the instrument governingsuch Indebtedness being Refinanced) within five (5) Business Days of the incurrenceof such new Indebtedness.

 

“Permitted Venezuelan Recourse Indebtedness” has the meaningspecified in Section 7.16(e) (*Limitationson Incurrence of Additional Indebtedness*).

 

“Perpetual Bonds” means the 7.75% Perpetual Bonds issued by theCompany.

 

“Person” means any natural person, partnership, limitedliability company, corporation, business trust, joint stock company, trust,unincorporated association, joint venture or Governmental Authority or otherentity.

 

“Plan” means any “employee benefit plan” (as such term isdefined in Section 3(3) of ERISA) established by the Company or anyERISA Affiliate.

 

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“Pledged Entity Asset Sale” means any Asset Sale by anySubsidiary in the Gimsa Division, the Gruma Corp. Division or the MolineraDivision.

 

“Pledged Entity Casualty Event” meansany Casualty Event affecting any Subsidiary in the Gimsa Division, the GrumaCorp. Division or the Molinera Division.

 

“Post-Default Rate” means a rate perannum equal to (x) the Alternate Base Rate plus the Applicable Margin or(y) LIBOR plus the Applicable Margin, as notified to the Company by theLender, in each case plus two percent (2%).  Unless anduntil the Lender notifies the Company otherwise, the Post-Default Rateapplicable to the Loan shall be LIBOR plus the Applicable Margin plus twopercent (2%)

 

“Probable Bond” means a bond for or inconnection with a Proceeding for which the Company’s or its Subsidiaries’accountants have required reserves to be provided in accordance with applicableGAAP.

 

“Proceeding”means a litigation,claim, action or other proceeding before any Governmental Authority.

 

“Process Agent” has the meaning specified in Section 9.15(d) (*Consent to Jurisdiction; Waiver of Jury Trial*).

 

“Prohibited Collateral Sale” means any Disposition of the“Collateral”, as such term is used in the Major Derivative Counterparty Loan.

 

“Property” means any asset, revenue or any other property,whether tangible or intangible, including any right to receive income.

 

“Pro Rata Share” means, as of any date, with respect to eachMinor Derivative Counterparty, a fraction (expressed as a decimal, rounded tothe second decimal place) the numerator of which is the outstanding principalamount of the Loan of such Minor Derivative Counterparty and the denominator ofwhich is the aggregate principal amount of all Minor Derivative CounterpartyLoans.

 

“Qualified Accountant” means any of PriceWaterhouseCoopers,KPMG, Deloitte Touche Tohmatsu or Ernst and Young; provided that, at anytime, the auditor of the Company or any of its Subsidiaries shall not be aQualified Accountant.

 

“Qualified Counterparty” means afinancial institution (a) based in a country that is a member of the OECDand (b) that has a creditrating of A- or higher from S&P or A3 or higher from Moody’s, or, if suchfinancial institution is rated by both S&P and Moody’s, a credit rating ofA- or higher from S&P and A3 or higher from Moody’s.

 

“Quarterly Compliance Certificate”means a certificate substantially in the form of Exhibit B-1.

 

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“Refinance” means, in respect of anyIndebtedness, to issue any Indebtedness in exchange for or to refinance,replace, defease or refund such Indebtedness in whole or in part.  “Refinanced” and “Refinancing”have the meanings correlative thereto.

 

“Register” has the meaning specified in Section 9.08(c) (*Assignments, Participations, Etc.*).

 

“Reinvestment Certificate” means, with respect to an Asset Sale,a certificate signed by a Senior Officer of the Company stating that within therelevant Reinvestment Period, up to 50% of the Net Cash Proceeds of such AssetSale shall be used to make Restricted Investments.

 

“Reinvestment Period” means

 

(a)                                  with respect to any Casualty Event, theperiod of one hundred eighty (180) days following the date on which the Net CashProceeds of such Casualty Event are received by the Company; and

 

(b)                                 with respect to any Asset Sale, theperiod of two hundred and seventy (270) days following the date on which suchAsset Sale was consummated.

 

“Reportable Event” means any of the events set forth in Section 4043(c) ofERISA, other than events for which the thirty (30)-day notice period has beenwaived.

 

“Reporting Entity” has meaning specified in Section 6.01(a)(i) (*Financial Statements and Other Information*).

 

“Reporting Indebtedness” means each of (a) the SecuredIndebtedness, (b) the Bancomext Loan, (c) the Minor DerivativeCounterparty Loans, and (d) any Indebtedness the proceeds of which areapplied to the Refinancing of the foregoing.

 

“Reporting Indebtedness Documentation” has the meaning specifiedin Section 4.01(m) (*Delivery ofReporting Indebtedness Documents*).

 

“Reporto Contract” means any Contractual Obligation providingfor (a) the sale to a third party counterparty by the Company or itsSubsidiaries of a negotiable warehouse receipt (*certificado de depósito*) or any similar instrumentrepresenting corn or wheat stored in a warehouse and (b) the subsequentrepurchase of such negotiable warehouse receipt (*certificado de depósito*) or similar instrument by theCompany or such Subsidiary from such third party counterparty for the sameprice plus a premium previously agreed to by the parties.

 

“Required Payment Period” means, with respect to an Asset Saleor a Casualty Event, the period of (i) five (5) Business Daysfollowing the receipt of the Net Cash Proceeds thereof (or, if applicable,following the last day of the relevant Reinvestment Period) if such Net CashProceeds are received by the Company, or (ii) ten (10) Business Daysfollowing the receipt of the Net Cash Proceeds thereof (or, if applicable,following the last day of the relevant Reinvestment Period) if such Net CashProceeds are received by a Subsidiary of the Company.

 

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“Required Repayment Date” means, with respect to an Asset Saleor Casualty Event, the last day of the relevant Required Payment Period.

 

“Requirement of Law” means, as to any Person, any law (statutoryor common), treaty, rule or regulation or order, injunction, writ, decreeor other determination of an arbitrator or a court or other GovernmentalAuthority, including any Environmental Law, in each case applicable to orbinding upon such Person or any of its property or to which the Person or anyof its property is subject.

 

“Restore” means, with respect to any Property affected by aCasualty Event, to rebuild, repair, restore or replace such affected Property.

 

“Restricted Investments” means:

 

(a)                                  Investments consisting of the purchase ofthe capital stock of Gimsa;

 

(b)                                 subject to andin accordance with Section 7.12(b) (*FundamentalChanges, Limitations on Asset Sales, Asset Exchanges and Acquisitions*),Investments relatingto the Company’s Core Business (other than Investments in the VenezuelanDivision);

 

(c)                                  Investments by the Company in any MaterialSubsidiary (other than any Subsidiary that is part of the Venezuelan Division)or by any Material Subsidiary in the Company or in any Material Subsidiary(other than any Subsidiary that is part of the Venezuelan Division); and

 

(d)                                 Investments consisting of CapitalExpenditures in excess of the Capital Expenditures permitted by Sections7.14(a) and 7.14(b) (*Limitationson Capital Expenditures*) for such Fiscal Year; provided thatthe Company complies with Section 7.14(c) (*Limitations on Capital Expenditures*) with respect to suchCapital Expenditures;

 

provided, however,that notwithstanding any of the foregoing, the Company and its Subsidiaries(other than any Subsidiary that is part of the Venezuelan Division) shall notmake any Investments in the Venezuelan Division.

 

“Restricted Payment” means, with respect to any Person:

 

(a)                                  any direct orindirect dividend or other distribution (whether in cash, securities or otherProperty) on account of any shares of any class of capital stock of,partnership interest of or other ownership interest of, such Person, now orhereinafter outstanding;

 

(b)                                 any payment,sinking fund or similar deposit, purchase, redemption, retirement, acquisition,cancellation or termination of any such shares of capital stock, partnershipinterest or other ownership interest in, or of any option, warrant or otherright to acquire any such shares of capital stock, partnership interest orother interest in, of such Person; and

 

(c)                                  any payment orprepayment of principal of, premium, if any, or fees or other charges on orwith respect to, and any redemption, purchase, retirement, defeasance, sinkingfund or similar payment and any claim for rescission with respect to, anyIndebtedness which is 

 

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subordinated to the Obligations (other than Intercompany Indebtedness),including Subordinated Indebtedness.

 

 “S&P” meansStandard & Poor’s Ratings Service, presently a division of TheMcGraw-Hill Companies, Inc. and its successors.

 

“Sale Lease-Back Transaction” means any arrangement pursuant towhich a Person sells or transfers, directly or indirectly, any Property used oruseful in its business, and thereafter such Person or an Affiliate of suchPerson rents or leases such Property or other Property from the purchaser ortransferee (or their Affiliate) for the same or similar use in its business, orany similar transaction or arrangement.

 

“SAR” means the *Sistema de Ahorro para el Retiro*ofMexico.

 

“SCLA” means Standard Chartered Bank Latin America B.V.

 

“Secured Indebtedness” means the Major Derivative CounterpartyLoan, the BBVA Loan and the Perpetual Bonds.

 

“Senior Officer” means, with respect to any Person, the chiefexecutive officer, the president, the general manager or the chief financial officerof such Person, or, in each case, any other officer of such Person havingsubstantially the same authority and responsibility.

 

“Shared Casualty Events Proceeds” means Net Cash Proceeds ofCasualty Events (other than Net Cash Proceeds from a Casualty Event received byany Subsidiary that is part of the Venezuelan Division, to the extent suchSubsidiary is prohibited by Venezuelan laws or regulations from transferring orpaying such Net Cash Proceeds out of Venezuela).

 

“Shared Permitted Prepayment Asset Sale Proceeds” means the NetCash Proceeds of any Permitted Prepayment Asset Sale.

 

“Shared Proceeds” means the (a) the Shared PermittedPrepayment Asset Sale Proceeds and (b) Shared Casualty Events Proceeds.

 

“Shared Proceeds Trigger” has the meaning specified in Section 2.05(a)(ii) (*Mandatory Prepayments*).

 

“Solvent” means, with respect to any Person on a particulardate, that on such date, (a) the present fair value of the property ofsuch Person is greater than the total amount of debts and liabilities,subordinated, contingent or otherwise, of such Person, (b) such Personwill be able to pay its debts and liabilities, subordinated, contingent orotherwise, as such debts and liabilities become absolute and matured, (c) suchPerson will not have unreasonably small capital with which to conduct thebusiness in which it is engaged as such business is now conducted and proposedto be conducted after such date, (d) such Person is notin a generalized default of its payment obligations *(incumplimientogeneralizado en el pago de sus obligaciones)* within the meaning of Section Ior II of Article 10 of the Mexican *Ley de ConcursosMercantiles*, and (e) none of the events enumerated in SectionsI through VII of Article 11 of the Mexican *Ley deConcursos Mercantiles* shall be in effect with respect to suchPerson.  The amount of contingent 

 

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liabilities at any time shall be computed as the amount that, in thelight of all the facts and circumstances existing at such time, represents theamount that could reasonably be expected to become an actual or maturedliability.

 

“Specified Court” has the meaning specified in Section 9.15(a) (*Consent to Jurisdiction; Waiver of Jury Tria*l).

 

“Subordinated Indebtedness” means, withrespect to the Company or any of its Subsidiaries, any Indebtedness of theCompany or such Subsidiary, as the case may be, which is pursuant to its termsexpressly subordinated in right of payment to any senior Indebtedness.

 

“Subsidiary” of a Person means any corporation, partnership,joint venture, limited liability company, trust, estate or other entity (a) of which more than 50% of the voting stock or otherequity interests (in the case of Persons other than corporations), is owned orControlled directly or indirectly by such Person, or one or more of theSubsidiaries of such Person, or a combination thereof, or (b) that is, at the time anydetermination is made, otherwise Controlled, by such Person or one or more Subsidiariesof such Person.  Unless the context otherwise clearlyrequires, references herein to a “Subsidiary” refer to a direct or indirectSubsidiary of the Company.

 

“Substitute Lender” means (a) a Foreign FinancialInstitution (including a bank that is already a Lender hereunder) or (b) amultiple banking institution (*institución debanca múltiple*) that is organized as a *sociedad anónima*under Mexican law and is authorized toengage in the business of banking by the Ministry of Finance, in each case thatis acceptable to the Lender, whose consent will not be unreasonably withheld.

 

“Target” has the meaning specified inSection 7.12(b) (*FundamentalChanges, Limitations on Asset Sales, Asset Exchanges and Acquisitions*).

 

“Taxes” means any and all present or future taxes, duties,levies, assessments, imposts, deductions, withholdings or similar charges, andall liabilities with respect thereto, including any related interest orpenalties, imposed by Mexico or any political subdivision or taxing authoritythereof or therein or by any jurisdiction from which the Company shall make anypayment (or from which any payment shall be made) hereunder or under any LoanDocument.

 

“Temporary Accounts” means the Temporary Loan Account and eachaccount established for similar purpose by the Other Minor DerivativeCounterparties and the Major Derivative Counterparties in the name of theCompany pursuant to the Other Minor Derivative Counterparty Loans and the MajorDerivative Counterparty Loan.

 

“Temporary Loan Account” has the meaning specified in Section 2.03(b) (*Procedure for Making of Loan*).

 

“Terminated Derivative Obligation” means the $22,896,000obligation (other than in respect of interest) of the Company to the InitialLender arising out of the Confirmation.

 

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“Total Indebtedness” means, on any date, the outstandingprincipal balance of all Indebtedness of the Company and its ConsolidatedSubsidiaries (excluding Venezuelan Non-Recourse Indebtedness).

 

“Trustee” means Banco Nacional deMéxico S.A., Integrante del Grupo Financiero Banamex, División Fiduciaria asthe trustee (*fiduciario*) pursuantto the Intercompany Trust Agreement.

 

“Unfunded Pension Liability” means the excess of a PensionPlan’s benefit liabilities under Section 4001(a)(16) of ERISA, over thecurrent value of that Pension Plan’s assets, determined in accordance with theassumptions used for funding the Pension Plan pursuant to Section 412 ofthe Code for the applicable plan year.

 

“United States” and “US” each means the United States ofAmerica.

 

“Unused CapEx” means, in respect of any Fiscal Year, thePermitted Capital Expenditures Amount (without giving effect to any carry-overfrom any prior year) for such Fiscal Year less all Capital Expenditures madeduring such Fiscal Year.

 

“US Dollars”, “Dollars” and “US$” each meanslawful currency of the United States.

 

“US Dollar Equivalent” means, with respect to any non-USDollar-denominated amount on any date, the amount of US Dollars obtained byconverting such non-US Dollar-denominated amount into US Dollars using theConversion Rate on such date.

 

“US GAAP” means (i) generally accepted accountingprinciples in the United States or (ii) theinternational financial reporting standards set by the International AccountingStandards Board or any successor thereto, to the extent that a Person organized under the lawsof a jurisdiction of the United States would be permitted under the applicableRequirements of Law to use such standards in financial statements filed inreports with the Securities and Exchange Commission.

 

“Venezuelan Division” means each of theVenezuelan Subsidiaries together with their respective direct and indirectSubsidiaries.

 

“Venezuelan EBITDA” means, with respect to theVenezuelan Division, for any period (a) the sum of (i) consolidatedoperating income (determined in accordance with Mexican GAAP) for such period, (ii) theamount of depreciation and amortization expense deducted during such period indetermining such consolidated operating income for such period and (iii) anyother non-cash expenses deducted during such period in determining suchconsolidated operating income of the Venezuelan Division for such period *minus* (b) any other non-cash incomeincluded in the calculation of consolidated operating income of the Subsidiariesthat are part of the Venezuelan Division for such period.

 

“Venezuelan Non-Recourse Indebtedness” meansany Indebtedness incurred by any Subsidiary that is part of the VenezuelanDivision that is not directly or indirectly guaranteed or otherwise withrecourse to the Company or any Subsidiary of the Company other than anySubsidiary that is part of the Venezuelan Division.

 

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“Venezuelan Recourse Indebtedness” means anyIndebtedness incurred by any Subsidiary that is part of the Venezuelan Divisionthat is not Venezuelan Non-Recourse Indebtedness.

 

“Venezuelan Subsidiaries” means (i) eachof Derivados de Maíz Seleccionado, S.A. and Molinos Nacionales, C.A. and (ii) anySubsidiary of the Company that is organized under the laws of Venezuela afterthe date of this Agreement, provided that (x) such new Subsidiaryis duly organized under the laws of Venezuela and (y) the OrganizationalDocuments of such new Subsidiary do not violate the terms of this Agreement.

 

“Withdrawal Liability” has the meaning given such term under Part Iof Subtitle E of Title IV of ERISA.

 

“Working Capital Indebtedness” means (i) Indebtedness(other than Venezuelan Non-Recourse Indebtedness) incurred or held by theCompany or any of its Subsidiaries, that matures no later than three hundredsixty-five (365) days after the date of its incurrence and (ii) the Bankof America Facility.

 

1.02.                        Other Interpretive Provisions.

 

(a)                                  The meanings of defined terms are equallyapplicable to the singular and plural forms of the defined terms.

 

(b)                                 The words “hereof”, “herein”, “hereunder”and similar words refer to this Agreement as a whole and not to any particularprovision of this Agreement; and Section, clause, Schedule and Exhibit referencesare to this Agreement unless otherwise specified.

 

(c)                                  The terms “including” and “include” arenot limiting and mean “including without limitation” and “include withoutlimitation”.

 

(d)                                 In the computation of periods of timefrom a specified date to a later specified date, the word “from” means “fromand including”; the words “to” and “until” each means “to but excluding”, andthe word “through” means “to and including”.

 

(e)                                  Any definition of or reference to anyagreement, instrument or other document herein shall be construed as referringto such agreement, instrument or other document as from time to time amended,supplemented or otherwise modified (subject to any restrictions on suchamendments, supplements or modifications set forth herein).

 

(f)                                    Any reference herein to any Person shallbe construed to include such Person’s successors and assigns.

 

(g)                                 Any reference herein to “year”, “month”or “day” shall mean a calendar year, month, or day unless otherwise specified.

 

(h)                                 The captions and headings of thisAgreement are for convenience of reference only and shall not affect theinterpretation of this Agreement.

 

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(i)                                     The amounts of Consolidated EBITDA,Consolidated Interest Charges and Total Indebtedness shall be expressed inMexican Pesos in accordance with Mexican GAAP, consistently applied.

 

(j)                                     The calculation of the US DollarEquivalent of any amount shall be the US Dollar Equivalent thereof:

 

(i)                                                             if such amount is being created, incurredor assumed by the Company, as of the date of such creation, incurrence orassumption; and

 

(ii)                                                          if such amount is being paid (includingany mandatory prepayment required by Section 2.05 (*Mandatory Prepayments*) or Disposed of bythe Company, as of the date of such payment or Disposition.

 

1.03.                        Accounting Principles.

 

(a)                                  Unless the context otherwise clearlyrequires, all accounting terms not expressly defined herein shall be construed,and all financial computations required under this Agreement shall be made, in accordancewith Mexican GAAP, consistently applied.

 

(b)                                 References herein to “Fiscal Year” and“Fiscal Quarter” refer to such fiscal periods of the Company.

 

ARTICLEIITHE LOAN

 

2.01.                        The Loan.

 

(a)                                  The Initial Lender agrees, on the termsand subject to the conditions set forth herein, and relying on the representations and warranties set forth herein, to make a single term loan in US Dollarsin a single disbursement to the Company on the Closing Date in a principalamount equal to the Initial Lender’s TerminatedDerivative Obligation (the “Loan”).

 

(b)                                 No amounts prepaid or repaid with respectto the Loan may be reborrowed.

 

(c)                                  In the event that each of (x) theClosing Date and (y) the disbursement of the Loan in accordance withclause (a) above do not occur on or before the date that is ten (10) calendardays following the date of this Agreement, then this Agreement and thecommitments hereunder shall automatically terminate, and the TerminatedDerivative Obligation shall continue to be governed by the Confirmation;provided that notwithstanding the foregoing, the agreements contained inSections 3.01 (*Taxes*), 3.05 (*Funding Losses*), 9.04 (*Costs and Expenses*), 9.05 (*Indemnification by the Company*), 9.13 (*Severability*), 9.14 (*Governing Law*), 9.15 (*Consent to Jurisdiction, Waiver of Jury Trial*),9.16 (*Waiver of Immunity*) and9.17 (*Payment in US Dollars; JudgmentCurrency*) shall survive any termination pursuant to this Section 2.01(c).

 

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2.02.                        Evidence of Indebtedness.

 

(a)                                  The Lender’s Loan shall be evidenced by aNote payable to the order of the Lender in a principal amount equal to theLender’s Loan, maturing on the Maturity Date.

 

(b)                                 It is the intent of the Company and theLender that the Note qualifies as a *pagaré*underMexican law.

 

(c)                                  In the eventthat any conflict arises between the provisions of this Agreement and the termsof any Note, the provisions of this Agreement shall prevail.  In addition, the Company hereby agrees andcovenants that it will execute and deliver any and all endorsements to theNote, or replace (in exchange for) the Note, and take all further action thatthe Lender may reasonably request from time to time in order to ensure that theNote duly reflects the terms of this Agreement.

 

2.03.                        Procedure for Making of Loan.

 

(a)                                  Disbursement of the Loan shall be madeupon the Company’s irrevocable written notice delivered to the Initial Lenderin the form of a Notice of Borrowing (which notice must be received by theInitial Lender prior to 11:00 a.m. (New York City time) two (2) BusinessDays prior to the Closing Date) (i) specifying the proposed Closing Date,which shall be a Business Day, and (ii) instructing the Initial Lender toapply the proceeds of the Initial Lender’s Loan to repay the TerminatedDerivative Obligation of the Initial Lender.

 

(b)                                 The Initial Lender shall disburse the full amountof its Loan not later than 11:00 a.m. (New York City time) on the Closing Date by wiretransfer of immediately available funds to an account established in the nameof the Company at the Initial Lender or the Initial Lender’s nominee (the “TemporaryLoan Account”), which account shall be governed by the Control Agreementwith such Initial Lender.

 

(c)                                  Upon receipt of the proceeds of theInitial Lender’s Loan in the Temporary Loan Account established in the name ofthe Company at the Initial Lender, the Initial Lender shall, pursuant to theinstructions contained in the Notice of Borrowing delivered by the Company tothe Initial Lender, apply such proceeds to repay the Terminated DerivativeObligation of the Initial Lender.  TheCompany hereby irrevocably instructs the Initial Lender (or the InitialLender’s nominee) to apply the proceeds of the Loan to the TerminatedDerivative Obligation as specified above.

 

2.04.                        Voluntary Prepayments.

 

(a)                                  Subject to Section 3.05 (*Funding Losses*) and Section 2.09 (*Payments by the Company*), the Company may,at any time or from time to time, upon not less than three (3) BusinessDays’ irrevocable written notice to the Lender, voluntarily prepay the MinorDerivative Counterparty Loans on a prorata basis in accordancewith clause (c) below, in whole or in part, in minimum amounts ofUS$3,000,000 or any multiple of US$1,000,000 in excess thereof.  The notice of prepayment shall specify thedate and amount of such prepayment (and, upon the date specified in any suchnotice, the amount to be prepaid shall become due and payable hereunder).

