Fibra E

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FIBRA E In the framework of the third government report of Mexico’s Constitutional President, Enrique Peña Nieto, early in September 2015, it was announced the implementation of several actions seeking to promote Mexico’s economic development. Among such initiatives, it was announced the creation of “FIBRA E” as a new investment vehicle that will allow private and public participants to monetize assets characterized by having stable and predictable cash flow, under a tax regime that reduces levels of taxation and therefore allows for greater distributions. Mexico’s FIBRA E introduces an investment alternative substantially similar to the MLPs (Master Limited Partnerships) that have been traded in the United States since 1981, which market capitalization in the US, in accordance with the Alerian MLP Index, reaches US$347bn, as of December 31, 2015.

Following the announcement of FIBRA E, the Executive Branch, through the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público) published on September 29, 2015, the resolution that amends the current tax framework in order to incorporate the tax regime applicable to FIBRA E, which will contribute to the capital advantage of FIBRA E over other financial instruments. These tax rules were further amended on April 1, 2016. Likewise, on October 20, 2015 the Mexican Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) published the amendments to the securities regulations, in order to regulate, among others, the FIBRA E as an issuer under the Mexican securities market and to provide for minimum corporate governance requirements for such investment vehicle (the “Regulations”).

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I. What is FIBRA E?

FIBRA E is a trust created in accordance with the laws of Mexico with a Mexican banking institution acting as trustee, that issues publicly traded securities in the form of trust bonds or certificados bursátiles fiduciarios de inversion en energía e infraestructura (“CBFEs”), registered with the National Securities Registry (Registro Nacional de Valores – the “RNV”) and listed in the Mexican Stock Exchange (Bolsa Mexicana de Valores, S.A.B. de C.V. – the “BMV”), in accordance with Securities Market Law (Ley del Mercado de Valores – the “Securities Law”) and its regulations (Disposiciones de carácter general aplicables a las emisoras de valores y otros participantes del mercado de valores – the “Regulations”). As provided in the Securities Law, the CBFEs shall grant its holders a pro rata property right with respect to trust assets.

A corporate sponsor (the “Sponsor”) typically would form and contribute to the FIBRA E equity interests (in whole or in part) in Mexican resident legal entities (the so-called “Promoted Companies”) that own the assets and perform the “exclusive activities” (see below) via share transfer or contributions in kind, and the Sponsor would typically receive in exchange cash and/or CBFEs, and other rights to receive a greater proportion of the FIBRA E incremental cash flow in the future, subject to the payment

of a preferred return to the security holders (“incentive distribution rights” or “IDRs”). Structuring the contribution of such interests is directly driven by the tax regime applicable to the formation of the FIBRA E and other legal issues, such as contractual prohibitions on asset transfers, consent requirements, licenses and permits, debt covenants, among others.

The ownership of a FIBRA E may be divided into two main groups of security holders: the public and the Sponsor. In accordance with the current Regulations, the offering documents may provide that the holders of a certain class of CBFEs agree to subordinate the payment of their distributions to the payment of a preferred return to the holders of another class of CBFEs. This type of subordinated CBFEs is typically issued in favor of the Sponsor.

The Sponsor or any other person generally controlled by the Sponsor (the “Manager”), would manage the assets of the FIBRA E, in accordance with the terms and conditions of the relevant Management Agreement and subject to the security holders’ rights provided in the Securities Laws and its Regulations, as described further herein.

Manager

Managment agreement

Public

FIBRA E Technical comiteeOther

shareholders(%) (%)

Promoted Company

Promoted Company

Promoted Company

Assets / Qualified income

FIBRA E

Sponsor

Below is a chart summarizing a typical structure for FIBRA E:

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II. Tax regime applicable to FIBRA E

In general terms, the FIBRA E tax regime is based on the current regulations applicable to the existing real-estate FIBRA. However, as opposed to the latter, in which the assets (immovable property exclusively intended for leasing) must be owned directly by the issuer trust or by a subsidiary trust, in the case of FIBRA E a legal entity must own the assets. This is due to the nature of the vehicle’s “exclusive activities” (see below). As such, under the FIBRA E regime, the issuer trust must invest in shares issued by one or several Promoted Companies, which in turn own the assets and perform such “exclusive activities”. All investors of the FIBRA E are subject to taxation in Mexico on income obtained through the FIBRA E, according to the regime applicable to each of them.

