-------------------------------------------------------
$30,000,000
SECOND RESTATED CREDIT AGREEMENT
Among
PEPSI-COLA PUERTO RICO BOTTLING COMPANY,
PEPSI-COLA PUERTO RICO MANUFACTURING COMPANY,
PEPSI-COLA PUERTO RICO DISTRIBUTING COMPANY,
BEVERAGE PLASTICS COMPANY
and
BANCO POPULAR DE PUERTO RICO
Dated as of April 8, 1997
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CREDIT AGREEMENT
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS .................................... 1
Section 1.1 Defined Terms .................................. 1
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES .............. 15
Section 2.1 Description of Transaction ..................... 15
Section 2.2 Commitments .................................... 15
Section 2.3 The Advances ................................... 15
Section 2.4 Making the Revolving Credit Borrowings ......... 17
Section 2.5 Fees ........................................... 17
Section 2.6 Reduction of the Revolving Credit Commitment ... 18
Section 2.7 Interest and Repayment ......................... 18
Section 2.8 Optional Prepayments ........................... 20
Section 2.9 Mandatory Prepayments and Reductions of
Commitments................................... 22
Section 2.10 Payments and Computations ...................... 23
Section 2.11 Payments on Non-Business Days .................. 23
Section 2.12 Funding Procedure .............................. 24
Section 2.13 Increased Costs ................................ 24
Section 2.14 Changed Circumstances .......................... 24
Section 2.15 Taxes .......................................... 25
Section 2.16 Extension of Termination Date .................. 26
ARTICLE III CONDITIONS OF LENDING .......................... 26
Section 3.1 Condition Precedent to All Advances ............ 26
Section 3.2 Conditions Precedent to All Advances ........... 28
Section 3.3 Reference to and Effect on the Loan Documents... 28
ARTICLE IV REPRESENTATIONS AND WARRANTIES ................. 29
Section 4.1 Representations and Warranties of the Borrowers. 29
ARTICLE V COVENANTS OF THE BORROWERS ..................... 35
Section 5.1 Affirmative Covenants .......................... 35
Section 5.2 Negative Covenants ............................. 43
ARTICLE VI SPECIAL PROVISIONS AS TO COLLATERAL ............ 47
Section 6.1 Perfection of Security Interest ................ 47
Section 6.2 Provisions Relating to Receivables ............. 48
Section 6.3 Warranties with Respect to Receivables ......... 48
Section 6.4 Provisions Relating to Inventory ............... 48
Section 6.5 Provisions Relating to Machinery and Equipment.. 49
Section 6.6 Collateral Reporting ........................... 49
Section 6.7 Collections; Blocked Account ................... 51
Section 6.8 Application of Collateral ...................... 51
Section 6.9 Release of Collateral .......................... 51
i
ARTICLE VII EVENTS OF DEFAULT .............................. 52
Section 7.1 Event of Default ............................... 52
ARTICLE VIII MISCELLANEOUS .................................. 54
Section 8.1 Amendments, Etc. ............................... 54
Section 8.2 Notices ........................................ 54
Section 8.3 No Waiver; Remedies ............................ 55
Section 8.4 Accounting Terms ............................... 56
Section 8.5 Costs, Expenses and Taxes; Indemnification ..... 56
Section 8.6 Right of Set-Off ............................... 57
Section 8.7 Binding Effect; Governing Law .................. 57
Section 8.8 Execution in Counterparts ...................... 58
Section 8.9 Sale of Notes; Participations and Commitments... 58
Section 8.10 Severability of Provisions ..................... 58
Section 8.11 Survival of Covenants .......................... 58
Section 8.12 Application of Payments ........................ 58
Section 8.13 Disbursement Authorization ..................... 59
Section 8.14 Cross Default and Joint and Several Obligations. 59
Section 8.15 Loans and Collateral under Financing Agreement
and the First Restated Credit Agreement
Remain in Full Force and Effect............... 59
LIST OF EXHIBITS
Exhibit A - Term Loan Note
Exhibit B - Revolving Credit Note
Exhibit C - Cash Collateral Agreement
Exhibit D - Borrowers' Places of Business
Schedule 5.2(b)
Schedule 5.2(j)
ii
SECOND RESTATED CREDIT AGREEMENT
SECOND RESTATED CREDIT AGREEMENT entered into as of this 8th day of
April, 1997, among PEPSI-COLA PUERTO RICO BOTTLING COMPANY ("Pepsi-Cola
PR"), PEPSI-COLA PUERTO RICO DISTRIBUTING COMPANY ("Distributing"),
BEVERAGE PLASTICS COMPANY ("Beverage Plastics") and PEPSI-COLA PUERTO RICO
MANUFACTURING COMPANY ("Manufacturing"; Pepsi-Cola PR, Distributing,
Beverage Plastics and Manufacturing hereinafter sometimes referred to
individually as a "Borrower" and collectively as "Borrowers"), each a
corporation organized and existing under the laws of the State of Delaware;
and
BANCO POPULAR DE PUERTO RICO, a banking corporation organized and
existing under the laws of the Commonwealth of Puerto Rico (hereinafter
referred to as the "Bank").
ARTICLE I
DEFINITIONS
Section 1.1 DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms
defined):
"ADVANCES" shall include all Revolving Credit Advances and Term Loan
Advances.
"AFFILIATE" shall mean, with respect to any Person, any other Person
(i) that directly or indirectly through one or more Persons controls, or is
controlled by, or is under common control with, such Person, (ii) that
directly or indirectly, of record or beneficially, owns or holds eight (8%)
percent or more of the shares of any class of any equity, capital stock or
partnership interest of such Person having voting powers or other equity
interest, or (iii) eight percent (8%) or more of the shares of stock,
partnership interest or other equity interest of which are owned or held,
directly or indirectly, of record or beneficially, for such Person. For the
purposes of this Agreement, the term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of
management and policies of a Person, whether through ownership of voting
securities or partnership interest, by contract or otherwise; all of the
Borrowers' officers, shareholders, directors, subsidiary corporations,
joint venturers and partners shall be deemed to be the Borrowers'
Affiliates.
"AGREEMENT" or "THIS AGREEMENT" shall include all amendments,
modifications and supplements hereto and shall refer to this Second
Restated Credit Agreement as the same may be in effect at the time such
reference becomes operative.
"ANNUALIZED CASH FLOW" shall mean, as of the end of each fiscal
quarter, Operating Cash Flow for such quarter and the previous fiscal
quarters, if any, during the current fiscal year PLUS, any legal expenses
and settlements and judgments paid during such period by any of the
Borrowers or their Restricted Subsidiaries not covered by insurance related
to the Shareholders' Suit, if any, divided by the number of months elapsed
in such fiscal year and multiplied by twelve.
"BAESA" means Buenos Aires Embotelladora, S.A.
"BAESA STOCK DISPOSITION" shall mean any sale, assignment, transfer or
other disposition of any stock or warrants convertible into stock of BAESA
(whether now owned or hereafter acquired or received) by the Borrowers or
any of their Restricted Subsidiaries.
"BANK" has the meaning assigned to that term in the Preamble.
"BASE RATE" means the highest of the rates of interest announced
publicly from time to time in THE WALL STREET JOURNAL by the principal
commercial banks in New York, New York as their prime or base rate.
"BLOCK ACCOUNT" shall have the meaning assigned thereto in Section
6.7.
"BORROWER" or "BORROWERS" have the meanings assigned to such terms in
the Preamble.
"BORROWINGS" shall refer collectively to the Revolving Credit
Borrowings and the Term Loan Borrowing.
"BOTTLING APPOINTMENT" shall mean the Exclusive Bottling Appointment
Agreement dated April 27, 1987 between Pepsi-Cola PR and PepsiCo, as
amended to date.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a
legal holiday or the equivalent for banks generally under the laws of the
Commonwealth or New York, New York.
"CAPITAL EXPENDITURES" shall mean, for any period and for all
Borrowers and their Restricted Subsidiaries taken as a whole, the sum of
all expenditures actually incurred by all Borrowers and their Restricted
Subsidiaries for such period for any assets or improvements, replacements,
substitutions or additions thereto that have a useful life of more than one
(1) year, including the direct or indirect acquisition of such assets by
way of increased product or service charges, offset items or otherwise, but
excluding from such expenditures (i) Indebtedness incurred in connection
with Capitalized Leases permitted under Section 5.2(b), (ii) expenditures
financed with the proceeds from the sale of any capital stock of Pepsi-Cola
PR (other than proceeds under the Option Agreement required to effect any
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mandatory prepayment under Section 2.9(e)), or (iii) financed from any
contribution and other monies that are made available to the Borrowers by
PepsiCo or any Affiliate thereof for the specific purpose of financing the
acquisition of Capital Expenditures.
"CAPITALIZED LEASES" means all rental obligations which have been or
should be capitalized on the books of the Borrowers or any of their
respective Restricted Subsidiaries in accordance with Generally Accepted
Accounting Principles and good accounting practice, and in each case taken
at the amount thereof accounted for as Indebtedness, net of interest
expense, determined in accordance with Generally Accepted Accounting
Principles and good accounting practice.
"CASH COLLATERAL ACCOUNT" means that deposit account described in
Section 5.1(v).
"CASH COLLATERAL AGREEMENT" means the Collateral Account Agreement
governing the operation of the Cash Collateral Account and the use of funds
deposited therein, executed as of the Closing Date by and among the
Borrowers and the Bank.
"CASUALTY" shall mean any damage to or destruction of the Realty,
Machinery and Equipment or other property of any of the Borrowers or their
Restricted Subsidiaries.
"CLASS A SHARES" shall have the meaning set forth in Section 4.1(y).
"CLASS B STOCK OFFERING" shall have the meaning set forth in Section
2.8(d).
"CLOSING DATE" shall mean the date of this Agreement.
"COLLATERAL" shall mean and include all Receivables, Inventory,
Machinery and Equipment, Realty, the Cash Collateral Agreement, all
agreements and contracts assigned hereunder and all of the Borrowers' other
real and personal property in which a security interest is granted, or
purported to be granted, in accordance with the terms of this Agreement and
the other Loan Documents.
"COMMITMENTS" shall refer collectively to the Term Loan Commitment and
the Revolving Credit Commitment.
"COMMONWEALTH" shall mean the Commonwealth of Puerto Rico.
"DEBT SERVICE" shall mean, for any period, the sum for the Borrowers
and the Restricted Subsidiaries (determined on a consolidated basis without
duplication in accordance with Generally Accepted Accounting Principles) of
the following: (a) all scheduled payments of principal on (i) any Advances
hereunder (other than repayments of Revolving Credit Advances if there was
no corresponding reduction in the amount of the Revolving Credit
Commitment), and (ii) ail other Indebtedness of the Borrowers and the
Restricted Subsidiaries scheduled to be made during such period, PLUS
(b) the total interest expense on all Advances and such Indebtedness for
such period.
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"DISPOSITION" shall mean any sale, assignment, transfer or other
disposition of any property (tangible or intangible, and whether now owned
or hereafter acquired) by the Borrowers or any of their Restricted
Subsidiaries to any Person excluding (a) any sale of Inventory in the
ordinary course of business, (b) the disposition of obsolete or worn-out
equipment, and (c) any BAESA Stock Disposition.
"DISPOSITION RECAPTURE DATE" shall mean each date on which any of the
Borrowers or any of their Restricted Subsidiaries receive Net Available
Proceeds.
"DISTRIBUTING" has the meaning assigned to that term in the Preamble.
"ELIGIBLE INVENTORY" shall mean and include only such Inventory of the
Borrowers (excluding raw materials and work in process) located at
Borrowers' places of business listed on Exhibit D hereto, which, in the
Bank's commercially reasonable judgment, is in good and saleable condition,
it is not obsolete or unmerchantable and does not otherwise constitute
unacceptable collateral and which is subject to no other Lien other than
Permitted Liens.
"ELIGIBLE RECEIVABLES" shall mean and include only such Receivables
arising in the ordinary course of the Borrowers' business which are
scheduled to the Bank and which the Bank, in its commercially reasonable
judgment, deems to be Eligible Receivables. No Receivable shall be an
Eligible Receivable if (a) it arises out of a sale made by the Borrowers to
an Affiliate of the Borrowers or to a Person controlled by an Affiliate of
the Borrowers; or (b) it is due or unpaid more than ninety (90) days after
the original invoice date; or (c) the account debtor has commenced a
voluntary case under the federal bankruptcy laws, as now constituted or
hereafter amended, or made an assignment for the benefit of creditors, or
if a decree or order for relief has been entered by a court having
jurisdiction in the premises of the account debtor in an involuntary case
under the federal bankruptcy laws, as now constituted or hereafter amended,
or if any other petition or other application for relief under the federal
bankruptcy laws has been filed against the account debtor, or if the
account debtor has failed, suspended business, ceased to be Solvent, or
consented to or suffered a receiver, trustee, liquidator or custodian to be
appointed for it or for all or a significant portion of its assets or
affairs; or (d) is not expressed in United States dollars; or (e) the sale
to the account debtor is on a xxxx-and-hold, guaranteed sale, sale-and-
return, sale on approval, consignment or any other repurchase or return
basis; or (f) the Bank believes, in its commercially reasonable judgment,
that collection of such receivable is insecure or that such receivable may
not be paid by reason of the account debtor's financial inability to pay;
or (g) the account debtor is the United States of America or the
Commonwealth of Puerto Rico or any department, agency or instrumentality of
either, unless the corresponding Borrower assigns its right to payment of
such Receivable to the Bank pursuant to the Assignment of Claims Act of
1940, as amended (31 U.S.C. 203 ET SEQ.) or Act No. 16
of May 1, 1967, as amended (3 L.P.R.A. 901-902), as the
4
case may be; or (h) the goods giving rise to such Receivable have not been
shipped and delivered to and accepted by the account debtor or the services
giving rise to such Receivable have been performed by Distributing and
accepted by the account debtor or the Receivable otherwise does not
represent a final sale; or (i) the Receivable was not invoiced on or within
seven (7) days after the date of shipment of the finished goods covered
thereby; or (j) the Bank at all times does not have a perfected first
priority security interest on such Receivable; or (k) the account debtor is
located outside of Puerto Rico or the United States; or (l) the Receivable
consists of insurance proceeds payable to any the Borrowers or their
Restricted Subsidiaries related to the Shareholders' Suit; or (m) the
Receivable arises from sales made by the Cristalia division of Pepsi-Cola
PR.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as supplemented or amended from time to time. Section references to
ERISA are to ERISA as in effect on the date of this Agreement and any
subsequent provisions of ERISA, amendatory thereof, supplemental thereto of
substituted therefor.
