1
EXHIBIT 10.19
CONFORMED COPY
INVESTMENT NUMBER 8354
SHARE RETENTION, NON-COMPETITION AND
PUT OPTION AGREEMENT
AMONG
DVI, INC.
AND
MSF HOLDING LTD.
AND
CADILUR S.A.
AND
ESTOLUR S.A.
AND
NATULER S.A.
AND
INTERNATIONAL FINANCE CORPORATION
DATED APRIL 27, 1998
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TABLE OF CONTENTS
Article or
Section Item Page No.
------- ---- --------
ARTICLE I......................................................................2
DEFINITIONS....................................................................2
Section 1.01. Definitions................................................2
Section 1.02. Other Terms................................................2
Section 1.03. Interpretation.............................................6
ARTICLE II.....................................................................7
REPRESENTATIONS AND WARRANTIES.................................................7
Section 2.01. General Representations....................................7
Section 2.02. Further Representations....................................8
Section 2.03. IFC Reliance...............................................8
Section 2.04. Non-Estoppel...............................................8
ARTICLE III....................................................................9
RETENTION OF SHARES............................................................9
Section 3.01. DVI's Undertakings........................................9
Section 3.02. MSF Holding's Undertakings.................................9
Section 3.03. Additional Obligations....................................10
Section 3.04. Request for Transfer......................................10
Section 3.05. Further Assurances........................................11
Section 3.06. Tag-Along Rights..........................................11
ARTICLE IV....................................................................11
NON-COMPETITION PROVISIONS....................................................11
Section 4.01. Competing Activities......................................12
Section 4.02. Acknowledgments of DVI....................................12
ARTICLE V.....................................................................13
PUT OPTION....................................................................13
Section 5.01. Put Option................................................13
Section 5.02. Notice of Exercise........................................13
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Article or
Section Item Page No.
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Section 5.03. Commitment of DVI.........................................13
Section 5.04. Settlement................................................13
Section 5.05. Share Certificates........................................14
Section 5.06. Right of Transfer.........................................14
Section 5.07. Obligations Irrevocable, Absolute and Unconditional.......14
Section 5.08. Term of the Put Option....................................15
Section 5.09. Cancellation of the Put Option............................16
Section 5.10. Required Documentation....................................17
ARTICLE VI....................................................................17
MISCELLANEOUS.................................................................17
Section 6.01. Waivers..................................................17
Section 6.02. MSF Holding as Agent for Communication....................19
Section 6.03. Notices...................................................19
Section 6.04. English Language..........................................21
Section 6.05. Fees and Expenses.........................................21
Section 6.06. Financial Calculations....................................22
Section 6.07. Termination of Agreement..................................22
Section 6.08. Severability..............................................22
Section 6.09. Applicable Law and Jurisdiction...........................22
Section 6.10. Successors and Assigns....................................25
Section 6.11. Amendment.................................................25
Section 6.12. Counterparts..............................................25
Section 6.13. Remedies and Waivers......................................25
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SHARE RETENTION, NON-COMPETITION AND
PUT OPTION AGREEMENT
AGREEMENT, dated April 27, 1998 among DVI, Inc. ("DVI"), a corporation
organized and existing under the laws of the State of Delaware, USA, MSF HOLDING
LTD., a company organized and existing under the laws of the Commonwealth of the
Bahamas ("MSF Holding"), CADILUR S.A. ("MSF"), ESTOLUR S.A. ("Estolur"), and
NATULER S.A. ("HSF" and together with MSF Holding, MSF and Estolur, the
"Co-Borrowers" and each individually a "Co-Borrower"), each of MSF, Estolur and
HSF are companies organized and existing under the laws of Uruguay, and
INTERNATIONAL FINANCE CORPORATION, an international organization established by
Articles of Agreement among its member countries (hereinafter called "IFC").
WHEREAS:
(A) By an investment agreement of even date herewith among IFC and the
Co-Borrowers (the "Investment Agreement"), IFC has agreed to (i) extend a loan
to the Co-Borrowers in the aggregate principal amount of up to forty million
Dollars ($40,000,000) (the "Loan"), in the form of an A Loan of up to fifteen
million Dollars ($15,000,000), and a B loan of up to twenty-five million Dollars
($25,000,000) and (ii) make the IFC Subscription, upon the terms and conditions
set forth in the Investment Agreement.
(B) In consideration of IFC entering into the Investment Agreement and
as an inducement to IFC to make the first Disbursement of the Loan and the first
Disbursement and Subscription under the IFC Subscription, each of DVI and the
Co-Borrowers has agreed to undertake the obligations assumed by it in this
Agreement.
(C) IFC's obligation to make the Loan and the IFC Subscription is
conditioned upon the agreement by DVI not to engage in certain forms of
competition with the Co-Borrowers, as more particularly set forth herein.
(D) Each of DVI and the Co-Borrowers has been provided with, and hereby
acknowledges receipt of, a copy of the Investment Agreement and all the other
Transaction Documents.
NOW, THEREFORE, the parties agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Wherever used in this Agreement, unless the
context otherwise requires, or unless otherwise defined in the preamble or
Recitals hereto, capitalized terms defined in the Investment Agreement shall
have the same meanings herein.