General requirements of the FIBRA E tax regime

The following requirements apply to the FIBRA E regime, in addition to those established by the Mexican tax legislation with regards to real-estate FIBRAs, if applicable:

• A FIBRA E must be a trust created according to Mexican legal guidelines. A Mexican tax resident banking institution or an authorized brokerage house must act as trustee.

• All shareholders of a Promoted Company must be legal entities that reside in Mexico for tax purposes. This requirement should be met before a FIBRA E acquires shares of a Promoted Company.

• At least 90% of a Promoted Company’s annual taxable income should derive from the following “exclusive activities”:

- The treatment, refining, transportation and storage of oil; the processing, compression, liquefaction, decompression, regasification, transportation, storage and distribution of natural gas; the transportation, storage and distribution of oil products; and the transportation by pipeline and subsequent storage of petrochemicals, among others. The hydrocarbon transportation, storage and distribution activities are considered exclusive activities even when they are carried out within the perimeter of a contractual area or assignment area, provided such activities are not carried out under a contract or an assignment.- The treatment, blending, processing, conversion, and transportation of oil products, petrochemicals or any other products derived from oil or natural gas, except for the sale,

marketing and end-sale of these products to the public.- The generation, transmission and distribution of electricity, in compliance with the Electric Industry Law and its Regulations.- Infrastructure investment projects that include concessions, services or any other contractual arrangement executed between private parties and the government for performing services for the public sector or the final user, provided that such projects are currently in operations and have a remaining term of at least 7 years, in the following areas:

(i) Roads, highways, railways and bridges;(ii) Ports, maritime terminals and port facilities;(iii) Civilian airfields, excluding private ones;(iv) The expansion of the country’s telecommunications network;(v) Public safety and social reintegration;(vi) Drinking water, sewerage and wastewater treatment.

- The administration and management of the FIBRA E trusts.

The gains from the sale of land, fixed assets and deferred expenses might be considered as taxable income for purposes of calculating the 90% income threshold, provided that such assets were used during the 12 months immediately preceding their sale, in the development of the aforementioned “exclusive activities”. In addition, the taxable annual inflation adjustment and foreign exchange profits might be excluded from the total taxable income in order to calculate the 90% income threshold.

• State Productive Companies and their subsidiaries that are entitled to hydrocarbons exploration and production rights, legal entities that entered into a contract for hydrocarbons exploration and production with the National Hydrocarbons Commission, and other legal entities engaged in the seismic activities and hydrocarbons exploration and production activities, are not allowed to qualify as Promoted Companies.

• ► No more than 25% of the accounting value of a Promoted Company’s non-monetary assets in any given year can be invested in “new” assets (less than 12 months since their start of operations). Subject to the previous authorization from the Mexican tax authorities, the following investments are not considered as “new” assets:

- In connection with the exclusive activities related to infrastructure investment projects, the assets acquired or built to comply with the obligations contracted under a concession to carry out exclusive activities, or, when applicable, to exercise the rights derived from or related

Fibra E4

to such title, shall not be considered new assets, provided the entity in question has been the concessionaire of such concession for at least 12 months before carrying out the aforementioned investments.- With respect to the hydrocarbons and electricity exclusive activities, the referred amendment establishes that the investments made in an asset through which the entity has developed the aforementioned activities for at least a period of 12 months shall not be considered new assets, provided these additional investments are considered part of the same permit granted by the CRE.

• ►At least 70% of the annual average net worth of a FIBRA E trust must be invested in shares of Promoted Companies, which in turn must comply with the “exclusive activities” test. The remainder must be invested in securities issued by Mexico’s Federal Government and registered at the National Securities Registry, in shares of debt-related mutual funds, or in CBFEs issued by the same FIBRA E provided that the tax requirements for their buyback were complied with (see “Tax regime applicable to the FIBRA E”).

• A FIBRA E trustee must issue CBFEs amounting to the entire trust’s patrimony. Such CBFEs must be registered at the National Securities Registry.

• A FIBRA E trustee must distribute to CBFEs holders, at least once a year and no later than March 15, at least 95% of the FIBRA E tax result.