"ERISA AFFILIATE" shall mean each trade or business (whether or not
incorporated) which, together with the Borrowers or any Subsidiary, would
be deemed to be a single employer within the meaning of Section 4001 of
ERISA or Section 414 of the U.S. Internal Revenue Code of 1986, as amended.
"EURODOLLAR FUNDS" means deposits in United States dollars in
immediately available funds in the London interbank market on the first day
of a Funding Period (in the case of the Term Loan Note) for a period equal
to the Funding Period, and in an amount equal or comparable to the
principal amount of the Advance being funded with such Eurodollar Funds.
"EVENT OF DEFAULT" shall mean any of the events or circumstances
specified in Section 7.1.
"EXCESS CASH FLOW" shall mean for any period, Operating Cash Flow for
such period, MINUS, without duplication, the sum of (a) Capital
Expenditures for such period permitted under Section 5.2(o) that were not
financed by indebtedness, (b) all scheduled payments of principal and all
interest expensed or accrued on Indebtedness (including the interest
component of Capitalized Leases) included within the definition of Debt
Service, paid (including voluntary and mandatory prepayments) during such
period, and (c) Taxes for such period.
5
"FINANCING AGREEMENT" has the meaning assigned to that term in Section
2.1.
"FIRST RESTATED CREDIT AGREEMENT" has the meaning assigned to that
term in Section 2.1.
"FUNDING PERIOD" shall mean each period of three calendar months
commencing on the first day of January, April, July and October of each
year and ending on the last day of the third calendar month thereafter,
except that (i) the initial Funding Period shall begin on the Closing Date
and shall end on June 30, 1997 and (ii) the last Funding Period for (a) the
Term Loan Advance shall end on March 31, 2007 and (b) the Revolving Credit
Advances shall end on the Termination Date.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" or "GAAP" shall mean
generally accepted accounting principles consistently applied and
maintained throughout the period indicated and consistent with the prior
financial practice of the Borrowers, except for changes mandated by the
Financial Accounting Standards Board or any similar accounting authority of
comparable standing.
"INCURRED" has the meaning assigned to that term in Section 3.5(a).
"INDEBTEDNESS" shall mean, for any Person, all obligations of such
Person, without duplication, required by GAAP to be shown as liabilities on
its balance sheet, and in any event shall include all: (a) indebtedness
created, issued or incurred by such Person for borrowed money (whether by
loan or the issuance and sale of debt securities or the sale of property to
another Person subject to an understanding or agreement, contingent or
otherwise, to repurchase such property from such Person); (b) obligations
of such Person representing the deferred purchase or acquisition price of
property or services, other than trade accounts payable (other than for
borrowed money) arising, and accrued expenses incurred, in the ordinary
course of business so long as such trade accounts payable are payable
within 90 days of the date the respective goods are delivered or the
respective services are rendered; (c) obligations and liabilities of any
Person secured by a Lien, claim, encumbrance, or security interest upon
property now or hereafter owned by any Borrower or any Restricted
Subsidiary, even though such Borrower or such Restricted Subsidiary has not
assumed or become liable for the payment thereof; (d) obligations or
liabilities created or arising under any lease of real or personal
property, or conditional sales contract or other title retention agreement,
including, but not limited to Capitalized Leases with respect to property
used or acquired by any Borrower, even though the rights and remedies of
the lessor, seller or the Bank thereunder are limited to repossession of
such property; (e) obligations of such Person in respect of letters of
credit or similar instruments issued or accepted by banks and other
financial institutions for account of such Person; and (f) Indebtedness of
others guaranteed by such Person.
6
"INVENTORY" shall mean and include all of the corresponding Borrower's
now owned and hereafter acquired inventory, including, without limitation,
all goods, merchandise and other personal property furnished under any
contract of service or intended for sale or lease, all raw materials, work
in process, finished goods and materials and supplies of any kind, nature
or description which are or might be used, consumed or sold in such
Borrower's business or are or might be used in connection with the
manufacture, packing, shipping, advertising, selling or finishing of such
goods, merchandise and other personal property, all returned or repossessed
goods now, or at any time or times hereafter, in the possession or under
the control of such Borrower or the Bank, and all documents of title or
documents representing the same.
"LIBOR RATE" shall mean the offered quotation for the rate of interest
on deposits with a tenor equal to the applicable Funding Period of United
States dollars in the London interbank market, as published by Telerate
Systems, Inc. (currently on page 4843 of the financial information
reporting services furnished electrically by Telerate Systems, Inc.) at
approximately 9:00 a.m. Eastern Standard Time on the Pricing Date.
"LIEN" shall mean any mortgage, deed of trust, pledge, security
interest, hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), or preference, priority or other security agreement
or preferential arrangement, charge or encumbrance of any kind or nature
whatsoever (including, without limitation, any conditional sale or other
title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, and the filing or recording
of any financing statement or other instrument under the Uniform Commercial
Code or comparable law of any jurisdiction to evidence any of the
foregoing).
"LOAN DOCUMENTS" has the meaning assigned to that term in Section
3.1(b).
"LOAN PARTIES" has the meaning assigned to that term in Section 3.1
(b).
"MACHINERY AND EQUIPMENT" shall mean and include all of each
Borrower's now owned and hereafter acquired equipment and fixtures,
including, without limitation, all bottles, cases, tanks, shells,
cylinders, furniture, machinery, tool, dies, moldings vehicles and trade
fixtures, together with any and all accessories, accessions, parts and
appurtenances thereto, substitutions therefor and replacements thereof, and
any other equipment or fixtures to be acquired or financed in whole or in
part by the Bank, that form part of the Plant or that is otherwise given as
security to the Bank.
"MANUFACTURING" has the meaning assigned to that term in the Preamble.
7
"MARKETING AGREEMENT" shall mean that certain Cooperative Advertising
and Marketing Agreement between Concentrate Manufacturing Operations
PepsiCo Puerto Rico, Inc. and Pepsi-Cola PR dated April 7, 1997, as amended
or supplemented from time to time.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a)
the property, business, operations, financial condition, liabilities,
assets or capitalization of the Borrowers and the Restricted Subsidiaries
of the Borrowers taken as a whole, (b) the ability of a Loan Party to
perform its obligations under any of the Loan Documents, (c) the validity
or enforceability of any of the Loan Documents, or (d) the rights and
remedies of the Bank under any of the Xxxx Documents.
"MINIMUM CASH BALANCE" means, as of any date, Ten Million Dollars
($10,000,000) MINUS the sum of (a) the aggregate principal amount of any
mandatory prepayments made by the Borrowers to the Bank pursuant to
Sections 2.9(e) and 2.9(f) hereof, PLUS (b) the principal amount then held
to the credit of the Cash Collateral Account, PLUS (c) the aggregate
principal amount of any optional prepayments made by the Borrowers to the
Bank pursuant to Section 2.8(e), PLUS (d) the aggregate amount of any
reductions in the Revolving Credit Commitment, PLUS (e) $5,000,000, to the
extent, and only to the extent that: (i) the Borrowers and their Restricted
Subsidiaries achieve and maintain at all times a ratio of Operating Cash
Flow to Total Debt Service of not less than 1.5 to 1, and (ii) the
Shareholders' Suit is settled to the reasonable satisfaction of the Bank or
Pepsi-Cola PR provides evidence to the reasonable satisfaction of the Bank
that all costs, expenses, judgments and settlements of such lawsuit will be
paid from other than internal funds of any of the Borrowers and their
Restricted Subsidiaries.
"MULTIEMPLOYER PLAN" means any multiemployer plan, as defined in
Section 4001 of ERISA and subject to Title IV of ERISA, which is maintained
or at any time during the five (5) calendar years preceding the date of
this Agreement was maintained for employees of the Borrowers or of an ERISA
Affiliate.
"NET AVAILABLE PROCEEDS" shall mean, in the case of any Disposition or
BAESA Stock Disposition, the amount of Net Cash Payments received in
connection with such Disposition or BAESA Stock Disposition, which Net Cash
Payments are not promptly used to replace Machinery and Equipment.
"NET CASH PAYMENTS" shall mean, with respect to any Disposition or
BAESA Stock Disposition, the aggregate amount of all cash payments
(including, without limitation, all cash payments received by way of
deferred payment of principal pursuant to a note or installment receivable
or otherwise, but only as and when received) of such Disposition or BAESA
Stock Disposition; provided that:
8
(a) Net Cash Payments shall be net of (i) the amount of any
reasonable legal, title and recording tax expenses, commissions and other
fees and expenses actually paid by each Borrower and its Restricted
Subsidiaries in connection with such Disposition or BAESA Stock Disposition
and satisfactorily documented in connection therewith and (ii) any Federal,
state, Commonwealth and local income or other taxes estimated to be payable
by the corresponding Borrower and its Restricted Subsidiaries as a result
of such Disposition or BAESA Stock Disposition (but only to the extent that
such estimated taxes are in fact reserved on the books of the corresponding
Borrower and its Restricted Subsidiaries for such purpose in accordance
with GAAP); and
(b) Net Cash Payments shall be net of any repayments by the
corresponding Borrower or any of its Restricted Subsidiaries of
Indebtedness to the extent that (i) such Indebtedness is secured by a Lien
on the property that is the subject of such Disposition and such
Indebtedness was permitted to be incurred under Section 5.2(b) and (ii) the
transferee of (or holder of a Lien on) such property requires that such
Indebtedness be repaid as a condition to the Disposition of such Property.
"NET INSURANCE PAYMENTS" shall mean, with respect to any Casualty, the
aggregate amount of all insurance proceeds received with respect to such
Casualty net of any Federal, State or local or other taxes payable by each
Borrower and its Restricted Subsidiaries in connection with the receipt of
such insurance proceeds.
"NET WORTH" shall mean, as of any date, the sum for the Borrowers and
their Restricted Subsidiaries (determined on a consolidated basis without
duplication in accordance with Generally Accepted Accounting Principles) of
the following (a) the amount of capital stock and paid in capital PLUS
(b) the outstanding principal amount of Subordinated Debt, PLUS (c) the
amount of surplus and retained earnings (or, in the case of a surplus or
retained earnings deficit, minus the amount of such deficit), MINUS the
cost of any treasury shares.
"NON-EXCLUDED TAXES" has the meaning assigned to that term in Section
2.15(a).
"NON-REVOLVING CREDIT ADVANCES" has the meaning assigned to that term
in Section 2.3(a)(ii).
"NOTES" has the meaning assigned to that term in Section 2.7(c).
"OBLIGATIONS" shall mean and include all loans, advances, debts,
liabilities, obligations, covenants and duties due and owing by any
Borrower or any Restricted Subsidiary to the Bank of any kind or nature,
present or future, monetary or contractual, whether or not evidenced by any
note, guaranty or other instrument, arising under this Agreement, the Notes
or any other Loan Document (in each case as now in effect or as thereafter
amended or supplemented). The term includes, without limitation, all
interest, charges, expenses, fees, attorneys' fees and any other sums
chargeable to any Borrower under this Agreement or any other Loan Document.
9
"OPERATING CASH FLOW" shall mean, for any period, the sum, for the
Borrowers and their Restricted Subsidiaries (determined on a consolidated
basis without duplication in accordance with Generally Accepted Accounting
Principles) of the following: (a) net operating income (or loss)
(calculated before taxes, interest expense, and extraordinary items of
income (or loss)) for such period, PLUS (b) depreciation and amortization
(only to the extent deducted in determining net operating income) for such
period, PLUS (c) gain from the sale or other disposition of the BAESA
capital stock owned by Pepsi-Cola PR, PLUS (d) other sources of funds
during such period (including, but not limited to, Subordinated Debt,
capital stock contributions and any other monies that are made available to
the Borrowers by PepsiCo under the Bottling Appointment and the Marketing
Agreement) that are not reflected on the financial statements of the
Borrowers as revenues, a reduction of expenses or otherwise, PLUS (e)
permitted earnings from equity in Unrestricted Subsidiaries or Affiliates
(paid and received in cash), MINUS (x) to the extent permitted by Section
5.2(c) hereof, any dividends paid or declared on the outstanding shares of
capital stock of the Borrowers or the Restricted Subsidiaries during such
period.
"OPTION AGREEMENT" shall have the meaning assigned to that term in
Section 4.1(z).
"ORGANIZATIONAL DOCUMENTS" means, with respect to any Borrower, the
certificate of incorporation and by-laws of such Borrower.
"ORIGINAL REVOLVING CREDIT ADVANCES" shall have the meaning set forth
in Section 2.1(a)(iii).
"OTHER TAXES" shall have the meaning assigned to that term in Section
2.15(b).
"PBGC" means the Pension Benefit Guaranty Corporation.
"PENSION PLAN" means any single employer plan, as defined in Section
4001 ERISA and subject to Title IV of ERISA, which is maintained, or at any
time during the five calendar years preceding the date of this Agreement
was maintained, for employees of any Borrower or an ERISA Affiliate.
