EXHIBIT 4.12
EXECUTION COPY
CONFIRMATION
Date: December 13, 2002
To: Empresas Tolteca de Mexico, S.A. de C.V. (Counterparty)
Telecopy No.: (528) 328 7162
Attention: Rodrigo Trevino
From: Citibank, N.A. (Bank)
Telecopy No.: (212) 723-8674
Transaction Reference Number: [____________]
The purpose of this communication is to set forth the terms and conditions of
the above-referenced transaction entered into on the Trade Date specified below
(the Transaction) between you and us. This communication constitutes a
"Confirmation" as referred to in the Agreement specified below.
1. Master Agreement
This Confirmation supplements, forms a part of, and is subject to, the
ISDA Master Agreement dated as of December 13, 1999 (as amended and
supplemented from time to time, the Agreement), between you and us. All
provisions contained in the Agreement shall govern this Confirmation
except as expressly modified below.
2. Incorporation of Terms
Except as expressly set forth herein and except as the context
otherwise requires, the terms of the Transaction (the First
Transaction) described in the Confirmation dated December 13, 1999 (the
First Confirmation) between Counterparty and Bank, as modified and
supplemented and in effect immediately prior to the date hereof and
immediately prior to the execution of Amendment No. 2 hereto, are
hereby incorporated by reference, notwithstanding the fact that the
First Transaction shall be terminated on or prior to the date hereof.
In the event of any conflict between the terms of the First
Confirmation and this Confirmation, this Confirmation shall prevail.
3. Certain Terms
The terms of the particular Transaction to which this Confirmation
relates are as follows:
Trade Date: December 11, 2002
Effective Date: December 13, 2002, which shall be the
effective date under each of the Group
Confirmations
Termination Date: December 12, 2003
Notional Amount: USD154,625,513.40
Forward
Payment Amount: USD159,080,246.91 (subject to the "Early
Termination by Counterparty" provision
below).
The paragraphs across from the captions "Cemex ADS Purchase Procedures"
and "Valenciana Shares Purchase Procedures" in Paragraph 3 of the First
Confirmation shall not apply except for purposes of providing
definitions for terms used but not defined elsewhere in the First
Confirmation.
4. Additional Payments by Counterparty:
(a) On the Effective Date, Counterparty shall pay to Bank USD70,936,238.67
as a partial prepayment of the Forward Payment Amount (the amount of
such payment, the Initial Forward Payment Amount).
(b) On June 13, 2003 (the Intermediate Forward Payment Date), Counterparty
shall make an Intermediate Forward Payment to Bank of the Intermediate
Forward Payment Amount payable on the Intermediate Forward Payment
Date.
5. Conditions Precedent
The obligations of the parties under this Confirmation shall be subject
to the conditions precedent that
(i) each "Participant" identified in the Calculation Agency and
Interbank Agreement shall have executed and delivered a
Confirmation (as described therein); and
(ii) Bank shall have received:
(A) an opinion of Ritch, Heather y Mueller, S.C., as special
Mexican counsel to Bank, in form and substance
satisfactory to Bank, with respect to the matters
addressed in the opinion delivered by such counsel in
connection with the First Transaction; and
(B) an opinion of Freshfields Bruckhaus Deringer LLP, as
special U.S. counsel to Bank, in form and substance
satisfactory to Bank, with
respect to the matters addressed in the opinion
delivered by such counsel in connection with the
First Transaction.
6. Representations and Agreements Annex:
The Representations and Agreements Annex attached as Exhibit II to the
First Confirmation is hereby incorporated into this Confirmation as if
set forth in full herein, and the representations contained therein are
representations for purposes of Section 3(d) of the Agreement.
7. Definitions
For purposes of this Confirmation, the following terms shall have the
following meanings:
Adjusted Forward Payment Amount means the USD amount as determined by
the Calculation Agent according to the following formula:
PV of (a - b - c - d)
where
a = Forward Payment Amount
b = USD72,979,899.07(FV1 of the Initial Forward Payment
Amount) c = The FV2 of the Intermediate Forward Payment Amount
d = Aggregate of all FV2 of the Advanced Forward Payment
Amount
provided that, on and after the Termination Date, the "Adjusted Forward
Payment Amount" will be the amount determined by the Calculation Agent
to be equal to (a) the Forward Payment Amount less (b) USD72,979,899.07
less (c) the FV2 of the Intermediate Forward Payment Amount less (d)
the Aggregate of all FV2 of the Advanced Forward Payment Amount
Calculation Agency and Interbank Agreement means the Calculation Agency
and Interbank Agreement dated as of December 13, 1999 between Empresas
Tolteca de Mexico, S.A. de C.V., the Calculation Agent, and each of the
banks or other financial institutions party thereto, as amended on
December 13, 2002 and as further modified and supplemented and in
effect from time to time.