 

(b)                                 Any optionalprepayment of the Loan under this Section 2.04 shall (i) be accompaniedby any accrued and unpaid interest with respect to the principal amount of theLoan 

 

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being repaid through the date of repayment together with additionalamounts due, if any, and (ii) if such prepayment shall be made on a dayother than the last day of the Interest Period, be accompanied by any and allamounts payable in connection therewith pursuant to Section 3.05 (*Funding Losses*).

 

(c)                                  The aggregate amount of any such prepayment of the Loan by the Companyshall be (i) paid in US Dollars and (ii) applied to (x) allMinor Derivative Counterparty Loans on a prorata basis accordingto each Minor Derivative Counterparty’s Pro Rata Share and (y) reduce prorata the amountof each of the last six (6) (or, if at the time of such repayment six(6) or less are remaining, all remaining) installments of principal, and thereafter to theremaining installments of principal in the inverse order of maturity set forth in Section 2.06 (*Repayment of the Loan*).

 

2.05.                        Mandatory Prepayments.

 

(a)                                  In each Fiscal Year:

 

(i)                                                             the Company shall, and shall cause eachof its Subsidiaries to, prepay 100% of Shared Permitted Prepayment Asset SaleProceeds to the Mandatory Prepayment Indebtedness within the applicable RequiredPayment Period until such time that the amount of Shared Proceeds paid to theMandatory Prepayment Indebtedness pursuant to this Section 2.05 exceedsUS$50,000,000 (or the US Dollar equivalent thereof) in such Fiscal Year; and

 

(ii)                                                          if, at any time during such Fiscal Year,the amount of Shared Proceeds received in such Fiscal Year by the Company andits Subsidaries and paid to theMandatory Prepayment Indebtedness pursuant to this Section 2.05 exceedsUS$50,000,000 (or the US Dollar equivalent thereof) (the “Shared ProceedsTrigger” for such Fiscal Year), then after the Shared Proceeds Trigger anduntil the last day of such Fiscal Year, the Company shall, and shall cause eachof its Subsidiaries to, prepay 100% of Shared Permitted Prepayment Asset SaleProceeds of any Permitted Prepayment Asset Sales received by the Company aftersuch Shared Proceeds Trigger to the Other Prepayment Indebtedness within theapplicable Required Payment Period; provided that, notwithstanding theforegoing, if and for so long as any “Default” or “Event of Default” iscontinuing under, and as defined in, the Major Derivative Counterparty Loan orthe BBVA Loan, the Company shall and shall cause each of its Subsidiaries toprepay 100% of the Net Cash Proceeds of any Pledged Entity Asset Sales to theMandatory Prepayment Indebtedness within the applicable Required PaymentPeriod;

 

provided that, in the case of clauses (i) and (ii) above,if and for so long as no Default or Event of Default is continuing hereunderand the Company has delivered a Reinvestment Certificate within the applicableRequired Payment Period for such Permitted Prepayment Asset Sale, up to 50% ofthe Shared Permitted Prepayment Asset Sale Proceeds (other than the Dispositionof any of the Banorte Shares) may be used for Investments in long-termproductive assets used in the Company’s Core Business during the ReinvestmentPeriod for such Permitted Prepayment Asset Sale; provided, further,that any such amount of Shared Permitted Prepayment Asset Sale Proceeds used forInvestments in long-term productive assets used in the Company’s Core Businessshall not be counted against the thresholds in clauses (i) and (ii) above;provided, 

 

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further, that if all or any portion of such Shared PermittedPrepayment Asset Sale Proceeds is not ultimately applied to such Investmentswithin the Reinvestment Period pursuant to the preceding proviso, any remainingportion of such Shared Permitted Prepayment Asset Sale Proceeds shall beapplied to prepay the Mandatory Prepayment Indebtedness or the Other PrepaymentIndebtedness, as applicable pursuant to the thresholds in clauses (i) and(ii) above, on the Required Repayment Date.  Notwithstanding anything herein to thecontrary, 100% of the Net Cash Proceeds of any Disposition of any of theBanorte Shares shall be applied to the prepayment of the Mandatory PrepaymentIndebtedness or the Other Prepayment Indebtedness, as applicable pursuant tothe thresholds in clauses (i) and (ii) above, within the applicableRequired Payment Period, and none of the Net Cash Proceeds thereof may be usedfor Investments in long-term productive assets in the Company’s Core Businessor any purpose other than prepayment of the Mandatory Prepayment Indebtednessor Other Prepayment Indebtedness, as applicable.

 

(b)                                 In each Fiscal Year:

 

(i)                                                             the Company shall, and shall cause eachof its Subsidiaries to, prepay 100% of Shared Casualty Event Proceeds to theMandatory Prepayment Indebtedness within the applicable Required Payment Perioduntil such time that the amount of Shared Proceeds received by the Company andits Subsidiaries exceeds US$50,000,000 (or the US Dollar equivalent thereof) insuch Fiscal Year; and

 

(ii)                                                          if, at any time during such Fiscal Year,a Shared Proceeds Trigger occurs, then after such Shared Proceeds Trigger anduntil the last day of such Fiscal Year, the Company shall, and shall cause eachof its Subsidiaries to, prepay 100% of such Shared Casualty Event Proceedsreceived by the Company after such Shared Proceeds Trigger to the OtherPrepayment Indebtedness within the applicable Required Payment Period;  provided that, notwithstanding theforegoing, if and for so long as any “Default” or “Event of Default” iscontinuing under, and as defined in, the Major Derivative Counterparty Loan orthe BBVA Loan, the Company shall and shall cause each of its Subsidiaries toprepay 100% of the Net Cash Proceeds of any Pledged Entity Casualty Event tothe Mandatory Prepayment Indebtedness within the applicable Required PaymentPeriod;

 

provided that, if and for so long as no Default or Event ofDefault is continuing hereunder, and (i) the Shared Casualty EventsProceeds of any Casualty Event do not exceed (A) US$10,000,000 (or the USDollar Equivalent thereof) without the written consent of the holders of morethan 50% of the then aggregate outstanding principal amount of the MajorDerivative Counterparty Loan (such consent not to be subject to a fee or to beunreasonably withheld) or (B) US$55,000,000 (or the US Dollar Equivalentthereof) in any event and (ii) the Company has (A) filed a claim inrespect of such Casualty Event within five (5) Business Days thereof and (B) delivereda Casualty Certificate within ten (10) Business Days following the filingof such claim, all (but no more than US$10,000,000 (or the US Dollar Equivalentthereof) without the written consent of the holders of more than 50% of thethen aggregate outstanding principal amount of the Major DerivativeCounteryparty Loan or US$55,000,000 (or the US Dollar Equivalent thereof) inany event) of such Shared Casualty Events Proceeds from such Casualty Event maybe used to Restore any such affected Properties during the Reinvestment Period;provided, 

 

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further, that any such amount of Shared CasualtyEvents Proceeds from such Casualty Event used to Restore any such affectedProperties shall not be counted against the thresholds in clauses (i) and (ii) above;provided, further, that if all or any portion of such Shared Casualty EventsProceeds from such Casualty Event is not ultimately applied to Restore anyaffected Properties within the Reinvestment Period pursuant to the precedingproviso, any remaining portion of such Shared Casualty Events Proceeds fromsuch Casualty Event shall be applied to prepay the Mandatory PrepaymentIndebtedness or the Other Prepayment Indebtedness, as applicable pursuant tothe thresholds in clauses (i) and (ii) above, on the RequiredRepayment Date.

 

(c)                                  The Company shall, and shall cause eachof its Subsidiaries to, apply 100% of the Net Cash Proceeds of the issuance ofany Indebtedness of the Company or any of its Subsidiaries (other than theissuance of Indebtedness permitted by Section 7.16 *(Limitations on Incurrence of Additional Indebtedness*))to prepayment of the Other Prepayment Indebtedness within five (5) BusinessDays following the receipt thereof.

 

(d)                                 If the Company incurs any PermittedRefinancing Indebtedness with respectto any Other Prepayment Indebtedness (including any partial Refinancingsthereof), and such Permitted Refinancing Indebtedness consists of:

 

(i)                                                             Permitted Refinancing Indebtedness raisedin the debt capital markets, the Company shall apply 100% of the Net CashProceeds of such Permitted Refinancing Indebtedness to prepayment of the OtherPrepayment Indebtedness within five (5) Business Days following thereceipt thereof; or

 

(ii)                                                          any other Permitted RefinancingIndebtedness, the Company shall apply 100% of the Net Cash Proceeds of suchPermitted Refinancing Indebtedness to the prepayment of Mandatory PrepaymentIndebtedness within five (5) Business Days following the receipt thereof.

 

(e)                                  Any mandatory prepayment of OtherPrepayment Indebtedness shall be made on a prorata basisaccording to the Other Prepayment Pro Rata Amounts for such Other PrepaymentIndebtedness.

 

(f)                                    Any mandatory prepayment of the Loansshall be paid in US Dollars and applied to all Minor Derivative CounterpartyLoans on a prorata basis according to each Minor Derivative Counterparty’sPro Rata Share.

 

2.06.                        Repayment of the Loan.

 

The Company shall repay the principal amount of the Loan on thefollowing dates in accordance withthe following amortization schedule:

 

| **Repayment Date**      | ** ** | **Amount** | ** ** |
|-------------------------|------------|------------|------------|
| August 21, 2010    |       | US$        | 954,000.00 |   |
| September 21, 2010 |       | US$        | 954,000.00 |   |

 

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| October 21, 2010   |   | US$ | 954,000.00 |   |
|-------------------------|--------|-----|------------|--------|
| November 21, 2010  |   | US$ | 954,000.00 |   |
| December 21, 2010  |   | US$ | 954,000.00 |   |
| January 21, 2011   |   | US$ | 954,000.00 |   |
| February 21, 2011  |   | US$ | 954,000.00 |   |
| March 21, 2011     |   | US$ | 954,000.00 |   |
| April 21, 2011     |   | US$ | 954,000.00 |   |
| May 21, 2011       |   | US$ | 954,000.00 |   |
| June 21, 2011      |   | US$ | 954,000.00 |   |
| July 21, 2011      |   | US$ | 954,000.00 |   |
| August 21, 2011    |   | US$ | 954,000.00 |   |
| September 21, 2011 |   | US$ | 954,000.00 |   |
| October 21, 2011   |   | US$ | 954,000.00 |   |
| November 21, 2011  |   | US$ | 954,000.00 |   |
| December 21, 2011  |   | US$ | 954,000.00 |   |
| January 21, 2012   |   | US$ | 954,000.00 |   |
| February 21, 2012  |   | US$ | 954,000.00 |   |
| March 21, 2012     |   | US$ | 954,000.00 |   |
| April 21, 2012     |   | US$ | 954,000.00 |   |
| May 21, 2012       |   | US$ | 954,000.00 |   |
| June 21, 2012      |   | US$ | 954,000.00 |   |
| July 21, 2012      |   | US$ | 954,000.00 |   |

 

provided that thefinal installment payable by the Company on the Maturity Date shall be in anamount, if such amount is different from that specified above, sufficient torepay the aggregate principal amount of the Loan outstanding on the MaturityDate.

 

2.07.                        Interest.

 

(a)                                  Subject to the provisions of clause (c) below,the Loan shall bear interest on the outstanding principalamount thereof for each Interest Period at a rate per annum equal to LIBOR plus the Applicable Margin.

 

(b)                                 Interest on the Loan shall be paid inarrears on each Interest Payment Date. Interest shall also be paid on the date of any prepayment of the Loanunder Section 2.04 (*VoluntaryPrepayments)* and Section 2.05 (*MandatoryPrepayments*) with respect to the portion 

 

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of the Loan so prepaid, and upon payment (including prepayment) in fullof the Loan.  During the existence of anyEvent of Default, interest shall be payable on demand.

 

(c)                                  Upon the occurrence and during thecontinuation of an Event of Default, any amounts outstanding under the Loan(including any overdue principal and, to the extent permitted by applicablelaw, overdue interest or other amount payable hereunder) shall bear interestpayable on demand, for each day from the date payment thereof was due to thedate of actual payment, at a rate per annum equal to the Post-Default Rate.

 

2.08.                        Computation of Interest and Fees.

 

(a)                                  Computation of the Alternate Base Rate,when the Alternate Base Rate is determined based on the Lender’s prime rate,shall be calculated on the basis of a year of three hundred sixty-five (365) orthree hundred sixty-six (366) days, as the case may be, and the actual number ofdays elapsed (including the first day but excluding the last day).  All other computations of interest and feeswhich are computed on a per annum basis shall be calculated on the basis of ayear of three hundred sixty (360) days and the actual number of days elapsed(including the first day but excluding the last day).

 

(b)                                 Each determination of LIBOR and theAlternate Base Rate by the Lender shall be conclusive and binding on theCompany and the Lender in the absence of manifest error.

 

2.09.                        Payments by the Company.

 

(a)                                  Subject to Section 3.01 (*Taxes*), all payments to be made by theCompany shall be made without condition or deduction for any set-off,counterclaim or other defense.  Except asotherwise expressly provided herein, all payments by the Company shall be madeto the Lender at the Lender’s Payment Office, and shall be made in US Dollarsin immediately available funds, no later than 11:00 A.M. (New York Citytime) on the date specified herein.  Anypayment received by the Lender later than 11:00 A.M. (New York City time)may be deemed, at the election of the Lender to have been received on thefollowing Business Day and any applicable interest or fee shall continue toaccrue.

 

(b)                                 Subject to the provisions set forth inthe definition of “Interest Period” herein, whenever any payment is due on aday other than a Business Day, such payment shall be made on the followingBusiness Day, and such extension of time shall in such case be included in thecomputation of interest.

 

2.10.                        Promise to Pay.  The Companyagrees to pay the principal amount of the Loan in installments on the dates andin the amounts set forth in Section 2.06 (*Repaymentof the Loans*) with a final installment on the Maturity Date, andfurther agrees to pay all unpaid interest accrued thereon, in accordance withthe terms of this Agreement and the Note.

 

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ARTICLEIIITAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01.                        Taxes.

 

(a)                                  Any and all payments by the Company to orfor the account of the Lender pursuant to this Agreement and any other LoanDocument shall be made free and clear of, and without deduction or withholdingfor, any Indemnified Taxes or Other Taxes except to the extent such deductionor withholding is required by applicable law.

 

(b)                                 In addition, the Company shall pay allOther Taxes to the relevant Governmental Authority in accordance withapplicable law.

 

(c)                                  If the Company shall be required by lawto deduct or withhold any Indemnified Taxes or Other Taxes from or in respect ofany sum payable hereunder or under any other Loan Document to the Lender, then:

 

(i)                                                             the sum payable shall be increased asnecessary so that, after making all required deductions and withholdings(including deductions and withholdings applicable to additional sums payableunder this Section 3.01), the Lender receives and retains an amount equalto the sum it would have received and retained had no such deductions orwithholdings been made;

 

(ii)                                                          the Company shall make such deductionsand withholdings;

 

(iii)                                                       the Company shall pay the full amountdeducted or withheld to the relevant Governmental Authority in accordance withapplicable law; and

 

(iv)                                                      in the event of an increase, after thedate of this Agreement, in the Mexican withholding tax rate to a rate in excessof the rate applicable to the Lender party hereto on the date hereof, theCompany shall also pay to the Lender, at the time interest is paid, alladditional amounts that the Lender specifies as necessary to preserve theafter-tax yield the Lender would have received if such Indemnified Taxes orOther Taxes had not been imposed;

 

provided, however, that the Company shall not berequired, except during an Event of Default (including with respect to paymentsused to cure an Event of Default), to increase any such amounts payable to anyLender with respect to withholding tax in excess of the rate applicable to aLender that is a Foreign Financial Institution.

 

(d)                                 Subject to the proviso contained in thelast paragraph of Section 3.01(c) above, the Company agrees toindemnify and hold harmless the Lender for the full amount of (i) IndemnifiedTaxes and (ii) Other Taxes (including deductions and withholdingsapplicable to additional sums payable under this Section 3.01) in theamount that the Lender specifies as necessary to preserve the after-tax yieldthe Lender would have received if such Indemnified Taxes or Other Taxes had notbeen imposed, and any liability (including penalties, interest, additions totax and expenses) arising therefrom or with respect thereto, whether or notsuch Indemnified Taxes or Other Taxes were correctly or legally asserted.

 

(e)                                  Within thirty (30) days after the date ofany payment by the Company of Indemnified Taxes or Other Taxes, the Companyshall furnish to the Lender the original or a certified copy of a receiptevidencing payment thereof or other evidence satisfactory to the Lender.

 

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(f)                                    The Lender shall, at or before the timeit becomes a Lender hereunder and otherwise, if reasonably requested by theCompany, promptly furnish to the Company such forms, documents or otherinformation as may be required by the Mexican tax law applicable at such timeand which such Lender is eligible to provide under applicable law, in order toallow the Company to make the corresponding gross up payments to such Lenderand to establish any available exemption from, or reduction in the amount of,applicable tax rates that the company may be required to withhold in accordancewith Mexican tax law; provided, however, that compliancewith requirements under this clause (f) shall not require registration ofa Lender as a Foreign Financial Institution or require a Lender to discloseinformation regarding the Lender’s tax affairs or computations or owners thatthe Lender in good faith considers to be confidential or otherwisedisadvantageous to disclose (including, in the case of a Lender that is a taxtransparent entity, any documentation from its owners) or would expose theLender to any unindemnified cost, risk or expense, or to provide any documents,forms, or other evidence that it is not legally entitled to provide. The Lender agrees that, for the avoidance of doubt, the provision ofdocuments or other information relating solely to identity, nationality,residence or other similar information regarding the Lender (but not itsowners) would not, absent extraordinary circumstances, be confidential orotherwise disadvantageous to the Lender.

 

(g)                                 Should the Lender become subject to Taxesand not be entitled to indemnification under Section 3.01(c) or Section 3.01(d) withrespect to Taxes imposed by the relevant Governmental Authority, the Companyshall take such steps as the Lender shall reasonably request at the expense ofthe Lender to assist the Lender to recover such Taxes.

 

3.02.                        Illegality.

 

(a)                                  If the Lender determines that anyRequirement of Law has made it unlawful, or that any Governmental Authority hasasserted that it is unlawful, for the Lender or its applicable Lending Officeto make or maintain its Loan contemplated by this Agreement (and, in thereasonable opinion of the Lender, the designation of a different applicableLending Office would either not avoid such unlawfulness or would bedisadvantageous to the Lender), then, on notice thereof by the Lender to theCompany, the Lender shall be an “Affected Lender” and by written noticeto the Company:

 

(i)                                                             any obligation of such Affected Lender tomake or continue a Loan of that type shall be suspended until the circumstancesgiving rise to such determination no longer exist; and

 

(ii)                                                          subject to Section 3.09 (*Substitution of Lender*), the Lender’s Loanshall be prepaid by the Company, together with accrued and unpaid interestthereon and all other amounts payable to the Lender by the Company under theLoan Documents, on or before such date as shall be mandated by such Requirementof Law.

 

(b)                                 If the Lender determines that anyRequirement of Law has made it unlawful, or that any Governmental Authority hasasserted that it is unlawful or restricts the authority of the Lender topurchase or sell, or to take deposits of, US Dollars in the London interbankmarket, or to determine or charge interest rates based upon LIBOR (and, in thereasonable opinion of the Lender, the designation of a different applicableLending Office would either not avoid such 

 

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unlawfulness or would be disadvantageous to the Lender), then, onnotice thereof by the Lender to the Company, the Lender shall be an Affected Lenderand by written notice to the Company:

 

(i)                                                             the obligation of the Lender to make orcontinue a Loan bearing interest rates based on LIBOR shall be suspended untilthe circumstances giving rise to such determination no longer exist; and

 

(ii)                                                          subject to Section 3.09 (*Substitution of Lender*), the Loan of theAffected Lender shall bear interest at the Alternate Base Rate plus the Applicable Margin then in effect until the circumstancesgiving rise to such determination no longer exist.

 

(c)                                  For purposes of this Section 3.02, anotice to the Company by the Lender shall be effective, if lawful, on the lastday of the Interest Period currently applicable to the Loan; in all other casessuch notice shall be effective on the date of receipt by the Company.

 

3.03.                        Inability to Determine Rates. If the Lender determines (which determination will be conclusive absentmanifest error) that (a) US Dollar deposits are not being offered to banksin the London interbank market for the applicable amount and Interest Period ofthe Loan, (b) adequate and reasonable means do not exist for determiningLIBOR applicable to such Interest Period, or (c) LIBOR for the Loan doesnot adequately and fairly reflect the cost to the Lender of making ormaintaining the Loan, the Lender will promptly notify the Company.  Thereafter, until the Lender revokes suchnotice, the Loan shall bear interest at the Alternate Base Rate plus the Applicable Margin then in effect.

 

3.04.                        Increased Costs and Reduction of Return.

 

(a)                                  If the Lender reasonably determines that,due to either (i) the introduction of, or any change in, or any change inthe interpretation or application of, any Requirement of Law or (ii) thecompliance by the Lender with any guideline, directive or request from anycentral bank or other Governmental Authority (whether or not having the forceof law), there shall be any increase in the cost to the Lender of agreeing tomake or making, funding or maintaining its Loan to the Company or to reduce anyamount receivable hereunder (in either case other than payment on account ofany Taxes referred to in Section 3.01 (*Taxes*)or any Excluded Taxes), then the Company shall be liable for, and shall fromtime to time, upon demand, promptly pay to the Lender additional amounts as aresufficient to compensate the Lender for such increased costs or reduced amountreceivable.

 

(b)                                 If the Lender reasonably determines that (i) theintroduction of any Capital Adequacy Regulation, (ii) any change in anyCapital Adequacy Regulation, (iii) any change in the interpretation oradministration of any Capital Adequacy Regulation by any central bank or otherGovernmental Authority charged with the interpretation or administrationthereof, or (iv) compliance by the Lender (or its Lending Office) with anyCapital Adequacy Regulation affects or would affect the amount of capitalrequired or expected to be maintained by the Lender or any corporationControlling the Lender and determines that the amount of such capital isincreased as a consequence of its Loan or obligations under this Agreement,then, upon demand of the Lender to the Company, the Company shall pay to theLender, from time to time as specified by the Lender, additional amountssufficient to compensate the Lender for such increase.

 

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3.05.                        Funding Losses.

 

(a)                                  The Company shall reimburse the Lenderand hold the Lender harmless from (in each case by prompt payment of anyrelevant amounts to the Lender) any loss, cost or expense that the Lender maysustain or incur, including any loss incurred in obtaining, liquidating orredeploying deposits bearing interest by reference to LIBOR from third parties(“Funding Losses”) as a consequence of any of the following events (eacha “Breakage Event”):

 

(i)                                                             the failure of the Company to make on atimely basis any scheduled payment of principal of the Loan;

 

(ii)                                                          the failure of the Company to borrow the Loan on the Closing Dateproposed in the Notice of Borrowing;

 

(iii)                                                       the failure of the Company to make anyvoluntary prepayment in accordance with any notice delivered under Section 2.04(*Voluntary Prepayments*) ormandatory prepayment in accordance with Section 2.05 (*Mandatory Prepayments*); or

 

(iv)                                                      the prepayment or repayment (includingpursuant to Section 2.04 (*VoluntaryPrepayments*), Section 2.05 (*MandatoryPrepayments)* or Section 2.06 (*Repaymentof the Loan*), but not including any mandatory prepayments pursuantto Section 2.05(b)) or other payment (including after accelerationthereof) of the Loan on a day that is not the last day of the relevant InterestPeriod therefor (including as a result of the replacement of the Lender with aSubstitute Lender pursuant to Section 3.09 (*Substitution of Lender*);

 

including in each case (x) any such loss orexpense arising from the liquidation or reemployment of funds obtained by theLender to maintain the Loan or from fees payable to terminate the deposits fromwhich such funds were obtained and (y) any customary and reasonableadministrative fees charged by the Lender in connection therewith.