"PEPSICO" means PepsiCo, Inc., a corporation organized under the laws
of the State of North Carolina.
"PERMITTED LIENS" shall mean: (a) Liens in favor of the Bank created
by the Loan Documents; (b) Liens for taxes, assessments or governmental
charges, but only to the extent that such taxes, assessments and charges
(i) are not yet due, or (ii) are being contested in good faith by
10
appropriate proceedings and adequate reserves or other appropriate
provisions are being maintained with respect thereto in accordance with
Generally Accepted Accounting Principles; (c) statutory Liens of landlords,
Liens of carriers, warehousemen, mechanics and materialmen and other Liens
imposed by law and created in the ordinary course of the Borrowers' or any
Restricted Subsidiary's business, but only to the extent that the amounts
secured or to be secured by such Liens (i) are not past due, (ii) are being
contested in good faith by appropriate proceedings and adequate reserves or
other appropriate provisions are being maintained with respect thereto in
accordance with Generally Accepted Accounting Principles; (d) Liens
incurred or deposits made in the ordinary course of the Borrowers' or a
Restricted Subsidiary's business (including, without limitation, surety
bonds and appeal bonds) in connection with workers' compensation,
unemployment insurance and other types of social security benefits or to
secure the performance of tenders, bids, leases, contracts (other than for
the repayment of borrowed money or the deferred purchase price of property
or services), statutory obligations and other similar obligations or
arising as a result of progress payments under government contracts; (e)
Liens which are purchase money security interests, or Liens on property
subject to Capitalized Leases, including, but not limited to Liens on
vending machines and coolers arising in connection with Indebtedness
permitted to be incurred under Section 5.2(b) of this Agreement; (f)
easements, rights-of-away, restrictions and other similar charges or
encumbrances on real property which do not, singly or in the aggregate,
have a Material Adverse Effect; (g) extensions, renewals and replacements
of any lien referred to in subparagraphs (a) through (f) above, provided
that the principal amount of the obligation secured thereby is not
increased and that any such extension, renewal or replacement is limited to
the property originally encumbered thereby; and (h) Liens consented to in
writing by the Bank.
"PERSON" shall mean and include any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association, corporation, institution, entity, party or government (whether
national, federal, state, county, city, municipal, or otherwise, including,
without limitation, any instrumentality, division, agency, body or
department thereof), and including any Borrower.
"PLANT" shall mean the manufacturing plant of the Borrowers with a
gross area of approximately 144,600 square feet on a real property located
in Toa Baja, Puerto Rico.
"PRICING DATE" shall mean 9:00 A.M. (San Xxxx, Puerto Rico time) on
the first day of a Funding Period.
"REALTY" shall mean those certain parcels of land and any and all
improvements now or hereafter existing thereon, described in Sections
3.1(b)(iv) and (v) and 3.1(b)(vii).
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"RECAPTURE LEVERAGE RATIO" shall mean, for any period, and based upon
the immediately preceding fiscal quarter of the Borrowers and their
Restricted Subsidiaries determined on a consolidated basis for such period
without duplication pursuant to Generally Accepted Accounting Principles,
the quotient obtained by dividing (i) the outstanding principal amount of
the Term Loan Advance, PLUS the amount of the Revolving Credit Commitment
as of the end of the immediately preceding fiscal quarter of the Borrowers,
and (ii) Annualized Cash Flow.
"RECEIVABLES" shall mean and include all of the corresponding
Borrower's present and future rights to payments for goods, merchandise or
Inventory sold or leased or for services rendered, whether or not
represented by instruments or chattel paper, and whether or not earned by
performance; all of the corresponding Borrower's now owned or hereafter
acquired accounts, contract rights, chattel paper, instruments, documents,
and proceeds, including, without limitation, all insurance proceeds;
proceeds of any letter of credit on which such Borrower is beneficiary; and
all forms of obligations whatsoever owing to the corresponding Borrower,
together with all instruments and documents of title representing any of
the foregoing, all rights in any goods, merchandise or Inventory which any
of the foregoing may represent, all rights in any returned or repossessed
goods, merchandise or Inventory, and all rights, security and
guaranties with respect to each of the foregoing, including, without
limitation, any right of stoppage in transit.
"REPORTABLE EVENT" has the meaning assigned to that term in Title IV
of ERISA.
"RESTRICTED SUBSIDIARIES" shall mean all Subsidiaries of the Borrowers
other than the Unrestricted Subsidiaries.
"REVOLVING CREDIT ADVANCE" has the meaning assigned to that term in
Section 2.3(b).
"REVOLVING CREDIT BORROWINGS" has the meaning assigned to that term in
Section 2.3(b).
"REVOLVING CREDIT COMMITMENT" has the meaning assigned to that term in
Section 2.3(b).
"REVOLVING CREDIT NOTE" has the meaning assigned to that term in
Section 2.7(b).
"SHAREHOLDERS' SUIT" shall mean the lawsuits listed in Schedule 4.1(e)
hereto.
"SOLVENT" shall mean, as to any Person, that such Person has
(i) capital sufficient to carry on its business and transactions and all
business and transactions in which it is about to engage; and (ii) is able
to pay its debts (excluding intercompany debts among the Borrowers and
their Restricted Subsidiaries) as they mature and owns property having a
12
fair saleable value, greater that the amount required to pay its debts as
they become due.
"SUBORDINATED DEBT" shall mean unsecured Indebtedness of the Borrowers
for borrowed money which are expressly subordinate and junior in right of
payment to the Notes and all the Obligations of the Borrowers under this
Agreement and the Loan Documents (such subordination to be evidenced by
subordination agreements in form and substance acceptable to the Bank) in
that no payment or prepayment, directly or indirectly, on account of the
principal of or interest and premium, if any, on the Subordinated Debt
shall be made (in cash or property or securities, or by set-off or
otherwise) and no holder of Subordinated Debt shall be entitled to demand
or receive any such payment or prepayment unless (i) all amounts then due
for principal, interest and premium, if any on the Notes and all other
Obligations of the Borrowers to the Bank shall have been paid in full or
(ii) if at the time of such payment or prepayment or immediately after
giving effect thereto, there shall have occurred any Event of Default.
"SUBSIDIARY" shall mean any corporation, association, joint stock
company, business trust or similar organization of which more than fifty
percent (50%) of the outstanding capital stock or other equity interest
having ordinary voting powers to elect a majority of the board of directors
or other governing body of such corporation is at the time directly or
indirectly owned or controlled by any Borrower or by one or more
Subsidiaries.
"SURVEY" shall mean that certain survey of the Realty and certain
other real property located in Toa Baja prepared by Xxxxxxx Xxxxxxx and
dated October 27, 1994 delivered to the Bank in connection with the
transactions contemplated by the First Restated Credit Agreement.
"TANGIBLE NET WORTH" shall mean, as of any date on which the amount
thereof shall be determined, the aggregate Net Worth of the Borrowers and
the Restricted Subsidiaries (determined on a consolidated basis without
duplication in accordance with Generally Accepted Accounting Principles),
MINUS (a) the sum of any amounts attributable to any intangible assets,
including but not limited to, trademarks and patent rights determined in
accordance with Generally Accepted Accounting Principles, MINUS (b)
deferred expenses and taxes, MINUS (c) any Indebtedness of the
stockholders, officers, Subsidiaries and Affiliates of the Borrowers
(excluding intercompany transactions between the Borrowers and the
Restricted Subsidiaries arising in the ordinary course of business), MINUS
(d) prepaid expenses, MINUS (e) investment s made by the Borrowers and any
Restricted Subsidiaries in the Unrestricted Subsidiaries permitted
hereunder.
"TAXES" shall mean any and all present or future taxes, levies,
imposts, deductions, charges or withholdings or all liabilities with
respect thereto imposed with respect to any and all payments by the
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Borrowers hereunder and under the Notes, excluding Other Taxes.
"TERM LOAN I ADVANCE" has the meaning assigned to that term in Section
2.3(a)(i).
"TERM LOAN ADVANCE" has the meaning assigned to that term in Section
2.3(a)(iv).
"TERM LOAN BORROWING" has the meaning assigned to that term in Section
2.3(a)(iv).
"TERM LOAN COMMITMENT" has the meaning assigned to that term in
Section 2.3(a)(iv).
"TERM LOAN NOTE" has the meaning assigned to that term in Section
2.7(a).
"TERM PORTION" has the meaning assigned to that term in Section
2.3(a)(iii).
"TERMINATION DATE" has the meaning assigned to that term in Section
2.3(b).
"TERMINATION EVENT" shall mean (a) a Reportable Event described in
Section 4043 of ERISA and the regulations issued thereunder (other than a
Reportable Event not subject to the provision for 30-day notice to the PBGC
under such regulations), or (b) the withdrawal of any Borrower or any ERISA
Affiliate of such Borrower from a Pension Plan during a plan year in which
it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA,
or (c) the filing of a notice of intent to terminate a Pension Plan or the
treatment of a Pension Plan amendment as a termination under Section 4041
of ERISA, or (d) the institution of proceedings to terminate a Pension Plan
by the PBGC under Section 4042 of ERISA, or (e) any other event or
condition which would constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any
Pension Plan.
"TOTAL LIABILITIES" shall mean, as of any date the sum, for the
Borrowers and their Restricted Subsidiaries (determined on a consolidated
basis without duplication in accordance with Generally Accepted Accounting
Principles), of the following (a) all Indebtedness (other than contingent
liabilities not required to be reflected on a balance sheet pursuant to
Generally Accepted Accounting Principles), and (b) all other obligations
(excluding Subordinated Debt) that should be classified as liabilities on a
balance sheet, including, without limitation, all reserves (other than
general contingency reserves) and all deferred taxes and other deferred
items.
"UNRESTRICTED SUBSIDIARIES" shall mean BAESA, Seven-Up
Concesiones S.A.I.C., AYDECAR S.A., Argentine Bottling Associates, BAESA
Shareholders Associates, Riverside, S.A., Embotelladoras Chilenas Unidas,
14
Embotelladora del Uruguay, S.A., Perla del Norte, S.A., Punch N.V.
Limitada, 9 de julio, S.A., Embotelladora Centroamericana, S.A., Sierras
del Mar, S.A.I.C., Embosur, S.A., Pepsi-Cola Engarrafadora Ltda., PCE
Bebidas, Ltda., and any other Subsidiaries of any of the Borrowers
operating outside of the United States and Puerto Rico with respect to
which the Bank has given its previous written consent to be treated as
Unrestricted Subsidiaries.
"VOTING TRUST" shall have the meaning set forth in Section 4.1(y).
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
Section 2.1 DESCRIPTION OF TRANSACTION. The Bank and the Borrowers
entered into a Restated Credit Agreement dated as of November 10, 1994, as
amended by a First Amendment to Restated Credit Agreement dated September
26, 1995 and a Second Amendment to Restated Credit Agreement and Loan
Documents dated June 4, 1996 (collectively, the "First Restated Credit
Agreement") in order to reflect in a single document certain modifications
to the terms and conditions of a Financing Agreement, dated September 10,
1993, among the Bank, Pepsi-Cola PR and Beverage Plastics (the "Financing
Agreement"), reflect a corporate reorganization of Pepsi-Cola PR and
Beverage Plastics and grant to Manufacturing a non-revolving credit
facility to finance part of the cost of acquiring, developing, equipping
and constructing a new manufacturing plant in Toa Baja, Puerto Rico. The
Borrowers have now requested certain further modifications to the terms and
conditions of the First Restated Credit Agreement. In order to reflect
such modifications the parties hereto have agreed to execute this Second
Restated Credit Agreement, It is not the intention of the parties to this
Agreement and nothing contained shall be interpreted as a novation of any
Obligations of the Borrowers to the Bank under the First Restated Credit
Agreement, the Financing Agreement, any collateral documents securing such
Obligations or of the indebtedness evidenced by notes issued pursuant
thereto, it being expressly acknowledged and agreed by the parties hereto
that the First Restated Credit Agreement, the Financing Agreement and all
of the documents issued or executed thereunder (as security therefor or
otherwise) shall continue to be in full force and effect as herein
modified.
Section 2.2 COMMITMENTS. Subject to the terms and conditions and
relying upon the representations and warranties contained herein, the Bank
hereby agrees to make available to the Borrowers certain loans as more
fully set forth in this Agreement.
Section 2.3 THE ADVANCES. (a) (i) On September 10, 1993, the Bank
made a term loan advance (the "Term Loan I Advance") to Pepsi-Cola PR and
15
Beverage Plastics in the aggregate principal amount of TEN MILLION
DOLLARS ($10,000,000). On the date hereof, the aggregate outstanding
principal amount of the Term Loan I Advance, after applying all the
installments of principal on the Term Loan I Advance which have been
received by the Bank on or before the date hereof, is $5,256,410.56. The
proceeds of the Term Loan I Advance were originally used for the purpose of
refinancing certain existing indebtedness of Pepsi-Cola PR and for general
corporate purposes of Pepsi-Cola PR and Beveral Plastics. In connection
with the execution of the First Restated Credit Agreement, Manufacturing
agreed to become a co-borrower with respect to the Term Loan I Advance.
Pursuant to this Agreement the Term Loan I Advance will be consolidated
with the Non-Revolving Credit Advances and the Term Portion of the
Revolving Credit Advances as part of the Term Loan Advance referred to in
Section 2.3(a)(iv) hereof.
(ii) Pursuant to the First Restated Credit Agreement, the Bank
made non-revolving credit advances to Manufacturing (the "Non-Revolving
Credit Advances"), for the development, equipping and construction of the
Plant. On the date hereof, the aggregate outstanding principal amount of
the Non-Revolving Credit Advances is FIFTEEN MILLION DOLLARS ($15,000,000).