FV2 means, with respect to any Advanced Forward Payment Amount or
Intermediate Forward Payment Amount, the value on the Termination Date
that, when discounted to the date of payment of such amount (on a
30/360 basis compounded quarterly) at the Swap Rate, equals such
Advanced Forward Payment Amount or such Intermediate Forward Payment
Amount, as the case may be. As used in this definition, Swap Rate
means, as of any date of payment referred to above, the fixed rate of
interest (computed on a 30/360 basis)
equivalent, for the period from and including the date of payment of
such amount to but excluding the Termination Date, to three-month
USD-LIBOR-BBA plus 125 bps (computed on a 30/360 basis compounded
quarterly) based upon the zero coupon swap curve in effect on the date
of payment of such amount, as determined by the Calculation Agent in
accordance with Section 3(b) of the Calculation Agency and Interbank
Agreement.
Intermediate Forward Payment Amount means, with respect to any
Intermediate Forward Payment Date, the USD1,196,976.60 (the USD amount
as determined by the Calculation Agent according to the following
formula:
(Notional Amount - Initial Forward Payment
Amount)*((1+r/4)^2 - 1)
where
"r" = the fixed rate of interest (computed on a 30/360 basis)
equivalent, for the period from and including the Effective
Date to but excluding the Termination Date, to three-month USD
LIBOR plus 125 bps (computed on a 30/360 basis compounded
quarterly) based upon the zero coupon swap curve in effect on
the Effective Date).
Minimum Advanced Forward Payment Amount means USD2,152,000.00 (the USD
amount equal to (i) 2.5% multiplied by (ii) the Forward Payment Amount
minus the FV1 of the Initial Forward Payment Amount).
PV means, with respect to any Valuation Date and any specified amount,
the present value of such specified amount, discounted from the
Termination Date to such Valuation Date at a discount rate per annum
equal to the fixed rate of interest (computed on a 30/360 basis)
equivalent, for the period from and including such Valuation Date to
but excluding the Termination Date, to three-month USD LIBOR plus 125
bps (computed on a 30/360 basis compounded quarterly) based upon the
zero coupon swap curve in effect on such Valuation Date.
Valuation Dates means each of (i) December 20, 2002 and thereafter the
last Business Day of each week up to and including December 12, 2003,
(ii) any Early Termination Date, (iii) any Voluntary Early Termination
Date and (iv) the Termination Date.
8. Agreement to Deliver Documents:
For the purpose of Section 4(a)(ii) of the Agreement, each party agrees
to deliver the following documents, as applicable:
-------------------- ------------------------------- --------------------------- ----------------------
Party required to Form/Document/ Date by which to be Covered by Section
deliver document Certificate delivered 3(d) Representation
-------------------- ------------------------------- --------------------------- ----------------------
Bank and Evidence of the authority, Upon the execution by Yes
Counterparty incumbency and specimen such party or any Credit
signature of each person Support Provider of this
executing any document upon Confirmation, any Credit
behalf of such party or any Support Document with
Credit Support Provider of respect to such party or
such party (including, in the any other documentation
case of Counterparty and each relating to the Agreement
Credit Support Provider, or any such Credit
notarized copies of the Support Document
by-laws of and powers of
attorney given by
Counterparty or such Credit
Support Provider to its
officers, as the case may be)
-------------------- ------------------------------- --------------------------- ----------------------
Counterparty Evidence of the appointment Upon the execution by Yes
of an agent of service of such party or any Credit
process for the Counterparty Support Provider of this
and each Credit Support Confirmation, any Credit
Provider (including copies of Support Document with
appointment and acceptance respect to such party or
letters and powers of any other documentation
attorney (executed in the relating to the Agreement
presence of a Mexican notary) or any such Credit
granted by Counterparty and Support Document
each Credit Support Provider
in favor of the process agent)
-------------------- ------------------------------- --------------------------- ----------------------
-------------------- ------------------------------- --------------------------- ----------------------
