ENGLISH TRANSLATION OF A
SPANISH LANGUAGE DOCUMENT
COMPLIANCE AND SETTLEMENT AGREEMENT BETWEEN TFM, GRUPO TFM,
GRUPO TMM, KCS AND THE FEDERAL GOVERNMENT
Complex Type of Compliance and Settlement Agreement entered into on one part by
TFM, S.A. de C.V. (hereinafter TFM), represented in this act by Marcoflavio
Rigada Xxxx; Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V.
(hereinafter GRUPO TFM), represented in this act by Marcoflavio Rigada Xxxx;
Grupo TMM, S.A. (hereinafter GRUPO TMM), represented in this act by Xxxx
Xxxxxxxxx Xxxxxxx Xxxxxxx and Xxxxxx Xxxxxxx Xxxxxxx; and Kansas City Southern
(hereinafter KCS), represented in this act by Xxx X. Xxxxxxx; and on the other
part by the FEDERAL GOVERNMENT of the United Mexican States, through the conduct
of the Secretariat of Communications and Transports (SECRETARIA DE
COMUNICACIONES Y TRANSPORTES) (hereinafter SCT), represented in this act by
Xxxxx Xxxxxxx Poltolarek; the Secretariat of Finance and Public Credit
(SECRETARIA DE HACIENDA Y CREDITO PUBLICO) (hereinafter SHCP), through the
Federal Treasury (TESORERIA DE LA FEDERACION) (hereinafter TESOFE), represented
in this act by Xxxxxxx Xxxxx Xxxxx Xxxxx; and the Revenue Administration Service
(SERVICIO DE ADMINISTRACION TRIBUTARIA) (hereinafter SAT), represented in this
act by Xxxx Xxxxx Xxxxxxx Maqueo;, and with the appearance of the General
Attorney of the Republic (PROCURADURIA GENERAL DE LA REPUBLICA) (hereinafter
PGR), represented by German Xxxxxxxx Xxxxxx; pursuant to the following
Antecedents, Representations and Clauses:
For the effects of this AGREEMENT, the terms used have the meanings ascribed to
them in the First Clause. ANTECEDENTS
1. TRANSACTIONS THAT CAUSED THE VAT REFUND AND OBLIGATION OF THE COMPANY. On
December 2 and 3, 1996, the FEDERAL GOVERNMENT and the Northeast Railway
Company (FERRROCARRIL DEL NORESTE, S.A. DE C.V.; (at that time owned by the
FEDERAL GOVERNMENT and currently TFM), entered into two agreements: a
purchase and sale agreement of fixed assets and an agreement for the
sublease of locomotives; as well as the granting of a concession. The total
amount for the three transactions was $16,185,190,392.30 pesos (Sixteen
billion one hundred and eighty five million one hundred ninety thousand
three hundred and ninety two 30/100 pesos), comprised of $14,074,078,602.00
pesos (Fourteen billion seventy four million seventy eight thousand six
hundred and two 00/100 pesos), plus $2,111,111,790.30 pesos (Two billion
one hundred eleven million one hundred eleven thousand seven hundred and
ninety 30/100 pesos), the final amount was equivalent to the VAT.
2. PURCHASE AND SALE. On January 31, 1997, the PURCHASE AND SALE AGREEMENT of
the shares representing 80% of the capital stock of the railway company
named Ferrocarril del Noreste, S.A. de C.V., (currently TFM), was executed
between the FEDERAL GOVERNMENT, represented by the TESOFE and Ferrocarriles
Nacionales de Mexico, as sellers, with the appearance of the SCT, and
Transportacion Ferroviaria Mexicana, S. de X.X. de C.V. (currently GRUPO
TFM) as buyer. In said agreement, GRUPO TFM obligated itself to acquire the
20% of the shares (SECOND PACKET) on the terms and conditions therein
stipulated.
3. AMENDMENT OF THE PURCHASE AND SALE AGREEMENT. The PURCHASE AND SALE
AGREEMENT was amended on June 9, 1997 through the AMENDMENT AGREEMENT that
extended the term for the purchase of the SECOND PACKET.
4. REFUND OF THE VAT TO TFM. TFM requested from TESOFE the payment of the
positive balance of the VAT arising from the operations described in
Antecedent 1 of this AGREEMENT. With respect to the described request it
established the implied denial in accordance with the provisions of article
37 of the Fiscal Code of the Federation. As a result, on October 29, 1997,
TFM initiated before the former Federal Fiscal Court a nullity trial so
that it would be granted the refund of the VAT generated as a result of the
transactions described in Antecedent 1. After several judicial proceedings,
on August 13, 2003 the Federal Court of Fiscal and Administrative Justice
issued a judgment through which it ordered the requested VAT refund, as a
result TESOFE on January 19, 2004 issued the tax refund certificate in the
amount of $2,111,111,790.30 pesos (Two billion one hundred eleven million
one hundred eleven thousand seven hundred and ninety 30/100 pesos).
On January 26, 2005, the Federal Court of Fiscal and Administrative Justice
issued a judgment through which -in compliance with the JUDGMENT issued by
the Fourth Collegiate Court for Administrative Matters of the First Circuit
of November 23, 2004, which resolved the appeal of complaint for defect in
complying with the judgment mentioned in the preceding paragraph- it
ordered the issuance in favor of TFM of a single certificate, through which
it would pay the requested refund in the amount of $2,111,111,790.30 pesos
(Two billion one hundred eleven million one hundred eleven thousand seven
hundred ninety 30/100 pesos), plus the indexation for inflation and
corresponding interest, in the terms that are established in Article 22 of
the Federal Fiscal Code in effect since January 1, 1997, which totals
$12,965,742,236.00 pesos (Twelve billion nine hundred sixty five thousand
seven hundred forty two thousand two hundred and thirty six 00/100 pesos),
the same which was challenged through an appeal of complaint initiated by
the SHCP, which was decided in the session of August 24, 2005, and in said
session the complaint was declared to be unfounded.
Due to the foregoing, that judgment remains firm and its contents are
definitive and unassailable.
TESOFE's compliance with the JUDGMENT is currently pending.
5. PURCHASE AND SALE OF 20% OF THE SHARES (SECOND PACKET). Pursuant to the
terms set forth in the PURCHASE AND SALE AGREEMENT, the SCT notified GRUPO
TFM, on April 25 and on October 31, 2003, of the obligation to purchase
from the FEDERAL GOVERNMENT the 20% of the remaining shares of TFM.
6. PENDING CONTROVERSIES.
A) ORDINARY COMMERCIAL TRIAL 166/2003-V, initiated on October 16, 2003 by
GRUPO TFM against TESOFE, SCT and PGR, is pending before the Twelfth
District Court for Civil Matters in the Federal District, in which the
judicial interpretation of certain clauses of the PURCHASE AND SALE
AGREEMENT and the AMENDMENT AGREEMENT relevant to the sale of the SECOND
PACKET was requested. Currently there are no pending procedures;
nonetheless, this trial was consolidated with case number 230/2004.