• ►A notice should be filed before the Mexican tax authorities stating under oath that all the requirements of the FIBRA E tax regime are met.

• A FIBRA E must be registered at the FIBRAs registry, which is managed by the Mexican tax authorities.

• ►Promoted Companies’ shareholders must fulfill a number of formal obligations in order to ensure the payment of income tax on tax profits pertaining to such Promoted Companies (see “Tax regime applicable to the Promoted Companies”).

• ►All shareholders of a Promoted Company must state in writing, before the Mexican tax authorities, the following: (i) they accept to offset their tax losses from previous years to the first sale of shares to a FIBRA E, only against profits not obtained from the Promoted Company; (ii) they assume a joint liability with respect to the income tax resulting from the FIBRA E tax regime (vis-à-vis their shareholding participation); (iii) they assume a joint liability with regards to all the tax obligations of the Promoted Company, previous to the transfer of its shares to a FIBRA E (vis-à-vis their shareholding participation); and (iv) they accept the primacy of the Promoted Company’s rules of distributions.

• ►A Promoted Company should not be subject, either before or after the acquisition of its shares by a FIBRA E, to the regimes of “Sociedad Anónima Promotora de Inversión Bursátil” or “Sociedad Anónima Bursátil”, as defined by the Mexican Securities Market Law.

• The trust agreement must include distribution rights for managers, the trust settlor or related parties of a FIBRA E. The payment of any compensation, commission, fee, incentive or distribution will be subordinated to the payment of a preferred return to CBFEs holders, excepting those commissions, fees or distributions that are required for the proper functioning of the fund.

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Transfer of a Promoted Company to a FIBRA E

A Promoted Company’s shareholders, whose shares are transferred (totally or partially) to a FIBRA E, must determine the taxable gain or loss from the sale of the company’s land, fixed assets and deferred expenses on a proportional basis, as if they were selling assets instead of shares. The sale price of such assets will be that agreed for the share transfer, plus the debt that the Promoted Company may have at such a date and that is related to such assets, also on a proportional basis. In order to determine the aforementioned gain or loss, the Promoted Company’s shareholders must compare the sale price with the tax-cost basis of such assets.

If a taxable gain is due, shareholders are obliged to pay the applicable income tax and have the option to defer a portion of such tax in accordance with the deferral regime analyzed in the following section. This taxable gain implies a deferred expense for the respective FIBRA E, irrespective of whether the seller shareholders opted to apply the deferral regime or not. However, if the result is a tax loss, this will imply that the FIBRA E should have to recognize a deferred gain (see “Tax regime applicable to the FIBRA E”).

The sale of shares issued by a Promoted Company must be audited by a Certified Public Accountant registered before the Mexican tax authorities.

Tax deferral

Sponsors that transfer shares of a Promoted Company to the FIBRA E have the possibility of deferring the partial recognition of the gain triggered in such transfer, to the extent that those entities receive CBFEs issued by the FIBRA E as compensation for the total or partial value of such shares.

The above mentioned deferral is only applicable to the proportion of the compensation for the transferred shares that was paid by the FIBRA E through the issuance of CBFEs. To this end, the sale price of the shares transferred that were paid through CBFEs shall be divided by the total price of the transfer of shares to the FIBRA E, and the amount obtained shall then be multiplied by the total gain determined on the transfer of shares to the FIBRA E, and the result will be the deferred gain for the seller. This deferred gain must subsequently be allocated among all the CBFEs obtained by the Sponsor as compensation, in order to determine the deferred gain per CBFE.

Sponsors that opt to defer the partial recognition of the gain determined on the transfer of shares of Promoted Companies to the

FIBRA E, shall recognize at the end of each fiscal year as taxable income, including the year in which the shares were transferred, an amount equal to the 15% of the deferred gain determined in the manner described above, until the total amount has been exhausted, regardless of the amount of the amortization of the deferred expense that has been recognized at the FIBRA E level to determine its own tax result.

The recognition of this taxable income by the Sponsors that have opted to defer a portion of the gain is in addition to and independent from the recognition as taxable income of the tax result distributed to them by the FIBRA E trust at the end of each fiscal year corresponding to their participation in the trust as a result of their CBFE ownership.