Manufacturing has requested and the Bank has agreed to convert all of the
now outstanding Non-Revolving Credit Advances into a term loan comprising a
portion of the Term Loan Advance referred to in Section 2.3 (a) (iv) hereof
subject to the conditions of this Agreement.
(iii) Pursuant to the First Restated Credit Agreement, the Bank
made revolving credit advances to Distributing (the "Original Revolving
Credit Advances"). On the date hereof, the aggregate outstanding principal
amount of the Original Revolving Credit Advances is TEN MILLION DOLLARS
($10,000,000). Distributing has requested the Bank has agreed to include
Pepsi-Cola PR, Beverage Plastics and Manufacturing as borrowers under the
Revolving Credit Commitment and to a reduction of the revolving credit
commitment amount under the First Restated Credit Agreement to FIVE MILLION
DOLLARS from TEN MILLION DOLLARS effective as of the Closing Date and to
convert $4,743,584.44 (the "Term Portion") of the now outstanding Original
Revolving Credit Advances into a term loan comprising part of the Term Loan
Advance referred to below and FIVE MILLION DOLLARS ($5,000,000) into a
revolving credit advance subject to the conditions of this Agreement.
(iv) The Term Loan I Advance, the Non-Revolving Credit Advances,
the Term Portion and the Original Revolving Credit Advances shall be
consolidated into a single term loan advance to be referred to as the "Term
Loan Advance" and the aggregate principal amount of the Term Loan Advance,
that is TWENTY-FIVE MILLION DOLLARS ($25,000,000) shall be referred to as
the "Term Loan Commitment." In connection with the execution of this
16
Agreement, each of the Borrowers hereby agrees to become a co-borrower with
respect to the Term Loan Advance. The borrowings made under this Section
2.2(a) shall be hereinafter referred to as the "Term Loan Borrowing."
(b) The Bank agrees, on the terms and conditions hereinafter set
forth, to make revolving credit advances to Borrowers (each advance made
hereunder is hereinafter sometimes referred to individually as a "Revolving
Credit Advance" and collectively as "Revolving Credit Advances") from time
to time during the period from the Closing Date up to and including
September 30, 1997 (as such date may be extended pursuant to section 2.16
hereof, the "Termination Date") which shall not exceed at any time
outstanding for the Borrowers in the aggregate (subject to the provisions
of subsection (a) of Section 2.9) the sum of (i) eighty percent (80%) of
the amount of Distributing's Eligible Receivables, plus (ii) fifty percent
(50%) of the net value of Distributing's Eligible Inventory (calculated
based on the cost of Eligible Inventory); PROVIDED, HOWEVER, that revolving
Credit Advances to the Borrowers shall not exceed FIVE MILLION DOLLARS
($5,000,000) in the aggregate at any time (the "Revolving Credit
Commitment"). Each borrowing under this Section 2.3(b) (a "Revolving
Credit Borrowing") shall be in an aggregate principal amount of not less
than TWENTY-FIVE THOUSAND DOLLARS ($25,000). Within the limits of the
Revolving Credit Commitment, the Borrowers may borrow, repay and reborrow
Revolving Credit Advances under this Section 2.3(b). In connection with
the execution of this Agreement, each of the Borrowers hereby recognizes
that as of the Closing Date the aggregate outstanding principal amount of
Revolving Credit Advances is FIVE MILLION DOLLARS and each of the Borrowers
hereby agrees to become a co-borrower with respect to the Revolving Credit
Advances.
Section 2.4 MAKING THE REVOLVING CREDIT BORROWINGS. Each Revolving
Credit Borrowing shall be made upon the receipt of written notice from any
of the Borrowers to the Bank delivered by not later than 1:00 p.m. (San
Xxxx, Puerto Rico time) on the date of the proposed Borrowing specifying
the amount desired.
Section 2.5 FEES. (a) Pepsi-Cola PR agrees to pay to the Bank on
the Closing Date a fee in the amount of TWO HUNDRED THIRTY THOUSAND DOLLARS
($230,000). in order to compensate the Bank for the costs associated with
the structuring, processing, approving and closing of the transactions
contemplated by Section 2.3 of this Agreement, including, but not limited
to, administrative, out-of-pocket, general, overhead and lost opportunity
costs, but not including any expenses for which the Borrowers have agreed
to indemnify the Bank pursuant to Section 8.5 (d) of this Agreement or to
reimburse the Bank pursuant to Section 8.5 (a) of this Agreement. The Bank
acknowledges having received from Pepsi-Cola PR, the amount of FORTY
THOUSAND DOLLARS ($40,000) of the total fee due on the Closing Date
pursuant to this Section 2.5 (a), such amount to be credited on the Closing
Date against such fee.
(b) Pepsi-Cola PR agrees to pay to the Bank an additional fee from
the date of this Agreement until the repayment of all Obligations hereunder
in the amount of twenty-five basis points of the Revolving Credit
17
Commitment, as reduced from time to time, payable annually in advance on
April 8th of each year or if such day is not a Business Day, on the first
Business Day immediately following such date during the term of this
Agreement (without any proration as a result of early prepayment),
commencing on the Closing Date.
(c) Each of the above fees shall be fully earned when due and shall
not be subject to pro-ration or rebate upon the early termination of this
Agreement for any reason.
Section 2.6 REDUCTION OF THE REVOLVING CREDIT COMMITMENT. The
Borrowers shall have the right, upon at least three (3) Business Days'
notice to the Bank, to terminate in whole or reduce in part the unused
portions of the Revolving Credit Commitment, provided that each partial
reduction related thereto shall be in the aggregate amount of ONE HUNDRED
THOUSAND DOLLARS ($100,000) or an integral multiple thereof.
Section 2.7 INTEREST AND REPAYMENT. (a) THE TERM LOAN ADVANCE shall
be evidenced by a promissory note of the Borrowers to the order of the Bank
in substantially the form of Exhibit A hereto (the "Term Loan Note"). The
notes previously executed by Pepsi-Cola PR, Manufacturing and Beverage
Plastics Company on November 10, 1994, in connection with the First
Restated Credit Agreement, shall be restated in its entirety and replaced
by the Term Loan Note. The Term Loan Note shall be in the principal amount
of TWENTY-FIVE MILLION DOLLARS ($25,000,000) and shall be payable one
hundred twenty (120) consecutive monthly installments of principal, each
payable on the first (1st) day of each month, commencing on May 1, 1997.
The installments shall be in the amounts set forth below:
May 1, 1997 - April 1, 1998 $ 83,333.33
May 1, 1998 - April 1, 1999 $ 83,333.33
May 1, 1999 - April 1, 2000 $ 87,500.00
May 1, 2000 - April 1, 2001 $ 95,833.33
May 1, 2001 - April 1, 2002 $ 104,166.66
May 1, 2002 - April 1, 2003 $ 104,166.66
May 1, 2003 - April 1, 2004 $ 125,000.00
May 1, 2004 - April 1, 2005 $ 137,500.00
May 1, 2005 - April 1, 2006 $ 145,833.33
May 1, 2006 - March 1, 2007 $11,795,833.69
; PROVIDED, that the final installment shall be in such amount as necessary
to pay in full the Obligations related to the Term Loan Advance.
The Term Loan Note shall bear interest from its date until full
payment on the unpaid balance of principal thereof at an annual rate of
interest which throughout each Funding Period shall be equal to the
following rate, commencing on the date of the Term Loan Note: (i) if
Eurodollar Funds are then available to the Bank for such Funding Period, a
18
fixed rate equal to two point five percent (2.5%) over and above the LIBOR
Rate; or (ii) if Eurodollar Funds are not then available to the Bank for
such funding Period, a fluctuating annual rate equal to the Base Rate, each
change in such fluctuating rate to take effect simultaneously with the
corresponding change in the Base Rate. Anything herein to the contrary
notwithstanding, and without detriment to any other rights and remedies
available to the Bank, the interest rate applicable to the outstanding
principal of the Term Loan Note during any period when an Event of Default
shall have occurred and be continuing shall be a fluctuating annual rate
equal to three percent (3%) over and above the Base Rate, each change in
such fluctuating rate to take effect simultaneously with the corresponding
change in the Base Rate. Interest due on the Term Loan Note shall be
payable monthly in arrears on the first (1st) day of each month and on the
date on which the Term Loan Advance is paid in full for the actual number
of days elapsed.
(b) THE REVOLVING CREDIT ADVANCES made by the Bank to the Borrowers
shall be evidenced by a promissory note of the Borrowers to the order of
the Bank in substantially the form of Exhibit B hereto (the "Revolving
Credit Note"). The note previously executed by Distributing on November
10, 1994, in connection with the First Restated Credit Agreement shall be
restated in its entirety and replaced by the Revolving Credit Note. The
Revolving Credit Note shall be in the maximum principal amount of FIVE
MILLION DOLLARS ($5,000,000). Revolving Credit Advances shall be payable
on the Termination Date. Each Revolving Credit Advance made by the Bank
shall bear interest from its date until full payment on the unpaid balance
of principal thereof at an annual rate of interest which throughout each
Funding Period shall be equal to the following rate: (i) if Eurodollar
Funds are then available to the Bank for such Funding Period, a fixed rate
equal to two point five percent (2.5%) over and above the LIBOR Rate
applicable to such Funding Period; or (ii) if Eurodollar Funds are not
available to the Bank for any Funding Period, a fluctuating annual rate
equal to the Base Rate, each change in such fluctuating rate to take effect
simultaneously with the corresponding change in the Base Rate. Anything
herein to the contrary notwithstanding, and without detriment to any other
rights and remedies available to the Bank, the interest rate applicable to
the outstanding principal amount of the Revolving Credit Note during any
period when an Event of Default shall have occurred and be continuing shall
be a fluctuating annual rate equal to three percent (3%) over and above the
Base Rate, each change in such fluctuating rate to take effect
simultaneously with the corresponding change in the Base Rate. Interest
due on each Revolving Credit Advance shall be payable monthly in arrears on
the day of each successive month on which such Revolving Credit Advance was
disbursed and on the date on which the Revolving Credit Advance is paid in
full for the actual number of days elapsed.
All outstanding Revolving Credit Advances shall be paid in full by not
later than the Termination Date.
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(c) [Reserved]
(d) Any payments of principal or interest due under the Notes,
including liquidated sums for the payment of attorneys' fees and interest
on any overdue principal, if any, may be charged at the Bank's option, when
due and payable, against any account of any of the Borrowers with the Bank.
The Bank shall promptly notify the corresponding Borrower of any such
charges made against the accounts of such Borrower.
Section 2.8 OPTIONAL PREPAYMENTS. (a) The Borrowers may, upon at
least three (3) Business Days' prior written notice to the Bank, prepay
(without premium or penalty) to the Term Loan Note, in whole or in part
with accrued interest to the date of such prepayment on the amount prepaid,
provided that such prepayment is made from internally generated cash flow,
proceeds from the sale of capital stock of any of the Borrowers (including,
but not limited to any Class A or Class B capital stock of Pepsi-Cola PR),
other than the cash proceeds remaining from the issuance of the Class B
Stock Offering or from a refinancing of the Term Loan Advance by the Bank;
PROVIDED, HOWEVER, that in the event of the prepayment in full of the Term
Loan Note, the Borrowers shall agree in writing to continue to provide the
reports listed in Section 5.1(c) (i) and (ii) for a period of 12 months
following such prepayment in order for the Bank to verify that such
prepayment was made from funds obtained as permitted by this Section
2.8(a). Each such partial prepayment shall be in an aggregate principal
amount of not less than ONE HUNDRED THOUSAND DOLLARS ($100,000) and in
integral multiples thereof, and shall be applied to the principal
installments of the Term Loan Note, as directed by the Borrowers, in the
inverse order of their maturities, and provided further, that if the Term
Loan Note being prepaid is then funded with Eurodollar Funds, such
prepayment may only be made on the last day of the corresponding Funding
Period.
(b) The Borrowers may, upon at least three (3) Business Days' prior
written notice to the Bank, but only after the prepayment in whole of the
Term Loan Note, prepay (without premium or penalty) the Revolving Credit
Note, in whole with accrued interest to the date of such prepayment on the
amount prepaid, provided that such prepayment is made from proceeds from
the sale of capital stock of any of the Borrowers (including, but not
limited to any Class A or Class B capital stock of Pepsi-Cola PR), other
than proceeds of the Class B Stock Offering or from a refinancing of the
Revolving Credit Advances by the Bank; PROVIDED, HOWEVER, that the
Borrowers shall agree in writing to continue to provide the reports listed
in Section 5.1(c) (i) and (ii) for a period of 12 months following such
prepayment in order for the Bank to verify that such prepayment was made
from funds obtained as permitted by this Section 2.8(a), and provided
further, that if the Revolving Credit Note being prepaid is then funded
with Eurodollar Funds, such prepayment may only be made on the last day of
the corresponding Funding Period.
20
(c) In the event that the Borrowers desire to make a prepayment
hereunder of the Term Loan Note from other than internally-generated cash
flow, or from proceeds from the sale of assets, including from a
refinancing of the Term Loan Advance by a third party, the Borrowers may,
upon at least three (3) Business Days' prior written notice to the Bank,
prepay Term Loan Advance in whole or in part, with accrued interest to the
date of such prepayment on the amount prepaid, provided, that if the Term
Loan Note is then funded with Eurodollar Funds, prepayment thereof may only
be made on the last day of the Funding Period. Upon any such prepayment,
the Borrowers shall pay to the Bank a fee equal to one percent (1%) of the
sum of the principal amount of the Term Loan Advance being prepaid. Any
such prepayment of the Term Loan Note shall be applied to the principal
installments of such Term Loan Note in the inverse order of their
maturities.