Section 1.02. Other Terms. Wherever used in this Agreement, unless the
context otherwise requires, the following terms shall have the following
meanings:
"Average
Consolidated
Pre-Tax Income" means, as at the date of the relevant Notice of
Exercise, the amount resulting from calculating the
average of the audited consolidated pre-tax profit
recorded by MSF Holding for the previous Fiscal Year,
as determined from the consolidated audited financial
statements for such Fiscal Year and the audited
consolidated profit recorded by MSF Holding for the
current year (annualized), as determined from the
consolidated audited financial statements for the
most recently completed fiscal quarter before which
the relevant Notice of Exercise is given, audited in
accordance with Section 5.10 (iii) hereof if so
requested by IFC;
"Exercise Period" means, the period (A) beginning on the earlier of (i)
the fourth anniversary of the date of this Agreement,
and (ii) the date on which a Triggering Event occurs;
and (B) expiring as provided in Section 5.08(a);
"Exercise Price" means, the higher of (A) a multiple of one point two
five (1.25) times the Net Worth of MSF Holding or (B)
a multiple of eight (8) times the Average
Consolidated Pre-Tax Income of MSF Holding;
"Net Worth" means, the capital, reserves and retained earnings of
MSF Holding based on the consolidated audited
financial
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statements for the Fiscal Year immediately preceding
the date of the relevant Notice of Exercise, or, if
available, the consolidated financial statements for
the most recently completed fiscal quarter of the
Fiscal Year in which the relevant Notice of Exercise
is given, provided any such quarterly statements have
been audited in accordance with Section 5.10(iii)
hereof;
"Notice of Exercise" means any written notice given at any time or from
time to time during the Exercise Period by IFC to DVI
pursuant to Article V, which shall set forth:
(i) only in the case that the Notice of Exercise
is given before the fourth anniversary of
the date of this Agreement, the occurrence
and description of a Triggering Event and
the basis of its determination, which
determination by IFC shall be final,
conclusive and binding xxxx XXX (absent
gross negligence or clerical error);
(ii) whether IFC is exercising the Put Option
with respect to all or part of the Option
Shares and, if less than all the Option
Shares are to be put to DVI, the number of
Option Shares with respect to which IFC is
exercising the Put Option;
(iii) the Settlement Date;
(iv) the Settlement Place;
(v) the Exercise Price and the basis for its
determination, which determination by IFC
shall be final, conclusive and binding xxxx
XXX (absent gross negligence or clerical
error); and
(vi) the account to which payment of the Exercise
Price is to be made.
"Option Shares" means:
(i) the IFC Shares;
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(ii) any other Shares subscribed or acquired by,
or delivered to, IFC pursuant to the
exercise of preemptive rights, options or
warrants accruing to IFC in relation to the
Option Shares;
(iii) any Shares received by IFC as a result of
stock dividends, stock splits or otherwise
on the Option Shares; and
(iv) any Shares received by IFC in exchange,
replacement or substitution for the Option
Shares;
"Put Option" means the right of IFC to require DVI and the
obligation of DVI to purchase in accordance with the
terms and conditions of this Agreement some or all of
the Option Shares;
"Region" means the countries of Uruguay, Argentina, Brazil,
Colombia and any other Latin American Country where
any Co-Borrower or any of its Subsidiaries operates;
"Settlement Date" means a date specified in the relevant Notice of
Exercise for making payment for and delivery of the
Option Shares specified in the Notice of Exercise,
which shall not be less than ninety (90) days nor
more than one hundred twenty (120) days after the
relevant Notice of Exercise shall have been given;
"Settlement Place" means the place in New York, New York, United States
to be specified by IFC in the relevant Notice of
Exercise where payment for and delivery of the
relevant Option Shares are to be made;
"Stock Exchange" means an internationally recognized stock exchange
acceptable to IFC including, but not limited to, the
London Stock Exchange and NASDAQ;
"Termination Date" means the date which is the eighth anniversary date
of this Agreement; and
"Triggering Event" means:
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(i) the failure or incapability of MSF Holding
to maintain, on a consolidated basis, a
diversified vendor lease portfolio, with no
single vendor providing more than:
(A) fifty percent (50%) of the equipment
financed pursuant to Eligible
Leases/Loans in the MSF Portfolio from
December 31, 2000 through December 31,
2001; and
(B) forty percent (40%) of the equipment
financed pursuant to Eligible
Leases/Loans in the MSF Portfolio
thereafter;
(ii) the failure or incapability of MSF Holding
to maintain, on a consolidated basis, a
Lease/Loan Loss Reserve of at least:
(A) one percent (1%) of Net Financed
Assets during Fiscal Years 1997 and
1998;
(B) one and one-half percent (1.5%) of Net
Financed Assets during Fiscal Year
1999; and
(C) two percent (2%) of Net Financed
Assets in Fiscal Year 2000 and
thereafter;
(iii) any material default or non-compliance by
any party thereto (other than IFC) with any
of its respective obligations, or any
material misrepresentation or breach of
warranty by any party thereto (other than
IFC), under any of the Transaction
Documents, in each case, to the extent any
of such events are not attributable to IFC,
and so long as any such default or
non-compliance, or any such
misrepresentation or breach of warranty, has
not been cured, to the satisfaction of IFC,
by any party thereto, as the case may be,
within a period of thirty (30) Business Days
commencing on the earlier of (i) the date in
which IFC has given written notice to the
Co-Borrowers and DVI that any of such events
has occurred and is continuing and (ii) the
date on which any of the Xx-
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Xxxxxxxxx xxx XXX shall have become aware of
any of such events, whether or not:
(A) such circumstance was beyond the
control of such party;
(B) IFC has exercised, or has omitted to
exercise, any other right, power or
remedy accruing to IFC upon such
circumstance under any of such
Transaction Documents; and
(C) such obligation is permitted, in whole
or in part, under any applicable laws;
or
(iv) any substantial change to DVI's shareholder
structure which would materially adversely
affect MSF Holding's or any of its
Subsidiaries policies or operations;
Section 1.03. Interpretation. In this Agreement, unless the context
otherwise requires:
(a) headings and underlinings are for convenience only and do not
affect the interpretation of this Agreement;
(b) words importing the singular include the plural and vice versa;