 

(b)                                 The Funding Losses to the Lender shall bedeemed to include an amount determined by the Lender to be the excess, if any,of (i) the amount of interest that would have accrued on the principalamount of the Loan had such event not occurred, at an amount equal to LIBORfor the Interest Period during which such Breakage Event occurs, forthe period from the date of such Breakage Event to the end of the then currentInterest Period therefor, over (ii) the amount of interest that wouldaccrue on such principal amount for such period at the interest rate which theLender determines in good faith would bid were it to bid, at the beginning ofsuch period, for US Dollar deposits of a comparable amount and period fromother banks in the Eurodollar market.

 

3.06.                        Reserves on Loan.  The Companyshall pay to the Lender, as long as the Lender shall be required to maintainreserves with respect to liabilities or assets consisting of or includingEurocurrency funds or deposits (currently known as “Eurocurrency Liabilities”),additional interest on the unpaid principal amount of the Loan equal to theactual costs of such reserves allocated to the Loan by the Lender (asdetermined by the Lender in good faith, which determination shall beconclusive, absent manifest error), payable on each date on which interest ispayable on the Loan, provided that the Company shall have received atleast fifteen (15) days’ 

 

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prior written notice of such additional interest from the Lender.  If the Lender fails to give notice fifteen(15) days prior to the relevant Interest Payment Date, such additional interestshall be payable fifteen (15) days from receipt of such notice.

 

3.07.                        Certificates of the Lender.

 

(a)                                  Except as otherwise specified herein, theLender claiming reimbursement or compensation under this Article III shalldeliver to the Company a certificate setting forth in reasonable detail theamount payable to the Lender hereunder and the reasons for such claim and suchcertificate shall be conclusive and binding on the Company in the absence ofmanifest error.  The Company shallpromptly pay the amount shown as due on any such certificate to the Lender, butin no case later than fifteen (15) days after receipt thereof.

 

(b)                                 The Lender agrees to notify the Companyof any claim for reimbursement pursuant to Section 3.04 (*Increased Costs and Reduction of Return*)or 3.06 (*Reserves on Loan*) notlater than one hundred eighty (180) days after any officer of the Lender responsiblefor the administration of this Agreement receives actual knowledge of the eventgiving rise to such claim.  If the Lenderfails to give such notice, the Company shall only be required to reimburse orcompensate the Lender, retroactively, for claims pertaining to the period ofone hundred eighty (180) days immediately preceding the date the claim wasmade.  However, if the change in aRequirement of Law (including any Capital Adequacy Regulation) giving rise to suchincreased cost or reduction is retroactive, then the one hundred eighty(180)-day period referred to above will be extended to include the period ofretroactive effect thereof.

 

3.08.                        Change of Lending Office. The Lender agrees that, upon the occurrence of any event giving rise toan obligation of the Company under Section 3.01 (*Taxes*), Section 3.02 (*Illegality*), Section 3.04 (*Increased Costs and Reduction of Return*)or Section 3.06 (*Reserves on Loan*)with respect to the Lender, it will, if requested by the Company, usereasonable efforts (subject to overall policy considerations of the Lender) todesignate another Lending Office for the Loan affected by such event or takeother action; provided that the Lender and its Lending Office suffer noeconomic, legal or regulatory disadvantage, with the object of avoiding theconsequence of the event giving rise to the obligation under any suchSection.  Nothing in this Section shallaffect or postpone any of the Obligations of the Company or the rights of theLender provided in Section 3.01 (*Taxes*),Section 3.02 (*Illegality*), Section 3.04(*Increased Costs and Reduction of Return*)or Section 3.06 (*Reserves on Loan*).

 

3.09.                        Substitution of Lender.  Upon thereceipt by the Company from the Lender of a claim for compensation under Section 3.04(*Increased Costs and Reduction of Return*)or Section 3.06 (*Reserves on Loan*),or giving rise to the operation of Section 3.02 (*Illegality*), the Company may, at itsoption, (i) request the Lender to use its best efforts to seek aSubstitute Lender willing to assume the Lender’s Loan or (ii) replace theLender with a Substitute Lender or Substitute Lenders that shall succeed to therights and obligations of the Lender under this Agreement upon execution of anAssignment and Acceptance; provided, however, that the Lendershall not be replaced or removed hereunder until the Lender has been repaid infull all amounts owed to it pursuant to this Agreement and the other LoanDocuments (including Section 2.08 (*Computationof Interest and Fees*), Section 3.01 (*Taxes*), Section 3.04 (*IncreasedCosts and Reduction of*

 

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*Return*), Section 3.05 (*Funding Losses*) and Section 3.06 (*Reserves on Loan*)) unless any such amountis being contested by the Company in good faith.

 

3.10.                        Survival.  Theagreements and obligations of the Company in this Article III shallsurvive the payment of all the Obligations.

 

ARTICLEIVCONDITIONS PRECEDENT

 

4.01.                        Conditions to Closing Date. The obligation of the Initial Lender to make its Loan on the Closing Date is subject to the satisfaction (or waiverin writing by the Initial Lender in accordance with Section 9.01 (*Amendments and Waivers*)) of each of thefollowing conditions precedent:

 

(a)                                  Loan Agreement and Note. This Agreement,each other Loan Document and the Intercompany Revolving Facilities shall have been duly executed by both of theparties hereto and thereto, the Note dated on the Closing Date shall have beenduly executed by the Company, and the Initial Lender shall have received fromthe Company a counterpart of this Agreement and each other Loan Document andIntercompany Revolving Facility, the Initial Lender’s Note and all relateddocumentation each in form and substance satisfactory to the Initial Lender andsigned by the Company.

 

(b)                                 Organizational Documents; Resolutions; Incumbency. The Initial Lender shall have received copies of:

 

(i)                                                             the Organizational Documents of theCompany and Intercompany Lenders certified as of the Closing Date as true andcorrect and in full force and effect in their delivered form as of such date by(x) an appropriate Secretary or anAssistant Secretary ofthe Company or suchIntercompany Lender, as the case may be, as to effectiveness, and (y) in the case of the Company orIntercompany Lender organized under the laws of Mexico, a Mexican notary publicas to authenticity;

 

(ii)                                                          all applicable powers-of-attorney (*poderes*), designating the Personsauthorized to execute this Agreement, the other Loan Documents and theIntercompany Revolving Facilities on behalf of the Company and the IntercompanyLenders in each case (x) certified by a Mexican notary public (or a notarypublic in the jurisdiction under the laws of which such Person is organized), (y) certifiedas of the Closing Date by the Secretary or an Assistant Secretary of theCompany, or such Intercompany Lender, as the case may be, and (z) includingauthority for acts of administration and to subscribe, indorse and issuenegotiable instruments (*títulos de crédito*);and

 

(iii)                                                       a certificate of the Secretary or AssistantSecretary of the Company (x) certifying the names and true signatures ofthe Senior Officers of the Company authorized to execute and deliver thisAgreement, all other Loan Documents and the Intercompany Revolving Facilitiesto be delivered by the Company and the Intercompany Lenders hereunder and (y) attachingcopies of all documents evidencing all necessary corporate action (including any necessary resolutions of the Boardof Directors or of the shareholders of the Company or Intercompany Lender) and governmental approvals, if 

 

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any, with respectto the authorization for the execution, delivery and performance of each suchLoan Document and the transactions contemplated hereby and thereby, which certificatesshall state that the resolutions or other information referred to in suchcertificates have not been amended, modified, revoked or rescinded as of thedate of such certificates.

 

(c)                                  Authorizations. The Initial Lender shall have received evidence satisfactory to it thatall approvals, authorizations or consents of, or notices to, or filings orregistrations with, any Governmental Authority (including exchange controlapprovals) or third parties, if any, required in connection with the execution,delivery and performance by the Company of this Agreement or any other LoanDocument (includingwithout limitation, with respect to the Intercompany Trust Agreement and theIntercompany Revolving Facilities) have been obtained and are in full force and effect.  If no such approvals, authorizations,consents, notices or registrations are necessary, the Initial Lender shall havereceived a certificate executed by a Senior Officer of the Company so stating.

 

(d)                                 Process Agent. The Initial Lender shall have received (i) copies of irrevocablepowers of attorney for lawsuits and collections (*poder irrevocable para pleitos y cobranzas*) granted by theCompany, certified by a Mexican notary public, in form reasonably satisfactoryto the Initial Lender, irrevocably appointing each of the Process Agent and theAlternate Process Agent to act as such on behalf of the Company under thisAgreement and each of the other Loan Documents and (ii) an acceptanceletter duly executed and delivered by the Process Agent and the AlternateProcess Agent dated on or prior to the date hereof pursuant to which each agentirrevocably consents to and accepts its appointment as ProcessAgent or Alternate Process Agent for the Company under and for the term of thisAgreement and each of the other Loan Documents that requires such anappointment in connection with any Proceeding relating to this Agreement or theNote or the transactions contemplated under anyof the Loan Documents.

 

(e)                                  Legal Opinions. The Initial Lender shall have received (i) an opinion of Mijares,Angoita, Cortés y Fuentes, special Mexican counsel to the Company,substantially in the form of Exhibit D; (ii) an opinion ofMilbank, Tweed, Hadley & McCloy LLP, special New York counsel to theCompany, substantially in the form of Exhibit E-1; (iii) anopinion of Salvador Vargas Guajardo, General Counsel to the Company,substantially in the form of Exhibit E-2; (iv) a favorableopinion of White & Case S.C., special Mexican counsel to the InitialLender; and (v) a favorable opinion of CGSH, specialNew York counsel to the Initial Lender.

 

(f)                                    Payment of Fees. The Initial Lender shall have received evidence of payment of the feesand expenses then due and payable under each of the Advisor Fee Letters and under this Agreement or theother Loan Documents, including trustees’ and advisors’ fees and AttorneyCosts, plus such additional amounts of Attorney Costs as shall constitute itsreasonable estimate of Attorney Costs incurred or to be incurred through theclosing proceedings, and anyother fees required to be paid on or prior to the Closing Date.

 

(g)                                 Changes in Condition.

 

(i)                                                             The representations and warranties of theCompany contained in this Agreement or in any other Loan Document shall be trueand correct as of the Closing 

 

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Date, except tothe extent that such representations and warranties specifically refer to anearlier date, in which case they shall be true and correct as of such earlierdate.

 

(ii)                                                          The Company shall be in compliance withall of its covenants and agreements contained in the Loan Documents and the IntercompanyRevolving Facilities.

 

(iii)                                                       There shall not have occurred since thedate of the audited financial statements of the Company and its ConsolidatedSubsidiaries described in clause (o) below, a Material Adverse Effect,except as otherwise disclosed in the Company’s public filings with the USSecurities and Exchange Commission or the Comisión Nacional Bancaria y deValores prior to the date hereof and listed on Schedule 5.06(c) (*ExistingMaterial Adverse Effects*).

 

(iv)                                                      No Default or Event of Default shall haveoccurred and be continuing either prior to or after giving effect to thetransactions (including any transactions with respect to the Other RestructuredIndebtedness) contemplated on the Closing Date.

 

(v)                                                         There shall have occurred no circumstance and/or event of a financial,political or economic nature in Mexico or in the international financial,banking or capital markets that has a reasonable likelihood of having aMaterial Adverse Effect on the Company and its Subsidiaries.

 

(vi)                                                      No default shall have occurred and be continuing on any materialIndebtedness of the Company or any of its Subsidiaries (including the Bank ofAmerica Facility and the Bancomext-Gimsa Loan).

 

(vii)                                                   The Initial Lender shall have received acertificate signed by the chief financial officer and one additional SeniorOfficer of the Company, dated as of the Closing Date, to the effect that, bothbefore and after giving effect to the transactions contemplated by the Loan Documents and theIntercompany Revolving Facilities, each of the conditionsprecedent in clauses (i) through (vi) above are true and correct

 

(h)                                 Payment of Interest under Confirmation. All interest payable in respect of the Terminated Derivative Obligationpursuant to the Confirmation shall have been paid in US Dollars and in immediatelyavailable funds no later than 11:00 a.m. (New York City time) on theClosing Date.  For the avoidance ofdoubt, such interest shall have been payable at a rate equal to the sum ofLIBOR plus (i) 1.00% per annum, from and including the date ofConfirmation to, but excluding, July 21, 2009, (ii) 2.875% per annum,from and including July 21, 2009 to, but excluding, September 21,2009, (iii) 4.875% per annum, from and including September 21, 2009to, but excluding, 5:00 p.m. (New York time) on October 13, 2009, and(iv) 5.875% per annum, from and including 5:00 p.m. (New York time)on October 13, 2009 to, but excluding, the Closing Date.

 

(i)                                     Control Agreement. The Company shall have entered into the Control Agreement with theInitial Lender and the bank where the Temporary Loan Account for the InitialLender is located, on terms and conditions satisfactory to the Initial Lender.

 

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(j)                                     Intercompany Trust Agreement.

 

(i)                                                                                     The Intercompany Trust Agreement shallhave been duly executed by the parties thereto in form and substancesatisfactory to the Lender, and shall be in full force and effect and theCollateral Agent (or its counsel) shall have received from the Company acounterpart of such Intercompany Trust Agreement signed on behalf of suchparty.

 

(ii)                                                                                  The Collateral Agent shall have receivedsatisfactory evidence of notice and acknowledgment being delivered to theborrowers under the Intercompany Revolving Facilities regarding the transfer ofthe rights of the Intercompany Lenders (other than Subsidiaries in the GimsaDivision) to the Intercompany Trust Agreement.

 

(k)                                  Legal Matters. No Requirement of Law, shall in the reasonable judgment of the InitialLender, restrain, prevent, or impose materially adverse conditions upon the execution and delivery of,and performance under, the Loan Documents or the Intercompany RevolvingFacilities or the transactions contemplated hereby and under the otherLoan Documents andthe Intercompany Revolving Facilities andall corporate and other proceedings and all documents and other legal mattersin connection with the transactions contemplated hereby and under the LoanDocuments and theIntercompany Revolving Facilities.

 

(l)                                     Restructured or Refinanced Indebtedness. The Other Restructured Indebtedness shall have been executed anddelivered by the Company, and shall have been funded or settled by thecounterparties thereto.

 

(m)                               Delivery of Reporting IndebtednessDocuments.  The Company shall have provided the InitialLender with copies of all Contractual Obligations for all of the ReportingIndebtedness (suchContractual Obligations, the “Reporting Indebtedness Documentation”).

 

(n)                                 No Litigation. There shall be no pending or, to the best knowledge of the Company,threatened Proceeding (including a bankruptcy, *concurso*or other insolvency proceeding) with respect to this Agreement or the otherLoan Documents andthe Intercompany Revolving Facilities or the transactions contemplatedhereby or thereby, or that could reasonably be expected to have a MaterialAdverse Effect.

 

(o)                                 Delivery of Financial Statements. The Initial Lender shall have received (i) the audited financialstatements described in Section 6.01(a) (*Financial Statements and Other Information*) for the FiscalYear ending on December 31, 2008, provided that such auditedfinancial statements may contain the “going concern” qualification disclosed inthe financial statements contained in Item 18 of the Company’s annual report onForm 20-F filed with the US Securities and Exchange Commission on June 30,2009; and (ii) the unaudited financial statements described in Section 6.01(b) (*Financial Statements and Other Information*)for the Fiscal Quarters ending on March 31, 2009 and June 30, 2009 (or, with respect to GrumaCorp., on June 27, 2009).

 

(p)                                 Patriot Act. The Initial Lender shall have received(for itself and as requested by the Initial Lender) any documents orinformation reasonably required to obtain, verify and record information thatidentifies the Company and its Subsidiaries, which information may include (butshall not be limited to) the name and address of the Company and itsSubsidiaries and any 

 

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other information that will allow such the Initial Lender to identifythe Company and its Subsidiaries in accordance with the Patriot Act.

 

(q)                                 Delivery of Notice of Borrowing. The Initial Lender shall have received a Notice of Borrowing from theCompany signed by a Senior Officer of the Company.

 

(r)                                    Solvency.  The Company and eachMaterial Operating Subsidiary, after giving effect to the transactionscontemplated hereby and by the other Loan Documents and the IntercompanyRevolving Facilities, shall be Solvent and the Initial Lender shall havereceived a certificate from the chief financial officer of the Company to sucheffect.

 

(s)                                  Intercompany Revolving Facilities.  The Intercompany Revolving Facilities and theIntercompany Trust Agreement shall be in full force and effect and the Lenderand the Collateral Agent shall have copies of all definitive documentation (andany amendments thereto) and Contractual Obligations with respect to theIntercompany Revolving Facilities and the Intercompany Trust Agreement.

 

(t)                                    Other Documents. The Initial Lender shall have received such other certificates, powersof attorney, approvals, opinions, documents or materials as the Initial Lendermay reasonably request.

 

ARTICLEVREPRESENTATIONS AND WARRANTIES

 

The Company represents and warrants to the Lenderthat:

 

5.01.                        Corporate Existence and Power. The Company and each of its Subsidiaries:

 

(a)                                  is a corporation duly organized andvalidly existing under the laws of the jurisdiction of its organization and, tothe extent applicable under the laws of its jurisdiction of organization, is ingood standing;

 

(b)                                 is qualified to do business in everyjurisdiction where such qualification is required, except where the failure tobe qualified has not had and could not reasonably be expected to have aMaterial Adverse Effect;

 

(c)                                  has all requisite corporate power andauthority and all requisite governmental licenses, authorizations, consents andapprovals to (i) conduct its business as now conducted and as proposed tobe conducted and to own its Properties, except to the extent that the failureto obtain any such governmental license, authorization, consent or approval hasnot had and could not reasonably be expected to have a Material Adverse Effect,and (ii) execute, deliver and perform all of its obligations under each ofthe Loan Documents andthe Intercompany Revolving Facilities andeach other agreement or instrument contemplated thereby to which it is or willbe a party and receive the Loan hereunder; and

 

(d)                                 is in compliance with all Requirements ofLaw, except to the extent that the failure to comply therewith has not had andcould not reasonably be expected to have a Material Adverse Effect.

 

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5.02.                        Corporate Authorization; No Contravention. The execution and delivery of, and performance by the Company under,this Agreement and each other Loan Document to which it is a party have beenduly authorized by all necessary corporate and, if required, stockholder action and do not and will not:

 

(a)                                  contravene the terms of the Company’s orany of its Subsidiaries’ Organizational Documents; or

 

(b)                                 conflict or be inconsistent with orresult in any breach, violation or contravention of (alone or with notice orthe lapse of time or both), or the creation of any Lien under, or give rise to any right to accelerate or torequire the prepayment, repurchase or redemption of any obligation under orconstitute a default in respect of (i) any document evidencing any ContractualObligation to which the Company or any of its Subsidiaries is a party or (ii) anyRequirement of Law to which the Company or any of its Subsidiaries or theirrespective Property is subject.

 

5.03.                        No Additional Authorizations. No approval (including exchange control approval), consent, exemption,authorization, registration or other action by, or notice to, or filing with,any Governmental Authority or other third party is necessary or required inconnection with the execution, delivery or performance by, or enforcementagainst, the Company of this Agreement or any other Loan Document other than ashave been obtained pursuant to Section 4.01(c) (*Authorizations*).

 

5.04.                        Binding Effect.  ThisAgreement has been, and each other Loan Document, when delivered hereunder,will have been, duly executed and delivered by the Company.  This Agreement constitutes, and each otherLoan Document when so delivered will constitute, a legal, valid and bindingobligation of the Company, enforceable against the Company in accordance withits terms, except as enforceability may be limited by applicable bankruptcy,insolvency, *concurso mercantil*, *quiebra*, or similar laws affecting theenforcement of creditors’ rights generally or by equitable principles relatingto enforceability (regardless of whether enforcement thereof is sought in aProceeding at law or in equity).

 

5.05.                        Litigation.  Except asdisclosed in Schedule 5.05 (*PendingLitigation*), there are no Proceedings pending, or to the bestknowledge of the Company, threatened or contemplated, at law, in equity, inarbitration or before any Governmental Authority, by or against the Company orany of its Subsidiaries, which:

 

(a)                                  could reasonably be expected to affectthe legality, validity or enforceability of this Agreement or any other LoanDocument, or any of the transactions contemplated hereby or thereby; or

 

(b)                                 could reasonably be expected to have amaterial adverse effect on the ability of the Company to perform itsobligations under any Loan Document; or

 

(c)                                  that, in the aggregate, could reasonablybe expected to have a Material Adverse Effect

 

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5.06.                        Financial Information; No Material Adverse Effect; NoDefault; No Contingent Liabilities.

 

(a)                                  The Company’s audited consolidatedfinancial statements for the Fiscal Year ended December 31, 2008 (copiesof which have been furnished to the Lender) (i) are complete and correctin all material respects, (ii) have been prepared in accordance withMexican GAAP applied on a consistent basis and fairly present in accordancewith Mexican GAAP the financial condition of the Company and its ConsolidatedSubsidiaries as of such date and the results of their operations for the FiscalYear ended December 31, 2008, and (iii) have been audited andcertified by independent certified public accountants of internationalstanding.

 

(b)                                 The Company’s unaudited financialstatements for each of the Fiscal Quarters ended March 31, 2009 and June 30,2009 (copies of which have been furnished to the Lender) (i) are completeand correct in all material respects and (ii) have been prepared inaccordance with Mexican GAAP applied on a consistent basis and fairly presentin accordance with Mexican GAAP the financial condition of the Company and itsConsolidated Subsidiaries as of such date and the results of their operationsfor the period covered thereby, subject to the absence of footnotes and tonormal year-end audit adjustments.

 

(c)                                  Since the date of the most recent auditedfinancial statements, there has occurred no development, event or circumstancewhich has had or could reasonably be expected to have a Material AdverseEffect, except as otherwise disclosed in the Company’s public filings with theUS Securities and Exchange Commission or the Comisión Nacional Bancaria y deValores**and listed on Schedule5.06(c) *(Existing Material AdverseEffects)*.

 

(d)                                 As of the Closing Date, neither theCompany nor any of its Subsidiaries is in default under or with respect to anyContractual Obligation in any respect which has had or could reasonably beexpected to have a Material Adverse Effect, or that would, if such default hadoccurred after the Closing Date, create an Event of Default under Section 8.01(e) (*Cross-Default*).

 

(e)                                  Except as set forth on Schedule 5.06(e) (*Material Contingent Liabilities, Forward or Long-TermCommitments, Unrealized Losses*), none of the Company or itsConsolidated Subsidiaries has any material contingent liabilities, materialforward or long-term commitments or unrealized losses except as disclosed inthe financial statements described in clauses (a) or (b) above.