Lastly, the deferral of the recognition of the gain in question will end when any of the following conditions are met:

►- Upon the subsequent transfer of each of the CBFEs obtained by the Sponsor in the transfer that gave rise to the deferred gain;►- ►When the trustee transfers the shares of the Promoted Company that gave rise to the deferral; or ►- ►When the Promoted Company whose shares were acquired by the FIBRA E transfers the land, fixed assets or differed expenses for which the deferred gain was determined.

For purposes of the above, Sponsors that opt to defer the recognition of a portion of the gain shall recognize as taxable income at the time any of the aforementioned conditions are met, the remaining amount of the gain that at that date has been deferred for each CBFE transferred, or for all of the CBFEs in case the shares or the assets are transferred, as applicable.

Drop-down rules

a) Contribution of assets

The transfer of land, fixed assets or deferred expenses from a legal entity residing in Mexico to another (a Promoted Company) is not considered as a sale of goods for Mexican federal tax purposes, provided that the following requirements are met: (i) assets are only related to the “exclusive activities” described above; (ii) the transfer is made as equity contribution to a Promoted Company, as long as the full consideration for the assets’ contribution is paid with shares issued by the Promoted Company; (iii) at least 2% of the shares issued by the Promoted Company are acquired by a trust that complies with the FIBRA E requirements, within a maximum period of 6 months from the date on which the assets’ contribution is effective; and (iv) the Promoted Company complies with all the requirements to qualify as an investment target of a FIBRA E.

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If any of the applicable requirements are not met, the transfer of the assets will be considered as a taxable sale of goods for Mexican federal tax purposes, and the applicable taxes will have to be paid retroactively.

b) Spin-off

The spin-off of a Mexican resident entity, whereby land, fixed assets and/or deferred expenses are either transferred to a new entity or are held by the original entity, will not be considered as a sale of goods for Mexican federal tax purposes, provided that the following requirements are met: (i) assets transferred to the new entity or held by the original entity, as it corresponds, are only related to the “exclusive activities” referred to above, (ii) at least 2% of the shares issued either by the the new entity to which the assets were transferred or by the original entity that maintained the assets, as it corresponds, are acquired by a trust that complies with the FIBRA E requirements, within a maximum period of 6 months from the date on which the spin-off is effective; and (iii) the Promoted Company complies with all the requirements to qualify as an investment target of a FIBRA E.

If any of the applicable requirements are not met, the transfer of the assets will be considered as a taxable sale of goods for Mexican federal tax purposes, and the applicable taxes will have to be paid retroactively.

c) Contribution of shares

The transfer of shares issued by legal entities residing in Mexico that own land, fixed assets and deferred expenses related to “exclusive activities”, is not considered as a sale of goods for Mexican federal tax purposes, provided that the following requirements are met: (i) the shares in question are contributed to another entity that is a tax resident in Mexico and whose initial contribution is the contribution of such shares; (ii) in a maximum period of 6 months from the date the contribution of the shares is made to the referred entity, a trust that meets the FIBRA E requirements acquires at least 2% of the shares with voting rights of the entity whose shares were transferred (Promoted Company); (iii) immediately after the acquisition of the shares by the FIBRA E, the entity whose shares were transferred (Promoted company) meets all the requirements applicable to the regime; (iv) the consideration for the contribution in kind of the referred shares corresponds to the issuance of shares by the entity receiving the shares, for the total value of such shares.

In order to apply the above, prior to the sale of the shares it is necessary to have the corresponding authorization from the Mexican tax authorities.

Under the aforementioned restructuring options, in order to calculate the income tax base (see “Tax regime Applicable to the Promoted Companies”) at the level of the Promoted Company, the original investment value of the assets transferred to such Promoted Company, by either an equity contribution or a spin-off, will be the undepreciated value prior to such transfer (there is no step-up for tax purposes).

Tax regime applicable to a Promoted Company

A Promoted Company is considered as a business trust for tax purposes. This implies that a Promoted Company is not considered a taxpayer per se with regards to income tax. According to the tax regime applicable to business trusts, a Promoted Company must determine its yearly tax result as per Title II (“Legal Entities”) of the Mexican Income Tax Law, and then apportion it among its shareholders on a proportional basis. The latter, in turn, are responsible for settling their respective tax payment. Meanwhile, the FIBRA E must take into account such distribution when determining its own yearly tax result.