(c) words importing a gender or neuter include any gender or neuter;
(d) an expression importing a natural person includes any company,
partnership, joint venture, association, corporation or other body corporate and
any governmental or quasi-governmental authority or agency;
(e) a reference to any thing includes a part of that thing;
(f) a reference to a Section, paragraph, party, Annex, Exhibit or
Schedule is a reference to a Section and paragraph of, and a party, Annex,
Exhibit and Schedule to, this Agreement;
(g) a reference to a document includes an amendment or supplement to,
or replacement or novation of, that document disregarding any amendment,
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supplement, replacement or novation made in breach of the Investment Agreement;
and
(h) a reference to a party to any document includes that party's
successors and permitted assigns.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01. General Representations. Each of DVI and the Co-Borrowers
represents, warrants and covenants that:
(a) (i) in the case of DVI, it is a company duly incorporated and
validly existing under the laws of the State of Delaware, USA,
(ii) in the case of MSF Holding, it is a company duly
incorporated and validly existing under the laws of the
Commonwealth of the Bahamas, and (iii) in the case of each of
MSF, Estolur and HSF, it is a company duly incorporated and
validly existing under the laws of Uruguay;
(b) it has the corporate power to conduct its business as
presently conducted;
(c) it has the corporate power and all necessary corporate and
other action has been taken to authorize it to execute this
Agreement and to perform fully and completely all its
obligations and liabilities hereunder;
(d) the execution and delivery of this Agreement and the
performance of its respective obligations hereunder will not
violate or exceed its powers or contravene:
(i) any provision of any applicable law, regulation,
decree or order to which it is subject;
(ii) any provision of the Estatutos or Certificate of
Incorporation or Memorandum and Articles of
Association or other relevant constitutive documents;
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(iii) any provision of any mortgage, deed, contract,
agreement or undertaking to which it is a party or
which is binding upon all or any of its respective
property or assets;
(e) this Agreement constitutes its valid obligations, legally
binding upon it and enforceable in accordance with its terms;
(f) it has been provided with, and hereby acknowledges receipt of,
a copy of each of the Transaction Documents; and
(g) all governmental, corporate, shareholders', optionholders',
creditors' and other necessary authorizations, consents,
approvals, licenses and waivers required for its execution and
delivery of this Agreement and its performance of its
obligations under this Agreement, have been duly obtained or
granted and are in full force and effect.
Section 2.02. Further Representations. (a) DVI represents and warrants
that it presently holds, directly or through its wholly-owned Subsidiaries, at
least forty percent (40%) of the voting shares of MSF Holding unencumbered by
any Lien;
(b) MSF Holding represents and warrants that it presently holds one
hundred percent (100%) of the voting shares of each of MSF, HSF and Estolur
unencumbered by any Lien.
Section 2.03. IFC Reliance. Each of DVI and the Co-Borrowers hereby
acknowledges that it has made the representations in Sections 2.01 and 2.02
above with the intention of persuading IFC to enter into the Transaction
Documents and that IFC has entered into certain of the Transaction Documents on
the basis of, and in full reliance on, each of such representations. Each of DVI
and the Co-Borrowers warrants to IFC that each such representation is true and
correct in all material respects as of the date of this Agreement and that none
of them omits any matter the omission of which makes any of such representations
misleading.
Section 2.04. Non-Estoppel. The rights and remedies of IFC in relation
to any misrepresentations or breach of warranty on the part of DVI and the
Co-Borrowers shall not be prejudiced by any investigation by or on behalf of IFC
into the affairs of DVI and the Co-Borrowers, by the execution of this Agreement
or by any act or thing which may be done by or on behalf of IFC in connection
with
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this Agreement and which might, apart from this Section, prejudice such rights
or remedies.
ARTICLE III
RETENTION OF SHARES
Section 3.01. DVI's Undertakings. Unless IFC otherwise agrees in
writing, so long as any amounts are due and payable to IFC under any of the
Transaction Documents, and so long as IFC holds shares in the voting capital of
MSF Holding: (a) DVI agrees not to, and cause its Subsidiaries or Affiliates not
to sell, transfer, assign, redeem, pledge, or otherwise in any manner dispose of
or encumber, or permit any encumbrances or Liens to exist over, any of the
voting shares of MSF Holding which it now owns or which it may acquire in the
future, directly or indirectly through any of its Subsidiaries or Affiliates, if
as a result thereof, it would own directly or indirectly through its
wholly-owned Subsidiaries less than forty percent (40%) of the voting share
capital of MSF Holding, unencumbered by any pledge, Lien or security; and (b)
DVI also agrees that it will from time to time take such action as shall be
required on its part, directly or indirectly, including the exercise (to the
extent permitted by law) of its or its Subsidiaries' or Affiliates' preemptive
rights under the Memorandum and Articles of Association or other relevant
constitutive documents of MSF Holding to maintain its or its Subsidiaries' or
Affiliates' shareholding in MSF Holding at the minimum level specified above.
Section 3.02. MSF Holding's Undertakings. Unless IFC otherwise agrees
in writing, so long as any amounts are due and payable to IFC under any of the
Transaction Documents and so long as IFC holds shares in the voting capital of
MSF Holding:
(a) MSF Holding agrees not to sell, transfer, assign, redeem, pledge or
otherwise in any manner dispose of or encumber, or permit any encumbrances or
Liens to exist over, any of the voting shares of MSF, Estolur or HSF which it
now owns or which it may acquire in the future if, as a result thereof, it would
own less
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than one hundred percent (100%) of the voting share capital of each of MSF,
Estolur and HSF unencumbered by any pledge, Lien or security; and
(b) MSF Holding also agrees that it will from time to time take such
action as shall be required on its part, including the exercise (to the extent
permitted by law) of its preemptive rights under the respective Memorandum and
Articles of Association, Estatutos or other relevant constitutive documents of
each of MSF, Estolur and HSF to maintain its respective shareholdings in each
such company at the minimum levels specified above.