 

5.07.                        Pari Passu.  TheObligations constitute direct, unconditional and general obligations of theCompany and rank at least *pari passu*inall respects with all other unsecured and unsubordinated Indebtedness of theCompany, except such Indebtedness ranking senior by operation of law (and notby contract or agreement), which, in any event, is not material to the Company.

 

5.08.                        Taxes.  The Companyand each of its Subsidiaries have timely filed all federal (Mexican), state,provincial, local and foreign (non-Mexican) tax returns and reports required tobe filed, and have timely paid all taxes, assessments, fees and othergovernmental charges levied or imposed upon them or their Properties, includingrelated interest and penalties, otherwise due 

 

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and payable, except (a) those which are being contested in goodfaith by appropriate proceedings and for which adequate reserves have beenprovided in accordance with Mexican GAAP (or, in the case of Persons organizedunder laws of any other jurisdiction, the applicable GAAP therein) and(b) those tax returns or taxes for which such failure to timely file ortimely pay (as the case may be) could not reasonably be expected to have amaterial adverse effect on the business, financial condition or operations ofthe Company or such Subsidiary.

 

5.09.                        Environmental Matters.

 

(a)                                  The on-going operations of the Companyand each of its Subsidiaries are, and during the past five (5) years havebeen, in compliance in all material respects with all applicable EnvironmentalLaws except as set forth on Schedule 5.09 (*EnvironmentalMatters*) or except to the extent that the failure to comply therewithhas not had and could not reasonably be expected to have a Material AdverseEffect;

 

(b)                                 The Company and each of its Subsidiarieshave obtained all material environmental, health and safety permits necessaryor required for its operations, all such permits are in good standing, and theCompany and each of its Subsidiaries is and has been in compliance in allmaterial respects with all applicable terms and conditions of such permits,except as set forth on Schedule 5.09 (*EnvironmentalMatters*) or except to the extent that the failure to obtain, andmaintain in full force and effect, any such permit, or to the extent thatfailure to comply with the material terms thereof, has not had and could notreasonably be expected to have a Material Adverse Effect;

 

(c)                                  Neither the Company nor any of itsSubsidiaries is conducting, or to the best knowledge of the Company afterreasonable investigation, is required to conduct, any investigations orremediation of hazardous substances under any applicable Environmental Law atany property currently or formerly owned or operated by the Company or anySubsidiary (including soils, groundwater, surface water, buildings or otherstructures) except as set forth on Schedule 5.09 (*Environmental Matters*) or except as has not had and couldnot reasonably be expected to have a Material Adverse Effect; and

 

(d)                                 Neither the Company nor any of itsSubsidiaries has received any notice, demand, letter, claim or request forinformation indicating that it may be in violation of or subject to liabilityunder any Environmental Law, including any liability for any release of anyhazardous substance on any third party property, or is subject to any order,decree, injunction or other arrangement with any Governmental Authorityrelating to any Environmental Law, except as set forth on Schedule 5.09 (*Environmental Matters*) or except as hasnot had and could not reasonably be expected to have a Material Adverse Effect.

 

5.10.                        Compliance with Social Security Legislation, Etc. The Company and each of its Subsidiaries is in compliance with allRequirements of Law relating to social security legislation, including all rules andregulations of INFONAVIT, IMSS and SAR except to the extent that non­compliancetherewith has not had during the preceding five (5) calendar years, andcould not be reasonably expected to have, a Material Adverse Effect.

 

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5.11.                        Assets;Patents; Licenses; Insurance; Etc.

 

(a)                                  The Company and each of its MaterialSubsidiaries has good and marketable title to, or valid leasehold interests in,all Property that is reasonably necessary to, or used in the ordinary conductof, or is otherwise material to its business, and has no knowledge of anypending or contemplated condemnation proceeding, or Disposition in lieu of suchproceedings, with respect to such Property except as the foregoing may notreasonably be expected to have a Material Adverse Effect.

 

(b)                                 The Company and each of its MaterialSubsidiaries own or are licensed or otherwise have the right to use all of thematerial trademarks, trade names, copyrights, patents, contractual franchises,licenses, authorizations, other intellectual property and other rights that arereasonably necessary for the operation of their respective business, withoutconflict with the rights of any other Person except as the foregoing may notreasonably be expected to have a Material Adverse Effect.

 

(c)                                  None of the Property of the Company orany of its Subsidiaries is subject to any Liens except as permitted by Section 7.01(*Negative Pledge*).

 

(d)                                 Neither the Company nor any of itsSubsidiaries are party to any Sale Lease-Back Transactions except as set forthin Schedule 5.11(d) (*Existing SaleLease-Back Transactions*) (the “Existing Sale Lease-Back Transactions”).

 

(e)                                  The Company and each of its MaterialSubsidiaries have insurance with financially sound, responsible and reputableinsurance companies in such amounts and covering such risks as are usuallycarried by companies of good repute engaged in similar businesses and owningand/or operating properties similar to those owned and/or operated by theCompany or such Subsidiary, as the case may be, in the same general areas inwhich the Company or such Subsidiary owns and/or operates its properties, inaccordance with normal industry practice.

 

5.12.                        Subsidiaries.

 

(a)                                  A complete and correct list of allSubsidiaries of the Company, showing the correct name thereof, the jurisdictionof its incorporation and the percentage of shares of each class of capitalstock outstanding owned by the Company and each Subsidiary of the Company isset forth in Schedule 5.12(a) (*Subsidiaries*).  All such shares of capital stock are fullypaid and non-assessable and are owned by the Company or one or more of itsSubsidiaries free and clear of all Liens (other than the Liens created under any of the security documents in respect ofthe Secured Indebtedness).  There are nooutstanding options, warrants, rights of conversion or similar rights withrespect to such capital stock.

 

(b)                                 A list of all agreements, which by theirterms, expressly prohibit or limit the payment of dividends or otherdistributions to the Company by a Subsidiary or the making of loans to theCompany by a Subsidiary is set forth in Schedule 5.12(b) (*Restrictive Subsidiary Agreements*).

 

5.13.                        Commercial Acts.  TheObligations of the Company under the Loan Documents are commercial in natureand are subject to civil and commercial law with respect thereto.  The execution and performance of the LoanDocuments by the Company constitute private and commercial acts and notgovernmental or public acts.  The Companyand its Property is subject 

 

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to legal action in respect of its Obligations and is not entitled to immunityon the grounds of sovereignty or otherwise from the jurisdiction of any courtor from any legal process (whether through service or notice, attachment priorto judgment, attachment in aid of execution, execution or otherwise) inconnection therewith.  If the Company orany of its Property should become entitled to any such right of immunity, theCompany has effectively waived such right pursuant to Section 9.16 (*Waiver of Immunity*).

 

5.14.                        Proper Legal Form.  Each of theLoan Documents is (or if not yet executed, when executed and delivered, willbe) in proper legal form under any Requirements of Law for the enforcementthereof against the Company in accordance with their respective terms undersuch Requirements of Law.  To ensure thelegality, validity, enforceability or admissibility into evidence of the LoanDocuments, it is not necessary that any of such Loan Documents or any otherdocument be filed or recorded with any applicable Governmental Authority orthat any stamp or similar tax be paid on or in respect of any LoanDocument.  Any judgment against theCompany of a state or United States federal court in the State of New York,United States arising from, related to or in connection with any Loan Documentis capable of being enforced in the courts of Mexico; provided that inthe event any legal Proceedings are brought in the courts of Mexico, a Spanishtranslation of the documents, including this Agreement, prepared by acourt-approved translator would be required in such Proceedings.  It is not necessary in order for the Lenderto enforce any rights or remedies under the Loan Documents, or solely by reasonof the execution, delivery and performance by the Company of the LoanDocuments, that the Lender be licensed or qualified with any Mexican GovernmentalAuthority or be entitled to carry on business in Mexico.

 

5.15.                        Full Disclosure.  All writteninformation other than forward-looking information heretofore furnished by theCompany or its Subsidiaries, or their respective agents or representatives tothe Lender for purposes of or in connection with this Agreement or the otherLoan Documents or the Intercompany Revolving Facilities or thetransactions contemplated hereby or thereby, and all such information hereafter furnished by theCompany or its Subsidiaries, or their respective agents or representatives tothe Lender, is or will be true and accurate in all material respects on thedate as of which such information is stated or certified, and does not and willnot contain any material misstatement of fact or, taken as a whole, omit tostate any material fact necessary to make the statements therein, in light ofthe circumstances in which they were made, not misleading on the date on whichsuch information was furnished.  Allwritten forward-looking information heretofore furnished in writing to theLender has been prepared by the Company or its Subsidiaries in good faith basedupon assumptions the Company believes to be reasonable.  The Company has disclosed to the Lender inwriting any and all facts known to it that have or have had or it believescould reasonably be expected to have had or have a Material Adverse Effect.

 

5.16.                        Investment Company Act.  Both immediately before andafter giving effect to this Agreement and the transactions contemplated herein,neither the Company nor any of its Subsidiaries is, or will be requiredto register as, an “investment company” or an “affiliated person” or “promoter” of, or“principal underwriter” of or for, an “investment company”, as such terms aredefined in the InvestmentCompany Act of 1940, as amended.

 

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5.17.                        Margin Regulations.  Neither the Company nor any of its Subsidiaries isgenerally engaged in the business of purchasing or selling “margin stock” (assuch term is defined in Regulations T, U or X of the Board of Governors of theFederal Reserve System of the United States) or extending credit for thepurpose of purchasing or carrying margin stock. No part of the proceeds of the Loan will be used, whether directly orindirectly, and whether immediately, incidentally or ultimately, for anypurpose that entails a violation of, or that is inconsistent with, theprovisions of Regulation T, U or X of the Board of Governors of the USFederal Reserve System,or that entails a violation by the Company of any other regulations of theBoard of Governors of the US Federal Reserve System.

 

5.18.                        ERISA Compliance; Labor Matters.

 

(a)                                  Each Plan is in compliance in allmaterial respects with the applicable provisions of ERISA, the Code and otherfederal or state laws and the regulations and published interpretationsthereunder.  Each Plan that is intendedto qualify under Section 401(a) of the Code has received a favorabledetermination letter from the IRS or an application for such a letter iscurrently being processed by the IRS with respect thereto and, to the bestknowledge of the Company, nothing has occurred which would prevent, or causethe loss of, such qualification.  TheCompany and each ERISA Affiliate have made all required contributions to eachPlan subject to Section 412 of the Code, and no application for a fundingwaiver or an extension of any amortization period pursuant to Section 412of the Code has been made with respect to any Plan.

 

(b)                                 There are no pending or, to the bestknowledge of the Company, threatened claims, actions or lawsuits, or action byany Governmental Authority, with respect to any Plan that could be reasonablyexpected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciaryresponsibility rules with respect to any Plan that has resulted or couldbe reasonably expected to result in a Material Adverse Effect.

 

(c)                                  (i) No ERISA Event has occurred, orto the best knowledge of the Company, is reasonably expected to occur and nocondition or event currently exists or is reasonably expected to occur thatcould result in an ERISA Event; (ii) no Pension Plan has any UnfundedPension Liability; (iii) neither the Company nor any ERISA Affiliate hasincurred, or reasonably expects to incur, any liability under Title IV of ERISAwith respect to any Pension Plan (other than premiums due and not delinquentunder Section 4007 of ERISA; (iv) no event, condition or amendmenthas occurred, is planned or is reasonably expected to occur which could requirethe Company or any ERISA Affiliate to post security with respect to any Planand no such event, condition or amendment is planned or is reasonably expectedto occur; (v) no Pension Plan has failed to satisfy the minimum fundingstandard, whether or not waived, under Section 302 of ERISA or Section 412of the Code; (vi) the Company and each ERISA Affiliate has made allcontributions required to be made by such person to each Plan as and when suchcontributions have become due; (vii) neither the Company nor any ERISAAffiliate is required to file with the PBGC the information required under Section 4010of ERISA with respect to any Pension Plan; (viii) neither the Company norany ERISA Affiliate has incurred, or reasonably expects to incur, any liability(and no event has occurred which, with the giving of notice, under Section 4219of ERISA, would result in such liability) under Section 4201 or 4243 ofERISA with respect to a Multiemployer Plan; (ix) no Multiemployer Plan isin “endangered” or “critical” status within 

 

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the meaning of Section 305 of ERISA; (x) neither the Companynor any ERISA Affiliate has incurred any unsatisfied, or is reasonably expectto incur any, Withdrawal Liability to any Multiemployer Plan; (xi) neither theCompany nor any ERISA Affiliate has received any notification that anyMultiemployer Plan is in reorganization or will terminate or has beenterminated, and, to the best knowledge of the Company, no Multiemployer Plan isreasonably expected to be in reorganization or to be terminated; (xii) if theCompany and all ERISA Affiliates were to completely withdraw from allMultiemployer Plans, neither the Company nor any ERISA Affiliate would incur,directly or indirectly, any Withdrawal Liability; and (xiii) neither theCompany nor any ERISA Affiliate has engaged in a transaction that could besubject to Sections 4069 or 4212(c) of ERISA, except, in each case, aswould not be expected to have a material adverse effect on the business,financial condition or operations of the Company or such Subsidiary.

 

(d)                                 Each Foreign Pension Plan is incompliance in all material respects with all requirements of law applicablethereto and the respective requirements of the governing documents for suchplan. With respect to each Foreign Pension Plan, none of the Company or itsSubsidiaries or any of their respective directors, officers, employees oragents has engaged in a transaction which would subject the Company or anySubsidiary, directly or indirectly, to a tax or civil penalty which couldreasonably be expected to result in a Material Adverse Effect. With respect toeach Foreign Pension Plan, reserves have been established in the financial statementsfurnished to the Lender to the extent required by Section 6.01 (*Financial Statements and Other Information*)in respect of any unfunded liabilities in accordance with all Requirements ofLaw or, where required, in accordance with ordinary accounting practices in thejurisdiction in which such Foreign Pension Plan is maintained. The aggregateunfunded liabilities with respect to such Foreign Pension Plans could notreasonably be expected to result in a Material Adverse Effect; the presentvalue of the aggregate accumulated benefit liabilities of all such ForeignPension Plans (based on those assumptions used to fund each such ForeignPension Plan) did not, as of the last annual valuation date applicable thereto,exceed by more than US$20,000,000 the fair market value of the assets of allsuch Foreign Pension Plans.

 

(e)                                  None of the Company or any of itsSubsidiaries are a party to any labor dispute that could reasonably be expectedto have a Material Adverse Effect, and there are no strikes, walkouts, lockoutsor slowdowns against the Company or its Subsidiaries pending or, to the bestknowledge of the Company or its Subsidiaries, threatened, except as would notbe expected to have a material adverse effect on the business, financialcondition or operations of the Company or such Subsidiary.  There is no unfair labor practice complaintpending against any of the Company or its Subsidiaries or, to the bestknowledge of any of the Company or its Subsidiaries, threatened against any ofthem that could reasonably be expected to have a Material Adverse Effect.  There is no grievance or significantarbitration Proceeding arising out of or under any collective bargainingagreement pending against any of the Company or its Subsidiaries or, to thebest knowledge of any of the Company or its Subsidiaries, threatened againstany of them, in each case that could reasonably be expected to have a MaterialAdverse Effect.

 

5.19.                        Anti-Terrorism Laws.

 

(a)                                  Neither the Company nor any of itsAffiliates is in violation of any laws relating to terrorism or moneylaundering (“Anti-Terrorism Laws”), including Executive Order No.  

 

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13224 on Terrorist Financing, effective September 24, 2001 (the “ExecutiveOrder”), and the Uniting and Strengthening America by Providing AppropriateTools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law107-56 (the “Patriot Act”).

 

(b)                                 Neither the Company nor any of itsAffiliates acting or benefiting in any capacity in connection with the Loan isany of the following:

 

(i)                                                             a Person or entity that is listed in theannex to, or is otherwise subject to the provisions of, the Executive Order;

 

(ii)                                                          a Person or entity owned or Controlledby, or acting for or on behalf of, any Person or entity that is listed in theannex to, or is otherwise subject to the provisions of, the Executive Order;

 

(iii)                                                       a Person or entity with which the Lenderis prohibited from dealing or otherwise engaging in any transaction by anyAnti-Terrorism Law;

 

(iv)                                                      a Person or entity that commits,threatens or conspires to commit or supports “terrorism” as defined in theExecutive Order; or

 

(v)                                                         a Person or entity that is named as a“specially designated national and blocked person” on the most current listpublished by the US Treasury Department Office of Foreign Assets Control (“OFAC”)at its official website or any replacement website or other replacementofficial publication of such list.

 

(c)                                  Neither the Company nor any of theCompany’s Affiliates acting in any capacity in connection with the Loan (i) conductsany business or engages in making or receiving any contribution of funds, goodsor services to or for the benefit of any Person described in clause (b)(ii) above,(ii) deals in, or otherwise engages in any transaction relating to, anyproperty or interests in property blocked pursuant to the Executive Order or (iii) engagesin or conspires to engage in any transaction that evades or avoids, or has thepurpose of evading or avoiding, or attempts to violate, any of the prohibitionsset forth in any Anti-Terrorism Law.

 

5.20.                        Existing Indebtedness and Reporto Contracts.

 

(a)                                  Set forth on Schedule 5.20(a) (*Existing Indebtedness*) is a complete andaccurate list of all Existing Indebtedness that is (i) Working CapitalIndebtedness (the “Existing Working Capital Indebtedness”) and (ii) OtherIndebtedness (including all Guaranty Obligations) (the “Existing OtherIndebtedness”), in each case specifying the parties thereto, theoutstanding principal amounts thereof, any unborrowed amounts thereof and anyguarantors thereof.

 

(b)                                 Set forth on Schedule 5.20(b) (*Existing Intercompany Indebtedness*) is acomplete and accurate list of all Intercompany Indebtedness as of September 30,2009, specifying the parties thereto and outstanding principal amountsthereof.  All Existing IntercompanyIndebtedness (other than Intercompany Indebtedness owed to any Subsidiary inthe Gimsa Division by the Company and Guaranty Obligations by the Company thatare permitted by Section 7.16(e) or 7.16(h) (*Limitations on Incurrence of Additional Indebtedness*))has been issued or made pursuant to the Intercompany Revolving Facilities.

 

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(c)                                  Set forth on Schedule 5.20(c) (*Existing Hedging Agreements*) is a completeand accurate list of the parties to which the Company has any liability underHedging Agreements and the notional amounts and the Agreement Values thereof,as of the Business Day prior to the date hereof (or such earlier date asmutually agreed prior to the Closing Date between the Company and the InitialLender), and theCompany has provided reasonable documentation supporting the Agreement Valuesset forth in respect thereof.

 

(d)                                 Set forth on Schedule 5.20(d) (*Existing Reporto Contracts*) is a completeand accurate list of any outstanding Reporto Contract entered into with theCompany or any of its Subsidiaries, and the aggregate principal amount thereof,as of the Business Day prior to the date hereof.

 

(e)                                  Each of the Reporting IndebtednessDocumentation is a true and correct copy of such Contractual Obligation, and (i) theCompany has not entered into any Contractual Obligations in respect of theReporting Indebtedness other than the Reporting Indebtedness Documentation and (ii) theCompany has not paid any fees or made any other payment (and no fee or otherpayment is payable) in respect of the Reporting Indebtedness other than asexpressly provided in Reporting Indebtedness Documentation.

 

(f)                                    Since the date of the audited financialstatements of the Company and its Consolidated Subsidiaries described in Section 4.01(o) (*Delivery of Financial Statements*), neitherthe Company nor its Subsidiaries have restructured or Refinanced anyIndebtedness, or unwound any other Hedging Agreements to which they are aparty, in each case other than the Indebtedness identified in Section 4.01(l) (*Restructured or Refinanced Indebtedness*)or the Terminated Derivative Obligation.

 

5.21.                        Hedging Policy.  The HedgingPolicy hasbeen approved by the Board of Directors of the Company (or by a committee dulydelegated by such Board of Directors that is comprised of two or more membersthereof) and is currently in effect.

 

5.22.                        Collateral and Guaranties Relating to CompanyIndebtedness.

 

(a)                                  No Indebtedness of the Company other thanthe Secured Indebtedness is secured by a Lien on any Property of the Company orits Subsidiaries.

 

(b)                                 No Indebtedness of the Company isguaranteed by the Company’s Subsidiaries.

 

ARTICLEVIAFFIRMATIVE COVENANTS

 

The Company covenants and agrees that for so long as the Loan or anyother Obligation (other than unasserted contingent indemnification obligationsas to which no claim is known) remains unpaid:

 

6.01.                        Financial Statements and Other Information.

 

(a)                                  The Company will deliver to the Lender:

 

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(i)                                                             as soon as available and in any casewithin one hundred twenty (120) days after the end of each Fiscal Year, (x) consolidatedfinancial statements of the Company and its Consolidated Subsidiaries for suchFiscal Year, (y) consolidated financial statements for each MaterialOperating Subsidiary for such Fiscal Year and (z) unconsolidated financialstatements for the Company for such Fiscal Year (each such entity a “ReportingEntity”), in each case audited by independent accountants of recognizedinternational standing (without a “going concern” or like qualification orexception and without any qualification or exception as to the scope of suchaudit, provided that the financial statements of the Company and itsConsolidated Subsidiaries may contain an exception that the independentaccountants did not audit the financial statements of Grupo Financiero BanorteS.A.B. de C.V.), including an annual audited consolidated balance sheet and therelated consolidated statements of income, changes in equity and changes infinancial position prepared in accordance with Mexican GAAP (or US GAAP in the caseof Gruma Corp.) consistently applied (except as otherwise discussed in thenotes to such financial statements), which financial statements shall presentfairly, in accordance with Mexican GAAP (or US GAAP in the case of GrumaCorp.), the financial condition of the relevant Reporting Entity as at the endof the relevant Fiscal Year and the results of the operations of such ReportingEntity for such Fiscal Year; and

 

(ii)                                                          as soon as available and in any eventwithin one hundred twenty (120) days after the end of each Fiscal Year, anEnglish translation of the audited consolidated financial statements of theCompany and its Consolidated Subsidiaries for such Fiscal Year.

 

(b)                                 The Company will deliver to the Lender:

 

(i)                                                             as soon as available and in any case withinforty-five (45) days after the end of each of the first three (3) FiscalQuarters, (x) consolidated financial statements of the Company and itsConsolidated Subsidiaries for such Fiscal Quarter (y) consolidatedfinancial statements for each Material Operating Subsidiary for such FiscalQuarter and (z) unconsolidated financial statements for the Company forsuch Fiscal Quarter, in each case including therein an unaudited consolidatedbalance sheet and the related consolidated statements of income prepared inaccordance with Mexican GAAP (or US GAAP in the case of Gruma Corp.),consistently applied (except as otherwise discussed in the notes to suchstatements), which financial statements shall present fairly, in accordancewith Mexican GAAP (or US GAAP in the case of Gruma Corp.), the financialcondition of the relevant Reporting Entity as at the end of the relevant FiscalQuarter and the results of the operations of the Reporting Entity for suchFiscal Quarter and for the portion of the Fiscal Year then ended except for theabsence of complete footnotes and except for normal, recurring year-endaccruals and subject to normal year-end adjustments; and

 

(ii)                                                          as soon as available and in any eventwithin forty-five (45) days after the end of each of the first three (3) FiscalQuarters an English translation of the consolidated financial statements of theCompany and its Consolidated Subsidiaries for such Fiscal Quarter.