B) CONSTITUTIONAL PROTECTION TRIAL NUMBER 1628/2003, initiated on November 25,
2003 by GRUPO TFM against the SCT and PGR with respect to the exercise by
the SCT of the put of the SECOND PACKET. This case was assigned to the
Fourth District Judge for Administrative Matters in the Federal District,
who granted the definitive suspension in order to maintain the matters in
their current status.
C) ORDINARY COMMERCIAL TRIAL 230/2004, initiated on December 3, 2004 by the
FEDERAL GOVERNMENT against TFM, GRUPO TFM, GRUPO TMM and KCS, in which it
demanded compliance with all of the obligations that derive from the biding
process and the PURCHASE AND SALE AGREEMENT, among which are included the
obligation to purchase the SECOND PACKET and to cover the potential
liability in favor of the FEDERAL GOVERNMENT in connection with the
transferred VAT;
This matter was consolidated with the Ordinary Commercial Trial described
in paragraph A) above. The procedure is currently suspended by means of the
appeal initiated by the PGR representing the FEDERAL GOVERNMENT against the
judgment that ordered the new service of process on the defendants as a
result of the modification of the admission decree.
7. Because of the existence of the PENDING CONTROVERSIES, on June 28, 2005,
TFM presented an offer through which it intends to put an end to the same,
which was ratified through a letter dated September 2, 2005 (ANNEX 1).
8. On September 8, 2005, the Secretariat of Public Function, through official
communication 1102.-5633, issued at the request of the SCT and SHCP a
favorable opinion with respect to the execution of this AGREEMENT. (ANNEX
2).
9. APPEARANCE OF THE PARTIES.
I. The FEDERAL GOVERNMENT appears through:
A) The SCT which has an interest that the Federal Government not suffer any
patrimonial damage; that the SAT through official communication
330-SAT-17137 of September 12, 2005, left without effect its requirement of
collection effected through official communication 102-SAT-416, of November
10, 2004 (ANNEX 3) and that the Secretariat of the Public Function issued
the opinion referred to in official communication 1102.-5633, of September
8, 2005, which form a part of this instrument; as well as because: i) it is
the Entity authorized by the SHCP (pursuant to the publication of January
29, 1997 in the Official Gazette of the Federation) to carry out the sale
of the certificates representing the
capital stock of Ferrocarril del Noreste, S.A. de C.V. (currently TFM),
obliged by it to provide and to promote the conduct of it to the end that
the authorized sale procedure is carried out in an opportune, effective,
and transparent manner, and in accordance with the applicable legal
provisions (Art. 2 of the aforementioned Resolution); ii) it is the
authority that as sector coordinator and exercising the indicated
authorization participated in the fixed asset purchase and sale agreement
mentioned in section I of the section of antecedents of this instrument and
it granted the corresponding concession title, presented the corresponding
tax statement in connection with the VAT to be delivered; iii) that it is
the sector coordinator responsible for the process of selling the shares of
Ferrocarril del Noreste, S.A. de C.V. (currently TFM), including the sale
of the SECOND PACKET, that pursuant to the PURCHASE AND SALE AGREEMENT
notified to TFM, GRUPO TFM, KCS and GRUPO TMM the number of shares of the
SECOND PACKET and, consequently, pursuant to this AGREEMENT receives a
price identical to the price agreed in the PURCHASE AND SALE AGREEMENT,
which will be covered with the execution of this AGREEMENT, in order to
deliver it to TESOFE; iv) for the matters related to the CLAIMS OF THE
FEDERAL GOVERNMENT; v) it is a defendant in the Ordinary Commercial Trial
166/2003-V; and vi) it is the responsible authority in the Constitutional
Protection Trial number 1628/2003;
B) The SHCP, through the conduct of TESOFE and SAT:
1. TESOFE, in attention to its interest that the FEDERAL GOVERNMENT not
suffer any patrimonial damage; as well as because: i) it is obliged to
comply the JUDGMENT, that is to say, to issue the SPECIAL CERTIFICATE FOR
REFUND OF TAXES, and ii) it has physical custody of the shares
corresponding to the SECOND PACKET, which accordingly will be covered by
and delivered with the execution of the present instrument, and
consequently, it receives the delivery that is made to the SCT of the price
agreed to in the PURCHASE AND SALE AGREEMENT in which it was a party along
with the Mexican National Railway (FERROCARRILES NACIONALES DE MEXICO),
with the appearance of the SCT;
2. The SAT, in attention to its interest that the FEDERAL GOVERNMENT not
suffer any patrimonial damage and because it is the authority that: i) must
instruct TESOFE to comply with the JUDGMENT; ii) recognize and accept the
waiver performed by TFM and GRUPO TFM with respect to the VAT refund, and
iii) recognize the assignment of collection rights regarding the VAT refund
derived from the JUDGMENT on the terms set forth in the Third clause;
II. And for the other part TFM, GRUPO TFM, GRUPO TMM and KCS:
A) TFM since it is: i) the entity in which name the SPECIAL CERTIFICATE FOR
REFUND OF TAXES must be issued; ii) a party in the Ordinary Commercial
Trial 230/2004 described in Antecedent 6, and iii) the purchaser of the
SECOND PACKET;
B) GRUPO TFM since it is: i) a party in Ordinary Commercial Trial 166/2003-V;
ii) the plaintiff in Constitutional Protection Trial number 1628/2003; and
iii) a party in the Ordinary Commercial Trial 230/2004, described in
Antecedent 6;
C) GRUPO TMM since it is a party in Ordinary Commercial Trial 230/2004
described in Antecedent 6; and
D) KCS since it is a party in Ordinary Commercial Trial 230/2004 described in
Antecedent 6.
10. The PGR appears in its capacity as representative of the Federation: i) in
Ordinary Mercantile Trial 166/2003-V; ii) in Constitutional Protection
Trial 1628/2003; and iii) in the Ordinary Mercantile Trial 230/2004,
described in Antecedent 6 of this AGREEMENT and, consequently, it will
present this AGREEMENT for ratification before the judicial authority in
the above mentioned Ordinary Mercantile Trial 230/2004 (ANNEX 5).
In view of the foregoing, the FEDERAL GOVERNMENT, on one side, and TFM, GRUPO
TFM, GRUPO TMM and KCS agree to enter into this Agreement under the following
Representations and Clauses:
REPRESENTATIONS
1. TFM STATES THROUGH ITS REPRESENTATIVES THAT:
A) It is a corporation duly incorporated under Mexican law, registered at the
Public Registry of Commerce of its corporate domicile, by means of public
deed number 50,413, dated November 22, 1996, granted before Xxxxxx Xxxxxxx
Xxxxxx, Esq., notary public number 19 of the Federal District, which is
hereby reproduced as if it were inserted herein verbatim for all legal and
consensual effects, with the name Ferrocarril del Noreste, S.A. de C.V.,
which changed to its present corporate name TFM, S.A. de C.V., meeting all
requirements of the General Law of Commercial Entities (LEY GENERAL DE
SOCIEDADES Mercantiles) and of applicable Law in general, being the same
corporation for all legal effects.