Section 3.03. Additional Obligations. Each of DVI and MSF Holding
agrees that, for so long as any monies are payable to IFC under any of the
Transaction Documents and so long as IFC holds shares in the voting capital of
MSF Holding, unless IFC otherwise agrees in writing:
(a) it will exercise its voting rights at any meeting of, or in respect
of any other vote taken by, the shareholders of DVI, any of its Subsidiaries or
Affiliates or any of the Co-Borrowers in such manner and otherwise take or cause
to be taken all actions as to achieve a prompt and effective implementation of
all the provisions of, and performance of all obligations of DVI, any of its
Subsidiaries or Affiliates and the Co-Borrowers under, the Transaction
Documents; and
(b) it will not, under the relevant provisions of the Memorandum and
Articles of Association, Estatutos or other relevant constitutive documents of
DVI, any or its Subsidiaries or Affiliates or any of the Co-Borrowers, as the
case may be, approve or vote in favor of the approval of any transfer of shares
proposed to be made in violation of the provisions of this Agreement.
Section 3.04. Request for Transfer. (a) MSF Holding shall promptly give
written notice to IFC of any request received by it to record a transfer, pledge
or other form of disposition by DVI or any of its Subsidiaries or Affiliates of
the shares held by DVI and any of its Subsidiaries or Affiliates in MSF Holding,
and shall, to the extent permitted by law, refuse to make any such registration
which is in violation of the provisions of this Agreement.
(b) Each of MSF, Estolur and HSF shall promptly give written notice to
IFC of any request received by it to record a transfer, pledge or other form of
disposition by MSF Holding of the shares held by MSF Holding in any of MSF,
Estolur or HSF, and shall, to the extent permitted by law, refuse to make any
such registration which is in violation of the provisions of this Agreement.
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Section 3.05. Further Assurances. (i) MSF Holding undertakes to take
all necessary actions to ensure that this Agreement is expressly mentioned in
its respective registry of shareholders and/or any other registry whenever so
required under the laws of the Bahamas, as the case may be, in order for this
Agreement to become fully effective, valid and enforceable against the parties
hereto and third parties; and (ii) each of MSF Holding, MSF, Estolur and HSF
undertakes to take all necessary actions to ensure the prompt and effective
implementation of all of the provisions of this Agreement.
Section 3.06. Tag-Along Rights. Subject to the provisions of Section
3.01 above, if at any time DVI decides, directly or indirectly through any of
its Subsidiaries or Affiliates, to sell all or a percentage of the shares of MSF
Holding held by DVI or its Subsidiaries or Affiliates (the "DVI Shares"), unless
IFC has notified DVI that the sale shall not include any Option Shares, DVI,
directly or indirectly through any of its Subsidiaries or Affiliates, shall only
sell (or permit the sale of) any of the DVI Shares if the sale also includes all
or the same percentage of the Option Shares as the percentage of all DVI Shares
to be sold. If necessary, DVI, directly or indirectly through any of its
Subsidiaries or Affiliates, shall reduce the number of DVI Shares to be sold in
order to sell the required number of Option Shares. DVI shall notify IFC of the
terms and conditions on which it has decided to sell DVI Shares, and IFC shall
have sixty (60) days to decide whether to sell any or all of its Option Shares
as herein provided, and DVI, directly or indirectly through any of its
Subsidiaries or Affiliates, shall not sell any (or permit the sale of) DVI
Shares prior to the expiration of such sixty (60) day period. The provisions of
the preceding sentence shall apply to any DVI Shares that are not sold on the
terms and conditions set forth in any notice to IFC relating to the proposed
sale of such DVI Shares within thirty (30) days after the expiration of the
sixty (60) day period applicable to such DVI Shares.
ARTICLE IV
NON-COMPETITION PROVISIONS
Section 4.01. Competing Activities. So long as any amounts are due and
payable to IFC under any of the Transaction Documents, and so long as IFC holds
shares in the voting capital of MSF Holding, DVI agrees that it shall not
directly or indirectly, alone or in conjunction with others, through
Subsidiaries or Affiliates (other than the Co-Borrowers), joint ventures or
other business arrangements:
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(a) develop, own, manage, operate, join, control, finance or
participate in the ownership, management, operation, control or financing of, or
be connected as an officer, director, employee, consultant or otherwise with,
any business or enterprise engaged in any business which is competitive with the
business of the Co-Borrowers within the Region provided, however, that DVI may
continue to participate in the management, operation and control of Oferil;
(b) engage in any other manner, within the Region, in any business
which is competitive with the business of the Co-Borrowers provided, however,
that DVI may engage in the business of the Co-Borrowers through Oferil (i) if
and when such business has first been offered to the Co-Borrowers and the
Co-Borrowers have declined participation in such business; or (ii) in connection
with Oferil's existing portfolio which has not been transferred to MSF or HSF
pursuant to the Assignment Agreements; or
(c) induce or attempt to induce any customers, suppliers, distributors,
officers or employees of the Co-Borrowers to terminate their relationships with
or to take any action that would be disadvantageous to the business of the
Co-Borrowers.
For the purposes of this Section, the "business of the Co-Borrowers" shall be
defined as the financing, through leases, loans or otherwise, of medical
equipment.
Section 4.02. Acknowledgments of DVI. DVI acknowledges that the period
of restrictions and the restraints imposed by Section 4.01 are reasonably
required for the protection of IFC and the Co-Borrowers. In the event that any
of the provisions contained in this Agreement relating to the period of
restriction or the scope of such restrictions, as set forth in Section 4.01,
shall be deemed by a court of competent jurisdiction to exceed the maximum
periods of time which such court would deem enforceable, or to exceed the
enforceable scope of such provisions, the period or scope of such restriction,
as the case may be, shall, for purposes of this Agreement, be deemed to be the
maximum time period or maximum scope which such court would deem valid and
enforceable. DVI further acknowledges that any violation of the covenants
contained in Section 4.01 is likely to cause irreparable damage to IFC and the
Co-Borrowers and, if proven to the satisfaction of a court of competent
jurisdiction, it may be restrained in an action instituted by IFC or the
Co-Borrowers by process issued out of such court, in addition to any other legal
or equitable remedies provided by law.