(d) In the event that the Borrowers desire to make a prepayment
hereunder of the Term Loan Note from cash remaining from the issuance by
Pepsi-Cola PR of 3,500,00 shares of its Class B Common Stock on September
25, 1995 (the "Class B Stock Offering"), other than cash remaining from
such issuance then held to the credit of the Cash Collateral Account, the
Borrowers may, upon at least three (3) Business Days' prior written notice
to the Bank, prepay the Term Loan Advance in whole or in part, with accrued
interest to the date of such prepayment on the amount prepaid, provided,
that if the Term Loan Note is then funded with Eurodollar Funds, prepayment
thereof may only be made on the last day of the Funding Period. Upon any
such prepayment, the Borrowers shall pay to the Bank a fee equal to one-
half of one percent (0.5%) of the sum of the principal amount of the Term
Loan Advance being prepaid. Any such prepayment of the Term Loan Note shall
be applied to the principal installments of such Term Loan Note in the
inverse order of their maturities.
(e) In the event that the Borrowers desire to make a prepayment
hereunder under the Term Loan Note from any amounts on deposit in the Cash
Collateral Account, the Borrowers may, upon at least three (3) Business
Days' prior written notice to the Bank, prepay the Term Loan Advance in
whole or in part, with accrued interest to the date of such prepayment on
the amount prepaid, provided, that if the Term Loan Note is then funded
with Eurodollar Funds, prepayment thereof may only be made on the last day
of the Funding Period. Any such prepayment of the Term Loan Note shall be
applied to the principal installments of such Term Loan Note in the inverse
order of their maturities.
(f) In the event that the Borrowers desire to make a prepayment
hereunder under the Term Loan Note from any Net Available Proceeds of any
BAESA Stock Disposition, the Borrowers may, upon at least three (3)
Business Days' prior written notice to the Bank, prepay the Term Loan
Advance in whole or in part from such Net Available Proceeds of any BAESA
Stock Disposition, with accrued interest to the date of such prepayment on
the amount prepaid, provided, that if the Term Loan Note is then funded
with Eurodollar Funds, prepayment thereof may only be made on the last day
21
of the Funding Period. Any such prepayment of the Term Loan Note shall be
applied to the principal installments of such Term Loan Note in the inverse
order of their maturities.
(g) In the event that any Borrower prepays any Advance hereunder
except as permitted by this Section 2.8 and the Bank suffers any loss or
expense as a result of such prepayment, including, without limitation, any
loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by the Bank to fund any such Advance, the
Borrowers shall, upon demand by the Bank, pay to the Bank additional
amounts sufficient to indemnify the Bank against such loss or expense. A
certificate in reasonable detail as to the amount of such loss or expense
submitted to the Borrowers by the Bank, absent manifest error, shall be
conclusive and binding for ail purposes.
Section 2.9 MANDATORY PREPAYMENTS AND REDUCTIONS OF COMMITMENTS.
(a) BORROWING BASE. Until the Termination Date, the Borrowers shall
from time to time prepay the Revolving Credit Advances in such amounts as
shall be necessary so that at all times the aggregate outstanding amount of
the Revolving Credit Advances shall not exceed the Bank's Revolving Credit
Commitment.
(b) SALE OF ASSETS. Without limiting the obligation of the Borrowers
to obtain the consent of the Bank pursuant to Section 5.2(d) hereof to any
Disposition of assets not otherwise permitted hereunder, no later than five
Business Days after the occurrence of any Disposition Recapture Date, the
Borrowers will deliver or cause to be delivered to the Bank a statement,
certified by the chief financial officer of the corresponding Borrower or
Restricted Subsidiary, in form and detail satisfactory to the Bank, of the
amount of the Net Available Proceeds, and upon the delivery of any such
statement, the Borrowers will prepay the Advances in a principal amount
equal to Net Available Proceeds from all Dispositions of assets during such
fiscal year in excess of TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000),
such prepayment and reduction to be effected in each case in the manner and
to the extent specified in clause (g) of this Section 2.9.
(c) INSURANCE PROCEEDS. No later than 7 days following the receipt
of Net Insurance Payments, the Borrowers will be obligated to repay the
Advances in an amount equal to Net Insurance Payments, such prepayment and
reduction to be effected in the manner and to the extent specified in
clause (g) of this Section 2.9; PROVIDED that no repayment shall be
required hereunder if such Net Insurance Payments are promptly (no later
than 60 days from the date of receipt thereof) applied to the repair or to
replace the assets damaged in such Casualty. No later than five (5) days
following the receipt or insurance proceeds as a result of any Casualty,
the Borrowers will deliver or cause to be delivered to the Bank a
statement, certified by the chief financial officer of the corresponding
22
Borrower or Restricted Subsidiary, in form and detail satisfactory to the
Bank, of the amount of Net Insurance Proceeds. Insurance proceeds, if any,
related to the Shareholders' Suit and from any business interruption shall
not be subject to this clause.
(d) EXCESS CASH FLOW. Not later than 120 days after the end of each
fiscal year of the Borrowers, the Borrowers shall calculate Excess Cash
Flow for such fiscal year and shall apply an amount equal to fifty percent
(50%) of such Excess Cash Flow to prepay the Term Loan Advance, such
prepayment to be effected in the manner and to the extent specified in
clause (g) of this Section 2.9.
(e) SALE OF CLASS A COMMON STOCK. Not later than five (5) Business
Days after the sale by any Borrower of any Class A Common Stock of Pepsi-
Cola PR subject to the Option Agreement or upon the assignment by any of
the Borrowers of any of their rights under the Option Agreement, such
Borrower shall apply an amount equal to twenty-five percent (25%) of the
net proceeds received from such sale or assignment to prepay the Term Loan
Advance, such prepayment to be effected in the manner and to the extent
specified in clause (g) of this Section 2.9.
(f) MONIES IN CASH COLLATERAL ACCOUNT. Upon the occurrence of an
Event of Default, any amounts on deposit to the credit of the Cash
Collateral Account shall be used by the Borrowers to prepay the Term Loan
Advance or reduce the Revolving Credit Commitment, such prepayment to be
effected in the manner and to the extent specified in clause (g) of this
Section 2.9.
(g) APPLICATION. Prepayments described in this Section 2.9 (other
than Section 2.9(a)) shall be applied first to the Term Loan Note in the
inverse order of the maturities of the installments of the Term Loan Note
then outstanding and the balance, if any, shall be applied to the then
outstanding Revolving Credit Advances and shall reduce the Revolving Credit
Commitment by the corresponding amount.
Section 2.10 PAYMENTS AND COMPUTATIONS. The Borrowers shall make
each payment hereunder or under the Notes or under any Loan Document not
later than 12:00 noon (San Xxxx, Puerto Rico time) on the day when due in
lawful money of the United States of America to the Bank at its address
referred to in Section 8.2 in immediately available funds. The Borrowers
hereby authorize the Bank to charge from time to time against any account
of any of the Borrowers with the Bank any amount so due, and the Bank
shall promptly thereafter notify the Borrowers of such action. All
computations of interest under the Notes and fees hereunder shall be made
by the Bank on the basis of a year of 360 days.
Section 2.11 PAYMENTS ON NON-BUSINESS DAYS. Whenever any payment to
be made hereunder or under the Notes or under any other Loan Document shall
be stated to be due, or whenever the last day of a Funding Period would
otherwise occur, on a day other than a Business Day, such payment may be
23
made, and the last day of such Funding Period shall occur, on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may
be.
Section 2.12 FUNDING PROCEDURE. The Borrowers hereby acknowledge
that, in the event that any Advance is funded with Eurodollar Funds, the
Bank, at its discretion and in order to fund such Advance, may purchase
deposits consisting of Eurodollar Funds in an aggregate amount equal to the
Advance being funded and with a maturity coterminous with the maturity of
such Advance or of the corresponding Funding Period. The Provisions of
this Agreement relating to the funding and pricing of Advances are included
only for the purpose of conducting operations hereunder, and it is
therefore understood that, regardless of the manner selected by the Bank to
fund such Advances, all operations hereunder, including without limitation
the determination as to the interest rate applicable to any such Advance
and the determination of any loss or expense incurred by the Bank by reason
of the liquidation or reemployment of deposits or other funds acquired by
the Bank to fund Advances hereunder, shall be conducted as if the Bank had
actually funded such Advances with Eurodollar Funds through the purchase of
deposits consisting of Eurodollar Funds in an aggregate amount equal to the
Advance being funded and with a maturity coterminous with the maturity of
such Advance or of the corresponding Funding Period.
Section 2.13 INCREASED COSTS. If, due to either (1) the
effectiveness of or any change (including, without limitation, any change
by way of imposition or increase of any reserve requirements) in or in the
interpretation of any law or regulation, or (2) the compliance with any
formal guideline or formal request from any central bank or other
governmental authority (whether or not having the force of law), there
shall be any increase in the cost to the Bank of agreeing to make or
making, funding or maintaining Advances made to any Borrower hereunder,
then the Borrowers shall from time to time, upon demand by the Bank, pay
the Bank additional amounts sufficient to indemnify the Bank against such
increased cost. A certificate in reasonable detail as to the amount of
such increased cost submitted to the Borrowers by the Bank, absent manifest
error, shall be conclusive and binding for all purposes.
Section 2.14 CHANGED CIRCUMSTANCES. Notwithstanding any other
provision of this Agreement, if the effectiveness of or any change in or in
the interpretation of any law or regulation shall make it unlawful, or any
central bank or other governmental authority shall assert that it is
unlawful, for the Bank to perform its obligations hereunder to fund or
maintain Advances hereunder with Eurodollar Funds then, on notice thereof
and demand therefor by the Bank to the Borrowers, (1) the obligation of the
Bank to fund or maintain such Advances with Eurodollar Funds shall
terminate, and (2) the Bank shall convert all outstanding Advances funded
24
with Eurodollar Funds into Advances funded with funds other than Eurodollar
Funds. In the event that the Bank suffers any loss or expense as a result
of the conversion of the Advances as aforesaid, the Borrowers shall, upon
demand by the Bank, pay the Bank additional amounts sufficient to indemnify
the Bank against such loss or expense. A certificate in reasonable detail
as to the amount of such loss or expense submitted to the Borrowers by the
Bank, absent manifest error, shall be conclusive and binding for all
purposes.
Section 2.15 TAXES. (a) Any and all payments by the Borrowers
hereunder and under the Notes shall be made free and clear of and without
deduction for any and all present or future Taxes, excluding all Taxes
imposed on or determined by reference to the Bank's net income. All Taxes
which the Borrowers are required to bear pursuant to the preceding sentence
are referred to as "Non-Excluded Taxes." If the Borrowers shall be
required by law to deduct any Non-Excluded Taxes from or in respect of any
sum payable hereunder or under the Notes, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 2.15) the Bank receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrowers shall make
such deductions, and (iii) the Borrowers shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law. In the event that the Bank receives any credit or refund
of any Non-Excluded Taxes included in any payment made by the Borrowers
pursuant to the immediately preceding sentence, the Bank shall reimburse
the corresponding Borrower for the amount of such credit or refund actually
received.
(b) In addition, the Borrowers agree to pay any present or future
stamp or documentary taxes or any other excise or property taxes, registry
fees, charges or similar levies which arise at any time from any payment
made hereunder or under the Notes or any other Loan Document or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement, the Notes or any other Loan Document (hereinafter referred to as
"Other Taxes").
(c) The Borrowers will indemnify the Bank for the full amount of
Non-Excluded Taxes or Other Taxes (including, without limitation, any Non-
Excluded Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.15) paid by the Bank or any liability
(including penalties, interest and expenses) arising therefor or with
respect thereto, whether or not such Non-Excluded Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within
five (5) days from the date the Bank makes written demand therefor.
(d) Within thirty (30) days after the date of any payment of Non-
Excluded Taxes, the Bank will furnish to the Borrower, at its address
referred to in Section 8.2, the original or a certified copy of a receipt
evidencing payment thereof.
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Section 2.16 EXTENSION OF TERMINATION DATE. The obligation of the
Bank to make the Revolving Credit Advances shall terminate on September 30,
1997, such date, as it may be extended pursuant to the following sentence,
being the "Termination Date"). The Bank, at its sole discretion, may
extend the Termination Date for additional periods (which may be less than
one year) under terms and conditions (which may differ from those contained
in this Agreement) that the Bank may determine, at its sole discretion,
based upon economic conditions prevailing as of the Termination Date and
the Borrowers' ability to meet their obligations.
ARTICLE III
CONDITIONS OF LENDING
Section 3.1 CONDITION PRECEDENT TO ALL ADVANCES. The execution of
this Second Restated Credit Agreement and the making of any Advance
hereunder is subject to the condition precedent that the Bank shall have
received on or before the day of any additional Advance hereunder the
following, in form and substance satisfactory to the Bank:
(a) Each of the Notes to the order of the Bank.