B) In a session of the Board of Directors: i) the levels of risk of the
PENDING CONTROVERSIES and the potential FUTURE CONTROVERSIES were
recognized, and ii) its representatives were authorized to carry out the
acknowledgement, assumption, transmission and waivers that this AGREEMENT
implies and that this instrument formalizes, which is evidenced in the
notarization of the minutes made as per public deed number 23,422, dated as
of July 22, 2005, granted before Xxxxxx Xxxxxx Xxxxxxxx Xxxxxxxxxx, Esq.,
notary public number 201 of the Federal District, which is hereby
reproduced as if it was inserted verbatim herein for all legal and
consensual effects.
C) Its representatives have the broadest possible faculties for the execution
of this act, and that such faculties have not been revoked, modified or
reformed in any manner, which is evidenced in the public deed identified in
the prior section B), which is hereby reproduced as if it was inserted
herein verbatim for all legal and consensual effects.
D) TFM participates in this AGREEMENT, among others, because the PENDING
CONTROVERSIES have involved deterioration of its commercial image and of
its relationships with the FEDERAL GOVERNMENT, as well as of the expenses
that those actions generate; situations that have caused its operations and
therefore its competitiveness with the other concessionaires of the Mexican
railroad system to be strongly affected as a public service provider, for
which it has become necessary to end those PENDING CONTROVERSIES.
2. GRUPO TFM STATES THROUGH ITS REPRESENTATIVES THAT:
A) It is a corporation duly incorporated under Mexican law, recorded at the
Public Registry of Commerce of its corporate domicile, by means of public
deed number 32,372, dated July 12, 1996, granted before Xxxxxx Xxxxx Xxxx,
Esq. notary public number 97 of the Federal District, which is hereby
reproduced as if it were inserted herein verbatim for all legal and
consensual effects, with the corporate name Transportacion Ferroviaria
Mexicana, S. de X.X. de C.V., which changed to its present corporate name
Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V., meeting all
requirements of the General Law of Commercial Entities and of applicable
Laws in general, being the same corporation for all legal effects.
B) In a session of the Board of Directors: i) the levels of risk of the
PENDING CONTROVERSIES and the potential FUTURE CONTROVERSIES were
recognized, for GRUPO TFM itself and for its subsidiary TFM, and ii) it
authorized its representatives to carry out the acknowledgement,
assumption, transmission and waivers that this AGREEMENT implies and that
this instrument formalizes, which is evidenced in the notarization of the
minutes made through public deed number 23,418, dated as of July 21, 2005,
granted before Xxxxxx Xxxxxx Xxxxxxxx Xxxxxxxxxx, Esq., notary public
number 201 of the Federal District, which is hereby reproduced as if it was
inserted herein verbatim for all legal and consensual effects.
C) Its representatives have the broadest possible faculties for the execution
of this act, and such faculties have not been revoked, modified or reformed
in any manner, which is evidenced in terms of the public deed referred to
in section B) hereof.
D) Its representatives were authorized to present a dismissal from the
Constitutional Protection Trial, the Ordinary Mercantile Trial 166/2003-V
and the Ordinary Civil Trial referred in Antecedent 6, sections B and C,
since as a consequence of the execution of this AGREEMENT they are moot.
3. GRUPO TMM STATES THROUGH ITS REPRESENTATIVES THAT:
A) It is a corporation duly incorporated under the laws of the United Mexican
States, recorded at the Public Registry of Commerce of its corporate
domicile, by means of public deed number 22729, dated September 19, 1958,
granted before Xxxxxx Xxxxx Xxxxxxx, Esq., notary public number 44 of the
Federal District, which is hereby reproduced as if it were herein inserted
verbatim for all legal and consensual effects, with the denomination of
Transportacion Maritima Mexicana, S.A. de C.V., which changed to its
current name,
Grupo TMM, S.A., complying with all requirements of the General Law of
Commercial Entities and of applicable Laws in general, being the same
corporation for all legal effects.
B) In a session of the Board of Directors: i) the levels of risk of the
PENDING CONTROVERSIES and the potential FUTURE CONTROVERSIES were
recognized, and ii) its representatives were authorized to carry out the
acknowledgement, assumption, transmission and waivers that this AGREEMENT
implies and that this instrument formalizes, which is evidenced in the
notarization of the minutes made as per public deed number 39,847, of
September 12, 2005, granted before Xxxxxx Xxxxx Xxxx, Esq., notary public
number 97 of the Federal District, which is hereby reproduced as if it was
inserted herein verbatim for all legal and consensual effects.
C) Its representatives have the broadest faculties for the execution of this
act, and such faculties have not been revoked, modified or reformed in any
manner, which is evidenced in terms of the public deed referred to in
section B) hereof, and which is hereby reproduced as if it were inserted
herein verbatim for all applicable legal and consensual effects.
4. KCS STATES THROUGH ITS REPRESENTATIVES THAT:
A) It is a corporation duly incorporated under the laws of the State of
Delaware, United States of America.
B) That in the session of its Executive Committee: i) the levels of risk of
the PENDING CONTROVERSIES and the potential FUTURE CONTROVERSIES were
recognized, and ii) its representatives were authorized to carry out the
acknowledgements, assumptions, transmissions and waivers that this
AGREEMENT implies and that this instrument formalizes, which is evidenced
in the minutes of September 12, 2005 (translated to Spanish), which is
hereby reproduced as if it was inserted herein verbatim for all legal and
consensual effects.
C) That its representatives have the most ample faculties for the execution of
this act, which faculties have not been revoked, modified or reformed in
any way, which is evidenced in terms of the notarization before the public
notary of the United States of America, Xxxxxxx X. Xxxxx of Clay County,
State of Missouri, which commission expires May 21, 2007, notarized
September 12, 2005, certified September 12, 2005 by Xxxxx Xxxxxxxx,
Secretary of State of the State of Missouri, through apostille number
136214, notarized by Xxxxxxxxx Xxxxxx Xxxxx, Esq., notary public number 246
of the Federal District, which is hereby reproduced as if it was inserted
herein verbatim for all legal and consensual effects.
5. TFM, GRUPO TFM, GRUPO TMM and KCS declare that they execute this AGREEMENT
because of the benefits that it implies for them, which are, along with
those set forth in Representation 9, sections H) and I), the following:
A) That the requested VAT refund will be resolved.
B) That through the assignment by TFM of the right to collect the VAT refund,
equivalent to the amount of $5,623,927,338.00 pesos (Five billion six
hundred twenty three million nine hundred twenty seven thousand three
hundred and thirty eight 00/100 pesos), they will transfer to TFM ownership
of the shares of the SECOND PACKET.
6. The FEDERAL GOVERNMENT, through the SCT and SHCP, the latter through the
conduct of SAT and TESOFE, state that:
A) They have the faculties necessary for the execution and performance of this
AGREEMENT.
B) Within their authorities and in accordance to that set forth in Antecedent
9, subpart I, they will carry out, respectively, the acknowledgement,
transmission and waivers derived from this AGREEMENT.
C) They recognize and accept that the JUDGMENT regarding the VAT refund to TFM
is final and unassailable and that as of this date it obligates the FEDERAL
GOVERNMENT to issue a SPECIAL CERTIFICATE FOR REFUND OF TAXES in an amount
of $12,965,742,236.00 pesos (Twelve billion nine hundred sixty five million
seven hundred forty two thousand two hundred and thirty six 00/100 pesos).