 

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(c)                                  The Company will deliver to the Lender:

 

(i)                                                             concurrently with the delivery of thefinancial statements pursuant to clauses (a)(i) and (b)(i) above, aQuarterly Compliance Certificate, substantially in the form of Exhibit B-1,signed by the chief financial officer and one additional Senior Officer of theCompany, which shall set forth in reasonable detail and in form and substancesatisfactory to the Lender, the calculations required to determine the LeverageRatio and the Interest Coverage Ratio as of the date of the financial statementsdelivered concurrently with such Quarterly Compliance Certificate;

 

(ii)                                                          concurrently with the delivery of thefinancial statements for a Fiscal Year pursuant to clause (a)(i) above, anAnnual Compliance Certificate, substantially in the form of Exhibit B-2, signed by the chief financial officer and oneadditional Senior Officer of the Company:

 

(A)                                                      setting forth in reasonable detail and ina form reasonably satisfactory to the Lender, the calculations required todetermine the amount of Excess Cash for such Fiscal Year;

 

(B)                                                        setting forth in reasonable detail the amount of Available Excess CashAmount used to finance Capital Expenditures pursuant toSection 7.14(c) (*Limitations onCapital Expenditures*) and other Restricted Investments pursuant toSection 7.02(b) (*Investments*);

 

(C)                                                        listing all of the Asset Sales in whichthe Company or its Subsidiaries have engaged during the prior twenty-one(21)-month period ending on the last day of such Fiscal Year, including theamounts of Net Cash Proceeds thereof, any amount of Net Cash Proceeds thereofthat was prepaid to the Other Prepayment Indebtedness and any amount of NetCash Proceeds thereof that was invested in long term productive assets used inthe Company’s Core Business as well as reasonable detail with respect to suchInvestment;

 

(D)                                                       listing all of the Casualty Events withrespect to the Company or its Subsidiaries during the prior eighteen (18)-monthperiod ending on the last day of such Fiscal Year, including the amounts of NetCash Proceeds thereof, any amount of Net Cash Proceeds thereof that was prepaidto the Other Prepayment Indebtedness and any amount of Net Cash Proceedsthereof that was used to Restore such affected Properties; and

 

(E)                                                         listing all of the Subsidiaries of theCompany and the Company’s and each Subsidiaries’ respective ownershippercentages therein;

 

(iii)                                                       concurrently with the delivery of thefinancial statements for a Fiscal Year pursuant to clause (a)(i) above, acertificate signed by the independent accountants that have audited thefinancial statements described in clause (a)(i) above, stating whetherduring the course of their examination of such financial statements theyobtained knowledge of any Default under Section 7.09 (*Interest Coverage Ratio*) or Section 7.10

 

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(*Leverage Ratio*) (which certificate may belimited to the extent required by accounting rules or guidelines); and

 

(iv)                                                      concurrently with the delivery of thefinancial statements for a Fiscal Year pursuant to clause (a)(i) above, awritten notice signed by the chief financial officer and one additional SeniorOfficer of the Company (a “CapEx Report”) indicating:

 

(A)                                                      the amount of Capital Expenditures made during such Fiscal Year;

 

(B)                                                        the portion of the Permitted CapitalExpenditures Amount to be carried forward from such Fiscal Year to the presentFiscal Year, if any; and

 

(C)                                                        the amount of Available Excess CashAmount used to finance Capital Expenditures in such Fiscal Year; pursuant toSection 7.14(c) (*Limitations onCapital Expenditures*).

 

(d)                                 To the extent not otherwise providedunder clause (a) or (b) above, the Company will furnish to theLender, promptly after they are publicly available, copies of all financialstatements and financial reports filed by the Company or any of itsSubsidiaries with (i) any Governmental Authority (if such statement orreports are required to be filed for the purpose of being publicly available)or (ii) with any Mexican or other securities exchange (including the BolsaMexicana de Valores, S.A.B. de C.V., the New York Stock Exchange and theLuxembourg Stock Exchange) and which are publicly available.

 

(e)                                  The Company will furnish to the Lender, within twenty (20) Business Daysafter the end of each month (or otherwise promptly if requested in writing bythe Lender), the Agreement Value of its Hedging Agreements as of the last dayof such month, together with reasonable supporting documentation of theAgreement Value of its Hedging Agreements for the end of such month and foreach date during such period on which there was a material change in theAgreement Value in respect thereof, including such documentation provided tothe Company by the counterparties to such Hedging Agreements after reasonablerequest.

 

(f)                                    The Company will deliver to the Lender,promptly after the furnishing thereof, copies of any statement, report,proposed amendment or request for waiver, or any other similar notice furnishedto any holder of Reporting Indebtedness and not otherwise required to befurnished to the Lender pursuant to this Section 6.01 or Section 6.02(*Notice of Other Events*).

 

(g)                                 The Company will furnish to the Lender,promptly upon request of the Lender, such additional information regarding thebusiness, financial or corporate affairs of the Company and its Subsidiaries asthe Lender may reasonably request including for know-your-customer andanti-money laundering rules and regulations, including the Patriot Act.

 

(h)                                 The Company will furnish to the Lenderupon request a complete copy of the annual report (Form 5500) of each Planof the Company or any ERISA Affiliate required to be filed with the InternalRevenue Service.

 

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(i)                                     The Company will furnish to the Lenderthe definitive documentation for any Permitted Refinancing Indebtedness incurredto Refinance any Reporting Indebtedness within five (5) Business Days ofthe execution thereof.

 

(j)                                     The Company will furnish to the Lender as soon as available and in anycase within five (5) Business Days after the end of the preceding month, alisting of the Intercompany Indebtedness, specifying the parties thereto andoutstanding principal amounts thereof, current as of the last day of theimmediately preceding month.

 

(k)                                  The Company will furnish to the Lender as soon as available and in anycase within five (5) Business Days after the end of the preceding month,the listing of the Reporto Contracts, specifying the parties thereto andoutstanding principal amounts thereof, current as of the last day of theimmediately preceding month.

 

6.02.                        Notice of Other Events.  The Companywill furnish to the Lender, no later than three (3) Business Days afterthe Company obtains knowledge thereof:

 

(a)                                  notice of any Default or Event ofDefault, signed by a Senior Officer of the Company, describing such Default orEvent of Default and the steps that the Company proposes to take in connectiontherewith;

 

(b)                                 notice of any litigation, claim, actionor Proceeding pending or threatened in writing before any GovernmentalAuthority (i) against the Company or any of its Subsidiaries, in whichthere is a probability of success by the plaintiff on the merits and which, ifdetermined adversely to the Company or such Subsidiary could be reasonablyexpected to have a Material Adverse Effect, (ii) which could reasonably beexpected to result in liability of the Company and its Subsidiaries in anaggregate amount exceeding US$20,000,000 (or the US DollarEquivalent thereof)or (iii) relating to this Agreement or any ofthe other Loan Documents or the Intercompany Revolving Facilities or the transactionscontemplated hereby or thereby;

 

(c)                                  notice of the modification of anyconsent, license, approval or authorization referred to inSection 4.01(c) (*Authorizations*);

 

(d)                                 notice of the occurrence of any ERISAEvent that, alone or together with any other ERISA Events that have occurred,could reasonably be expected to result in liability of the Company and itsSubsidiaries in an aggregate amount exceeding US$5,000,000 (or the US Dollar Equivalentthereof);

 

(e)                                  notice that an application has been madeto the Secretary of the Treasury for a waiver or modification of the minimumfunding standard (including any required installment payments) or an extensionof any amortization period under Section 412 of the Code with respect to aPension Plan;

 

(f)                                    notice that a material contributionrequired to be made to a Pension Plan by the Company or any ERISA Affiliate hasnot been timely made;

 

(g)                                 notice that a Pension Plan has failed tomeet minimum funding standards to a level sufficient to give rise to a lienunder ERISA or the Code;

 

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(h)                                 notice that a proceeding has beeninstituted pursuant to Section 515 of ERISA to collect a materialdelinquent contribution to a Multiemployer Plan;

 

(i)                                     notice that the Company or any ERISAAffiliate is required to file with the PBGC the information required under Section 4010with respect to any Pension Plan; and

 

(j)                                     notice of any other event or developmentof which the Company obtains knowledge that has had or could reasonably beexpected to have a Material Adverse Effect.

 

6.03.                        Maintenance of Existence; Conduct of Business.

 

(a)                                  The Company will, and will cause each ofits Subsidiaries to: (i) maintain in effect its corporate existence andall registrations necessary therefor; (ii) take all necessary actions tomaintain all rights, privileges, titles to property, franchises and the like,necessary or desirable in the normal conduct of its business (as now conductedand as proposed to be conducted), activities or operations; and (iii) maintainand preserve all of its Property and keep such Property in good working orderor condition; provided, however, that this covenant shall notprohibit any transaction by the Company or any of its Subsidiaries otherwisepermitted under Section 7.03 (*Mergers,Consolidations, Sales and Leases*), nor shall it require anySubsidiary (other than a Material Subsidiary) to maintain any such right,privilege, title to property or franchise or the Company to preserve thecorporate existence of any Subsidiary (other than a Material Subsidiary) if theCompany shall determine in good faith that the maintenance or preservationthereof is no longer desirable in the conduct of the business of the Company orits Subsidiaries and that the loss thereof could not reasonably be expected tohave a Material Adverse Effect.

 

(b)                                 The Company will, and will cause each ofits Material Subsidiaries to, continue to engage only in the Company’s CoreBusiness.

 

6.04.                        Insurance.  The Companywill, and will cause each of its Subsidiaries to, maintain, and pay allpremiums with respect to, insurance with financially sound, responsible andreputable insurance companies in such amounts and covering such risks as areusually carried by companies of good repute engaged in similar businesses andowning and/or operating properties similar to those owned and/or operated bythe Company or such Subsidiary, as the case may be, in the same general areasin which the Company or such Subsidiary owns and/or operates its properties, inaccordance with normal industry practice; provided that the Company andits Subsidiaries shall not be required to maintain such insurance for damaged, obsolete or worn-out equipment orother Property that is no longer used in or useful to the business or ifthe failure to maintain such insurance could not reasonably be expected to havea Material Adverse Effect.

 

6.05.                        Maintenance of Governmental Approvals. The Company will, and will cause each of its Material Subsidiaries to,maintain in full force and effect all governmental approvals (including anyexchange control approvals), consents, licenses and authorizations which may benecessary or appropriate under any Requirement of Law for the conduct of itsbusiness (except where the failure to maintain any such approval, consent,license or authorization could not reasonably be expected to have a MaterialAdverse Effect) or for the performance of any of the 

 

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Loan Documents or the Intercompany Revolving Facilities and for the validity orenforceability hereof.  The Company will,and, if applicable, will cause each of its Subsidiaries to, file allapplications necessary for, and shall use its reasonable best efforts toobtain, any additional authorization as soon as possible after determinationthat such authorization or approval is required for the Company or Subsidiary,as applicable, to perform its obligations under this Agreement or any of theother Loan Documents orthe Intercompany Revolving Facilities.

 

6.06.                        Use of Proceeds.  The Companywill use the proceeds of the Loan to repay the Terminated Derivative Obligationon the Closing Date.

 

6.07.                        Payment of Obligations.  The Companywill, and will cause each of its Subsidiaries to, pay all taxes, assessmentsand other governmental charges imposed upon it or any of its Property inrespect of any of its franchises, businesses, income or profits before anypenalty or interest accrues thereon, and pay promptly all Indebtedness andother obligations or claims (including claims for labor, services, materialsand supplies) for sums that have become due and payable in accordance withtheir terms and that by law have or might become a Lien upon its Property, except(a) if the failure to make such payment has not had and would notreasonably be expected to have a Material Adverse Effect or (b) if suchcharge or claim is being contested in good faith by appropriate provisionpromptly initiated and diligently conducted and if such reserves or otherappropriate provision, if any, as shall be required by Mexican GAAP (or, in thecase of Persons organized under laws of any other jurisdiction, the applicableGAAP therein) shall have been made therefor.

 

6.08.                        Ranking; Priority.  The Companywill, and will cause each of its Subsidiaries to, promptly take all actions asmay be necessary to ensure that its obligations under the Loan Documents willat all times constitute direct, unconditional and general obligations thereofranking at least *pari passu* inall respects with all other future and present unsecured and unsubordinatedIndebtedness of the Company, except such Indebtedness ranking senior byoperation of law (and not by contract or agreement).

 

6.09.                        Compliance with Laws.

 

(a)                                  The Company will, and will cause each ofits Subsidiaries to, comply in all respects with all applicable Requirements ofLaw, including all applicable Environmental Laws and all Requirements of Lawrelating to social security and ERISA, including INFONAVIT, IMSS and SAR,except (i) where the necessity of compliance therewith is contested ingood faith by appropriate proceedings promptly initiated and diligentlyconducted and if such reserves or other appropriate provision, if any, as shallbe required by Mexican GAAP (or, in the case of Persons organized under laws ofany other jurisdiction, the applicable GAAP therein) shall have been madetherefor or (ii) where any non-compliance could not reasonably be expectedto have a Material Adverse Effect.

 

(b)                                 Notwithstanding the foregoing, the Company will, and will cause each ofits Subsidiaries to, comply in all respects with Requirements of Law relatingto or arising from maintaining the registration of securities with the MexicanRegistro Nacional de Valores (or any substitute registry) and listing ofsecurities in the Bolsa Mexicana de Valores, S.A.B. de C.V. (or any substitutesecurities exchange), including filing all statements and reports (financial or

 

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otherwise) required from time to time underapplicable laws and regulations in Mexico; provided, however, that if atany time securities issued by the Company cease to be so registered or listedfor any reason, then the Company shall furnish to the Lender (on anon-confidential basis) all such statements and reports (financial orotherwise) that the Company would have been required to file or disclose fromtime to time under applicable laws and regulations in Mexico, had suchsecurities continued to be so registered or listed.

 

6.10.                        Maintenance of Books and Records.

 

(a)                                  The Company will, and will cause each ofits Mexican Subsidiaries to, maintain books, accounts and other records inaccordance with Mexican GAAP, and the Company will cause its Subsidiariesorganized under laws of any other jurisdiction to maintain their books andrecords in accordance either with the GAAP of the applicable jurisdiction orMexican GAAP.

 

(b)                                 The Company will, and will cause each ofits Material Subsidiaries to, permit representatives of the Lender or itsdesignee to visit and inspect any of their respective properties and to examinetheir respective corporate, financial and operating books and records, all atsuch reasonable times during normal business hours and as often as may bereasonably desired upon reasonable advance notice to the Company or suchSubsidiary, and one (1) such visit per year shall be at the expense of theCompany; provided, however, that when a Default or Event ofDefault exists the Lender or its designee may do any of the foregoing at anytime during normal business hours and without advance notice; and providedfurther that when an Event of Default exists, all of the foregoing shallbe at the expense of the Company.

 

6.11.                        Intercompany Indebtedness.

 

(a)                                  The Company will and will cause itsSubsidiaries to cause all Intercompany Indebtedness (other than IntercompanyIndebtedness owed to any Subsidiary in the Gimsa Division by the Company andGuaranty Obligations by the Company that are permitted bySection 7.16(e) or 7.16(h) (*Limitationson Incurrence of Additional Indebtedness*)) to be subordinated to theLoan pursuant to the Intercompany Subordination Agreement and the IntercompanyTrust Agreement andto be evidenced by and issued pursuant to the Intercompany RevolvingFacilities.  Prior to the issuance of anyIntercompany Indebtedness by any Subsidiary that is not an Intercompany Lender,such Subsidiary shall (i) provide to the Lender certified copies of theOrganizational Documents of such Subsidiary as are in full force and effect,and such applicable corporate documentation evidencing the authority of suchSubsidiary (and the signatories of such Subsidiary, as applicable) to enterinto and perform (x) the Intercompany Revolving Facility and (y) inthe case of any Subsidiary other than Subsidiaries in the Gimsa Division, theIntercompany Trust Agreement and the Intercompany Subordination Agreement and(ii) become a party to (x) an Intercompany Revolving Facility and(y) in the case of any Subsidiary other than Subsidiaries in the GimsaDivision, the Intercompany Trust Agreement and the Intercompany SubordinationAgreement.  The Company will treat theObligations as senior in payment to any obligations owed to any Subsidiary thatis part of the Gimsa Division by the Company in accordance withSection 7.19(c) (*IntercompanyIndebtedness*) and will not take any action that would result in theObligations not being treated as senior in payment to any obligations owed toany Subsidiary that is part of the Gimsa Division by the Company in accordancewith Section 7.19(c) (*Intercompany Indebtedness*).

 

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(b)                                 During the pendency of any proceedingfiled by or against the Company seeking relief as debtor, or seeking toadjudicate the Company as bankrupt or insolvent, or seeking reorganization,arrangement, adjustment or composition of the Company or its debts under anylaw relating to bankruptcy, insolvency, reorganization, *concurso mercantil*,*quiebra*, or relief of debtors, or seekingappointment of a receiver, trustee, assignee, custodian, liquidator or *visitador*, *conciliador* or *sindico*or any other similar official for the Company or for any substantial part ofits property, the Company will cause each Subsidiary to vote any claims thatsuch Subsidiary might have based on Intercompany Indebtedness in the samemanner as the majority of the third party creditors of the Company.

 

6.12.                        Further Assurances.  The Companywill, and will cause each of its Subsidiaries to, at the Company’s own cost andexpense, execute and deliver to the Lender all such other documents,instruments and agreements and do all such other acts and things as may bereasonably required in the opinion of the Lender or its counsel, to enable the Lenderto exercise and enforce its rights under, and to enable the Lender and theCompany to carry out the intent of this Agreement or the other Loan Documentsincluding in each case (i) making payments of fees and other charges and (ii) publishingor otherwise delivering notice to third parties.

 

ARTICLEVIINEGATIVE COVENANTS

 

The Company covenants and agrees that for so long as the Loan or anyother Obligation (other than unasserted contingent indemnification obligationsas to which no claim is known) remains unpaid:

 

7.01.                        Negative Pledge.  The Companywill not, and will not cause or permit any of its Subsidiaries (other than anySubsidiary that is part of the Venezuelan Division) to, directly or indirectly,create, incur, assume or suffer to exist any Lien upon or with respect to anyof its present or future Property, except the following Liens (each a “PermittedLien”):

 

(a)                                  any Lien existing to secure the SecuredIndebtedness (including any Lien created by an amendment thereto in connectionwith the incurrence of Permitted Refinancing Indebtedness in respect of theMandatory Prepayment Indebtedness);

 

(b)                                 the Liens in favor of the Initial Lender,the Other Minor Derivative Counterparties or the Major DerivativeCounterparties on such Person’s Temporary Accounts; provided, however,that such Liens shall be terminated immediately upon payment of the InitialLender’s Terminated Derivative Obligation in accordance with Section 2.03(c) (*Procedure for Making Loan*) or such OtherMinor Derivative Counterparty’s or Major Derivative Counterparty’s (or itsAffiliate’s) “Terminated Derivative Obligation” (as such term is used in theOther Minor Derivative Counterparty Loans and the Major Derivative CounterpartyLoan) in accordance with the Other Minor Derivative Counterparty Loans and theMajor Derivate Counterparty Loan;

 

(c)                                  any Lien on any Property (or, in the caseof a line of credit secured by inventory or accounts receivable, class ofProperty) existing on the date hereof and set forth in Schedule 7.01 (*Existing Liens*); provided that suchLiens shall secure only those obligations which they secure on the date hereof;

 

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(d)                                 any Lien on any asset securing all or anypart of the purchase price of property or assets (excluding inventories)acquired or any portion of the cost of construction, development, alteration orimprovement of any property, facility or asset or Indebtedness incurred orassumed solely for the purpose of financing all or any part of the cost ofacquiring or constructing, developing, altering or improving such property,facility or asset; provided that (i) such Indebtedness is otherwisepermitted by Section 7.16 (*Limitationson Incurrence of Additional Indebtedness*), (ii) suchIndebtedness does not exceed the lesser of the cost and the fair market valueof such property, facility or asset, and (iii) such Lien attaches solelyto such property, facility or asset during the period that such property,facility or asset is being constructed, developed, altered or improved orconcurrently with or within one hundred twenty (120) days after theacquisition, construction, development, alteration or improvement thereof;

 

(e)                                  Liens of a Subsidiary existing prior tothe time such Subsidiary became a Subsidiary of the Company which (i) donot secure Indebtedness exceeding the aggregate principal amount ofIndebtedness subject to such Lien prior to the time such Subsidiary became aSubsidiary of the Company, (ii) do not attach to any Property other thanthe Property attached pursuant to such Lien prior to the time such Subsidiarybecame a Subsidiary of the Company, and (iii) were not created incontemplation of such Subsidiary becoming a Subsidiary of the Company;

 

(f)                                    any Lien on any Property existing thereonat the time of the acquisition of such Property and not created in connectionwith or in contemplation of such acquisition;

 

(g)                                 any Lien on any Property (or, in the caseof a line of credit secured by inventory or accounts receivable, class ofProperty) securing an extension, renewal, refunding or replacement ofIndebtedness or a line of credit secured by a Lien referred to in clauses (c),(d), (e) or (f) above or this clause (g); provided that (A) theprior Lien was otherwise permitted pursuant to this Agreement at the time ofsuch extension, renewal, refunding or replacement; (B) such new Lien islimited to the Property (or, in the case of a line of credit secured byinventory or accounts receivable, class of Property) which was subject to theprior Lien immediately before such extension, renewal, refunding orreplacement; and (C) the principal amount of Indebtedness or the amount ofthe line of credit secured by the prior Lien is not increased immediatelybefore or in contemplation of or in connection with such extension, renewal,refunding or replacement;

 

(h)                                 any Lien securing taxes, assessments andother governmental charges, the payment of which is not yet due or the paymentof which is being contested in good faith by appropriate proceedings promptlyinitiated and diligently conducted and for which such reserves or otherappropriate provision, if any, as shall be required by Mexican GAAP or, in thecase of Subsidiaries organized under laws of any other jurisdiction, theapplicable GAAP therein, shall have been made;

 

(i)                                     Liens incurred or deposits made in theOrdinary Course of Business in connection with workers’ compensation,unemployment insurance, other types of social security and any Liens imposed byERISA;

 

(j)                                     statutory Liens of landlords and Liens ofcarriers, warehousemen, mechanics, materialmen, repairmen or the like arisingin the Ordinary Course of Business for sums not yet 

 

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due or the payment of which is being contested in good faith byappropriate proceedings promptly initiated and diligently conducted and forwhich such reserves or other appropriate provision, if any, as shall berequired by Mexican GAAP or, in the case of Subsidiaries organized under lawsof any other jurisdiction, the applicable GAAP therein, shall have been made;

 

(k)                                  any Lien created by attachment orjudgment (provided that such attachment or judgment does not constitutean Event of Default), unless the judgment it secures shall not, within sixty(60) days after the entry thereof, have been discharged or execution thereofstayed pending appeal;

 

(l)                                     any Lien on cash, Cash EquivalentInvestments or in the form of a letter of credit, in each case created inconnection with, and posted or granted as required by, a Hedging Agreemententered into in accordance with Section 7.18 (*Limitations on Hedging*) in an amount not in excess of US$35,000,000 (or theUS Dollar Equivalent thereof) in the aggregate at any one time; and

 

(m)                               Liens created to secure Permitted NewIndebtedness not in excess of US$250,000,000 (or the US Dollar Equivalentthereof) in the aggregate consisting of:

 

(i)                                                             Liens on real or personal property tosecure Permitted New Capital Obligations consisting of Capital LeaseObligations not in excess of US$50,000,000 (or the US Dollar Equivalentthereof); provided that any Lien on real or personal property to securea Permitted New Capital Obligation consisting of a Capital Lease Obligationshall be on the real or personal property leased pursuant to such Capital LeaseObligation; and

 

(ii)                                                                                  Liens on inventories or accountsreceivable created to secure Permitted New Working Capital Indebtedness, when taken together withLiens pursuant to clause (l)(i) of this Section 7.01, not in excess of US$250,000,000 (or the USDollar Equivalent thereof), subject to the restrictions on such Indebtedness inSection 7.16(g) (*Limitations onIncurrence of Additional Indebtedness*).