ARTICLE V
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PUT OPTION
Section 5.01. Put Option IFC, in its discretion, shall have the right
at any time, at one or more times and from time to time during the Exercise
Period to sell to DVI, and to require DVI to purchase (and DVI shall be
obligated to purchase), all or a portion of the Option Shares at the Exercise
Price, in accordance with the provisions of this Article.
Section 5.02. Notice of Exercise The Put Option may be exercised by IFC
in respect of all or some of the Option Shares at any time, at one or more times
and from time to time during the Exercise Period by delivery of a Notice of
Exercise, executed by IFC and duly delivered to DVI.
Section 5.03. Commitment of DVI Subject to the terms and conditions set
forth xxxxxx, XXX hereby unconditionally, absolutely and irrevocably agrees to
purchase from IFC, on the Settlement Date, at the Settlement Place and at the
Exercise Price, all of the Option Shares in respect of which an Exercise Notice
shall have been duly issued by IFC and delivered to DVI.
Section 5.04. Settlement Upon receipt of a Notice of Exercise, DVI
shall, on the Settlement Date and at the Settlement Place, purchase all of the
Option Shares in respect to which such Notice of Exercise was issued and shall
make all necessary arrangements to pay, and shall pay, the Exercise Price in
full, in Dollars in immediately available funds by wire transfer to the account
so designated by IFC in the Notice of Exercise, it being understood that such
payment shall be made to IFC without any set-off, counterclaim or condition and
without any deduction whatsoever for fees, taxes, duties, expenses, costs or
other charges howsoever called, all of which shall be borne by DVI.
Section 5.05. Share Certificates IFC shall, on the Settlement Date, but
only after receipt of the Exercise Price, transfer to DVI or its assigns the
Option Shares sold on such Settlement Date, free and clear of Liens, charges and
encumbrances and deliver to DVI or its assigns, certificates representing such
Option Shares, duly endorsed in property (en propriedad) by IFC in the name of
DVI and together with such instruments of transfer, if any, as shall be required
by the laws of the Commonwealth of the Bahamas or the State of Delaware, USA to
effect the transfer.
Section 5.06. Right of Transfer. Without prejudice to any remedies
available to IFC under this Agreement or otherwise, and notwithstanding any
other provision of this Agreement to the contrary, in the event that DVI shall
fail
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to pay to IFC in full in Dollars the Exercise Price on or before the Settlement
Date at the Settlement Place, IFC, at its sole discretion and with prior written
notice to DVI, shall be free to:
(i) sell, transfer or otherwise dispose of any or all of such
Option Shares, provided, however, that in the event of any
such sale, transfer or other disposition of such Option
Shares, the provisions of this Agreement (including, without
limitation, the obligation of DVI to purchase the Option
Shares) with respect to the portion of the Option Shares so
sold, transferred or otherwise disposed of, shall have no
further force or effect; provided, further, that DVI shall
remain obligated to pay to IFC the Exercise Price, but reduced
by an amount equal to the net proceeds, if any, received by
IFC from such sale, transfer or disposition of such Option
Shares; and/or
(ii) cancel, in whole or in part, the relevant Notice of Exercise
and the sale of all or part of the Option Shares to be made
pursuant thereto, without penalty of any kind to IFC and
without prejudice to any other right, remedies, powers and
remedies of IFC hereunder or elsewhere.
Section 5.07. Obligations Irrevocable, Absolute and Unconditional. (a)
The obligations of DVI under this Article V are firm, unconditional, absolute
and irrevocable and shall not be terminated, suspended or affected in any manner
by the deterioration of DVI's or the Co-Borrowers' financial situation, the
interruption of DVI's or the Co-Borrowers' operations, the insolvency of any of
the Co-Borrowers or, to the extent permitted by law, DVI, the filing of any
bankruptcy procedure or any similar procedure against any of the Co-Borrowers
or, to the extent permitted by law, DVI, or any other circumstances whatsoever.
(b) DVI's obligations hereunder can be discharged only by performance
and then only to the extent of such performance.
(c) The Put Option shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the Exercise Price is
rescinded or must otherwise be returned by IFC or any other person upon the
insolvency, bankruptcy or reorganization of any person or otherwise, all as
though such payment had not been made.
Section 5.08. Term of the Put Option. (a) The provisions of this
Article V shall be effective from the date hereof and shall continue to be in
full force and
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effect until the first to occur of (A) the first date on which MSF Holding shall
be deemed to have become a public company as provided in subsection (b) below,
(B) the date on which the payment of any of the Exercise Price shall no longer
be subject to recision or return pursuant to Section 5.07(c) hereof, (C) the
date on which the right of MSF Holding to the IFC Subscription under the
Investment Agreement shall have been canceled and (D) the date which is the
eighth anniversary date of this Agreement.