A Promoted Company’s tax loss in a given year cannot be apportioned among shareholders. Such loss can only be offset against its future taxable profits. The FIBRA E tax regime does not allow for a step-up with regards to the assets that belong to a Promoted Companie, as opposed to the step-up granted under the real-estate FIBRA regime. Therefore, a Promoted Company must determine its tax result based on the assets’ remaining tax cost. A Promoted Company is not obliged to make income tax advance payments; this is consistent with the regime contained in the Mexican Income Tax Law for real-estate FIBRAs.

Promoted Companies are not allowed to deduct, for income tax purposes, those payments made for the temporary use or enjoyment of land and constructions attached thereto, in favor of persons that are not obliged to income tax payment in terms of the Mexican Income Tax Law.

Finally, a Promoted Company may freely distribute cash flow to its shareholders as dividends or capital reimbursements, without triggering a corporate income tax payment. The 10% dividend tax withholding is not applicable in respect of dividends distributed to the FIBRA E.

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Tax regime applicable to FIBRA E

a) Tax result computation

A FIBRA E trustee must determine the yearly tax result of its vehicle in accordance with the provisions of Title II of the Mexican Income Tax Law. To do so, the trustee must take into account the following: (i) all the tax results distributed by a Promoted Company to the FIBRA E; (ii) a tax deduction through the amortization of the deferred expense arising from the acquisition of a Promoted Company shares, or the recognition of the deferred gain at an annual rate of 15% in case of a tax loss triggered upon the transfer of the shares to the FIBRA E, if applicable (see “Transfer of Promoted Companies to FIBRA E”); and (iii) any other deduction that may be required for the proper operation of the FIBRA E trust.

b) Tax result distribution

The distribution of tax results by a FIBRA E follows the same rules applicable to a real-estate FIBRA. In general terms, tax result distributions should be subject to a 30% income tax withholding, except on the portion attributable to exempt CBFEs holders (i.e., Mexican SIEFORES) (see “Tax Regime Applicable to FIBRA E Investors”). Any undistributed tax result is subject to a 30% tax rate and is considered as a final payment. If the amount of the distributions exceeds the tax result, it is considered as a capital reimbursement, lowering in turn the acquisition value of the respective CBFEs.

For purposes of the above, the trustees of the FIBRA E trusts are required to maintain a Capital Contribution Account (“CUCA”, Spanish acronym) in accordance with the regulations applicable to Mexican business trusts and they shall use the CUCA to recognize the contributions made to the trust either in cash or in kind, as well as the capital reimbursements paid by the FIBRA E to the owners of the CBFEs. However, opposed to the provisions applicable to business trust, it is specified that FIBRA E trusts should maintain this account on a global basis, instead of having separate accounts for each beneficiary of the trust.

The distributions that decrease the balance of the CUCA are the amounts that exceed the tax result distributed by the FIBRA E, considering that the amount distributed corresponds first to the tax result. When the distributions of capital reimbursements referred to above exceed the balance of the CUCA or the balance of this account is exhausted, the distributions that are not paid from such account shall be considered taxable income for the holders of the CBFEs, in accordance with the tax regime applicable to each CBFE holder, as though the referred amount corresponded to a distribution of the tax result of the FIBRA E.

c) Buyback of CBFEs

Trusts that meet the requirements to apply the FIBRA E tax regime have the option to buy back the CBFEs they issued, in accordance with the specific rules established in the Mexican Income Tax Law for legal entities, to the extent that the funds used for the buyback of the CFBEs correspond to the profits that the trust in question was not required to distribute (5% of the tax result of each year).

In general terms, these trusts may buy back the CBFEs they issued, provided that the amount of the CBFEs repurchased does not exceed the 5% of the outstanding CBFEs of such trust and they are put back on the market within a year from the date of the repurchase.

The amount of the investment held in its own CBFEs by a trust that meets the requirements to apply the FIBRA E tax regime shall be considered an authorized investment provided the total investment in CBFEs, Mexican government securities and shares of debt-related mutual funds does not exceed 30% of the annual average value of its equity and that the FIBRA E trust considers the returns on such investments for purposes of determining its tax result.