(b) Evidence that the following security instruments (such
instruments, together with this Agreement, the Notes and all security
instruments delivered, or to be delivered, to the Bank hereunder, and any
amendments executed in connection with any of the foregoing, hereinafter
collectively referred to as the "Loan Documents"), duly executed by the
parties identified below or in such other instruments (such parties
hereinafter collectively referred to as the "Loan Parties") are in full
force and effect:
(i) the pledge a mortgage note in the amount of $3,118,800,
secured by personal property mortgages creating a continuing perfected
security interest covering the Borrowers' Machinery and Equipment listed in
Schedule E hereto;
(ii) assignment of accounts receivable agreements creating a
continuing perfected security interest covering all of the Receivables of
the Borrowers and the corresponding statements of assignment of accounts
receivable;
(iii) factor's lien agreements executed by each of the
Borrowers creating a continuing first priority security interest covering
all of the Inventory of the Borrowers and all of the Receivables generated
the sale of such Inventories;
(iv) a pledge of two mortgage notes in the aggregate
principal amount of TWO-MILLION NINE HUNDRED AND TWENTY THOUSAND DOLLARS
($2,920,000) secured by first mortgages creating continuing first priority
security interests covering certain real estate recorded at page one
26
hundred ninety-seven (197) of Volume twenty-four (24) of the Registry of
Property, Toa Baja, Section II of Bayamn, property number one hundred
eighty-seven (187);
(v) a pledge of a mortgage note in the principal amount of
FIFTEEN MILLION DOLLARS ($15,000,000) secured by a second mortgage creating
a continuing second priority security interest covering the real property
described in Section 3.1(b)(iv);
(vi) a pledge of a mortgage note in the principal amount of
EIGHTY-FIVE THOUSAND DOLLARS ($85,000) secured by a second mortgage
creating a second priority lien on the parcel of real property referred to
as 5-A on the Survey and segregated from the real property described in
Section 3.1(b)(iv);
(vii) a pledge of a mortgage note in the principal amount of
THREE MILLION FORTY THOUSAND DOLLARS ($3,040,000) secured by a first
mortgage creating a continuing first priority security interest covering
certain real estate recorded at page 121 of volume 77 of Sabana Llana,
property number 30319 of the Registry of Property of Puerto Rico; and
(viii) a pledge of a mortgage note in the principal amount of
EIGHT MILLION ONE HUNDRED TWENTY-NINE THOUSAND SIX HUNDRED FORTY THREE
DOLLARS ($8,129,643) secured by a first mortgage creating a continuing
priority security interest covering the Machinery and Equipment of
Manufacturing described in that certain Personal Property Mortgage and
Affidavit dated October 11, 1996 executed by Manufacturing in favor of the
Bank.
(ix) a pledge of a mortgage note in the principal amount of
ONE MILLION FOUR HUNDRED EIGHTY-NINE THOUSAND ONE HUNDRED NINETY-TWO
DOLLARS ($1,489,192) secured by a first mortgage creating a continuing
first priority security interest covering the Machinery and Equipment of
Beverage Plastics described in that certain Personal Property Mortgage and
Affidavit dated October 11, 1996 executed by Beverage Plastics in favor of
the Bank.
(c) Evidence that all actions necessary, or in reasonable judgment of
the Bank, desirable to perfect and protect the security interest in the
Collateral have been taken.
(d) Certified copies of the resolutions of the Board of Directors of
each of the Borrowers and, if required, the consents of the stockholders of
each Loan Party, approving the execution and delivery of this Agreement and
the Notes and any amendment to each Loan Document to which it is a party
required by the Bank.
(e) A certificate of the Secretary or an Assistant Secretary of each
Borrower certifying the names and true signatures of the officers of such
Borrower authorized to sign this Agreement, the Notes and any amendment to
each Loan Document to which it is a party required by the Bank and the
other documents to be delivered by it hereunder.
27
(f) Favorable opinion of counsel for the Borrowers, in substantially
the form agreed to by the Bank and the Borrowers.
(g) Certificates of good standing dated not more than ten days prior
to the execution of this Agreement showing that the Borrowers are in good
standing in the State of Delaware, and copies certified by the Secretary of
State of the State of Delaware, dated not more than ten (10) days prior to
the date of execution of this Agreement, of the Organizational Documents of
each of the Borrowers.
(h) A Certificate dated not more than ten (10) days prior to the
execution of this Agreement showing that the Borrowers are qualified to
transact business in and are in good standing under the laws of the
Commonwealth of Puerto Rico.
(i) The Cash Collateral Agreement in the form attached to this
Agreement as Exhibit C.
(j) Evidence of the insurance required by Section 5.1(b) hereof.
(k) A copy of the Marketing Agreement, stating the total marketing
budget of the Borrower for 1997 and that the amount expected to be spent by
PepsiCo for marketing, advertising related expenditures and discount and
allowances shall be not less than the amount set forth in the term sheet
prepared by the Bank in connection with this Agreement.
(l) Copies of all policies and correspondence received by any of the
Borrowers on or before the Closing Date from any insurance company that
insures any of the Borrowers or their officers and directors with respect
to the Shareholders' Suit.
(m) Such other documents, instruments and agreements as the Bank
shall reasonably request.
Section 3.2 CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation
of the Bank to make an Advance on the occasion of each Borrowing (including
the initial Borrowing) shall be subject to the further condition precedent
that on the date of such Advance the following statements shall be true and
the Bank shall have received a certificate signed by a duly authorized
officer of each of the Borrowers, dated the date of such Advance, stating
that the representations and warranties contained in Articles IV and VI of
this Agreement, in the Loan Documents to which it is a party and, to the
best of its knowledge, in the Loan Documents executed by any other Loan
Party, are correct in all material respects on and as of the date of such
Advance as though made on and as of such date (except to the extent that
such representations and warranties relate to an earlier date).
Section 3.3 REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS. Upon
the effectiveness of this Agreement, on and after the date hereof each
28
reference in each of the Loan Documents to "the First Restated Credit
Agreement "thereunder," "thereof" or words of like referring to the First
Restated Credit Agreement, shall mean and be a reference to this Agreement
and each reference in the Notes to "this Note," "hereunder," "hereof" or
words of like import referring to such Note, and each reference in the
other Loan Documents to "the Notes," "thereunder," "thereof" or words of
like import referring to the Notes, shall mean and be a reference to the
Notes executed on the date hereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 REPRESENTATIONS AND WARRANTIES OF THE BORROWERS. In
order to induce the Bank to enter into this Agreement and to make the
Advances hereunder, the Borrowers jointly and severally (solidariamente)
make the following representations and warranties to the Bank as at the
Closing Date, each and all of which shall survive the execution and
delivery of this Agreement:
(a) Each of the Borrowers: (i) is a corporation, partnership or
other entity duly organized, validly existing and in good standing under
the laws or the jurisdiction of its organization; (ii) has all requisite
corporate or other power and authority, and has all material governmental
licenses, authorizations, consents and approvals necessary to own its
assets and carry on its business as now being or as proposed to be
conducted; and (iii) is qualified to do business and is in good standing in
all jurisdictions in which the nature of the business conducted by it makes
such qualification necessary and where failure so to qualify could have a
Material Adverse Effect.
(b) Borrower has all necessary power (corporate or otherwise), and
authority to execute, deliver and perform its obligations under each of the
Loan Documents; the execution delivery and performance by each Borrower of
each of the Loan Documents to which any Borrower is or will be a party have
been duly authorized by all necessary corporate or other action on its
part, including, without limitation, any required shareholder or partner
approvals); and this agreement has been duly and validly executed and
delivered by each Borrower and constitutes, and each of the other Loan
Documents executed and delivered by each Borrower (in the case of the
Notes, for value) constitutes, its legal, valid and binding obligations
enforceable against each Borrower in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability
affecting the enforcement of creditors' rights.
(c) No information, report, financial statement, exhibit, schedule or
disclosure letter furnished in writing by or on behalf of any of the
Borrowers to the Bank in connection with the negotiation, preparation or
29
delivery of this Agreement and the other Loan Documents or included therein
or delivered pursuant thereto contains any untrue statement of material
fact or omits or omitted to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading. All written information furnished after the date
hereof by each of he Borrowers to the Bank in connection with this
Agreement and the other Loan Documents and the transactions contemplated
hereby and thereby will be true, complete and accurate in every material
respect, or (in the case of projections, based on reasonable estimates, on
the date as of such projections) on the date as of which such information
is stated or certified. There is no fact known to the Borrowers that could
have a Material Adverse Effect that has not been disclosed herein, in the
other Loan Documents or in a report, financial statement, exhibit,
schedule, disclosure letter or other writing furnished to the Bank for use
in connection with the transactions contemplated hereby.
(d) None of the execution and delivery of this Agreement and the
Notes and the other Loan Documents, the consummation of the transactions
herein and therein contemplated or compliance with the terms and provisions
hereof and thereof will conflict with or result in a breach of, or require
any consent under, the Organizational Documents of any Borrower or any of
its Subsidiaries, or any applicable law or regulation, or any order, writ,
injunction or decree of any court or Governmental authority, or agency, or
any agreement or instrument to which any of the Borrowers is a party or by
or to which any of them or any of their property is bound or subject, or
constitute a default (with or without the giving of notice or the lapse of
time) under any such agreement or instrument, or (except for the Liens
created pursuant to the Loan Documents) result in the creation or
imposition of any Lien upon any property of Borrowers pursuant to the terms
of any such agreement or instrument.
(e) Except as set forth in Schedule 4.1(e) hereto, there is no
pending or, to the best of the Borrowers' knowledge, or, to the knowledge
of the Borrowers or their Restricted Subsidiaries officers, threatened
litigation, arbitration, investigation or proceeding against any of the
Borrowers or their Restricted Subsidiaries before any court, governmental
agency or arbitrator that, adversely determined, could result in a material
judgment not fully covered by insurance, could result in a forfeiture of
all or any substantial part of the property of any of the Borrowers or
their Restricted Subsidiaries or could otherwise have a Material Adverse
Effect.
(f) No authorization, approvals or consents of, and no filings,
recordations or registration with, any governmental or regulatory authority
or agency or any securities exchange are necessary for the execution,
delivery or performance by the Borrowers of this Agreement, the Notes or
any Loan Document to which any of the Borrowers are or will be a party or
for the legality, validity or enforceability thereof, except for filings
30
and recordings in respect of the Liens created pursuant to the Loan
Documents.
(g) No proceeds of any Advance will be used to acquire any security
in any transaction that is subject to Sections 13 and 14 of the Securities
Exchange Act of 1934 and the proceeds of the Advances will be applied only
for the purposes set forth in Article II hereof.
(h) None of the Borrowers is engaged in the business of extending
credit for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying margin stock (within the meaning of Regulation U and
X issued by the Board of Governors of the Federal Reserve System), and no
proceeds of any Advance will be used to purchase or carry any margin stock
or to extend credit to others for the purpose of purchasing or carrying any
margin stock.
(i) Each Borrower is, and after giving effect to the consummation of
the transactions contemplated by this Agreement, will be Solvent.
(j) Each of the Borrowers and each of their respective Restricted
Subsidiaries have filed all federal, state, Commonwealth and other tax
returns required to be filed and have paid all taxes, assessments and other
governmental charges shown thereon to be due, including interest and
penalties, or have provided adequate reserves therefor; no unpaid or
uncontested assessments have been made against any Borrower or any
Restricted Subsidiary of any Borrower by any taxing authority, nor has any
penalty or deficiency been assessed by any such authority, and all
contested assessments have been disclosed to the Bank and adequate reserves
have been made therefor. Such tax returns properly reflect the income and
taxes of the Borrowers and their Restricted Subsidiaries for the periods
covered thereby, subject only to reasonable adjustments required by the
corresponding taxing authorities upon audit and having no Material Adverse
Effect on the financial condition, business or results of operations of the
Borrowers, and such evidence that each Borrower has provided to the Bank
showing that any such taxes or penalties have been paid by such Borrower is
true and correct.
(k) No Borrower nor any Restricted Subsidiary is in default in any
material respect under any agreement or instrument to which it is a party,
such default having the effect of permitting the termination or
acceleration of such agreement or instrument, including, but not limited to
the Bottling Agreement and the Marketing Agreement.
(l) The Borrowers' use of the proceeds of each Advance made by the
Bank hereunder is, and will continue to be, a legal and proper corporate
use (duly authorized by the Borrowers' Board of Directors or similar body)
and such use is, and will continue to be, consistent with all applicable
laws and regulations.
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(m) The operations of the Borrowers and their Restricted Subsidiaries
comply in all material respects with all applicable federal, state,
Commonwealth or local environmental statutes and regulations; none of the
operations of the Borrowers or their Restricted Subsidiaries is subject to
any judicial or administrative proceedings alleging the violation of any
federal, state, Commonwealth or local environmental, health or safety
statute or regulation; none of the operations of the Borrowers or their
Restricted Subsidiaries is the subject of a federal, state,
Commonwealth or local investigation evaluating whether any remedial action
is needed to respond to a release of any hazardous toxic waste, substance
or constituent, or any other substance into the environment, which remedial
action could have a Material Adverse Effect; the Borrowers or their
Restricted Subsidiaries have not filed any notice under any federal, state,
Commonwealth or local law indicating past or present treatment, storage or
disposal of a hazardous waste for purposes of the Federal Resource
Conservation and Recovery Act or other similar state or Commonwealth law;
and the Borrowers have no contingent liability in connection with any
release of any hazardous or toxic waste, substance or constituent, into the
environment which contingent liability, if liquidated, would not be
adequately covered (in the Bank's reasonable determination) by insurance or
other indemnification rights or which, in the Bank's reasonable
determination, would not be expected to have a Material Adverse Effect.
(n) None of the Borrowers or their Restricted Subsidiaries is an
"investment company," or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended or any
other statute or regulation that limits its ability to incur Indebtedness.
(o) None of the Borrowers is a "holding company," or an "affiliate"
of a "holding company" or a "subsidiary company" of a "holding company,"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
(p) Set forth in Schedule 4.1(p) hereto is a complete and correct
list, as of the date of this Agreement, of all the Subsidiaries of the
Borrowers (and the respective jurisdiction of incorporation of each such
Subsidiary) and of all investments held by the Borrowers or any Subsidiary
in other Persons through joint ventures or otherwise. Except as disclosed
in Schedule 4.1(p) hereto, each Borrower owns free and clear of Liens, all
outstanding shares of such Subsidiaries (and each Subsidiary owns, free and
clear of Liens, all outstanding shares of its Subsidiaries) and all such
shares are validly issued, fully paid and nonassessable and no rights to
subscribe to any additional shares have been granted and no options,
warrants or similar rights are outstanding.