Counterparty The Amendment to the Credit On or prior to the Yes
Support Document with respect execution by such party
to such party specified in of this Confirmation
Paragraph 9 of this
Confirmation
-------------------- ------------------------------- --------------------------- ----------------------
Bank and The Amendment to the On or prior to the Yes
Counterparty Calculation Agency and execution of this
Interbank Agreement Confirmation
-------------------- ------------------------------- --------------------------- ----------------------
Counterparty Opinion of internal legal On the Effective Date Yes
counsel of Counterparty and
each of its Credit Support
Providers, in form and
substance satisfactory to
Bank, with respect to the
matters addressed in the
opinion delivered by such
counsel in connection with
the First Transaction
-------------------- ------------------------------- --------------------------- ----------------------
Counterparty Opinion of Skadden, Arps, On the Effective Date No
Slate, Meagher & Flom LLP, as
counsel to Cemex, in form and
substance satisfactory to
Bank, with respect to the
matters addressed in the
opinion delivered by such
counsel in connection with
the First Transaction
-------------------- ------------------------------- --------------------------- ----------------------
-------------------- ------------------------------- --------------------------- ----------------------
Counterparty Opinion of Skadden, Arps, Not later than the tenth Yes
Slate, Meagher & Flom LLP, as Business Day immediately
counsel to Cemex, in form and succeeding the
substance satisfactory to effectiveness of the
Bank, certifying that the Registration Statement
Registration Statement with
respect to the Cemex ADS is
effective and that no refusal
or stop order has been issued
by the United States
Securities and Exchange
Commission
-------------------- ------------------------------- --------------------------- ----------------------
Counterparty Evidence of receipt of any On or prior to the Yes
necessary Mexican approvals execution of this
by Counterparty and each of Confirmation
its Credit Support Providers
-------------------- ------------------------------- --------------------------- ----------------------
9. Credit Support:
For purposes of this Transaction only, each of Cemex and Cemex Mexico,
S.A. de C.V. shall be a Credit Support Provider in relation to
Counterparty, and the Guarantee, dated as of December 13, 1999 and
amended as of December 13, 2002, made by the Credit Support Providers
in favor of Bank shall be a Credit Support Document in relation to
Counterparty.
10. Representations:
In connection with this Confirmation, the Transaction to which this
Confirmation relates and any other documentation relating to the
Agreement, each party to this Confirmation (and, with respect to
Counterparty, Cemex) makes to the other party the representations and
acknowledgements set forth in Paragraph 15 of the First Confirmation.
In addition, each party to this Confirmation represents and warrants to
the other party to this Confirmation that it is an "eligible contract
participant" as such term is defined in Section 1a(12) of the U.S.
Commodity Exchange Act.
Counterparty hereby agrees (a) to check this Confirmation carefully and
immediately upon receipt so that errors or discrepancies can be promptly
identified and rectified and (b) to confirm that the foregoing correctly sets
forth the terms of the agreement between
us with respect to the particular Transaction to which this Confirmation
relates, by manually signing this Confirmation and providing any other
information requested herein and immediately returning an executed copy to Luis
Miraglia at (212) 723-8674. Hard copies should be returned to 399 Park Avenue,
New York, New York 10022.
Yours sincerely,
CITIBANK, N.A.
By: /s/ Kurt Vogt
------------------------------
Name: Kurt Vogt
Title: Managing Director
Confirmed as of the date first above written:
EMPRESAS TOLTECA DE MEXICO, S.A. DE C.V.
By: /s/ Humberto Moreira
---------------------------
Name: Humberto Moreira
Title: Attorney-in-fact
Acknowledged and Agreed solely for purposes of Paragraphs 2, 6, 9 and 10:
CEMEX, S.A. DE C.V.
By: /s/ Mario de la Garza
---------------------------
Name: Mario de la Garza
Title: Attorney-in-fact
Acknowledged and Agreed solely for
purposes of Paragraph 9:
CEMEX MEXICO, S.A. de C.V.
By: /s/ Victor Naranjo
---------------------------
Name: Victor Naranjo
Title: Attorney-in-fact