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Tax regime applicable to FIBRA E investors

a) Tax result distributions

The distribution of tax results by a FIBRA E to CBFEs holders follows the same rules applicable to a real-estate FIBRA. The applicable tax regime depends on the nature of each CBFE holder, as summarized below:

Individuals residing in Mexico should consider the withholding on the distribution of tax results as income from business activities. Such individuals are entitled to offset it with their annual income tax liability, in accordance with the tax rates applicable to each one.

Foreign residents, including pension funds, should consider the withholding on the tax result distribution as a final payment. Unlike real-estate FIBRAs, in the case of FIBRAs E foreign pension funds are not exempt from taxation with regards to income obtained through a FIBRA E. The rationale is that FIBRA E income has an “active” nature. By contrast, foreign pension funds are exempted on real estate investments made in Mexico (i.e. income obtained through real-estate FIBRAs).

Type of holder

Legal entities residing in Mexico 30%

30%

30%

30%

N/A N/A

Individuals residing in Mexico

Mexican pension funds

Foreign residents

Foreign pension funds

WithholdingExemptDefinitive payment

Withholding

b) Sale of CBFEs

Capital gains obtained by CBFEs holders follow the same rules applicable to real estate FIBRAs. The applicable tax regime depends on the nature of each CBFE holder, as summarized below:

c) Foreign residents

As a general rule, foreign holders of CBFEs are deemed to have a permanent establishment in Mexico. However, foreign investors are not obliged to comply with all the formal obligations related to the creation and maintenance of a permanent establishment in Mexico (i.e., obtaining a tax ID number, filing returns, etc.), provided that all the requirements that apply to the FIBRA E regime are met and that tax result distributions made by such trust are subject to income tax withholding, when applicable. In this case, income tax withheld on FIBRA E tax result distributions is a final payment.

Legal entities residing in Mexico

Individuals residing in Mexico

Mexican pension funds

Foreign residents

Foreign pension funds

ExemptType of holder

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III. Securities law regulations applicable to FIBRA E

In view that the FIBRA E undertakes a public offering in Mexico, the issuer trust needs to satisfy all procedures before the CNBV and disclosure requirements contained in the Securities Law and its Regulations, in order to obtain the CNBV’s authorization to carry out the public offering. Such requirements include, without limitation, the preparation and authorization of a prospectus and other documents directly related to the offering, such as financial statements, underwriting agreement, trust bonds certificate, opinions of external counsel and auditors, among other documentation.

After the IPO, the FIBRA E would be required to periodically furnish certain information to the CNBV and the BMV, including unaudited quarterly financial statements and audited annual financial statements, as well as various periodic reports related to material events.

IV. Governance of FIBRA E

In accordance with the current Regulations, the FIBRA E is subject to certain corporate governance minimum requirements. Below is a brief description of the applicable corporate governance requirements for FIBRA E:

a. Security Holders Meeting

The security holders meeting has the authority, among others, to approve the following matters (regardless that series with limited vote are issued): (i) any amendment to the investment regime of the trust estate, (ii) the rules for contracting credit facilities and loans which shall establish the debt ceiling and the debt coverage ratio in accordance with the Regulations,(iii) any increase in the compensation and commissions schemes for the Manager; (iv) modifications to the trust’s purpose or its extinction; (v) extensions for the issuance of CBFEs; and (vi) the removal and substitution of the Manager upon the occurrence of the events of default provided in the governing documents of the FIBRA E, with the vote of security holders of 66% of the outstanding CBFEs. The governing documents shall contain, in any case, the following events of default: (a) omission by the Manager to inform the security holders of its management activities, (b) fraud, negligence or willful misconduct by the Manager, (c) omit to perform the agreed distributions, and (d) serious material breach to its contractual or legal duties and obligations.

b. Minority rights

The Regulations provide for the following minority rights of CBFEs holders:

• ►Security holders having, individually or as a group, 20% or more of the outstanding CBFEs, may judicially oppose to the resolutions of the security holders meeting. provided that they have not attended the meeting or otherwise voted against the relevant resolution.