(b) MSF Holding shall be deemed to have become a public company when
all the requirements set out below have been fully satisfied:
(i) MSF Holding shall have delivered to IFC a notice, in
form and substance satisfactory to IFC, signed by an
authorized representative of MSF Holding certifying
that (A) all legal, governmental, corporate,
creditors', and other necessary licenses, approvals
or consents required to be obtained or fulfilled
under the laws, rules, procedures and regulations of
the applicable Stock Exchange, any other applicable
laws and MSF Holding's Memorandum and Articles of
Association or other relevant constitutive documents;
to become a public company, have been duly fulfilled,
granted and obtained by MSF Holding and all such
licenses, approvals or consents have become
irrevocable and unconditional under their relevant
terms; and (B) no Event of Default or suspension or
cancellation of the IFC Subscription, and no
Triggering Event, shall have occurred or be
continuing;
(ii) IFC shall have received a certificate from the Stock
Exchange or other documentation satisfactory to IFC
confirming that (A) Shares representing at least
thirty percent (30%) of the outstanding share capital
of MSF Holding were placed within a period not to
exceed forty-five (45) consecutive calendar days
counting from the day on which such shares were
originally made available for subscription by the
public; provided, that for purposes of the
calculation referred to in this Section
5.08(b)(ii)(A), any Shares offered in an initial
public offering and subscribed by, or any Shares
traded by or on behalf of, any of the Co-Borrowers or
DVI or any Subsidiary or Affiliate of the
Co-Borrowers or DVI shall be excluded; and (B) IFC
has
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received documentation establishing that the
Shares are actively traded in a manner satisfactory
to IFC;
(iii) IFC shall have received a legal opinion or opinions,
in form and substance acceptable to IFC of counsel
acceptable to it in (A) the Commonwealth of the
Bahamas, and (B) such other jurisdiction as IFC shall
deem appropriate, and concurred in by counsel for MSF
Holding, with respect to the matters referred to in
paragraph (i) above and such other matters incident
to the public offering of the capital of MSF Holding
and the trading of the Shares in such Stock Exchange
as IFC shall reasonably request; and
(iv) IFC shall have delivered to MSF Holding a notice
stating that the notice from MSF Holding, the
confirmation by such Stock Exchange, the other
documentation and the legal opinions referred to in
paragraphs (i), (ii) and (iii) above are acceptable
to IFC, and such notice shall not be unreasonably
withheld by IFC.
Section 5.09. Cancellation of the Put Option. Notwithstanding anything
to the contrary provided in this Article V, IFC may, at its own discretion, at
any time prior to the relevant Settlement Date, by notice to DVI, cancel the
relevant Notice of Exercise and the sale of Option Shares to be made pursuant
thereto. In such event, IFC agrees to reimburse DVI for any reasonable expenses
incurred theretofore by it as a result of or in connection with the relevant
Notice of Exercise that has been canceled by IFC.
Section 5.10. Required Documentation. For the purposes of calculating
the Exercise Price, DVI agrees to cause MSF Holding to, and MSF Holding agrees
to, furnish to IFC:
(i) within ninety (90) days after the commencement of a Fiscal
Year, the audited financial statements of each of the
Co-Borrowers for the immediately preceding Fiscal Year;
(ii) within sixty (60) days after the commencement of a fiscal
quarter of a Fiscal Year, the unaudited financial statements
of each of the Co-Borrowers for the immediately preceding
fiscal quarter of such Fiscal Year; and
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(iii) only if so requested by IFC for purposes of calculating the
Exercise Price, special audited financial statements of the
Co-Borrowers for the immediately preceding fiscal quarter of
such Fiscal Year (such audit to be at the cost of the
Co-Borrowers, and such special audited quarterly financial
statements shall be delivered to IFC within forty-five (45)
days after the date of the notice of request sent by IFC to
DVI in this respect).
ARTICLE VI
MISCELLANEOUS
Section 6.01. Waivers. (a) DVI and each of the Co-Borrowers hereby
irrevocably waives, to the extent permitted by applicable laws, any defenses,
rights, claims, counterclaims, remedies and powers that it may now or hereafter
have in any way relating to any or all of the following:
(i) any lack of validity or enforceability of the
Investment Agreement, the other Transaction Documents
or any agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment
of, or in any other term of or relating to, all or
any obligations of any person under the Investment
Agreement or any other Transaction Document, or any
other amendment or waiver of or any consent to
departure from the Investment Agreement or any other
Transaction Document;
(iii) any change, restructuring, reorganization, merger,
consolidation, liquidation or termination of the
corporate structure or existence of any of the
Co-Borrowers or DVI, or any of their respective
Subsidiaries, or any change in the ownership of any
shares of the capital stock of any of such entities;
(iv) any failure of IFC to disclose to the Co-Borrowers or
DVI any information relating to the financial
condition, operations, properties or prospects of any
other person now or in the future known to IFC;
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(v) the occurrence and/or continuance of any bankruptcy,
reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency,
liquidation or similar proceedings with respect to
DVI, any of the Co-Borrowers or any other person;
(vi) the existence of any claim, setoff, defense or other
right which DVI or the Co-Borrowers may have against
DVI, any of the Co-Borrowers, IFC or any other
person;
(vii) all requirements as to promptness, diligence,
presentment, demand, protest or notice of any kind
with respect to any obligations of any party (other
than IFC) under either this Agreement, the Investment
Agreement or any other Transaction Document;
(viii) any right to require IFC to proceed against DVI, any
of the Co-Borrowers or any other person, or to pursue
any other remedy, action or power whatsoever within
the power of IFC;
(ix) any right arising out of the absence of request for
payment (judicial or otherwise) by IFC to DVI or any
of the Co-Borrowers;
(x) any right to revoke or terminate this Agreement,
except as established in Sections 5.09. and 6.08
hereof;
(xi) any assertion of, or failure to assert, or delay in
asserting, any right, power or remedy against any
party in respect of any Triggering Event;
(xii) any failure of any of the Transaction Documents to
comply with any requirement of any applicable laws;
(xiii) any purported or actual assignment or transfer of any
of the Option Shares by IFC to any other party;
(xiv) any Transaction Document being in whole or in part
illegal, void, voidable, voided, unenforceable or
otherwise of limited force and effect; or
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(xv) any other circumstance (including, without
limitation, any statute of limitations) or any
existence of or reliance on any representation by IFC
that might otherwise constitute a defense available
to, or a discharge of, DVI.
(b) DVI and each of the Co-Borrowers acknowledges that it will receive
substantial direct and indirect benefits from the IFC Subscription contemplated
by the Transaction Documents and that the waivers set forth in subsection (e)
above are knowingly made in contemplation of such benefits.