(q) The audited consolidated balance sheets of the Borrowers and
their Restricted Subsidiaries as of September 30, 1996, and the related
statements of income and retained earnings of the Borrowers and their
Restricted Subsidiaries for the fiscal year then ended, and the unaudited
financial statements of the Borrowers and their Restricted Subsidiaries for
32
the three month period ending on December 31, 1996, complete copies of
which have been furnished to the Bank, fairly and accurately present the
financial condition of the Borrowers and their Restricted Subsidiaries at
such dates and the results of operations of the Borrowers and their
Restricted Subsidiaries for the periods ended on such dates, all in
accordance with Generally Accepted Accounting Principles consistently
applied, and since December 31, 1996, there has been no material adverse
change in such financial condition or operations. There are no
liabilities, contingent or otherwise, not disclosed in such financial
statement that involve a material amount.
(r) Each of the Borrowers and its Restricted Subsidiaries owns and
has good and marketable title to the properties shown to be owned in the
most recent financial statements of the Borrowers delivered to the Bank
prior to the date of this Agreement (other than assets and properties
disposed of in the ordinary course of business). Each Borrower and its
Restricted Subsidiaries owns and has good and marketable title to, and
enjoys peaceful and undisturbed possession of, all properties that are
necessary for the operation and conduct of their respective businesses as
conducted on the date hereof. Manufacturing has good insurable, recordable
and marketable title to the Realty. There are no squatters on the Realty
and, except as otherwise provided in this Agreement, Manufacturing is and
will remain for as long as any Obligation is outstanding, in complete and
exclusive possession of the Realty.
(s) Each Pension Plan of each Borrower and all of their Restricted
Subsidiaries, if any, is in material compliance with ERISA, no Termination
Event has occurred or is reasonably expected to occur with respect to any
Pension Plan which has resulted or could reasonably be expected to result
in a Material Adverse Effect, all contributions required to be made to any
Pension Plan by its terms, the Code or ERISA (including any quarterly
installments required under Section 412(m) of the Code or Section 302(e) of
ERISA) have been made by the applicable due date; to the knowledge of the
Borrowers, no Multiemployer Plan is insolvent or in reorganization; except
as set forth in Schedule 4.1(s), no Pension Plan has an accumulated or
waived funding deficiency within the meaning of Sections 302 and 303 of
ERISA or Section 412 of the Code; neither the Borrowers nor any ERISA
Affiliate has incurred any material liability (including any material
contingent liability) to or on account of a Pension Plan or Multiemployer
Plan pursuant to election 4062, 4063, 4064, 4201 or 4204 of ERISA which has
not been satisfied; no proceedings have been instituted to terminate any
Pension Plan, and no condition exists which presents a material risk to the
Borrowers nor an ERISA Affiliate of incurring a liability to or on account
of a Pension Plan or Multiemployer Plan pursuant to any of the foregoing
Sections of ERISA.
33
(t) Neither the business nor the properties of any Borrower or their
Restricted Subsidiaries are affected by any labor dispute materially
affecting such business or properties or the operations of the Borrowers or
their Restricted Subsidiaries.
(u) None of the Borrowers or their Restricted Subsidiaries is subject
to any restriction under its corresponding Organizational Documents which
could have a Material Adverse Effect.
(v) A complete and correct copy of each Organizational Document of
each Borrower in effect on the date of this Agreement or the date when such
Borrower became a party to this Agreement has been delivered to the Bank.
(w) The Borrowers' and their Restricted Subsidiaries possess all
patents, patent rights or licenses, trademarks, trademark rights, trade
names, trade name rights and copyrights which are required to conduct their
business as presently conducted and as proposed to be conducted without
known conflict with the rights of others.
(x) The execution of each of the Bottling Appointment and the
Marketing Agreement by Pepsi-Cola PR has been duly authorized by all
necessary corporate or other action on its part and constitutes its legal,
valid, binding and enforceable obligation in accordance with its terms.
Each of the Bottling Appointment and Marketing Agreement is in full force
and effect on the date hereof and has not been terminated or threatened to
be terminated and Pepsi-Cola PR is not in breach of any of the material
terms of any such agreement.
(y) That certain Voting Trust and Irrevocable Proxy dated as of
September 28, 1996 (the "Voting Trust") by and among the recordholders of
common stock of Pepsi-Cola PR, par value $0.01 and having six votes per
share (the "Class A Shares"), Xx. Xxxxxx Xxx and Pepsi-Cola PR
(collectively, the "Voting Trust Parties") has been duly authorized by
Pepsi Cola PR by all necessary corporate or other action on its part and,
with respect to those terms and conditions attributable to it, constitutes
legal, valid, binding and enforceable obligations of Pepsi-Cola PR in
accordance with its terms and as of the date hereof is in full force and
effect.
(z) That certain Stock Option Agreement dated as of September 28,
1996 (the "Option Agreement") by and among the Voting Trust Parties has
been duly authorized by Pepsi-Cola PR by all necessary corporate and other
action on its part and to the extent the Option Agreement is transferred to
Pepsi-Cola PR, as permitted thereunder, constitutes its legal, valid and
binding agreement enforceable by Pepsi-Cola PR in accordance with its terms
and as of the date hereof is in full force and effect.
34
ARTICLE V
COVENANTS OF THE BORROWERS
Section 5.1 AFFIRMATIVE COVENANTS. So long as any Note shall
remain unpaid or the Bank shall have any Commitment hereunder, the
Borrowers and each of their Restricted Subsidiaries, to the extent
applicable, shall:
(a) Comply in all material respects with the requirements of all
applicable laws, rules, regulations and orders of governmental or
regulatory authorities if failure to comply with such requirements could
have a Material Adverse Effect, except for any such law, rule, regulation
or order which is being contested in good faith and by proper proceedings
by a Borrower.
(b) Maintain the Plant, the Realty and all their other properties
(real and personal) insured at all times by responsible, reputable and
financially sound insurance companies or associations in such amounts and
covering loss or damage by fire, earthquake, hurricane and windstorm and
such other risks as are usually carried by companies engaged in similar
businesses and owning similar properties as the Borrowers, maintain
adequate (in the reasonable opinion of the Bank) business interruption
insurance covering such risks and hazards as are carried by companies
engaged in similar businesses and in such amounts as are reasonably
required by the Bank, and maintain adequate (in the reasonable opinion of
the Bank) insurance against liability to persons for such risks and
hazards and in such amounts as are usually carried by companies engaged in
similar businesses; all such policies shall name the Bank as an insured
party (as its interests may appear) and provide for payment of the proceeds
thereof to the Borrowers and/or the Bank, as their respective interests may
appear, and shall contain an endorsement providing that the insurance shall
not be cancelable except upon thirty (30) days prior written notice to the
Bank and from time to time at the request of the Bank, the Borrowers shall
deliver to the Bank a detailed schedule indicating all insurance policies
then in force and furnish to the Bank certificates or other evidence
satisfactory to the Bank of compliance with the foregoing insurance
provisions.
(c) Furnish to the Bank:
(i) as soon as available and in any event within forty-five
(45) days after the end of each of the first three quarters of each fiscal
year of each Borrower and its Subsidiaries (A) to the extent applicable,
consolidated and consolidating statements of income, statements of
stockholder's equity and cash flow of the Borrowers and their Subsidiaries
for such period and for the period from the beginning of the respective
fiscal year to the end of such period, and the related consolidated and
consolidating balance sheets as at the end of such period, and
(B) consolidated and consolidating statements of income, statements of
stockholder's equity and cash flow of each Borrower and the Restricted
35
Subsidiaries on a consolidated basis, for such period and for the period
from the beginning of the respective fiscal year to the end of such
period, setting forth in each case in comparative form the corresponding
consolidated and consolidating figures for the corresponding period in the
preceding fiscal year, accompanied by a certificate of a senior financial
officer of the corresponding Borrower, which certificate shall state that
said Financial statements fairly present the consolidated financial
condition and results of operations of each Borrower and its consolidated
Subsidiaries, and the unconsolidated financial condition and results of
operations of each Borrower and of each of its consolidated Subsidiaries,
in accordance with Generally Accepted Accounting Principles, consistently
applied, as at the end of, and for, such period (subject to normal year-end
audit adjustments and any footnotes thereto);
(ii) as soon as available and in any event within 120 days
after the end of each fiscal year of each Borrower, (A) to the extent
applicable, consolidated and consolidating statements of income, statement
of Stockholder's equity and cash flow of the Borrowers and their
Subsidiaries for such year and the related consolidated and consolidating
balance sheets as at the end of such year, and (B) consolidated and
consolidating statement of income, statements of stockholder's equity and
cash flow of each Borrower and the Restricted Subsidiaries for such year
and the related consolidating and consolidated balance sheet as at the end
of such year, setting forth in each case in comparative form the
corresponding consolidated and consolidating figures for the preceding
fiscal year, and accompanied by (1) in the case of said consolidated
statements and balance sheet, by an opinion thereon of independent
certified public accountants of recognized national standing, which opinion
shall state that said consolidated financial statements fairly present the
consolidated financial condition and results of operations of each Borrower
and its Subsidiaries as at the end of, and for, such fiscal year in
accordance with the Generally Accepted Accounting Principles, and a
certificate of such accountants stating that, in making the examination
necessary for their opinion, they obtained no knowledge, except as
specifically stated, of any Event of Default, and (2) in the case of said
consolidating statements and balance sheets, by a certificate of the
President or chief financial officer of each Borrower, which certificate
shall state that said consolidating financial statements fairly present the
unconsolidated financial condition and results of operations of such
Borrower and of each of its Subsidiaries in accordance with Generally
Accepted Accounting Principles, consistently applied, as at the end of, and
for, such fiscal year;
(iii) immediately after a Borrower knows or has reason to
believe that any Event of Default or event which, with notice or lapse of
time or both, would constitute an Event of Default, has occurred, a notice
of such Event of Default or event, describing the same in reasonable detail
and, together with such notice or as soon thereafter as possible, a
36
description of the action that such Borrower has taken and proposes to take
with respect thereto;
(iv) promptly after the receipt thereof by any Borrower,
copies of any reports submitted to the Borrowers by independent public
accountants in connection with any interim review of the accounts of any of
the Borrowers or their Subsidiaries made by such accountants;
(v) promptly after the same are available, copies of all
proxy statements, financial statements and reports that any of the
Borrowers shall send to its stockholders or that any of the Borrowers may
file with the Securities and Exchange Commission or any governmental
authority at any time having jurisdiction over any of the Borrowers or
their Restricted Subsidiaries;
(vi) within 30 days after the end of each month, listings of
accounts payable of each Borrower;
(vii) if and when any Borrower or its Subsidiaries gives or
is required to give notice to the PBGC of any "Reportable Event" (as
defined in Section 4043 of ERISA) with respect to any Pension Plan that
might constitute grounds for a termination of such Pension Plan under Title
IV of ERISA, or knows that any ERISA Affiliate or the plan administrator of
any Pension Plan has given or is required to give notice of any such
Reportable Event, a copy of the notice of such Reportable Event given or
required to be given to the PBGC; and
(viii) from time to time such other information regarding the
financial condition, operations, business or prospects of each Borrower or
any of its Subsidiaries as the Bank may reasonably request.
Each Borrower will furnish to the Bank at the time it furnishes each set of
financial statements for any fiscal quarter or fiscal year pursuant to
subparagraphs (c)(i) or (ii) above, a certificate of the President or the
chief financial officer of such Borrower (i) to the effect that no Event of
Default or event which, with notice or lapse of time or both, would
constitute an Event of Default, has occurred and is continuing, describing
the same in reasonable detail and describing the action that such Borrower
has taken and proposes to take with respect thereto) and (ii) setting forth
in reasonable detail the computations necessary to determine whether the
Borrowers are in compliance with all of the financial ratios required to be
maintained by the Borrowers under this Agreement, as of the end of such
fiscal quarter or fiscal year together.
(d) Preserve and maintain its legal existence, rights (charter and
statutory), licenses, permits, privileges and franchises, and its going
concern status.
37
(e) At any reasonable time and from time to time, permit the Bank or
any agents or representatives thereof, to examine and make copies of and
the abstracts from the records and books of account of, and visit the
properties of, the Borrowers and their Restricted Subsidiaries, and to
discuss the affairs, finances and accounts of the Borrowers and their
Restricted Subsidiaries with any of its respective officers or directors.
All documents and information made available to the Bank shall be kept
confidential except to the extent required to be disclosed by applicable
law or governmental authority (ii) disclosed to any Affiliate of the Bank
(which shall keep such documents and information confidential in accordance
with the terms hereof) or (iii) disclosed in connection with the exercise
of any rights granted to the Bank under this Agreement or any other Loan
Document.
(f) Keep proper records and books of account, in which complete and
correct entries shall be made of all financial transactions and the assets
and businesses of the Borrowers and their Restricted Subsidiaries, in
accordance with Generally Accepted Accounting Principles consistently
applied.
(g) Maintain and apply substantially the same accounting method used
by each Borrower and their Restricted Subsidiaries on the date of this
Agreement, except for changes mandated by the Financial Accounting
Standards Board or any similar accounting authority of comparable standing.
(h) Maintain and preserve all of their properties that are used or
useful in the conduct of their businesses in good repair, working order and
condition as required for the normal conduct of its business.
(i) Utilize the Advances for the purposes set forth in Section 2.3.