D) They recognize the levels of risk concerning the PENDING CONTROVERSIES as
well as the potential FUTURE CONTROVERSIES and their probable economic
effects.
E) They recognize and accept each and every one of its terms, conditions and
scope as described in the Antecedents of this AGREEMENT regarding the sale
of the SECOND PACKET, the CLAIMS of the FEDERAL GOVERNMENT, the possible
defenses of GRUPO TFM against the FEDERAL GOVERNMENT and, in general, the
representations of this AGREEMENT.
F) That they enter into this AGREEMENT because of the benefits for the FEDERAL
GOVERNMENT that it implies, such as, along with those set forth in
Representation 9, sections H) and I), to comply with the JUDGMENT in the
terms set forth in the Third clause, section (i).
7. THE SCT STATES THAT:
A) It is a Secretariat of the Centralized Federal Public Administration, in
accordance with articles 26 and 36 of the Organic Law of Federal Public
Administration, pursuant to articles 1, second paragraph, and 2 of the same
statute.
B) It appears and participates with the capacity set forth in Antecedent 9,
subpart I, part A), through the conduct of the Undersecretary of
Transportation and that it has faculties to execute this AGREEMENT
according to articles 36, subsections I, VIII and XXVII, and 48 and 49 of
the Organic Law of Federal Public Administration; 32 of the Federal Law of
State Entities, twelfth of the Accord by which the Inter-Secretarial
Commission of Dis-incorporation was created, and 6, subpart IX, of the
Internal Regulation of the Secretariat of Communications and Transports.
C) The requirement of November 10, 2004 formulated by SAT has been rendered
ineffective, pursuant to official communication 330-SSAT-17137 of September
12, 2005, notified by such authority on the same date.
8. THE SHCP, THROUGH TESOFE AND THE SAT, RESPECTIVELY, STATE THAT:
A) The SHCP is a Secretariat of the Centralized Federal Public Administration,
in accordance with articles 26 and 31 of the Organic Law of the Federal
Public Administration, pursuant to articles 1, second paragraph, and 2 of
the same statute.
B) The TESOFE states that it is an administrative unit of the SHCP and it has
the authority to enter into this AGREEMENT, in conformity with what is set
forth in articles 76 and 77 of the Federal Treasury Service Law and 11,
subsections XXVI and XLIII, of the Internal Regulation of the SHCP, acting
with the capacity set forth in Antecedent 9, subpart I, part B), clause 1).
C) The SAT states that it is a decentralized branch of the SHCP in accordance
with what is provided for in Article 1 of the Revenue Service
Administration Law, and it has faculties to execute this AGREEMENT in
accordance with articles 7, subpart XVIII, of said law and 3, subparts VIII
and XV, of the Internal Regulation of the Revenue Administration Service,
acting with the capacity stated in Antecedent 9, subpart I, part B), clause
2).
9. THE PARTIES JOINTLY STATE:
A) That they recognize and accept in each and every one of its terms,
conditions and scope as described in the Antecedents regarding: i) the
purchase and sale of the SECOND PACKET; (ii) the CLAIMS OF THE FEDERAL
GOVERNMENT; iii) the PENDING CONTROVERSIES and the potential FUTURE
CONTROVERSIES, and iv) in general, the Representations of this AGREEMENT.
B) That they expressly recognize the capacity with which the other PARTIES
appear, as well as that of their legal representatives for all applicable
legal effects.
C) That the execution of this AGREEMENT implies its express consent with the
performance of the acts that are stipulated herein, as a result of which
they will be obligated, which it is their intention to do, in accordance
with what is provided for in article 78 of the Commercial Code and, if
applicable, article 1832 of the Federal Civil Code.
D) That all the PENDING CONTROVERSIES, which are being litigated, originate
from:
a) The transactions related with the privatization of the company
Ferrocarril del Noreste, S.A. de C.V., currently TFM (Antecedents 1
and 5).
b) The PURCHASE AND SALE AGREEMENT and its AMENDMENT AGREEMENT
(Antecedents 2 and 3).
c) Compliance with the JUDGMENT.
That the controversies arose due to the difference of criteria, opinions
and claims of each of the PARTIES, and that due to their inability to
resolve them in amicable accord due to the different points of view and
interpretations of each of the PARTIES, they responded in defense of their
interests to exercise different actions which have resulted in
repercussions in different areas, and there exists the possibility of
exercising others.
That the actions and objectives of the PARTIES came into conflict by reason
of the belief, each one of the others, of the default of the other, the
lack of right, the enforceability of a right, the enforceability of an
obligation, the non-performance or the origin of an obligation.
E) That they have complete knowledge of the effects of this AGREEMENT, in the
sense that by virtue of the same compliance is given to the JUDGMENT and
all PENDING CONTROVERSIES are resolved in a definitive, total and absolute
manner, as well as the potential FUTURE CONTROVERSIES, as this AGREEMENT
has the same effects in terms of articles 2953 of the Federal Civil Code
and articles 354, 355, 357, final paragraph, 373, section I and 405, second
paragraph of the Federal Code of Civil Proceedings, as a final and
definitive judgment, being those effects that are set forth in clauses
Third and Fourth of this instrument.
F) That they agree and expressly obligate themselves to carry out the
procedural requirements (ANNEX 4) that permit them to jointly present and
ratify the contents and signatures of this AGREEMENT before any
jurisdictional and administrative authorities as is necessary, including,
but not limited to, before tribunals, courts, appellate courts, judges, and
magistrates in order for this instrument to be elevated to a definitive
judgment and with the enforceability of a final judgment and having effects
in any proceeding related to its purpose, obligating the PARTIES to treat
it on the same the terms and conditions agreed to herein (ANNEX 5).
G) That they accept that in case that any of the PARTIES executes any action,
notwithstanding the nature of such action, that is, to claim or require by
judicial or extrajudicial action or by any other means the reimbursement,
payment or delivery of any loan or amount related to the concepts that are
the subject matter of this AGREEMENT, criminal liability will be incurred
since it is a final judgment.
H) That they expressly recognize that they constitute fundamental aspects of
the spirit for the execution of this AGREEMENT that:
i) In compliance of the JUDGMENT, the FEDERAL GOVERNMENT is obliged to
issue a SPECIAL CERTIFICATE FOR REFUND OF TAXES in an amount of
$12,965,742,236.00 (Twelve billion nine hundred sixty five thousand
seven hundred forty two thousand two hundred and thirty six 00/100
pesos);
ii) The PENDING CONTROVERSIES that are aired in courts, tribunals and
before administrative authorities are in litigation and their
procedural phase is far from obtaining a judgment that resolves them
definitively and without the possibility of any additional appeal; and
iii) They would also resolve those FUTURE CONTROVERSIES that could arise
pursuant to the defense of the interests of each one of the PARTIES
related directly or indirectly to the PENDING CONTROVERSIES.
I) That by virtue of the performance of several waivers, dismissals,
acknowledgements, transmissions and acceptances that this settlement
implies, they will derive the following benefits:
(i) The certainty that compliance is given to the JUDGMENT, since TFM will
assign to the FEDERAL GOVERNMENT the collection rights in an amount
corresponding to the VAT refund to: a) pay the SECOND PACKET, b) pay
in an anticipated manner on behalf of TFM the income tax corresponding
to the default interest effectively collected, and c) waive the rights
to the remainder described in section (iii) below.