 

7.02.                        Investments.  The Companywill not, and will not cause or permit any of its Subsidiaries (other thanSubsidiaries that are part of the Venezuelan Division) to make, maintain orsuffer to exist any Investment, except the following:

 

(a)                                  the Company and its Subsidiaries may make(or, in the case of clause (i) below, maintain) at any time:

 

(i)                                                             Any Investment existing on the datehereof (A) as set forth on Schedule 7.02 (*ExistingInvestments*) if in excess of US$1,000,000 (or the US DollarEquivalent thereof) and (B) if less than such amount, included in thefinancial statements of the Company and/or its Subsidiaries prior to the datehereof;

 

(ii)                                                          Cash Equivalent Investments;

 

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(iii)                                                       Capital Expenditures not to exceed(A) the Permitted Capital Expenditures Amount and (B) any portion ofthe Permitted Capital Expenditures Amount carried over in accordance withSection 7.14(b) (*Limitations onCapital Expenditures*);

 

(iv)                                                      Investments consisting of extensions ofcredit of less than sixty (60) days in the nature of accounts receivable ornotes receivable arising from the sale or lease of goods or services in theOrdinary Course of Business;

 

(v)                                                         Subject to Section 7.12(b) (*FundamentalChanges, Limitations on Asset Sales, Asset Exchanges and Acquisitions*),and as long as no Default or Event of Default has occurred and is continuing,or will occur as a result of such Investment,Investments in the Core Business (other than Investments inthe Venezuelan Division) madefrom any Net Cash Proceeds of a Permitted Company Equity Issuance that isconsummated in accordance with Section 7.22(b) (*Equity Issuances*) that are not required tobe applied to the mandatory prepayment of Mandatory Prepayment Indebtedness;

 

(vi)                                                      Subject to Section 7.12(b) (*FundamentalChanges, Limitations on Asset Sales, Asset Exchanges and Acquisitions*),Investments in the long-term productive assetsused in the Core Business (other than Investments in the Venezuelan Division) made from 50% of the Net Cash Proceeds of anAsset Sale during the relevant Reinvestment Period for such Asset Sale; providedthat (x) no Default or Event of Default has occurred and is continuing, orwill occur as a result of such Investment, (y) a Reinvestment Certificatehas been delivered within the applicable Required Payment Period for such AssetSale and (z) the Company has made any mandatory prepayments requiredpursuant to Section 2.05(a) (*MandatoryPrepayments*);

 

(vii)                                                   Investments to Restore Property affectedby a Casualty Event made from the Net Cash Proceeds of such Casualty Event andmade during the relevant Reinvestment Period for such Casualty Event; providedthat (w) no Default or Event of Default has occurred and is continuing, orwill occur as a result of such Investment, (x) the Company has (i) filedan insurance claim in respect of such Casualty Event within five (5) BusinessDays thereof and (ii) delivered a Casualty Certificate within ten (10) BusinessDays following the filing of such claim, (y) the Company has made any mandatoryprepayments required pursuant to Section 2.05(b) (*Mandatory Prepayments*) and (z) theaggregate value of Investments in respect of any Casualty Event do not exceed (i) US$10,000,000(or the US Dollar Equivalent thereof) unless the written consent of the holdersof more than 50% of the then aggregate outstanding principal amount of theMajor Derivative Counterparty Loan has been obtained or (ii) US$55,000,000(or the US Dollar Equivalent thereof) in any event;

 

(viii)                                                Hedging Agreements permitted by and entered into in accordance withSection 7.16(f) (*Limitations onIncurrence of Additional Indebtedness*) and Section 7.18 (*Limitations on Hedging*);

 

(ix)                                                        Investments in Intercompany Indebtedness permitted by and made inaccordance with Sections 7.16(e), 7.16(h) or 7.16(j) (*Limitations on Incurrence of Additional Indebtedness*);and

 

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(x)                                                           Investments in Subsidiaries, other thanSubsidiaries in the Venezuelan Division, consisting of (x) IntercompanyIndebtedness Capitalization made prior to January 1, 2010 in an aggregateamount not to exceed an amount equal to the sum of (A) the amount ofExisting Intercompany Indebtedness set forth on Schedule 5.20(b) (*Existing Intercompany Indebtedness* and(B) US$30,000,000 (or the US Dollar Equivalent thereof) and(y) Intercompany Indebtedness Capitalization in an aggregate amount not toexceed US$30,000,000 (or the US Dollar Equivalent thereof) per annumthereafter; and

 

(b)                                 as long as no Default or Event of Default has occurred and is continuing,or will occur as a result of such Investment, in any Fiscal Year, if suchFiscal Year follows an Excess Cash Year, the Company and its Subsidiaries maymake, solely from the Available Excess Cash Amount for such Fiscal Year, RestrictedInvestments (other than Investments in the Venezuelan Division, which shall bedeemed excluded from this Clause (b)) in an amount not to exceed in theaggregate for the Company and its Subsidiaries the Permitted New InvestmentAmount

 

provided, however, that notwithstanding the foregoing clauses any of(a) and (b), the Company and its Subsidiaries (other than Subsidiariesthat are part of the Venezuelan Division) shall not make any Investments in theVenezuelan Division.

 

7.03.                        Mergers, Consolidations, Sales and Leases. The Company will not, and will not permit or cause any of its MaterialSubsidiaries (other than any Subsidiary that is part of the VenezuelanDivision) to (x) dissolve or liquidate, (y) merge, amalgamate orconsolidate with or into, or (z) convey, transfer or lease all orsubstantially all of its Property (other than Property of any Subsidiary thatis part of the Venezuelan Division) (whether now owned or hereinafter acquired)to or in favor of any Person (in each case, whether in one transaction or aseries of transactions), unless (i) the Minor Derivative Counterpartiesholding more than 50% of the then aggregate outstanding principal amount of theMinor Derivative Counterparty Loans consent to any such dissolution,liquidation, merger, amalgamation, consolidation, conveyance, transfer or leaseand (ii) immediately after giving effect to any dissolution, liquidation,merger, amalgamation, consolidation, conveyance, transfer or lease:

 

(a)                                  no Default or Event of Default hasoccurred and is continuing; and

 

(b)                                 in the case of a merger, amalgamation,consolidation, or conveyance, transfer or lease of substantially all of theCompany’s Property, any corporation formed by any such merger or consolidationwith the Company or the Person which acquires by conveyance or transfer, orwhich leases, all or substantially all of the Company’s Property shallexpressly assume in writing the due and punctual payment of the principal of,and interest on all Obligations, according to their terms, and the due andpunctual performance of all of the covenants and obligations of the Companyunder this Agreement by an instrument in form and substance reasonablysatisfactory to the Lender and shall provide an opinion of counsel acceptableto the Lender, obtained at the Company’s expense, on which the Lender mayconclusively rely;

 

provided that the consent of the Minor DerivativeCounterparties shall not be required for any merger, consolidation, conveyance,transfer or lease in which a Material Subsidiary (other than a MaterialOperating Subsidiary or its Subsidiaries) merges with any other Subsidiary(other 

 

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than a Material Operating Subsidiary or its Subsidiaries) where theMaterial Subsidiary is the surviving entity; and

 

provided further that, notwithstanding the foregoing, the Company willnot, and will not permit or cause any of the Material Operating Subsidiaries ortheir respective Subsidiaries to (x) dissolve or liquidate, or (y) merge,amalgamate or consolidate with or into, or (z) convey, transfer or leaseall or substantially all of its Property (whether now owned or hereinafteracquired) to or in favor of any Person (in each case, whether in onetransaction or a series of transactions).

 

7.04.                        Restricted Payments.  The Companywill not, and will not cause or permit any of its Subsidiaries to, declare ormake, directly or indirectly, any Restricted Payment, or incur any obligation(contingent or otherwise) to do so. Notwithstanding the foregoing limitation, and if andto the extent permitted by this Agreement, the Company or anySubsidiary may declare or make the following Restricted Payments:

 

(a)                                  each Subsidiary may make RestrictedPayments:

 

(i)                                                             to the Company (and, in the case of suchRestricted Payment by a non-wholly-owned Subsidiary, to each other owner ofcapital stock of such Subsidiary on a prorata basis based ontheir relative ownership interests);

 

(ii)                                                          consisting of dividend payments or otherdistributions in respect of such Subsidiary’s capital stock, partnershipinterest or ownership interest to any other Subsidiary of the Company (and, inthe case of such Restricted Payment by a non-wholly-owned Subsidiary, to eachother owner of capital stock of such Subsidiary on a proratabasis based on their relative ownership interests); and

 

(iii)                                                       other than as permitted by clauses (i) or(ii) above as long as no Default or Event of Default has occurred and iscontinuing, to wholly-owned Subsidiaries (other than any Subsidiary that ispart of the Venezuelan Division) (and, in the case of such Restricted Paymentby a non-wholly-owned Subsidiary, to the Company and any Subsidiary (other thanany Subsidiary that is part of the Venezuelan Division) and to each other ownerof capital stock of such Subsidiary on a prorata basis based ontheir relative ownership interests); provided that such RestrictedPayment would be otherwise permitted by 7.02(b) (*Investments*);

 

(b)                                 the Company and each Subsidiary maydeclare and make dividend payments or other distributions payable solely in thecommon stock of such Person; and

 

(c)                                  as long as no Default or Event of Default has occurred and is continuing,or would occur as a result of such Restricted Payment, Gimsa may purchase shares of thecapital stock of Gimsa to the extent permitted pursuant to Section 7.02 (*Investments*).

 

7.05.                        Other Agreements.  The Company will not, and will not cause orpermit any of its Subsidiaries to enter into, renew, suffer or permit to existor become effective, any agreement or arrangement with any other Person withrespect to the incurrence of any Indebtedness that contains any covenants(including but not limited to, affirmative, financial or negative 

 

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covenants) mandatory prepayments or events of defaultthat are more restrictive than those set forth herein other than as set forthin the Major Derivative Counterparty Loan and the BBVA Loan.

 

7.06.                        Burdensome Agreements.  The Companywill not, and will not cause or permit any of its Subsidiaries to, create,cause, incur, assume, enter into, renew, extend, suffer or permit to exist on or becomeeffective, any consensual encumbrance or restriction of any kind oragreement that: (a) expressly prohibits or restricts thepayment of dividends or other distributions to the Company or the making ofloans to the Company or the ability to transfer any of its property or assetsto any of the foregoing, other than in connection with the maintenance, renewalor extension of any agreement listed in Schedule 5.12(b) (*Restrictive Subsidiary Agreements*), providedthat (i) the restrictions or prohibitions under such agreement are notincreased as a result of such renewal or extension, and (ii) in connectionwith any such renewal or extension of an agreement that does not alreadycontain any such prohibition, the Company will not, and will not permit itsSubsidiaries to, agree to or accept the inclusion of such prohibition;(b) subordinatesany Indebtedness (other than Intercompany Indebtedness) owed to the Company orits Subsidiaries, or (c) in any way restricts or otherwise preventsthe Company from performing its obligations under any Loan Document, providedthat any payment or Disposition of Property otherwise permitted by thisAgreement shall not be deemed to restrict or otherwise prevent the Company fromperforming its obligations under any Loan Document.

 

7.07.                        Transactions with Affiliates; Arm’s LengthTransactions.  The Company will not, and will not cause orpermit any of its Subsidiaries to, enter into, renew or extend or be a party toany transaction or series of related transactions with (a) any Affiliateof the Company, (b) any Joint Venture Partner, or (c) any director orofficer of the Company, except in each case if such transaction is entered intoupon fair and reasonable terms no less favorable to the Company or suchSubsidiary than are obtainable in a comparable arm’s length transaction with anindependent unrelated third party that is not one of the persons listed in (a),(b) or (c) above.  The Companywill not, and will not cause or permit any of its Subsidiaries to, enter intoany transaction other than on an arm’s length basis.

 

7.08.                        No Subsidiary Guarantees of Certain Indebtedness. The Company will not cause or permit any of its Subsidiaries, directlyor indirectly, to guarantee or otherwise become liable or responsible for, inany manner, any Indebtedness of the Company.

 

7.09.                        Interest Coverage Ratio. The Company will not permit its Interest Coverage Ratio as of the lastday of any Fiscal Quarter ending after the date of this Agreement to be lessthan the following ratios in the followingyears:

 

| **Fiscal Year ending December 31,** | ** ** | **Interest Coverage Ratio** | ** ** |
|------------------------------------------|------------|-----------------------------|------------|
| 2009                                     |       | 2.50 to 1.00                |       |
| 2010                                     |       | 2.50 to 1.00                |       |
| 2011                                     |       | 2.75 to 1.00                |       |
| 2012                                     |       | 2.75 to 1.00                |       |

 

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7.10.                        Leverage Ratio. The Company will not permit its Leverage Ratio on any date after thedate of this Agreement to be greater than the following ratios in the following years:

 

| **Fiscal Year ending December 31,** | ** ** | **Leverage Ratio** | ** ** |
|------------------------------------------|------------|--------------------|------------|
| 2009                                     |       | 5.95 to 1.00       |       |
| 2010                                     |       | 5.60 to 1.00       |       |
| 2011                                     |       | 5.00 to 1.00       |       |
| 2012                                     |       | 4.50 to 1.00       |       |

 

7.11.                        Limitations on Changes to Constituent Documents,Indebtedness, Corporate Existence, Business.  The Companywill not, and will not cause or permit any of its Subsidiaries to:

 

(a)                                  amend, modify or otherwise change any ofits Organizational Documents in any way that would adversely affect the Lender;provided that any amendment, modification or change that would adversely affect thevalue of the Intercompany Indebtednessor the ability of any Lender to exerciseits rights under the Intercompany Trust Agreement shall be deemed toadversely affect the Lender;

 

(b)                                 amend, modify or otherwise change theterms of any Reporting Indebtedness (including through an amendment ormodification to the Reporting Indebtedness Documentation or the entry into anyContractual Obligation in respect of the Reporting Indebtedness) in any waythat would (i) require additional mandatory prepayments of such ReportingIndebtedness, (ii) require the Company or its Subsidiaries to incur anyLiens, (iii) reduce the weighted average maturity of such ReportingIndebtedness, (iv) increase the interest rate or any other amount payablein respect of such Reporting Indebtedness, (v) require the payment of anyfees to the holders of such Reporting Indebtedness (other than nominalamendment and waiver fees in amounts consistent with market practice at thetime such fees are paid), or (vi)  in any way that would otherwiseadversely affect (x) the economic rights of the Lender or (y) theeconomic obligations of the Company in a more onerous manner than the terms ofsuch Reporting Indebtedness;

 

(c)                                  take any action or conduct its affairs ina manner that could reasonably be expected to result in its corporate existencebeing ignored by any court of competent jurisdiction or in its assets and/orliabilities being substantively consolidated with those of any other Person ina bankruptcy, reorganization or other insolvency proceeding; or

 

(d)                                 with respect to the Company, change itsaccounting policies or tax reporting practices (other than as permitted byMexican GAAP) or change the end of its Fiscal Year to a date other thanDecember 31 (regardless of whether such change is permitted by MexicanGAAP).

 

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7.12.                        Fundamental Changes, Limitations on Asset Sales, AssetExchanges and Acquisitions.

 

(a)                                  The Company will not, and will not causeor permit any of its Subsidiaries to conduct any Asset Sales (other than AssetSales by any Subsidiary that is part of the Venezuelan Division) except AssetSales in respect of which (i) the consideration for such Asset Sale is at least 80% cash and(ii) a mandatory prepayment is madein accordance with Section 2.05(a) (*MandatoryPrepayments*), if applicable;

 

(b)                                 The Company and its Subsidiaries may acquire all or substantially all ofthe assets or capital stock of any Person (the “Target”) (in each case,a “Permitted Acquisition”) subject to any other limitations under thisAgreement and the satisfaction of each of the following conditions:

 

(i)                                                             the Lender shall receive at least fifteen (15) days’ prior written noticeof such proposed Permitted Acquisition, which notice shall include a reasonablydetailed description of such proposed Permitted Acquisition;

 

(ii)                                                          such Permitted Acquisition shall only involve assets comprising abusiness, or those assets of a business, engaged in the Core Business, andwhich would not subject the Lender to regulatory or third party approvals inconnection with the exercise of its rights and remedies under this Agreement orany other Loan Documents other than approvals applicable to the exercise ofsuch rights and remedies with respect to Company prior to such PermittedAcquisition;

 

(iii)                                                       no additional Indebtedness or other liabilities other than Indebtednesspermitted pursuant to Section 7.16 (*Limitationson Incurrence of Additional Indebtedness*) shall be incurred, assumedor otherwise be reflected on a consolidated balance sheet of Company and Targetafter giving effect to such Permitted Acquisition, except ordinary course tradepayables and accrued expenses;

 

(iv)                                                      the sum of all amounts payable in connection with all PermittedAcquisitions (including, without duplication, all transaction costs and allIndebtedness and liabilities (other than customary indemnities provided bypurchasers) incurred or assumed in connection therewith or otherwise reflectedon a consolidated balance sheet of Company and Target) shall be permitted pursuantto Section 7.02 (*Investments*);

 

(v)                                                         at the time of such Permitted Acquisition and after giving effectthereto, no Default or Event of Default has occurred and is continuing;

 

(vi)                                                      the business and assets acquired in such Permitted Acquisition shall befree and clear of all Liens (other than Liens permitted pursuant toSection 7.01 (*Negative Pledge*));and

 

 

(vii)                                                   with respect to any Permitted Acquisition where the aggregateconsideration (including any assumption of Indebtedness) in connectiontherewith is equal to or greater than US$40,000,000 (or the US DollarEquivalent thereof):

 

(A)                                                      Target shall have had a consolidated EBITDA of greater than negativeUS$5,000,000 (or the US Dollar Equivalent thereof), pro forma for adjustmentsreasonably satisfactory to the Lender for the trailing twelve-month 

 

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period preceding the date of the PermittedAcquisition, as determined based upon the Target’s financial statements for itsmost recently completed fiscal year and its most recent interim financialperiod completed within sixty (60) days prior to the date of consummation ofsuch Permitted Acquisition; and

 

(B)                                                        Concurrently with delivery of the notice referred to in clause(i) above, the Company shall have delivered to the Lender:

 

1.               a proforma consolidated balance sheet, income statement and cash flow statement ofthe Company and its Subsidiaries (the “Acquisition Pro Forma”), based onrecent financial statements, which shall be complete and shall fairly presentin all material respects the assets, liabilities, financial condition andresults of operations of the Company and its Subsidiaries in accordance withGAAP consistently applied, but taking into account such Permitted Acquisition;and

 

2.               a certificate of the chief financial officer of the Company to the effectthat:  (i) the Company will beSolvent upon the consummation of the Permitted Acquisition; (ii) theAcquisition Pro Forma fairly presents the financial condition of the Companyand its Subsidiaries (on a consolidated basis) as of the date thereof aftergiving effect to the Permitted Acquisition; and (iii) the Company and itsSubsidiaries have completed their due diligence investigation with respect tothe Target and such Permitted Acquisition, which investigation has producedresults satisfactory to the Company and its Subsidiaries.

 

7.13.                        Limitations on Sale Lease-Back Transactions. The Company will not, and will not cause or permit any of itsSubsidiaries (other than Subsidiaries that are part of the Venezuelan Division)to, directly or indirectly, enter into any Sale Lease-Back Transactions otherthan Permitted New Capital Obligations that are permitted by Section 7.16(g) (*Limitations on Incurrence of Additional Indebtedness*)consisting of Sale Lease-Back Transactions.

 

7.14.                        Limitations on Capital Expenditures.

 

(a)                                  Subject to clauses (b) and(c) below, the Company will not, and will not cause or permit any of itsSubsidiaries to, directly or indirectly, make (or be or become legally orcontractually obligated to make) any Capital Expenditures (other than CapitalExpenditures in Venezuela by Subsidiaries that are part of the VenezuelanDivision) during any Fiscal Year that would cause the aggregate Capital Expenditures for such year toexceed the Permitted Capital ExpendituresAmount for such Fiscal Year (which amount shall include any Permitted NewCapital Obligations consisting of Capital Lease Obligations incurred in suchFiscal Year).

 

(b)                                 To the extent that the Company and itsSubsidiaries do not expend the full Permitted Capital Expenditures Amount inany given Fiscal Year the Company and its Subsidiaries will be permitted tocarry forward any Unused CapEx to the immediately following Fiscal Year (butnot to any subsequent Fiscal Year); provided that (i) the Companyhas delivered 

 

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the CapEx Report in the present Fiscal Year and (ii) no Default or Event of Default has occurred and is continuingor would occur after giving effect to such transaction.

 

(c)                                  In addition to the foregoing, the Companymay, in its discretion, make additional Capital Expenditures to the extentpermitted by Section 7.02(b) (*Investments*);provided that (i) the Company has delivered the CapEx Report in thepresent Fiscal Year and (ii) no Default or Event of Default has occurredand is continuing or would occur after giving effect to such CapitalExpenditure.

 

7.15.                        Limitations on Voluntary Prepayments of Indebtedness. The Company will not, and will not cause or permit any of itsSubsidiaries to, directly or indirectly make any payment in violation of anysubordination terms of any Indebtedness, other than the payment of VenezuelanNon-Recourse Indebtedness by any Subsidiary that is part of the VenezuelanDivision.