• Security holders having, individually or as a group, 15% or more of the outstanding CBFEs, may claim corporate liability against the Manager for any breach of its obligations.

• Appoint one member of the Technical Committee, per each 10% of CBFEs; except in the event that the Manager has the right to appoint all members of the Technical Committee.

• Security holders having, individually or as a group, 10% or more of the outstanding CBFEs, may request the common representative to call for a general security holders meeting or postpone a meeting only once, by three calendar days without need for further call, if they deem to have not been properly informed regarding the items of the agenda.

• ►All security holders are entitled to receive all information and documentation related to or subject matter of any security holders meeting, with at least 10 days in advance of such meeting.

► • Security holders may enter into voting agreements, which shall

be disclosed to the public.

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c. Series of CBFEs

The governing documents of the FIBRA E may provide for different series of security holders, including preferred and subordinated CBFEs. In the case of subordinated CBFEs, any distributions to the holders of such securities would be subordinated to the payment of any agreed distributions in favor of the holders of preferred CBFEs.

In case that limited vote CBFEs are issued, it shall be established the obligation to pay the preferred return to such series of CBFEs.

d. Technical Committee

The FIBRA E’s Technical Committee shall be integrated by a maximum of 21 members of which at least a majority of such members must be independent. Independence shall be qualified with respect to the Promoted Companies, the Sponsor and the Manager. Any auxiliary committees (i.e. Conflicts Committee, Audit Committee, among others) created by the Technical Committee, shall be integrated by independent members only.

The members of the Technical Committee that have conflict of interest in any matter, must abstain from participating and being present in the deliberation and voting on the matter.

The Technical Committee would have the following duties:

• Verify the Manager’s activities.

• ►Review the quarterly report submitted by the Manager to the Technical Committee.

• Request the Manager any information that the Technical Committee deems necessary to carry out its activities.

• Request the trustee to call for a security holders meeting to discuss specific items, when the Technical Committee deems that the Manager has materially breached its obligations.

• ►Implement internal control procedures to identify all of the assets held, directly or indirectly, by the FIBRA E or the Promoted Companies, and its current state.

e. Conflicts Committee

If the Technical Committee approves the creation of a Conflicts Committee, such Committee shall approve any transactions with related parties or that may represent a conflict of interest, in an amount equal or exceeding 10% the trust estate. Any such transactions, when approved by the Conflicts Committee, shall be disclosed to the public as a material event.

The creation of this committee is mandatory in those cases where limited vote CBFEs are issued, or when the Manager has the right to appoint all members of the Technical Committee.

f. Manager

The offering documents must provide the following:

• ► The terms and conditions governing the exercise of its powers for acts of administration and domain.

► • The compensation and commissions schemes should, at all

times, take care of the CBFE holder’s interests.

• ► The liabilities regime.

• ► The obligation to periodically submit reports related to its management activities.

• ► The obligation to act with diligence, good faith and in the best interest of the trust and CBFE holders.

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Fibra E12

ContactsAlfredo Álvarez

alfredo.alvarez@mx.ey.com52 (55) 1101 8422

Rodrigo FernándezRodrigo.Fernandez@mx.ey.com

52(55) 5283 8666

Francisco ForastieriFrancisco.Forastieri@mx.ey.com

52 (52) 1101 7293

Jimena González de CossioJimena.Gonzalez@mx.ey.com

52 (55) 1101 7294

Oscar López-Velardeoscar.lopezvelardeperez@ey.com

52 (55) 5283 8677

Francisco Olivaresfrancisco.olivares@mx.ey.com

52 (55) 5283 1489

Mario Karimmario.karim@mx.ey.com

52 (55)1101 7226

Oscar Ortizoscar.ortiz@mx.ey.com

52 (55) 52831 468

Enrique Pérez GrovasEnrique.PerezGrovas@ey.com

+1 212 773 1594

Allen SarachoAllen.Saracho@mx.ey.com

52 (55) 5283 1300

Olivier HacheOlivier.Hache@mx.ey.com

52 (55) 5283 1310

Rafael Aguirrerafael.aguirre@mx.ey.com

52 (55) 5283 8650

Loic Le GallLoic.LeGall@mx.ey.com

52 (55) 5283 1333

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