(ii) The certainty that the FEDERAL GOVERNMENT sells and transmits the
property of the shares of the SECOND PACKET on the best conditions for
the State, since they will be covered through this AGREEMENT at the
value set forth in clause twenty-sixth of the PURCHASE AND SALE
AGREEMENT and not at the inferior value determined in the valuation
that is part of the proposal referred in Antecedent 7 and TFM receives
them in the terms of clause Third, sections iii) to v) of this
AGREEMENT, stating that it assumes the risks it may suffer with future
fluctuations in the value of such shares and it knows the current
market value, and that it agrees with this representation and with the
clauses of this AGREEMENT due to the benefits that this settlement
with its counterparty implies.
(iii) The certainty that TFM waives for the benefit of the FEDERAL
GOVERNMENT a part of the VAT refund, which implies for the FEDERAL
GOVERNMENT a direct benefit in not disbursing the amount of
$6,789,941,894.00 (Six billion seven hundred eighty nine million nine
hundred forty one thousand eight hundred ninety four 00/100 pesos), in
terms of the Third clause, paragraphs i) and ii).
(iv) The certainty that, with the effect of a final judgment, all of the
PENDING CONTROVERSIES are resolved and all of the FUTURE CONTROVERSIES
are prevented, in terms of the Third clause, sections (vi), (vii) and
(x).
10. The PGR states that:
A) It is an institution of the Federal Executive Power, empowered to intervene
in all the matters in which the Federation is a party, pursuant to Article
102, Section "A", of the Political Constitution of the United Mexican
States.
B) It has the faculties to appear in this AGREEMENT pursuant to Articles 4,
subpart II, paragraph b) and 7 of the Organic Law of the Office of the
Attorney General of the Republic and 12, subpart IX , and 32, subpart I of
the Regulation of its Organic Law.
C) At the request of the FEDERAL GOVERNMENT it intervenes in the trials set
forth in Antecedent 6 of this AGREEMENT, and that it is aware that the
agreement between the PARTIES has an impact in the aforementioned
litigation.
D) It will file before the Twelfth District Judge for Civil Matters in the
Federal District this AGREEMENT, in order to be approved by the judge, in
order for it to have the effects of a final judgment, and therefore it
adheres to the statements of representation 9 section F), in the scope of
its competence.
ON THE BASIS AND FOUNDATION PREVIOUSLY EXPRESSED THE PARTIES SUBMIT AND SUBJECT
THEMSELVES TO THE FOLLOWING:
CLAUSES
FIRST.- DEFINITIONS.
The PARTIES expressly agree for all applicable legal and consensual effects and
for the interpretation, performance and due fulfillment of this AGREEMENT, to
set forth the following conventional definitions:
SPECIAL CERTIFICATE FOR REFUND OF TAXES.- The document that the TESOFE is
obliged to issue for purposes of granting the VAT refund, in compliance with the
JUDGMENT.
AGREEMENT.- This instrument executed on one part by TFM, GRUPO TFM, GRUPO TMM
and KCS and on the other by the FEDERAL GOVERNMENT, through the SCT, and the
SHCP through the TESOFE and the SAT, and with the appearance of the PGR.
PURCHASE AND SALE AGREEMENT.- The agreement executed on January 31, 1997, by the
FEDERAL GOVERNMENT, through the TESOFE and the Mexican National Railway
(Ferrocarriles Nacionales de Mexico), with the appearance of the SCT, and by
Transportacion Ferroviaria Mexicana, S. de X.X. de C.V., which is referred to in
Antecedent 2.
PENDING CONTROVERSIES.- All those judicial and administrative proceedings
pending definitive resolution that are described in the Antecedents of this
AGREEMENT; as well as all the trials, proceedings, actions, claims, defenses and
exceptions, judicial and administrative, that have been initiated and are
currently being litigated and that have made up the dispute between the PARTIES
with respect to the matters described in Antecedent 6 of this AGREEMENT.
FUTURE CONTROVERSIES.- All of those potential or future judicial and
administrative proceedings in respect to any matter related to the purchase and
sale of the shares of the SECOND PACKET, the CLAIMS OF THE FEDERAL GOVERNMENT,
and the VAT refund.
AMENDMENT AGREEMENT.- The amendment agreement executed on June 9, 1997 between
TESOFE and GRUPO TFM, GRUPO TMM and KCS, with the appearance of the SCT, in
respect to the PURCHASE AND SALE AGREEMENT, to set forth the extension of the
agreed
term for the sale of the SECOND PACKET. This amendment agreement is referred in
Antecedent 3 of this AGREEMENT.
JUDGMENT.- The final and definitive resolution issued by the Full Panel of the
Superior Chamber of the Federal Court of Fiscal and Administrative Justice in
the fiscal trial 18003/97-11-10-1/99-PL-03-04, in compliance with the resolution
issued in Complaint Appeal Q.A. 99/2004 by the Fourth Collegiate Court in
Administrative Matters for the First Circuit that is referred to in Antecedent
4, as well as with respect to the resolution issued in the session of August 24,
2005, by the Fourth Collegiate Court in Administrative Matters for the First
Circuit, notified on September 1, 2005, whereby it resolves Complaint appeal
Q.A. 78/2005 presented by the SHCP. By virtue of the stated judgments the
issuance of a certificate in favor of TFM was ordered, by means of which the
requested refund in an amount of $2,111,111,790.30 (Two thousand one hundred
eleven million one hundred eleven thousand seven hundred and ninety pesos and
thirty centavos) is paid, plus the indexation for inflation and the
corresponding interest, which totals $12,965,742,236.00 (Twelve billion nine
hundred sixty five thousand seven hundred forty two thousand two hundred and
thirty six 00/100 pesos).
FEDERAL GOVERNMENT.- The government exercised through the Executive branch set
forth in articles 39, 40, 41 and 49 of the Political Constitution of the United
Mexican States.
GRUPO TFM.- The commercial company currently named Grupo Transportacion
Ferroviaria Mexicana, S.A. de C.V., and previously named Transportacion
Ferroviaria Mexicana, S. de X.X. de C.V.
GRUPO TMM.- The commercial company named GRUPO TMM, S.A., formerly named
Transportacion Maritima Mexicana, S.A. de C.V.
VAT.- Value Added Tax.
KCS.- The commercial company incorporated under the laws of the State of
Delaware, United States of America, named Kansas City Southern, formerly named
Kansas City Southern Industries, Inc.
THE PARTY.- Singularly and individually TFM, GRUPO TFM, GRUPO TMM, KCS or the
FEDERAL GOVERNMENT, by the conduct of the SCT and the SHCP, through the TESOFE
and the SAT, as applicable.
PARTIES.- Collectively, TFM, GRUPO TFM, GRUPO TMM, KCS and the FEDERAL
GOVERNMENT, by the conduct of the SCT and the SHCP, through the TESOFE and the
SAT, as applicable.
PGR.- The Office of the Attorney General of the Republic.