 

7.16.                        Limitations on Incurrence of Additional Indebtedness. The Company will not, and will not cause or permit any of itsSubsidiaries to, directly or indirectly, create, incur, assume or suffer toexist any Indebtedness; provided that the Company and its Subsidiariesshall be permitted to incur, assume, or suffer to exist, without duplication:

 

(a)                                  Indebtedness under the Loan Documents;

 

(b)                                 Existing Indebtedness listed on Schedule5.20(a) (*Existing Indebtedness*);

 

(c)                                  Permitted Refinancing Indebtedness (providedthat, if applicable, the Company makes any mandatory prepayment required bySection 2.05(d) (*MandatoryPrepayments*));

 

(d)                                 Venezuelan Non-Recourse Indebtedness;

 

(e)                                  Venezuelan Recourse Indebtedness inrespect of Indebtedness owed to Persons other than the Company or itsAffiliates in an amount not to exceed US$40,000,000 (or the US DollarEquivalent thereof) outstanding at any one time to the extent such Venezuelan Recourse Indebtedness isWorking Capital Indebtedness, the proceeds of which are used solely for grainpurchases (“PermittedVenezuelan Recourse Indebtedness”);

 

(f)                                    the Agreement Value of Hedging Agreementsexecuted in accordance with Section 7.18 (*Limitationson Hedging*);

 

(g)                                 As long as no Default or Event of Default has occurred and is continuingor would occur after giving effect to such Indebtedness under this clause (g),additional Indebtedness not otherwise permitted by this Section 7.16 in anaggregate amount for the Company and its Subsidiaries at any time outstandingnot to exceed an amount equal to (x) US$250,000,000 (or the US Dollar Equivalent thereof) less (y) the aggregateprincipal amount of all Reporto Contracts outstanding at such time (suchIndebtedness, “Permitted New Indebtedness”), to the extent suchPermitted New Indebtedness:

 

(i)                                                             is either unsecured or secured inaccordance with Section 7.01 (*NegativePledge*); and

 

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(ii)                                                          consists of either: (x) WorkingCapital Indebtedness (excluding Venezuelan Recourse Indebtedness) (such WorkingCapital Indebtedness, “Permitted New Working Capital Indebtedness”) or (y) nomore than US$50,000,000 (or the US Dollar Equivalent thereof) of Capital LeaseObligations and/or Sale Lease-Back Transactions related to the Company’s CoreBusiness (collectively, “Permitted New Capital Obligations”);

 

(h)                                 any of the following Guaranty Obligationsin respect of Indebtedness owed to Persons other than the Company or itsAffiliates (provided that solely for the purposes of this Section 7.16(h),Grupo Financiero Banorte S.A.B. de. C.V. and its Subsidiaries shall not beconsidered Affiliates of the Company):

 

(i)                                                             Guaranty Obligations of a Subsidiary inrespect of obligations of its direct or indirect Subsidiaries that are relatedto the Core Business provided that, notwithstanding the foregoing, any Subsidiary that is not part ofthe Venezuelan Division may not incur Guaranty Obligations in respect of obligationsof any Subsidiary that is part of the Venezuelan Division;

 

(ii)                                                          the Permitted Bancomext Guaranty;

 

(iii)                                                       the Guaranty Obligation incurred by theCompany in respect of operating leases of Subsidiaries that are not part of theGruma Corp. Division, the Latin American Divisions or the Venezuelan Division; providedthat such Guaranty Obligation shall not exceed US$25,000,000 (or the US DollarEquivalent thereof);

 

(iv)                                                      Guaranty Obligations of the Company in respectof Indebtedness not to exceed US$60,000,000 (or the US Dollar Equivalentthereof) outstanding principal amount in the aggregate at any time, consistingof:

 

(A)                                                      Working Capital Indebtedness (other thanVenezuelan Recourse Indebtedness, and including Guaranty Obligations in respectof Existing Working Capital Indebtedness but excluding the Permitted BancomextGuaranty) or ITOperating Leases of Subsidiaries that are part of the Gimsa Division, in eachcase to the extent permitted under this clause (iv), which Working CapitalIndebtedness and IT Operating Leases shall not exceed US$60,000,000 (or the USDollar Equivalent thereof) of outstanding principal amount in the aggregate atany time;

 

(B)                                                        Working Capital Indebtedness of Subsidiaries that are part of the CentralAmerica Division (including Guaranty Obligations in respect of Existing WorkingCapital Indebtedness but excluding the Permitted Bancomext Guaranty), to theextent permitted pursuant to this clause (iv), which Working CapitalIndebtedness shall not exceed US$35,000,000 (or the US Dollar Equivalentthereof) of outstanding principal amount in the aggregate at any time;

 

(C)                                                        Working Capital Indebtedness ofSubsidiaries that are part of the Molinera Division (including GuarantyObligations in respect of Existing Working Capital Indebtedness but excludingthe Permitted Bancomext Guaranty), 

 

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to the extent permitted pursuant to this clause(iv), which Working Capital Indebtedness shall not exceed US$20,000,000 (or theUS Dollar Equivalent thereof) of outstanding principal amount in the aggregateat any time;

 

(i)                                     Other Restructured Indebtedness; and

 

(j)                                     Intercompany Indebtedness(i) evidenced by and issued pursuant to the Intercompany Revolving Facilities in accordancewith Section 6.11 (*IntercompanyIndebtedness*), (ii) subordinated to the Loan pursuant to theIntercompany Subordination Agreement and the Intercompany Trust Agreement(other than, in each case, Intercompany Indebtedness owed by the Company to aSubsidiary in the Gimsa Division) and (iii) where all rights of suchIntercompany Lender of such Intercompany Indebtedness (other than IntercompanyIndebtedness owed by the Company to a Subsidiary in the Gimsa Division) havebeen assigned to the Trustee pursuant to the Intercompany Trust Agreement;

 

provided that, in addition to the foregoing restrictions, theCompany and its Subsidiaries will not, and will not cause, or permit any of itsSubsidiaries to, directly or indirectly, create, incur, assume or suffer toexist any Indebtedness otherwise permitted by this Section 7.16 (exceptPermitted Refinancing Indebtedness that is actually applied within five(5) Business Days to prepay Indebtedness being Refinanced (plus the amountof any premium required to be paid under the terms of the instrument governingsuch Indebtedness being Refinanced) and any other Indebtedness required to beprepaid pursuant to Section 2.05 (*MandatoryPrepayments*) (and any breakage costs in connection therewith)) ifthe creation, incurrence, assumption or existence of such Indebtedness wouldcause the Leverage Ratio to exceed the limits set in Section 7.10 (*Leverage Ratio*) or the Interest Coverage Ratio to be less thanthe minimum set forth in Section 7.09 (*InterestCoverage Ratio*) on a pro forma basis.

 

7.17.                        Limitations on ERISA Deficiencies. The Company shall not, and shall not cause or permit any of itsSubsidiaries or any ERISA Affiliate to (i) permit any Pension Plan toincur any “funding deficiency,” whether or not waived, within the meaning ofSection 302 of ERISA or Section 412 of the Code or (ii) permitor cause the Unfunded Pension Liability of all Pension Plans to exceed, in theaggregate, US$10,000,000 (or the US Dollar Equivalent thereof).

 

7.18.                        Limitations on Hedging.

 

(a)                                  The Company will not, and will not causeor permit any Subsidiary to, enter into (or become legally obligated to enterinto) any Hedging Agreement or transaction under any Hedging Agreement that:

 

(i)                                                             is for speculative purposes or is withthe aim of obtaining profits based on changing market values;

 

(ii)                                                          is based on or associated with theunderlying value of a product, interest rate or currency other than thoseproducts, interest rates or currencies that are used by the Company or suchSubsidiary in the Ordinary Course of Business;

 

(iii)                                                       has a notional value that exceeds:

 

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(A)                                                      in the case of a commodity or product,150% of the volume of such commodity or product consumed by the Company or suchSubsidiary during the most recent Measurement Period; or

 

(B)                                                        in the case of an interest rate orcurrency, the Company’s or such Subsidiary’s requirements for such interestrate or currency (pursuant to the Company’s or such Subsidiary’s ContractualObligations) for the eighteen (18) months immediately following the date ofsuch Hedging Agreement;

 

(iv)                                                      has a tenor of more than eighteen (18)months;

 

(v)                                                         would cause the aggregate notional amountof all Hedging Agreements with any single counterparty to exceed US$100,000,000(or the US Dollar Equivalent thereof);

 

(vi)                                                      is with a counterparty other than aQualified Counterparty; or

 

(vii)                                                   is in violation of, or otherwiseviolates, the Hedging Policy as in effect from time to time;

 

provided that the Company will be permitted to enter into non-speculativeHedging Agreements for the purpose of hedging the full amount of the interestrate risk associated with the Loan or the Other Restructured Indebtedness ifsuch Hedging Agreements otherwise are in compliance with clauses (i), (ii),(v), (vi) and (vii) above.

 

(b)                                 The Company will not:

 

(i)                                                             permit or cause the effectiveness of theHedging Policy to lapse until the Loan has been repaid;

 

(ii)                                                          permit or cause the Hedging Policy topermit hedging for speculative purposes or with the aim of obtaining profits based onchanging market values;

 

(iii)                                                       amend or otherwise change the HedgingPolicy unless (x) such amendment or change has been approved by the Boardof Directors of the Company (or of a committee duly delegated by such Board ofDirectors comprised of two (2) or more members thereof) and (y) theLender is provided with written notice and copies of such amendment or changeto the Hedging Policy no later than five (5) Business Days after any suchamendment or change is approved as contemplated above.

 

7.19.                        Intercompany Indebtedness.

 

(a)                                  The Company will not, and will not cause or permit any Subsidiary to,enter into or maintain any Intercompany Indebtedness other than(i) Guaranty Obligations permitted by Sections 7.16(e) and7.16(h) (*Limitations on Incurrence ofAdditional Indebtedness*) and (ii) Intercompany Indebtednessentered into pursuant to Section 6.11 (*IntercompanyIndebtedness*) and that is either (x) owed to any Subsidiary inthe Gimsa Division by the Company or (y) subordinated to the Loan pursuantto the Intercompany Subordination Agreement and the 

 

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Intercompany Trust Agreement, and where all rights ofsuch Intercompany Lender of such Intercompany Indebtedness (other thanIntercompany Indebtedness owed to any Subsidiary in the Gimsa Division by theCompany) have been assigned to the Trustee pursuant to the Intercompany TrustAgreement.

 

(b)                                 The Company will not, and will not cause or permit any Subsidiary to,amend or waive any part of the Intercompany Revolving Facilities in any waythat would result in (i) a violation of this Agreement or (ii) achange of any kind in the provisions of the Intercompany Revolving Facilitiesrelating to the subordination of the Intercompany Indebtedness.

 

(c)                                  Upon the occurrence and during thecontinuation of an Event of Default, the Company will not make any payment toany Subsidiary pursuant to the terms of any Intercompany Indebtedness and willnot take any action which could cause or result in such payment being made.

 

7.20.                        Material Subsidiaries.  The Companywill not, at any time, permit or cause the Company and its MaterialSubsidiaries to:

 

(a)                                  own less than 85% of the total assets ofthe Company and its Consolidated Subsidiaries as of the end of the Company’smost recently completed Fiscal Year; or

 

(b)                                 generate less than 85% of earnings beforeincome tax and employee statutory profit sharing of the Company and itsConsolidated Subsidiaries as of the end of the Company’s most recentlycompleted Fiscal Year;

 

provided that at any time, the Company may, by written noticeto the Lender, amend Schedule 1.01(b) (*ExistingMaterial Subsidiaries*) so as to (x) make any Subsidiary aMaterial Subsidiary or (y) remove any Subsidiary from Schedule 1.01(b) (*Existing Material Subsidiaries*)**if such Subsidiary (i) does notqualify as a Material Subsidiary pursuant to clauses (a), (b) or (d) ofthe definition thereof and (ii) is not required for the Company to meetthe conditions specified in clauses (a) and (b) above.

 

7.21.                        Reporto Contracts.  The aggregate principalamount of all of the Reporto Contracts at any time when taken together with allPermitted New Indebtedness shall not exceed US$250,000,000 (or the US DollarEquivalent thereof).

 

7.22.                        Equity Issuances.  The Companywill not, and will not cause or permit any Subsidiary to issue any capitalstock of the Company or such Subsidiary, except:

 

(a)                                  the Company may pay dividends in capitalstock of the Company and a Subsidiary of the Company may pay dividends in capitalstock of such Subsidiary, in each case in accordance with Section 7.04(b) (*Restricted Payments*); and

 

(b)                                 the Company may issue capital stock ofthe Company in a primary offering (such issuance a “Permitted Company EquityIssuance”); provided that the Company makes any required mandatoryprepayment of the Mandatory Prepayment Indebtedness.

 

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For the avoidance of doubt, the Company shall not cause or permit anySubsidiary to issue any capital stock (other than to the Company, but only tothe extent reasonably necessary in connection with an Intercompany IndebtednessCapitalization permitted under Section 7.02(a)(x) (*Investments*)).

 

ARTICLEVIIIEVENTS OF DEFAULT

 

8.01.                        Events of Default.  Any of the followingevents shall constitute an “Event of Default”:

 

(a)                                  Non-Payment. The Company fails to pay (i) when and as required to be paidherein, any amount of principal of the Loan, (ii) within three (3) days after the same becomes due, any interest payable hereunderor under any other Loan Document or (iii) within five (5) days after the same becomesdue, any other amount payable hereunder (including any amount due under anyother Loan Document), in each case whetherat the due date thereof or at a date fixed for mandatory prepayment thereof or byacceleration or otherwise; or

 

(b)                                 Representation or Warranty. Any representation or warranty by the Company made herein or in anyother Loan Document, or which is contained in any certificate, document orfinancial or other statement by the Company or any Senior Officer of theCompany, furnished at any time under this Agreement or any other Loan Document,is incorrect in any material respect on or as of the date made; or

 

(c)                                  Specific Defaults. The Company fails to perform or observe any term, covenant or agreementcontained in Sections 6.02(a) (*Noticeof Other Events*), 6.03(a) (*Maintenanceof Existence; Conduct of Business*) with respect to the corporateexistence of the Company and the Material Subsidiaries, 6.05 (*Maintenance of Government Approvals*), 6.08(*Ranking; Priority*) or fails toperform or observe any term, covenant or agreement contained in Article VII(*Negative Covenants*); or

 

(d)                                 Other Defaults. The Company fails to perform or observe any other term or covenantcontained in this Agreement or in any other Loan Document **(**other than as specified in clauses (a) and(c) above), and such default continues unremedied for a period of thirty(30) days after the earlier of (a) date upon which written notice thereof isgiven to the Company by the Lender or (b) the date on which the Company has knowledge thereof; or

 

(e)                                  Cross-Default. The Company or any of its Material Subsidiaries (i) fails to makeany payment in respect of any Indebtedness (other than Indebtedness hereunderand under the Note) having an aggregate principal amount (or its US DollarEquivalent) equal to US$20,000,000 (or the US Dollar Equivalent thereof) ormore when due (whether by scheduled maturity, required prepayment,acceleration, demand, or otherwise) and such failure continues after theapplicable grace period, if any, specified in the agreement or instrumentrelating to such Indebtedness; or (ii) fails to perform or observe anyother condition or covenant, or any other event shall occur or condition exist,under any agreement or instrument relating to such Indebtedness, and suchfailure continues after the applicable grace or notice period, if any,specified in the relevant document on the date of such failure if the effect ofsuch failure, event 

 

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or condition is to cause, or to permit the holder or holders of suchIndebtedness to cause, such Indebtedness to be declared to be due and payableprior to its stated maturity; or

 

(f)                                    BBVA Default. There shall have occurred and be continuing an “Event of Default” underthe BBVA Loan (as defined therein); or

 

(g)                                 Involuntary Proceedings.  (i) Adecree or order by a court having jurisdiction has been entered adjudging theCompany or any Material Subsidiary as bankrupt or insolvent, or approving asproperly filed a petition seeking reorganization, *concurso mercantil*, *quiebra*or bankruptcy of the Company or any Material Subsidiary and suchdecree or order shall have continued undischarged and unstayed for a period ofsixty (60) consecutive days; or (ii) a decree or order ofa court having jurisdiction for the appointment of a receiver or liquidator or *visitador*, *conciliador* or *síndico*or trustee or assignee in bankruptcy or insolvency or any other similarofficial of the Company or any Material Subsidiary or of any substantial partof the Property of the Company or any Material Subsidiary or for the winding upor liquidation of the affairs of the Company or any Material Subsidiary hasbeen entered, and such decree or order has continued undischarged and unstayedfor a period of sixty (60) consecutive days; or (iii) anywrit or warrant of execution or similar process is issued or levied against anysubstantial part of the Property of the Company or any Material Subsidiary; or

 

(h)                                 Voluntary Proceedings. The Company or any Subsidiary institutes proceedings to be adjudicatedbankrupt or consents to the filing of a bankruptcy proceeding against it, orfiles a petition or answer or consent in any proceeding seeking reorganization,*concurso mercantil*, *quiebra*or bankruptcy or consents to thefiling of any such petition, or consents to the appointment of a receiver orliquidator or trustee or *visitador*,*conciliador*or s*índico*or assignee in bankruptcy orinsolvency or any other similar official of it or any substantial part of itsProperty, or admits in writing that it is unable to pay its debts, or fails togenerally to pay its debts when they come due or makes a general assignment forthe benefit of creditors; or

 

(i)                                     Monetary Judgments. One or more judgments, orders, attachments or *embargos*, decrees or arbitration awards are entered againstthe Company or any of its Subsidiaries involving in the aggregate a liability(to the extent not covered by independent third-party insurance as to which theinsurer does not dispute coverage) as to any single or related series oftransactions, incidents or conditions, of an amount (or its US DollarEquivalent) equal to US$20,000,000 (or, if in another currency, the US DollarEquivalent thereof), and the same shall remain unsatisfied, unvacated orunstayed pending appeal for a period of sixty (60)consecutive days after the entry thereof; or

 

(j)                                     Unenforceability.  Any of the Loan Documents or the Intercompany Revolving Facilities at any time is suspended, revoked or terminated (byany Person other than the Lender) or for any reason ceases to be in full forceand effect in accordance with its respective terms or the binding effect orenforceability thereof, or of thetransactions contemplated thereby, is contested by the Company or its Subsidiaries, or the Company denies that it has any further liability or obligationhereunder or thereunder or in respect hereof or thereof, or performance by theCompany under any of the Loan Documents or the Intercompany Revolving Facilities shallbecome illegal, or the Company shall assert that any obligation under a LoanDocument orIntercompany Revolving Facility has become illegal; or

 

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(k)                                  Expropriation. Any Governmental Authority Expropriates all or a substantial portion of(x) the Property of the Company and its Subsidiaries taken as a whole or(y) the common stock of the Company; or

 

(l)                                     Change of Control. Any Change in Control has occurred; or

 

(m)                               Intercompany Trust Agreement.  At any time the assignment of rights pursuantto the Intercompany Trust Agreement (i) shall be or become unenforceable,(ii) shall be contested or denied in writing by any Intercompany Lender or(iii) shall be contestedor denied in writing by any Governmental Authority and such contest or denialshall continue unstayed for a period of sixty (60) consecutive days; or

 

(n)                                 Government Approval. Any approval, authorization, consent or registration of a GovernmentalAuthority that is at any time necessary to enable the Company to comply withany of its obligations under any of the Loan Documents is revoked, withdrawn,withheld or otherwise not in full force and effect and is not reinstated to thesatisfaction of the Lender within the earlier of (i) ten (10) daysafter such revocation, withdrawal, withholding or other loss of effectivenessor (ii) the third (3rd) BusinessDay before the day in which it shall be required to enable the Company tocomply with its obligations under the Loan Documents; or

 

(o)                                 ERISA.  (i) AnERISA Event has occurred; (ii) the Company, any Subsidiary or any ERISAAffiliate has been notified by the sponsor of a Multiemployer Plan that it hasincurred Withdrawal Liability to such Multiemployer Plan or that suchMultiemployer Plan is in reorganization or is being terminated, partitioned orreorganized; (iii) the Company or an ERISA Affiliate fails to pay, whendue, after the expiration of any applicable grace period, any installmentpayment with respect to its Withdrawal Liability under Section 4201 ofERISA or (iv) the Company, any Subsidiary or any ERISA Affiliate hasincurred any liability in connection with a withdrawal from a Pension Plansubject to Section 4063 of ERISA, such that, in the case of any eventdescribed in (i), (ii), (iii) or (iv), the Company, any Subsidiary or anyERISA Affiliate has incurred, in the aggregate and aggregating liabilitiesresulting from all such events that have occurred, liability equal toUS$20,000,000 (or the US Dollar Equivalent thereof) or more; or

 

(p)                                 Lapse of Process Agent. The Company’s appointment of the Process Agent or the Alternate ProcessAgent shall have lapsed, whether because of nonpayment of fees or otherwise,and such lapse remains unremedied for a period of three (3) Business Daysafter the Company obtains knowledge or receives notice thereof.

 

8.02.                        Remedies.  (a)  Ifany Event of Default occurs, the Lender may take any or all of the followingactions:

 

(i)                                                             declare the unpaid principal amount of the Loan, all interest accrued and unpaid thereon, and allother Obligations owing or payable hereunder or under any other Loan Documentto be immediately due and payable, without presentment, demand, protest orother notice of any kind, all of which are hereby expressly waived by theCompany; and

 

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(ii)                                                          exercise all rights and remediesavailable to the Lender under the Loan Documents or applicable law;

 

(b)                                 Notwithstanding the foregoing, upon theoccurrence of any event specified in Section 8.01(g) (*Involuntary Proceedings*) or 8.01(h) (*Voluntary Proceedings*), the unpaidprincipal amount of the Loan and all interest and otherObligations shall automatically become due and payable without further act of theLender.

 

(c)                                  After the exercise of remedies providedfor in this Section 8.02 (or after the Loan has automatically becomeimmediately due and payable), any amounts received on account of theObligations shall be applied by the Lender in the following order:

 

(i)                                                             first, to payment of that portion of theObligations constituting fees, indemnities and other amounts (other thanprincipal and interest) payable to the Lender (including Attorney Costs andamounts payable under Article III (*Taxes,Yield Protection and Illegality*));

 

(ii)                                                          second, to payment of that portion of theObligations constituting accrued and unpaid interest on the Loan;

 

(iii)                                                       third, to payment of that portion of theObligations constituting unpaid principal of the Loan; and

 

(iv)                                                      last, the balance, if any, after all ofthe Obligations have been indefeasibly paid in full, to the Company or asotherwise required by law.

 

8.03.                        Rights Not Exclusive.  The rightsprovided for in this Agreement and the other Loan Documents are cumulative andare not exclusive of any other rights, powers, privileges or remedies providedby law or in equity, or under any other instrument, document or agreement nowexisting or hereafter arising.

 

ARTICLEIXMISCELLANEOUS

 

9.01.                        Amendments and Waivers.  No amendment orwaiver of any provision of this Agreement or any other Loan Document, and noconsent to any departure by the Company therefrom, shall be effective unlessthe same shall be in writing and signed by the Lender and the Company, and thenany such waiver or consent shall be effective only in the specific instance andfor the specific purpose for which given.

 

9.02.                        Notices.

 

(a)                                  Except as otherwise expressly providedherein, all notices, requests, demands or other communications to or upon anyparty hereunder shall be in English and in writing (including facsimiletransmission and, subject to clause (c) below, a PDF attachment to anelectronic mail message) and shall be mailed by an internationally recognizedovernight courier service, transmitted by facsimile or electronic mail ordelivered by hand to such party: (i) in the case of the Company or theInitial Lender, at its address, facsimile number or electronic mail 

 

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address set forth on Schedule 9.02 (*Notices*)hereof or at such other address, facsimile number or electronic mail address assuch party may designate by notice to the other parties hereto, and(ii) in the case of any Lender other than the Initial Lender, at itsaddress, facsimile number or electronic mail address set forth in theAdministrative Questionnaire or at such other address, facsimile number orelectronic mail address as the Lender may designate by notice to the Company.