Section 6.02. MSF Holding as Agent for Communication. So long as any
amounts are due and payable to IFC under any of the Transaction Documents, and
so long as IFC holds shares in the voting capital of MSF Holding, any notice,
request or other communication to be given by IFC to MSF, Estolur and HSF under
the term of this Agreement and each Transaction Document may, at the option of
IFC and without prejudice to its right to communicate directly with MSF, Estolur
and HSF, be addressed to MSF Holding, as agent, which is hereby irrevocably
authorized and directed by MSF, Estolur and HSF to act as agent for it in such
matter, and MSF Holding hereby accepts such appointment.
(b) Each of MSF, Estolur and HSF hereby irrevocably appoints MSF
Holding to act as its agent to give any notice, request or other communication
to be given by MSF, Estolur and HSF under the terms of this Agreement and each
Transaction Document, and MSF Holding accepts such appointment.
Section 6.03. Notices. Any notice given under this Agreement shall be
in writing and shall be deemed to have been duly given when delivered by hand,
airmail or facsimile or established courier service to the party's address
specified below or at such other address as such party notifies to the other
party from time to time and will be effective upon receipt or, in the case of
delivery by hand or by established courier service, upon refusal to accept
delivery.
For DVI:
DVI, Inc.
000 Xxxx Xxxx
Xxxxxxxxxx, XX 00000 XXX
Attn: Xx. Xxxxxxx X. X'Xxxxxx
Facsimile: (000) 000-0000
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For the Co-Borrowers:
MSF Holding
Euro Xxxxxxxx Xxxxxx
Xxxxxxxxxxx Xxxxxx
X.X. Xxx X-0000
Facsimile: (000) 000-0000
For IFC:
International Finance Corporation
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Xxxxxx Xxxxxx of America
Attention: Director, Latin America and Caribbean Department
Facsimile: (000) 000-0000
With a copy (in the case of notices relating to payments) sent
to the attention of the Manager, Accounting Division, at:
Facsimile: 000-000-0000
Cable: CORINTFIN
Washington, D.C.
Section 6.04. English Language. All documents to be furnished or
communications to be given or made under this Agreement shall be in the English
language or, if in another language, shall, if IFC so requests, be accompanied
by a translation into English satisfactory to IFC certified by a representative
of DVI or the Co-Borrowers, as the case may be, which translation shall be the
governing version among DVI, the Co-Borrowers and IFC.
Section 6.05. Fees and Expenses. DVI and the Co-Borrowers shall pay to
IFC or as IFC may direct all taxes, including stamp taxes, duties, fees or other
charges payable in connection with the execution, delivery, registration or
notarization of this Agreement and shall pay:
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(a) the fees and expenses of IFC's counsel in the Bahamas, Uruguay, New
York, Delaware and any jurisdiction in which any of the Co-Borrowers conducts
Sbusiness, incurred in connection with:
(i) the preparation and/or review, execution and, if
appropriate, registration of this Agreement and any
other documents related to this Agreement;
(ii) the giving of any legal opinions required by IFC
under this Agreement; and
(iii) any amendment, supplement or modification to, or
waiver under this Agreement or any of the Transaction
Documents;
(b) the costs and expenses incurred by IFC in relation to the
enforcement or protection or attempted enforcement or protection of its rights
under this Agreement, including legal and other professional consultants' fees;
and
(c) any costs or expenses incurred by IFC or losses suffered as a
result of DVI's failure to pay to IFC in full in Dollars the Exercise Price on
or before the Settlement Date at the Settlement Place.
Section 6.06. Financial Calculations. (a) All financial calculations to
be made under, or for the purposes of, this Agreement shall be determined in
accordance with U.S. generally accepted accounting principles and applied on a
consistent basis and, except as otherwise required to conform to the definitions
and other provisions contained in this Agreement, shall be calculated from the
then most recently issued financial statements which each of the Co-Borrowers is
obligated to furnish to IFC under Sections 7.01 (d) and (e) of the Investment
Agreement.
(b) If any material adverse change in the financial condition of any of
the Co-Borrowers after the end of the period covered by the relevant financial
statements has occurred, such material adverse change shall also be taken into
account in calculating the relevant figures.
Section 6.07. Termination of Agreement. Except as otherwise provided
herein, this Agreement shall continue in force for as long as any amounts are
due and payable to IFC under any of the Transaction Documents. Notwithstanding
the above, the provisions of Article IV and, subject to the provisions of
Section 5.09 hereof, Article V shall survive the termination or cancellation of
the Investment
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Agreement or any other Transaction Document if IFC continues to hold any IFC
Shares notwithstanding such termination or cancellation.
Section 6.08. Severability. (a) The invalidity or unenforceability of
any provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement which shall remain in
full force and effect.
Section 6.09 Applicable Law and Jurisdiction. (a) This Agreement is
governed by, and shall be construed in accordance with, the laws of the State of
New York, United States of America.
(b) Each of DVI and the Co-Borrowers irrevocably agrees that any legal
action, suit or proceeding arising out of or relating to this Agreement or any
other Transaction Document to which DVI or any of the Co-Borrowers is a party
may be brought by IFC in the courts of the State of New York or of the United
States of America located in the Southern District of New York. Final judgment
against DVI or any of the Co-Borrowers in any such action, suit or proceeding
shall be conclusive and may be enforced in any other jurisdiction, including the
Bahamas or Uruguay, by suit on the judgment, a certified or exemplified copy of
which shall be conclusive evidence of the judgment, or in any other manner
provided by law.
(c) By the execution and delivery of this Agreement, each of DVI and
the Co-Borrowers irrevocably submits to the non-exclusive jurisdiction of any
such court in any such action, suit or proceeding and each of DVI and the
Co-Borrowers designates, appoints and empowers CT Corporation System, New York,
New York as its authorized agent to receive for and on its behalf service of any
summons, complaint or other legal process in any such action, suit or proceeding
in the State of New York.