CLAIMS OF THE FEDERAL GOVERNMENT.- The obligations on behalf of TFM that were
claimed in the ordinary mercantile trial 230/2004, referred in Antecedent 6,
section C.
SAT.- The Revenue Administration Service.
SCT.- The Secretariat of Communications and Transports.
SECOND PACKET.- The 20% (twenty percent) remaining of the shares that the
FEDERAL GOVERNMENT maintains for their sale on the terms provide for in the
PURCHASE AND SALE AGREEMENT and its AMENDMENT AGREEMENT, in respect to its
participation as shareholder of TFM's capital stock and that is sold pursuant to
this AGREEMENT.
SHCP.- The Secretariat of Finance and Public Credit.
TESOFE.- The Federal Treasury.
TFM.- The commercial company currently named TFM, S.A. de C.V., and previously
named Ferrocarril del Noreste, S.A. de C.V.
COMPLEX TYPE SETTLEMENT.- The reciprocal concessions and transmissions of
property which are granted by the PARTIES of this AGREEMENT, entered into on one
part by TFM, GRUPO TFM, GRUPO TMM and KCS on the other by the FEDERAL
GOVERNMENT, by the conduct of the SCT and the SHCP, through TESOFE and the SAT,
with the appearance of the PGR.
SECOND.- PURPOSE OF THE AGREEMENT.
The PARTIES accept and agree expressly that the purpose of this AGREEMENT is:
(i) To give compliance to the JUDGMENT, and
(ii) To grant reciprocal concessions to end the PENDING CONTROVERSIES and
prevent the FUTURE CONTROVERSIES (in accordance with article 2944 of
the Federal Civil Code).
THIRD.- OBLIGATIONS OF THE AGREEMENT.
The PARTIES recognize and expressly agree that the purpose and overriding ends
of the AGREEMENT are to comply with the JUDGMENT and substitute the current
undefined legal relations derived from the trials, proceedings, interpretations,
claims and actions between both PARTIES, for a legal relationship irrevocably
defined.
Through the execution of this AGREEMENT, the concrete legal consequences of
complying with the JUDGMENT will occur, as well as having the indisputable and
incontrovertible right that has been recognized and the waiver that has been
made, pursuant to article 2953 of the Federal Civil Code and to comply, if
applicable, with the transfers derived from the relevant recognitions or
waivers, which are:
(i) To give compliance to the JUDGMENT, and as a substitution of issuing
the SPECIAL CERTIFICATE FOR REFUND OF TAXES, the PARTIES agree to the
following:
a. That TFM in this act partially waives the collection of such
refund with respect to default interest in an amount of
$6,789,941,894.00 (Six billion seven hundred eighty nine million
nine hundred forty one thousand eight hundred ninety four 00/100
pesos).
b. That the FEDERAL GOVERNMENT recognizes and accepts TFM's waiver
concerning the VAT refund, in an amount of $6,789,941,894.00 (Six
billion seven hundred eighty nine million nine hundred forty one
thousand eight hundred ninety four 00/100 pesos).
c. That TFM acknowledges the receipt and assigns to the benefit of
the FEDERAL GOVERNMENT the collection rights concerning the VAT
refund in an amount of $5,623,927,338.00 (Five billion six
hundred twenty three million nine hundred twenty seven thousand
three hundred and thirty eight 00/100 pesos), which will be
destined to the payment of the SECOND PACKET.
d. That TFM deems as received and assigns to the benefit of the
FEDERAL GOVERNMENT the collection rights over the VAT refund, in
respect to the amount of $551,873,004.00 (Five hundred fifty one
million eight hundred seventy three thousand and four 00/100
pesos), which will be destined to the payment of the definitive
income tax caused by the default interest that will be applied by
TFM to the concept referred to in the preceding paragraph; TFM
may not subsequently request compensation or refund of this tax
paid in a definitive manner.
(ii) That the FEDERAL GOVERNMENT recognizes and accepts the amount of
$5,623,927,338.00 pesos (Five billion six hundred twenty three million
nine hundred twenty seven thousand three hundred and thirty eight
00/100 pesos), as payment for the SECOND PACKET, through the
assignment of TFM's collection right concerning the VAT refund.
(iii) That the FEDERAL GOVERNMENT transfers as property to TFM the shares
of the SECOND PACKET, and hereby delivers to TFM the corresponding
provisional share certificates 1 and 2 that represent 510 class III
shares of Series "A", Sub-series "A-1", provisional share certificates
1 and 2 that represent 141,166,215 class III shares of Series "A",
Sub-series "A-2", provisional share certificates 1 and 2, that
represent 490 class III shares of Series "B", Sub-series "B-1", and
provisional share certificates 1 and 2 that represent 135,630,286
class III shares of Series "B", Sub-series "B-2", all shares of the
SECOND PACKET duly endorsed in property.
(iv) That TFM receives in property provisional share certificates 1 and 2
that represent 510 class III shares of Series "A", Sub-series "A-1",
provisional share certificates 1 and 2 that represent 141,166,215
class III shares of Series "A", Sub-series "A-2", provisional share
certificates 1 and 2, that represent 490 class III shares of Series
"B", Sub-series "B-1", and provisional share certificates 1 and 2 that
represent 135,630,286 class III shares of Series "B", Sub-series
"B-2", all shares of the SECOND PACKET duly endorsed in property.
(v) The PARTIES themselves grant and reciprocally recognize the settlement
exception ("EXCEPTIO LITIS PER TRANSACIONEM FINITAE"), in the terms
set forth in Article 2953 of the Federal Civil Code, in the sense that
pursuant to this AGREEMENT the PENDING CONTROVERSIES and the potential
FUTURE CONTROVERSIES shall be deemed to be resolved as final judgment
in the event that any of the PARTIES again raises the same
controversy, therefore the decision of the PARTIES remains final.
(vi) The PARTIES set forth and admit, for all legal and consensual effects,
that this settlement is of complex type and therefore the effects and
consequences of the AGREEMENT are not merely declarative, but they
also imply transfers.
The PARTIES recognize and accept that pursuant to the provisions of
this AGREEMENT the JUDGMENT is fully complied with and special
certificate No. A.-089622, issued by the TESOFE on January 19, 2004,
shall cease to have effects, without reserving any right to exercise
it.
(vii) The PARTIES recognize and accept that the existing controversies are
those described in the chapter of Antecedents.
(viii) The PARTIES and the PGR undertake to file this AGREEMENT before the
Twelfth District Court for Civil Matters in the Federal District in
the Ordinary Commercial Trial referred in Antecedent 6, section C.
(ix) The PARTIES agree that, in connection with:
1. The Ordinary Commercial Trial referred in Antecedent 6, part A),
TFM must file its dismissal (ANNEX 6).
2. The Constitutional Protection Trial referred in Antecedent 6,
part B), TFM must file its dismissal (ANNEX 7).
3. The Ordinary Commercial Trial referred in Antecedent 6, part C),
the PARTIES and the PGR shall present this AGREEMENT and perform
the necessary actions in order for the judge to elevate it to the
level of a final judgment.