 

(b)                                 Unless otherwise expressly provided forherein, each such notice, request, demand or other communication shall beeffective upon the earlier to occur of (i) actual receipt and (ii) (A) ifsent by overnight courier service or delivered by hand, when signed for by oron behalf of the party to whom such notice is directed, (B) if given byfacsimile, when transmitted to the facsimile number specified pursuant toclause (a) above and confirmation of receipt of a legible copy is receivedby telephone, return facsimile or electronic mail, or (C) if given by anyother means, when delivered at the address specified pursuant to clause (a) above;provided, however, that notices to the Lender under Article II(*The Loan*), Article III (*Taxes, Yield Protection and Illegality*)and this Article IX shall not be effective until received.  Delivery by the Lender by facsimiletransmission or electronic mail of an executed counterpart of any amendment orwaiver or any provision of this Agreement or the Note or any other LoanDocument to be executed and delivered hereunder shall be effective as deliveryof a manually executed counterpart thereof.

 

(c)                                  Electronic mail and internet websites maybe used only to distribute routine communications, such as financialstatements, Casualty Certificates, Reinvestment Certificates, or anycertificate or document required by Article IV (*Conditions Precedent*) (except for the Initial Lender’sNote), Article VI (*AffirmativeCovenants*) or Article VII (*NegativeCovenants*) and other related information, and to distribute LoanDocuments for execution by the parties thereto, and may not be used for anyother purpose.

 

9.03.                        No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of theLender, any right, remedy, power or privilege hereunder or under any LoanDocument, shall operate as a waiver thereof; nor shall any single or partialexercise of any right, remedy, power or privilege hereunder or thereunderpreclude any other or further exercise thereof or the exercise of any otherright, remedy, power or privilege.  Therights and remedies herein provided are cumulative and not exclusive of anyrights or remedies provided by law.

 

9.04.                        Costs and Expenses.  The Companyagrees:

 

(a)                                  to pay or reimburse the Initial Lender (i) upondemand for all reasonable and documented costs and expenses (including AttorneyCosts) incurred by the Initial Lender in connection with the TerminatedDerivative Obligation and the preparation, negotiation, administration andexecution of the Loan Documents (whether or not consummated) and (ii) withinfive (5) Business Days after demand for all reasonable and documentedcosts and expenses incurred by the Lender in connection with any amendment,supplement, waiver or modification requested by the Company (in each case,whether or not consummated) to this Agreement or any other Loan Document,including Attorney Costs incurred by the Lender with respect thereto; providedthat the obligation of the Company with respect to the reimbursement 

 

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of Attorney Costs shall in any event be limited to one (1) UScounsel and one (1) local Mexican counsel; and

 

(b)                                 to pay or reimburse the Lender withinfive (5) Business Days after demand for all reasonable costs and expenses(including Attorney Costs) incurred by them in connection with the enforcement,attempted enforcement, or preservation of any rights or remedies under thisAgreement or any other Loan Document during the existence of an Event ofDefault or after acceleration of the Loan (including in connection with any“workout” or restructuring regarding the Loan, and including in any insolvencyor bankruptcy proceeding involving the Company).

 

9.05.                        Indemnification by the Company. Whether or not the transactions contemplated hereby are consummated, theCompany agrees to indemnify and hold harmless the Lender and its respectiveAffiliates, directors, officers, employees, counsel, agents andattorneys-in-fact (collectively the “Indemnitees”) from and against: (a) anyand all direct, punitive and consequential damages, claims, demands, actions orcauses of action that are asserted against any Indemnitee by any Personrelating, directly or indirectly, to a claim, demand, action or cause of actionthat such Person asserts or may assert against the Company or any of its respectiveofficers or directors, (b) any and all claims, demands, expenses(including Attorney Costs) actions or causes of action that may at any time(including at any time following repayment of the Obligations and thereplacement of the Lender) be asserted or imposed against any Indemnitee,arising out of or relating to, the Loan Documents (including the preparation,negotiation, execution and administration thereof), or the use or contemplateduse of the proceeds of the Loan, (c) any administrative or investigativeproceeding by any Governmental Authority arising out of or related to a claim,demand, action or cause of action described in (a) or (b) above, and (d) anyand all liabilities (including liabilities under indemnities), losses, costs orexpenses (including Attorney Costs) that any Indemnitee suffers or incurs as aresult of the assertion of any foregoing claim, demand, action, cause of actionor proceeding, or as a result of the preparation of any defense in connectionwith any foregoing claim, demand, action, cause of action or proceeding, in allcases, whether or not an Indemnitee is a party to such claim, demand, action,cause of action or proceeding (all the foregoing, collectively, the “IndemnifiedLiabilities”), in all cases, whether or not caused by or arising, in wholeor in part, out of the negligence of the Indemnitee; provided that noIndemnitee shall be entitled to indemnification for any claim caused by its owngross negligence or willful misconduct or for any loss asserted against it byanother Indemnitee determined in a final, nonappealable judgment by a court ofcompetent jurisdiction.  No Indemniteesshall be liable for any damages arising from the use by others of anyinformation or other materials obtained through any information transmissionsystems in connection with this Agreement, nor shall any Indemnitee have anyliability for any indirect or consequential damages relating to this Agreementor any other Loan Document or arising out of its activities in connectionherewith or therewith (whether before or after the Closing Date).  All amounts due under this Section 9.05shall be payable within ten (10) Business Days after demand therefor.  The agreements in this Section 9.05shall survive the repayment of all Obligations.

 

9.06.                        Payments Set Aside.  To the extentthat the Company makes a payment to the Lender or the Lender exercises itsright of set-off, and such payment or the proceeds of such set-off or any partthereof are subsequently invalidated, declared to be fraudulent or preferential,set aside or required (including pursuant to any settlement entered into by theLender in its 

 

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discretion) to be repaid to a trustee, receiver or any other party, inconnection with any insolvency, “*concursomercantil*” or bankruptcy proceeding involving the Company orotherwise, then to the extent of such recovery, the obligation or part thereoforiginally intended to be satisfied shall be revived and continued in fullforce and effect as if such payment had not been made or such set-off had notoccurred.

 

9.07.                        Successors and Assigns.  Theprovisions of this Agreement shall be binding upon and inure to the benefit ofthe parties hereto and their respective successors and assigns, except that theCompany may not assign or transfer any of its rights or obligations under thisAgreement without the prior written consent of the Lender (and any attempted assignmentor transfer by the Company without such consent shall be null and void).  Nothing in this Agreement, expressed orimplied, shall be construed to confer upon any Person (other than the partieshereto, their respective successors and assigns permitted hereby and, to theextent expressly contemplated hereby, the Indemnitees) any legal or equitableright, remedy or claim under or by reason of this Agreement.

 

9.08.                        Assignments, Participations, Etc.

 

(a)                                  The Lender may, at any time, assign toone or more assignees other than the Company or any of its Affiliates orSubsidiaries (each an “Assignee”) all or any part of its Loan and theother rights and obligations of the Lender hereunder, in a minimum amount ofUS$3,000,000.  The Company may continue to deal solely and directlywith the Lender in connection with the interest so assigned to an Assignee andthe assignment will not be effective until: (i) written notice of suchassignment, together with payment instructions, addresses and relatedinformation with respect to the Assignee, shall have been given to the Companyby the assigning Lender and the Assignee; and (ii) the assigning Lenderand its Assignee shall have delivered to the Company an Assignment andAcceptance substantially in the form of Exhibit C (an “Assignmentand Acceptance”), together with the Note subject to such assignment.

 

(b)                                 From and after the date that theassigning Lender and its Assignee shall have delivered to the Company a dulyexecuted Assignment and Acceptance, (i) the Assignee thereunder shall be aparty hereto and, to the extent that rights and obligations hereunder have beenassigned to it pursuant to such Assignment and Acceptance, shall have therights and obligations of the assigning Lender under the Loan Documents, and (ii) theassigning Lender shall, to the extent that rights and obligations hereunder andunder the other Loan Documents have been assigned by it pursuant to suchAssignment and Acceptance, relinquish its rights and be released from itsobligations under the Loan Documents.

 

(c)                                  The Company shall maintain a copy of eachAssignment and Acceptance delivered to it and a register for the recordation ofthe names and addresses of the Lender and the principal amount of the Loanowing to the Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall beconclusive, absent manifest error, and the Company and the Lender may treateach Person whose name is recorded in the Register pursuant to the terms hereofas the Lender hereunder for all purposes of this Agreement, notwithstandingnotice to the contrary.  The Registershall be available for inspection by the Lender at any reasonable time and fromtime to time upon reasonable prior notice.

 

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(d)                                 Within ten (10) Business Days afterreceipt of an executed Assignment and Acceptance, the Company shall execute anddeliver to the Assignee a new Note or Notes in the amount of such Assignee’sassigned Loan and, if the assigning Lender has retained a portion of its Loan,a replacement Note for the assignor Lender (such Note to be in exchange for,but not in payment of, the Note held by the assigning Lender).  Immediately upon the assigning Lender and itsAssignee having delivered to the Company a duly executed Assignment andAcceptance, this Agreement shall be deemed to be amended to the extent, butonly to the extent, necessary to reflect the addition of the Assignee and theresulting adjustment of the Loanarisingtherefrom.

 

(e)                                  The Lender (the “originating Lender”) mayat any time sell to one or more commercial banks or other Persons other thanthe Company or any of its Affiliates or Subsidiaries (a “Participant”)participating interests in all or any part of its Loan (each a “Participation”);provided, however, that (i) the originating Lender’sobligations under this Agreement shall remain unchanged, (ii) theoriginating Lender shall remain solely responsible for the performance of suchobligations, (iii) the Company shall continue to deal solely and directlywith the originating Lender in connection with the originating Lender’s rightsand obligations under this Agreement and the other Loan Documents and (iv) theLender shall not transfer or grant any participating interest under which theParticipant has rights to approve any amendment to, or any consent or waiverwith respect to, this Agreement or any other Loan Document.  In the case of any such participation, theLender selling such participation shall be entitled to agree to pay over to theParticipant any amounts paid to the Lender pursuant to Section 3.01 (*Taxes*), Section 3.04 (*Increased Costs and Reduction of Return*)and Section 3.05 (*Funding Losses*)and if amounts outstanding under this Agreement are due and unpaid, or shallhave been declared or shall have become due and payable upon the occurrence ofan Event of Default, each Participant shall be deemed to have the right ofset-off in respect of its participating interest in amounts owing under thisAgreement to the same extent as if the amount of its participating interestwere owing directly to it as the Lender under this Agreement; providedthat such agreement or instrument may provide that the Lender will not, withoutthe consent of the Participant, agree to any amendment, waiver or othermodification that would (i) postpone any date upon which any payment ofmoney is scheduled to be paid to such Participant or (ii) reduce theprincipal, interest, fees or other amounts payable to such Participant.  Subject to clause (f) of this Section 9.08,the Company agrees that each Participant shall be entitled to the benefits of Section 3.01(*Taxes*), Section 3.04 (*Increased Costs and Reduction of Return*)and Section 3.05 (*Funding Losses*)to the same extent as if it were the Lender and had acquired its interest byassignment pursuant to clause (a) of this Section 9.08.  To the fullest extent permitted by law, eachParticipant also shall be entitled to the benefits of Section 9.10 (*Set-off*) as though it were the Lender.

 

(f)                                    Except if an Event of Default hasoccurred and is continuing, no Assignee or Participant shall be entitled toreceive any greater payment under Section 3.01 (*Taxes*), Section 3.04 (*IncreasedCosts and Reduction of Return*), Section 3.05 (*Funding Losses*) or Section 3.06 (*Reserves on Loan*) than the Lender wouldhave been entitled to receive with respect to the rights transferred orparticipated, unless such transfer or participation is made with the Company’s priorwritten consent or at a time when the circumstances giving rise to such greaterpayment did not exist.

 

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(g)                                 The Lender may at any time pledge orassign a security interest in all or any portion of its rights under thisAgreement to secure obligations of the Lender, including any pledge orassignment to secure obligations to a Federal Reserve Bank; providedthat no such pledge or assignment shall release the Lender from any of itsobligations hereunder or substitute any such pledgee or assignee for the Lenderas a party hereto.

 

9.09.                        Confidentiality.

 

TheLender agrees to maintain the confidentiality of the Information (as definedbelow), except that Information may be disclosed (i) to its and itsAffiliates’, directors, officers, employees and agents, including accountants,legal counsel and other advisors (it being understood that the Persons to whomsuch disclosure is made will be informed of the confidential nature of suchInformation and instructed to keep such Information confidential); (ii) tothe extent requested by any regulatory or self-regulatory authority includingany securities exchange; (iii) to the extent required by applicable lawsor regulations or by any subpoena or similar legal process; (iv) to anydirect or indirect credit insurance provider, insurer, insurance broker orrating agencies relating to the Company and the Obligations (v) to anyother party to this Agreement; (vi) in connection with the exercise of anyremedies hereunder or any suit, action or proceeding relating to this Agreementor the enforcement of rights hereunder; (vii) subject to an agreementcontaining provisions substantially the same as those of this Section 9.09,to (1) any Assignee of or Participant in, or any prospective Assignee ofor Participant in, any of its rights or obligations under this Agreement or (2) anydirect or indirect contractual counterparty or prospective counterparty (orsuch contractual counterparty’s or prospective counterparty’s professionaladvisor) to any derivative or hedging transaction relating to obligations ofthe Company; (viii) with the consent of the Company; (ix) upon theoccurrence of any Event of Default; or (ix) to the extent such Information(1) becomes publicly available other than as a result of a breach of this Section or(2) becomes available to the Lender on a nonconfidential basis from asource other than the Company.  Inaddition, the Lender may disclose the existence of this Agreement andinformation about this Agreement to market data collectors, similar serviceproviders to the lending industry, and service providers to the Lender inconnection with the administration and management of this Agreement, the otherLoan Documents, the Participations, and the Loan.  For purposes of this Section, “Information”means all information received from the Company relating to the Company and/orits business, other than any such information that is available to the Lenderon a nonconfidential basis prior to disclosure by the Company; providedthat, in the case of information received from the Company after the datehereof, such information shall be deemed not to be confidential unless it isclearly identified in writing at the time of delivery as confidential or it isapparent on its face that such information is confidential.  Any Person required to maintain theconfidentiality of Information as provided in this Section shall beconsidered to have complied with its obligation to do so if such Person hasexercised the same degree of care to maintain the confidentiality of suchInformation as such Person would accord to its own confidentialinformation.  This Section 9.09shall supersede any prior confidentiality agreements entered into between theCompany and the Initial Lender, and all Information provided prior to the datehereof shall be subject to this Section 9.09.

 

9.10.                        Set-off.  In additionto any rights and remedies of the Lender provided by law, if an Event ofDefault exists or the Loan has been accelerated, the Lender is authorized atany time and from time to time, without prior notice to the Company, any suchnotice being waived by the 

 

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Company to the fullest extent permitted by law, to set off and applyany and all deposits (general or special, time or demand, provisional or finalin any currency, matured or unmatured) at any time held by, and otherIndebtedness at any time owing by, the Lender to or for the credit or theaccount of the Company against any and all Obligations owing to the Lender, nowor hereafter existing, irrespective of whether or not the Lender shall havemade demand under this Agreement or any Loan Document and although suchObligations may be contingent or unmatured. The Lender agrees promptly to notify the Company after any such set-offand application made by the Lender; provided, however, that thefailure to give such notice shall not affect the validity of such set-off andapplication.

 

9.11.                        Notification of Addresses, Lending Offices, Etc. The Lender shall notify the Company in writing of any changes in theaddress to which notices to the Lender should be directed, of addresses of itsLending Office, of payment instructions in respect of all payments to be madeto it hereunder and of such other administrative information as the Companyshall reasonably request.

 

9.12.                        Counterparts.  ThisAgreement may be executed in any number of separate counterparts, each ofwhich, when so executed, shall be deemed an original, and all of saidcounterparts taken together shall be deemed to constitute but one and the sameinstrument.  Delivery of an executedcounterpart of a signature page to this Agreement by facsimile orelectronic mail shall be effective as delivery of a manually executedcounterpart of this Agreement.

 

9.13.                        Severability.  Theillegality or unenforceability of any provision of this Agreement or anyinstrument or agreement required hereunder shall not in any way affect orimpair the legality or enforceability of the remaining provisions of thisAgreement or any instrument or agreement required hereunder.

 

9.14.                        Governing Law.  THISAGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OFTHE STATE OF NEW YORK.

 

9.15.                        Consent to Jurisdiction; Waiver of Jury Trial.

 

(a)                                  Each of the parties hereto herebyirrevocably and unconditionally submits, in any action or proceeding arisingout of or relating to this Agreement, any other Loan Document or thetransactions contemplated hereby, to the exclusive jurisdiction of any New YorkState or federal court sitting in New York City and any appellate court thereof(a “Specified Court”).

 

(b)                                 Each of the parties hereto herebyirrevocably waives, to the fullest extent it may effectively do so, the defenseof an inconvenient forum to the maintenance of such action or proceeding, theright to object that any Specified Court does not have any jurisdiction oversuch party, and any right of jurisdiction in such action or proceeding to whichit may otherwise be entitled.

 

(c)                                  EACH OF THE PARTIES HERETO HEREBYIRREVOCABLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OFANY LITIGATION BASED UPON, OR ARISING OUT OF, THIS AGREEMENT OR ANY OTHER LOAN 

 

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DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT ORACTIONS OF THE LENDER OR THE COMPANY RELATING THERETO.

 

(d)                                 The Company hereby irrevocably appointsCT Corporation (the “Process Agent”), with an office on the date hereofat, 111 Eighth Avenue, New York, New York 10011 or, if service cannot be effectuated onthe Process Agent, Gruma Corporation (the “Alternate Process Agent”),with an office on the date hereof at 1159 Cottonwood Ln., Irving, TX 75038,Attention: Vice President of Legal Services, as its agent to receive on behalfof the Company service of the summons and complaint and any other process whichmay be served in any action or proceeding brought in any New York state orfederal court sitting in New York City. Such service may be made by mailing or delivering a copy of such processto the Company, in care of the Process Agent or the Alternate Process Agent, asapplicable, at the address specified above for the Process Agent or theAlternate Process Agent, as applicable, and the Company hereby irrevocablyauthorizes and directs the Process Agent and the Alternate Process Agent, asapplicable, to accept such service on its behalf.  Such appointment shall be contained in anotarial instrument that complies with the 1940 Protocol on Uniformity ofPowers of Attorney to be utilized abroad as ratified by the United States andMexico.

 

(e)                                  Final judgment in any such action orproceeding shall be conclusive and may be enforced in other jurisdictions bysuit on the judgment or in any other manner provided by law.

 

9.16.                        Waiver of Immunity.  The Companyacknowledges that the execution and performance of this Agreement and eachother Loan Document is a commercial activity and to the extent that the Companyhas or hereafter may acquire any immunity from any legal action, suit orproceedings, from jurisdiction of any court or from set-off or any legalprocess (whether service or notice, attachment prior to judgment, attachment inaid of execution of judgment, execution of judgment or otherwise) with respectto itself or any of its Property, whether or not held for its own account, theCompany, to the fullest extent permitted by applicable law, hereby irrevocablyand unconditionally waives and agrees not to plead or claim such immunity inrespect of its obligations under this Agreement or any other Loan Document.

 

9.17.                        Payment in US Dollars; Judgment Currency.

 

(a)                                  All payments by the Company to the Lenderhereunder shall be made in US Dollars and in immediately available funds and insuch funds as are customary at the time for the settlement of internationaltransactions.

 

(b)                                 If for purposes of obtaining judgmentagainst the Company with respect to its obligations under this Agreement or theNote in any court it is necessary to convert a sum due under this Agreement inUS Dollars into another currency (the “Other Currency”), the Companyagrees, to the fullest extent permitted by applicable law, that the rate ofexchange used shall be that at which in accordance with normal bankingprocedures the Lender could purchase US Dollars with the Other Currency on theBusiness Day preceding that on which final judgment is given.

 

(c)                                  The obligation of the Company in respectof any sum due under this Agreement or the Note shall, notwithstanding anyjudgment in any Other Currency, be discharged only to 

 

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the extent that on the Business Day following receipt by the Lender ofany sum adjudged to be so due in the Other Currency the Lender may inaccordance with normal banking procedures purchase US Dollars with the OtherCurrency; if the amount of US Dollars so purchased is less than the sumoriginally due to the Lender in US Dollars, the Company hereby agrees, as aseparate obligation and notwithstanding any such judgment, to indemnify theLender against such loss.

 

9.18.                        Change to IFRS. If the Company intends or is required to adopt IFRS, the Company and theLender shall, at least one hundred and twenty (120) days prior to suchadoption, commence to negotiate in good faith with a view to agreeing suchwritten amendments to the financial covenants in Sections 7.09 (*Interest Coverage Ratio*) and 7.10 (*Leverage Ratio*) and, in each case, thedefinitions used therein and the equivalent definitions in the securitydocuments in respect of the Secured Indebtedness, as may be necessary to ensurethat the criteria for evaluating the Company’s financial condition (i) notprejudice the Company in terms of its compliance with the terms of thisAgreement more than, and (ii) grant to the Lender protection equivalent tothat which would have been enjoyed, in each case, had the Company not adoptedIFRS (such amendments, the “IFRS Amendments”).  If no written agreement with respect to anyof the IFRS Amendments is reached within sixty (60) days prior to the Company’sadoption of IFRS, then the Company and the Lender shall submit their differingpositions with respect to the IFRS Amendments to a Qualified Accountantselected by the mutual agreement of the parties, which in any event shall bethe same Qualified Accountant selected in this respect for the MandatoryPrepayment Indebtedness.  The QualifiedAccountant shall consider only the IFRS Amendments and shall only make adecision with respect thereto that is within the bounds set by the differingpositions of the Lender and the Company. The Qualified Accountant’s decision with respect thereto shall be finaland binding on the parties hereto and shall be made in writing and notified tothe parties hereto at least five (5) Business Days prior to the adoptionof IFRS by the Company.  Any IFRSAmendments agreed between the Company and the Lender or determined by theQualified Accountant shall take effect as of the date of the Company’s adoptionof IFRS.  The parties agree that noamendment fee shall be payable by the Company to the Lender in respect of anyIFRS Amendments other than payments or reimbursements in accordance with Section 9.04(a) (*Costs and Expenses*) of reasonable anddocumented costs (including Attorney Costs and the fees of the QualifiedAccountant) incurred by the Lender in connection with such IFRS Amendments.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to beduly executed and delivered by their proper and duly authorized officers as ofthe day and year first above written.

 
|   | GRUMA, S.A.B. de C.V. |
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*Signature Page to*

*Loan Agreement*

 

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 THIS PAGE IS A SIGNATURE PAGEFOR THE LOAN AGREEMENT, AS OF THE DATE FIRST WRITTEN ABOVE, AMONG GRUMA, S.A.B. DE C.V., AS THEBORROWER, AND THE LENDER

 
|   | STANDARD CHARTERED  BANK,  as Lender |
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