(d) Nothing in this Agreement shall affect the right of IFC to commence
legal proceedings or otherwise xxx DVI or any of the Co-Borrowers in the Bahamas
or Uruguay or any other appropriate jurisdiction, or concurrently in more than
one jurisdiction, or to serve process, pleadings and other legal papers xxxx XXX
or any of the Co-Borrowers in any manner authorized by the laws of any such
jurisdiction.
(e) As long as this Agreement remains in force, each of DVI and the
Co-Borrowers shall maintain a duly appointed agent for the service of summons,
complaint and other legal process in New York, New York, United States of
America, for purposes of any legal action, suit or proceeding IFC may bring in
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respect of this Agreement or any other Transaction Document to which any of DIV
and the Co-Borrowers is a party. Each of DVI and the Co-Borrowers shall keep IFC
advised of the identity and location of such agent.
(f) Each of DVI and the Co-Borrowers also irrevocably consents, if for
any reason any of DVI's or the Co-Borrower's authorized agent for
service of process of summons, complaint and other legal process in any
such action, suit or proceeding is not present in New York, New York,
to service of such papers being made out of those courts by mailing
copies of the papers by registered United States air mail, postage
prepaid, to any of DVI and the Co-Borrowers, as the case may be, at its
address specified in Section 6.03. In such a case, IFC shall also send
by telex or facsimile, or have sent by telex or facsimile, a copy of
the papers to DVI or such Co-Borrower, as the case may be.
(g) Service in the manner provided in subsection (f) above in any such
action, suit or proceeding will be deemed personal service, will be accepted by
DVI and the Co-Borrowers, as the case may be, as such and will be valid and
binding upon the Co-Borrowers, as the case may be, for all purposes of any such
action, suit or proceeding.
(h) Each of DVI and the Co-Borrowers irrevocably waives to the fullest
extent permitted by applicable law:
(i) any objection which it may have now or in the future
to the laying of the venue of any such action, suit
or proceeding in any court referred to in this
Section;
(ii) any claim that any such action, suit or proceeding
has been brought in an inconvenient forum; and
(iii) its right of removal of any matter commenced by IFC
in the courts of the State of New York to any court
of the United States of America.
(i) To the extent that DVI or any of the Co-Borrowers may be entitled
in any jurisdiction to claim for itself or its assets immunity in respect of its
obligations under this Agreement or any other Transaction Document to which DVI
or such Co-Borrower is a party from any suit, execution, attachment (whether
provisional or final, in aid of execution, before judgment or otherwise) or
other legal process or to the extent that in any jurisdiction such immunity
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(whether or not claimed) may be attributed to it or its assets, each of DVI and
the Co-Borrowers irrevocably agrees not to claim and irrevocably waives such
immunity to the fullest extent permitted by the laws of such jurisdiction.
(j) Each of DVI and the Co-Borrowers hereby acknowledges that IFC shall
be entitled under applicable law, including the provisions of the International
Organizations Immunities Act, to immunity from a trial by jury in any action,
suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby or any other Transaction Document to which any
of DVI or the Co-Borrowers is a party, brought against IFC in any court of the
United States of America. Each of DVI and the Co-Borrowers hereby waives any and
all rights to demand a trial by jury in any action, suit or proceeding arising
out of or relating to this Agreement or any other Transaction Document to which
any of DVI or the Co-Borrowers is a party or the transactions contemplated by
this Agreement or such Transaction Documents that is (i) brought against DVI or
any of the Co-Borrowers or (ii) brought against IFC in any forum in which IFC is
not entitled to immunity from a trial by jury.
(k) To the extent that DVI or any of the Co-Borrowers may, in any suit,
action or proceeding brought in any of the courts referred to in paragraph (b)
above or a court of the Bahamas, Uruguay or elsewhere arising out of or in
connection with this Agreement or any other Transaction Document to which DVI or
any of the Co-Borrowers is a party, be entitled to the benefit of any provision
of law requiring IFC in such suit, action or proceeding to post security for the
costs of DVI or any of the Co-Borrowers (cautio judicatum solvi), or to post a
bond or to take similar action, each of DVI and the Co-Borrowers hereby
irrevocably waives such benefit, in each case to the fullest extent now or in
the future permitted under the laws of the Bahamas, Uruguay or, as the case may
be, the jurisdiction in which such court is located.
Section 6.10 Successors and Assigns. This Agreement binds and benefits
the respective successors and assigns of its parties. However, DVI and the
Co-Borrowers may not assign or delegate any of their respective rights or
obligations under this Agreement without IFC's consent.
Section 6.11 Amendment. Any amendment of any provision of this
Agreement shall be in writing and signed by the parties.
Section 6.12 Counterparts. This Agreement may be executed in several
counterparts, each of which is an original, but all of which together constitute
one and the same agreement.
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Section 6.13 Remedies and Waivers. No failure or delay by IFC in
exercising any power, remedy, discretion, authority or other rights under this
Agreement shall waive or impair that or any other right of IFC. No single or
partial exercise of such a right shall preclude its additional or future
exercise. No such waiver shall waive any other right under this Agreement. All
waivers or consents given under this Agreement shall be in writing.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
in their respective names as of the date first above written.
DVI, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
XXXXXX X. XXXXXXXXX
Authorized Representative
MSF HOLDING LTD.
By: /s/ Xxxxxx X. Xxxxxxxxx
XXXXXX X. XXXXXXXXX
Authorized Representative
CADILUR, S.A.
By: /s/ Xxxxxx X. Xxxxxxxxx
XXXXXX X. XXXXXXXXX
Authorized Representative
ESTOLUR S.A.
By: /s/ Xxxxxx X. Xxxxxxxxx
XXXXXX X. XXXXXXXXX
Authorized Representative
NATULER S.A.
By: /s/ Xxxxxx X. Xxxxxxxxx
XXXXXX X. XXXXXXXXX
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Authorized Representative
INTERNATIONAL FINANCE CORPORATION
By: /s/ Xxxxxx Xxxxxx
XXXXXX XXXXXX
Authorized Representative