TFM is obligated to present before the competent jurisdictional
bodies, the dismissals of each one of the controversies, within three
business days following the execution of this AGREEMENT. PGR is
obligated to present this AGREEMENT before the judicial authority
within the three business days following the execution of this
AGREEMENT, as well as to conclude the appeal against the judicial
resolution of May 23, 2005, and the Constitutional Protection Trial
for the denial of a preliminary injunction. TFM and the PGR shall
perform the foregoing, pursuant to the forms attached hereto as
ANNEXES 5, 6, 7 AND 8.
TFM and the PGR shall reciprocally deliver within the three business
days after they are obtained, on behalf of the corresponding judicial
authorities, a certified copy of each one of the requests made as well
as the applicable resolutions issued with respect thereto.
(x) The PARTIES accept and recognize that there are no other actions,
claims, controversies, trials or administrative acts, other than those
mentioned in respect to the purpose of this AGREEMENT, and that in
case that due to an error or omission, a controversy has not been
included and exists with respect to the compliance of the JUDGMENT;
the sale of the SECOND PACKET and the CLAIMS OF THE FEDERAL
GOVERNMENT, and, in general, of the matters related with the PARTIES
derived from the process of privatization of Ferrocarril del Noreste,
S.A. de C.V.; it shall be resolved in terms of this instrument
pursuant to the provisions of this AGREEMENT.
(xii) The PARTIES accept and assume that the content that originated the
purpose of this AGREEMENT consists in the fundamental obligation to
recognize the right to comply with the waiver that has been made
pursuant to the Settlement, which causes three concrete legal
consequences:
a. Each of the PARTIES has as undisputable and incontrovertible the
right that has been recognized or the waiver that has been made
pursuant to article 2953 of the Federal Civil Code and to comply,
if applicable, with the transfers derived from the
acknowledgement or the waiver established in this AGREEMENT.
b. Each of the PARTIES has as undisputable and incontrovertible the
right or thing that has been transferred, pursuant to article
2953 of the Federal Civil Code and to comply, if applicable, with
the transfers derived from the transmission set forth in this
AGREEMENT.
c. Each of the PARTIES to reciprocally grant, in the event that any
of the PARTIES initiates the same controversy again, the
settlement exception ("EXCEPTIO LITIS PER TRANSACIONEM FINITAE")
equivalent to a final judgment.
The PARTIES agree that this AGREEMENT gives compliance to the JUDGMENT
and that due to its category it is directed to the definition of the
legal controversies between the PARTIES, which immediately ends the
disputes described in this AGREEMENT.
The PARTIES approve and admit that the rights involved in the
controversies or legal relations that are resolved through this
AGREEMENT are rights that are within commerce, and that they are
susceptible of being transferred, discounted or waived as is provided
for in articles 2955 in its final part and 6 of the Federal Civil
Code.
FOURTH.- UNITY OF THE AGREEMENT.
The PARTIES recognize and accept that this AGREEMENT is the only one that exists
among them with respect to the purpose set forth in clause Second above and
therefore this AGREEMENT substitutes any agreement, contract, relation or legal
negotiation existing among them, and therefore they agree that this AGREEMENT
shall govern the legal relations and shall end any difference or controversy,
whether by interpretation, default, lack of action or of right or due to any
other reason, preventing and ending any future contingencies and trials.
FIFTH.- RATIFICATION AND FINAL JUDGMENT.
The PARTIES agree and expressly undertake to ratify the content and signatures
of this AGREEMENT before the jurisdictional and administrative authorities that
may be necessary, including, without limitation, courts, appellate courts,
judges, and magistrates, with the purpose of elevating this instrument to a
definitive judgment and with the status of a final judgment, and the PARTIES
agree to perform such process on the agreed terms and conditions.
The PARTIES set forth that the effects of the Settlement, ratified before a
judicial authority and once the jurisdictional entity gives it the status of a
final judgment, implies that:
a. It has executive force and the executive procedure may be followed to
enforce the settlement in accordance with articles 354, 355, 356
section III and 357 of the Federal Code of Civil Procedures.
b. This AGREEMENT will be interpreted with its legal effects, in the same
manner as if it were a definite judgment elevated to the category of a
final judgment in accordance with the provisions of article 2953 of
the Federal Civil Code.
SIXTH.- ADDITIONAL RESPONSIBILITY
The PARTIES agree and accept from this moment, that the PARTY initiating any
action of any kind (whether demanding or requiring judicially or
extra-judicially or through any other way) with the purpose of requesting the
refund, payment or delivery of any transfer or amount regarding the reciprocal
transfers and concessions that are referred in clause Second of this AGREEMENT,
will incur in a responsibility, since it is equivalent to a final judgment
("EXCEPTIO LITIS PER TRANSACIONEM FINITAE"), pursuant to the provisions of
article 2953 of the Federal Civil Code, and therefore the waivers, acceptances
and settlements set forth in clause Second of this instrument have full force,
scope and validity, and therefore the defendant or affected party shall enforce
the exception of settlement before the jurisdictional authority that is
resolving the matter through the presentation of this AGREEMENT.
SEVENTH.- DOMICILES.
All the communications, notices and notifications that the PARTIES and the PGR
the must be made pursuant to this AGREEMENT or derived from the same, shall be
made in writing, at the domiciles indicated below, and the party making them
shall obtain evidence that the communication was delivered to its recipient at
the respective domicile.
The PARTIES and the PGR expressly agree that for any communications, notices,
judicial or extrajudicial notifications related to this AGREEMENT, which derives
from or is related hereto, for all applicable legal and consensual effects they
set forth as their domiciles the following:
- TFM
Periferico Sur Ave., 4829, 4th Floor
Col. Parques del Pedregal
00000 Xxxxxx, Federal District
Mexico
- GRUPO TFM
Periferico Sur Ave. 4829, 4th Floor
Col. Parques del Pedregal
00000 Xxxxxx, Federal District
Mexico
- GRUPO TMM
De la Cuspide Ave. 4755,
Col. Parques del Pedregal
C.P. 14010 Mexico, Federal District
- KCS
Xx. Xxxxxxxxxx Xxx 0000, 0xx Xxxxx
Xxx. Xxxxxxx del Pedregal
00000 Xxxxxx, Federal District
Attention: Senior Vice President & General Counsel
- SCT
SCT National Center, Xola and Universidad Avenues
Section "C", 1st Floor, Col. Xxxxxxxx
X.X. 00000, Xxxxxx, X.X.
-TESOFE
Constituyentes Ave. 1001, Tower A, 4th Floor
Col. Belen de las Xxxxxx, Deleg. Xxxxxx Xxxxxxx
X.X. 00000, Xxxxxx Federal District
-SAT
Xxxxxxx Ave. #77, Mod. I, X.X.
Xxx. Xxxxxxxx
X.X. 00000, Xxxxxx, Federal District
-PGR
Calle Xxxx No. 62
Col. Xxxxxxxx, Deleg. Xxxxxxxxxx
X.X. 00000, Xxxxxx, Xxxxxxx Xxxxxxxx
EIGHT.- INTERPRETATION.
The PARTIES accept, recognize and manifest their will that for the purposes of
interpretation, judgment or execution of this AGREEMENT the Antecedents,
Annexes, Representations and Clauses shall have the same force, scope and
validity.
NINTH.- COSTS AND EXPENSES.
Each of the PARTIES shall be responsible for the costs and expenses that have
been caused or are caused from the controversies, trials and existing
procedures, and therefore each one shall bear, including but not limited to, the
fees of lawyers or experts, the payment of contributions or expenses of any kind
that have been generated or will be generated for such controversies, as well as
for the execution of this Settlement.
TENTH.- JURISDICTION AND COMPETENCE.
The PARTIES agree expressly that for the interpretation, judgment or execution,
if applicable, of the content and scope of the Antecedents, Representations and
Clauses of this AGREEMENT, they submit from this moment to the jurisdiction of
the competent federal courts for mercantile matters of Mexico City, waiving
hereafter any other jurisdiction that may correspond to them due to their
present or future domiciles.
Once this document was read by the PARTIES and knowing the scope and legal force
of this AGREEMENT they sign it in ten counterparts as an express manifestation
of their will and perfecting the act with their consent, after being advised by
their respective legal experts.
Mexico, Federal District as of September 12, 2005.
THE PARTIES
For TFM, S.A. de C.V.
C. Marcoflavio Rigada Xxxx
For Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V.
C. Marcoflavio Rigada Xxxx
For GRUPO TMM, S.A.
C. Xxxx Xxxxxxxxx Xxxxxxx Xxxxxxx
C. Xxxxxx Xxxxxxx Xxxxxxx
For Kansas City Southern
C. Xxx X. Xxxxxxx
FEDERAL GOVERNMENT
Federal Treasury
C. Xxxxxxx Xxxxx Xxxxx Xxxxx
Secretariat of Communications and Transports
C. Xxxxx Xxxxxxx Poltolarek
Revenue Administration Service
Xxxx Xxxxx Xxxxxxx Maqueo
Office of the Attorney General of the Republic
C. German Xxxxxxxx Xxxxxx
EXHIBITS TO THE COMPLIANCE AND SETTLEMENT AGREEMENT ENTERED INTO BY AND BETWEEN
TFM, GRUPO TFM, GRUPO TMM, KCS AND THE FEDERAL GOVERNMENT
ANNEX 1.- Communication dated June 28, 2005, ratified through a
communication dated September 2nd, 2005, through which TFM, GRUPO
TFM, GRUPO TMM and KCS presented a proposal to the FEDERAL
GOVERNMENT in terms of which they intend to end the present
controversies and potential future ones.
ANNEX 2.- Official communication number 1102.-5633 dated September 8, 2005,
issued by the Secretariat of the Public Function.
ANNEX 3.- Official communication number 330-SAT-17137 dated September 12,
2005 and official communication number 102-SAT-416, dated
November 10, 2004.
ANNEX 4.- Writ through which TFM, GRUPO TFM, GRUPO TMM and KCS, will appear
before the TWELFTH DISTRICT JUDGE FOR CIVIL MATTERS IN THE
FEDERAL DISTRICT, to acknowledge the service of process in
respect to the judicial resolution of May 23, 2005, and they are
legally summoned to trial.
ANNEX 5.- Writ through which the PGR, along with TFM, GRUPO TFM, GRUPO TMM
and KCS will present the Compliance and Settlement Agreement
before the TWELFTH DISTRICT JUDGE FOR CIVIL MATTERS IN THE
FEDERAL DISTRICT.
ANNEX 6.- Writ through which TFM will present before the TWELFTH DISTRICT
JUDGE FOR CIVIL MATTERS IN THE FEDERAL DISTRICT its dismissal of
the legal action pursued in Ordinary Commercial Trial number
166/2003.
ANNEX 7.- Writ through which the PGR will present before the SECOND UNITARY
CIRCUIT COURT FOR CIVIL AND ADMINISTRATIVE MATTERS OF THE FIRST
CIRCUIT, the dismissal of the appeal related to the Ordinary
Commercial Trial number 230/2004, assigned to the Twelfth
District Judge for Civil Matters in the Federal District.
ANNEX 8.- Writ through which the PGR, along with TFM, GRUPO TFM, GRUPO TMM
and KCS, will request the MAGISTRATE OF THE FIRST UNITARY COURT
FOR CIVIL AND ADMINISTRATIVE MATTERS OF THE FIRST CIRCUIT, to
dismiss, in their capacity as plaintiffs, each and all of
constitutional protection trials consolidated to trial number
71/2005.
ANNEX 9.- Public deeds that evidence the capacity of the representatives of
TFM, GRUPO TFM, GRUPO TMM and KCS
(A) Second official transcript of public deed number 23,418
dated July 21, 2005, granted before Xxxxxx Xxxxxx Xxxxxxxx
Xxxxxxxxxx, Esq., Notary Public number
201 of the Federal District, that contains the written
confirmation of the resolutions taken unanimously in lieu of
a shareholders meeting by the shareholders of Grupo
Transportacion Ferroviaria Mexicana, S.A. de C.V. ("GTFM"),
regarding the authorization for the company to appear and
express its conformity with the offer sent by TFM, S.A. de
C.V. ("TFM"), to the Federal Government of United Mexican
States, in connection with the definitive judgments that
oblige the Federal Government to issue a special certificate
for the return of taxes;
(B) Second official transcript of public deed number 23,422
dated July 22, 2005, granted before Xxxxxx Xxxxxx Xxxxxxxx
Xxxxxxxxxx, Esq., Notary Public number 201 of the Federal
District, that contains the written confirmation of the
resolutions taken unanimously in lieu of a shareholders
meeting by the shareholders with voting rights of TFM
regarding the authorization for the company to present an
offer to the Federal Government of the United Mexican
States, in connection with the definitive judgments that
oblige the latter to issue a special certificate for the
return of taxes; and
(C) A special power of attorney dated September 12, 2005,
granted abroad by Kansas City Southern, dully apostilled, in
favor of Messrs. Xxxx X. Xxxxxxx, Xxxxxx X. Xxxxx, Xxx X.
Xxxxxxx and Xxxx Xxxxxxx Corta Xxxxxxxxx, in order to be
exercised jointly or severally, to perform certain acts on
behalf of the principal in connection with (I) TFM's right
to receive a VAT refund in 1997 and (II) the potential
obligation of GTFM, Grupo TMM, S.A. or the principal to
acquire the Mexican Federal Government's remaining shares of
TFM (the "SETTLEMENT"), including, without limitation, to
carry out a settlement offer, the execution of a settlement
agreement with the necessary transmissions, concessions and
waivers, present dismissals, and carry out the other actions
and to execute the documents that may be necessary or
convenient to perform the Settlement.
(d) General Powers of Attorney of GRUPO TMM, S.A.- Public deed
number 38,632 dated January 24, 2002, granted before Notary
Public number 97 of the Federal District, Xxxxxx Xxxxx Xxxx,
Esq.
Data of certification of the resolution of the Board of
Directors.- Public deed number 39,847 dated September 12,
2005, granted before Notary Public number 97 in the Federal
District, Xxxxxx Xxxxx Xxxx, Esq., through which the
certification of the resolution taken in a Board's meeting
on June 13, 2005, issued by the Secretary of the Board of
Directors of GRUPO TMM, S.A., was notarized.