(j) (i) File all federal, state, Commonwealth and local tax returns
and other reports required by law to be filed; (ii) maintain adequate
reserves for the payment of all taxes, assessments, governmental charges
and levies imposed upon each Borrower and its Restricted Subsidiaries, its
income or its profits; (iii) pay and discharge all such taxes, assessments,
governmental charges and levies imposed upon each Borrower and their
Restricted Subsidiaries or against their properties prior to the date on
which penalties accrue or attach thereto, except to the extent that the
same are being contested in good faith by such Borrower and by proper
proceedings and against which adequate reserves have been established and
are being maintained in accordance with Generally Accepted Accounting
Principles; PROVIDED, HOWEVER, that prior to their becoming overdue, each
Borrower and their Restricted Subsidiaries shall promptly notify the Bank
in writing as to any such taxes, assessments and governmental charges in
38
excess of TWO HUNDRED THOUSAND DOLLARS ($200,000) which it intends to
contest; and (iv) upon request by the Bank, provide it with evidence of
payment and discharge of any such taxes, and if such taxes are not
assessable, evidence thereof.
(k) Continue to be Solvent.
(l) Promptly upon becoming aware, give to the Bank written notice of
all litigation, arbitration or of any investigative proceedings, and of all
proceedings by or before any governmental or regulatory authority or agency
and the action being taken with respect thereto, and any material
development in respect of such litigation, arbitration, investigation or
other proceedings affecting any Borrower, any of its Restricted
Subsidiaries, the Plant or the Realty, involving a claim in excess of TWO
HUNDRED THOUSAND DOLLARS ($200,000).
(m) Duly and punctually pay and perform their obligations and cause
their Restricted Subsidiaries to pay and perform their respective
obligations under the Loan Documents in accordance with the terms thereof.
(n) Execute, or cause to be executed, promptly upon the request of
the Bank, any and all instruments which the Bank may reasonably require
from time to time in order to create or maintain in effect the security
interest in any and all Collateral delivered, or purported to be delivered,
to the Bank by any Loan Party hereunder, including, but not limited to,
instruments creating a security interest in after-acquired property of the
Borrowers.
(o) Maintain their main operating, demand deposit and transaction
bank accounts with the Bank.
(p) Conduct their respective business so as to comply in all material
respects with all environmental, health and safety laws and regulations in
all jurisdictions in which they are or may at any time be doing business,
including, without limitation, the Federal Resource Conservation and
Recovery Act, the Federal Comprehensive Environmental Response,
Compensation and Liability Act, the Federal Clean Water Act, the Federal
Clean Air Act and the Federal Occupational Safety and Health Act; PROVIDED,
HOWEVER, that nothing contained in this subsection shall prevent any
Borrower or their Restricted Subsidiaries from contesting, in good faith by
appropriate legal proceedings, any such law, regulation, interpretation
thereof or application thereof, provided, further, that such Borrower or
their Restricted Subsidiaries shall comply with the order of any court or
other governmental body of applicable jurisdiction relating to such laws
unless such Borrower or its Restricted Subsidiaries shall currently be
prosecuting an appeal or proceedings for review and shall have secured a
stay of enforcement or execution or other arrangement postponing
enforcement or execution pending such appeal or proceedings for review.
If any Borrower or its Restricted Subsidiaries shall (a) receive written
39
notice that any violation of any federal, state, Commonwealth or local
environmental, health or safety law or regulation may have been committed
or is about to be committed by such Borrower or their Restricted
Subsidiaries, (b) receive written notice that any administrative or
judicial complaint or order has been filed or is about to be filed against
such Borrower or its Restricted Subsidiaries alleging violations of any
federal, state, Commonwealth or local environmental law or regulation or
requiring such Borrower to take any action in connection with the release
of toxic or hazardous substances into the environment, (c) receive any
written notice from a federal, state, Commonwealth or local governmental
agency or private party alleging that such Borrower or their Restricted
Subsidiaries may be liable or responsible for costs associated with a
response to or cleanup of a release of a toxic or hazardous substance into
the environment or any damaged caused thereby, (d) receive any written
notice that such Borrower is subject to federal, state, Commonwealth or
local investigation evaluating whether any remedial action is needed to
respond to the release of any hazardous or toxic waste, substance or
constituent in the environment, or (e) receive any written notice that any
properties or assets of such Borrower or its Restricted Subsidiaries are
subject to a lien in favor of any governmental entity for any liability
under federal, state, Commonwealth or local environmental laws or
regulations or damages arising from or costs incurred by such governmental
entity in response to a release of a hazardous or toxic waste, substance or
constituent, or any other substance into the environment, then such
Borrower or Restricted Subsidiary shall promptly provide the Bank with a
copy of such notice, and in any event no later than within fifteen (15)
days from such Borrower's or its Restricted Subsidiaries receipt thereof.
Within fifteen (15) days of any such Borrower or Restricted Subsidiary
having learned of the enactment or promulgation of any federal, state,
Commonwealth or local law or regulation pertaining specifically to such
Borrower or Restricted Subsidiary or its industry that may result in any
Material Adverse Effect, such Borrower or such Subsidiary shall provide the
Bank with notice thereof. Upon the occurrence of an Event of Default and
ten (10) days' prior notice, if the Bank has reasonable grounds to believe
that (i) any hazardous substances or other toxic substances are present in
the soil or water, at the Realty or (ii) that the Borrowers are not in
compliance with all applicable federal or Commonwealth environmental laws,
the Bank may obtain one or more environmental assessments of the Realty,
and the Borrowers shall be responsible for the reasonable costs of one such
assessment. Notwithstanding the occurrence of an Event of Default, the
Bank may also obtain an environmental assessment, but the cost of such
assessment will be for the account of the Bank. The Borrowers will
cooperate with the persons retained by the Bank to prepare any such
environmental assessments.
(q) (i) Maintain a ratio of Total Liabilities to Tangible Net
Worth of not more than 1.60 to 1 during fiscal year 1997 and of 1.50 to 1
at all times thereafter during the term of this Agreement.
40
(ii) Maintain, as of the end of each fiscal quarter,
commencing with the quarter ended September 30, 1997 a ratio of Operating
Cash Flow for the four consecutive fiscal quarters just ended to total Debt
Service during such four fiscal quarters of not less than the following
ratios at any time during each period set forth below:
FISCAL QUARTER ENDING RATIO
On September 30, 1997 and on or 1.00 to 1
before June 30, 1998
On or after September 30, 1998 1.30 to 1
and on or before June 30, 1999
On or after September 30, 1999 1.50 to 1
; PROVIDED, HOWEVER, that the Borrowers shall not be deemed to have
breached the above financial covenant if during any period of noncompliance
the Minimum Cash Balance shall not be less than two (2) times the projected
aggregate Debt Service (assuming for purposes of making this computation
that the applicable interest rate for the Advances is the interest rate in
effect at the t' e the computation is made) for the Borrowers and their
Restricted Subsidiaries for the following fiscal year.
(iii) Maintain cash and marketable securities at all times in
an amount equal to not less than the Minimum Cash Balance.
(iv) Maintain a minimum Tangible Net Worth of not less than
the following respective amounts as of the end of each of the following
periods:
PERIOD AMOUNT
------ ------
Fiscal Year 1997 $37,000,000
Fiscal Year 1998 $39,500,000
Fiscal Year 1999 $42,000,000
Fiscal Year 2000 $44,500,000
Fiscal Year 2001 and for $47,000,000
each Fiscal year thereafter
; PROVIDED, HOWEVER, that at all times during each fiscal year the Tangible
Net Worth shall be at least equal to the requirement set forth as of the
end of the immediately preceding fiscal year.
(r) During normal business hours, permit the Bank and Bank's
representatives, inspectors and consultants to enter upon the Realty, to
inspect the Plant and materials used therein and to examine all contracts,
records, plans and shop drawings which are kept at the Plant or at any of
the Borrowers' offices.
41
(s) Not suffer or permit to exist or to continue for more than 30
days (i) any order or decree in any court of competent jurisdiction
enjoining prohibiting the Borrowers or the Bank from performing this
Agreement or (ii) any proceeding seeking any such order or decree.
(t) Cause the Plant to be operated in such manner that all licenses,
permits and approvals necessary or appropriate for the maintenance,
operation and use of the Plant for its intended purpose will be maintained
in full force and effect, except to the extent that failure to have such
licenses, permits and approvals would not have a Material Advance Effect.
(u) Perform and comply at all times with the material provisions of
each of the Bottling Appointment and the Marketing Agreement, maintain each
of the Bottling Appointment and the Marketing Agreement in fullforce and
effect and notify the Bank promptly of any material changes, modifications
or amendments to the Bottling Appointment or the Marketing Agreement or
upon the occurrence of an event of default or any event that with the
giving of notice or the passage of time or both would Constitute an event
of default under the Bottling Appointment or the Marketing Agreement.
(v) Not later than the date 45 days after the end of each fiscal
quarter of the Borrowers, commencing with the fiscal quarter ending March
31, 1997, deposit in a deposit account (the "Cash Collateral Account") to
be maintained with the Bank the following amounts up to the aggregate
amount of FIVE MILLION DOLLARS ($5,000,000) based on the Recapture Leverage
Ratio:
RECAPTURE LEVERAGE RATIO AMOUNT
------------------------ ------
Equal to or greater than 7.00 to $1,250,000
1.00
Equal to or greater than 6.00 to $ 937,000
1.00 but less than 7.00 to 1.00
Equal to or greater than 5.00 to $ 625,000
1.00 but less than 6.00 to 1.00
Equal to or greater than 4.00 to $ 312,500
1.00 but less than 5.00 to 1.00
Less than 4.00 to 1.00 $ 0
All moneys therein deposited from time to time shall be assigned and
pledged to the Bank pursuant to the Cash Collateral Agreement, the
provisions of which are incorporated herein by reference, as additional
security or collateral for the Obligations of the Borrower hereunder. The
Borrower agrees to execute such other documents or take such other action
as any Bank may deem necessary or desirable to create or maintain a lien or
security interest on amounts on deposit in the Cash Collateral Account.
42
(w) Submit such periodic information and reports as the Bank may
reasonably request regarding the status of the Shareholders' Suit.
(x) Deliver to the Bank on or prior to May 15, 1997, an appraisal of
the Realty and Machinery and Equipment on which the Bank has a security
interest, performed by an independent appraiser, who is a member of the
American Institute of Real Estate Appraisers ("MAI") and is satisfactory to
the Bank, stating that the value of the Realty and Machinery and Equipment
is at least TWENTY-FIVE MILLION DOLLARS ($25,000,000).
(y) Not consent to any modification, amendment, supplement or waiver
to the voting Trust or the Option Agreement which would adversely affect or
could reasonably be expected to adversely affect the rights of the voting
trustee under the Option Agreement or the Voting Trust with respect to all
Class A Shares, without the prior consent of the Bank.
Section 5.2 NEGATIVE COVENANTS. So long as any Note shall remain
unpaid or the Bank shall have any Commitment hereunder, the Borrowers, and
their Restricted Subsidiaries, to the extent applicable, will not, without
the consent of the Bank (such consent not to be unreasonably withheld or
delayed):
(a) Create, incur, assume or suffer to exist any Lien, security
interest or other charge or encumbrance securing Indebtedness for borrowed
money or purchase money debt, or any other Lien of a material nature (other
than Permitted Liens), or any other type of preferential arrangement, upon
or with respect to any of its Properties (real or personal, tangible or
intangible), including without limitation Liens on inventory and accounts
receivable, whether now owned or hereafter acquired, or on the capital
stock of their Restricted Subsidiaries, or assign any right to receive
income, other than those Liens permitted hereunder.
(b) Create, incur, guarantee, endorse, assume or suffer to exist any
Indebtedness, direct, contingent or otherwise, except (i) Indebtedness
under this Agreement and under the Notes; (ii) trade payables and accruals
incurred in the ordinary course of business; (iii) Indebtedness outstanding
on the date hereof and listed in Schedule 5.2 (b) hereto; (iv) any
Subordinated Debt; and (v) Capitalized Leases and purchase money security
interests not exceeding FIVE MILLION DOLLARS ($5,000,000) in the aggregate
at any time outstanding (including any such Indebtedness set forth in
Schedule 5.2(b)) for all Borrowers and their Restricted Subsidiaries taken
as a whole, (vi) Indebtedness owed by one Borrower to another Borrower, and
(vii) Indebtedness with respect to operating leases for real or personal
property providing for aggregate annual rental payments in excess of TWO
MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500,000) (including any such
Indebtedness set forth in Schedule 5.2(b)) or all Borrowers and their
Restricted Subsidiaries taken as a whole.
43
(c) Declare or pay any dividends or purchase, redeem, retire or
otherwise acquire for value, or make any commitment to purchase, redeem,
retire or otherwise acquire for value, any of its capital stock or warrants
or other rights therein now or hereafter outstanding, either directly or
indirectly, or make any other distribution on any shares of capital stock
of any Borrower, either directly or indirectly without the prior written
consent of the Bank, except (i) for such declaration, payment, purchase,
redemption, retirement, acquisition or Distribution in an amount that does
not exceed any dividends paid or declared and actually received by Pepsi-
Cola PR from BAESA, net of any taxes payable by such Borrower in connection
therewith, or (ii) the payment of noncumulative quarterly dividends on up
to 600,000 shares of Management Stock of Beverage Plastics in an amount not
exceeding 25 cents per share per quarter, or (iii) for such declaration,
payment or distribution in an amount not exceeding (A) the Net Available
Proceeds from any BAESA Stock Disposition; provided that at the time of
such declaration, payment or distribution the ratio of Operating Cash Flow
to Debt Service for the four consecutive fiscal quarters ending prior to
the date of such dividend is paid, declared or distributed is not less than
2.00 to 1.00, or (B) the Net Available Proceeds from any BAESA Stock
Disposition minus the outstanding principal amount of the Term Loan Advance
at the time of such declaration, payment or distribution, or (iv) the
exercise by Pepsi-Cola PR of any rights under the Option Agreement to the
extent exercised strictly in accordance with the terms thereof as in effect
on the date hereof (without any modification, amendment, supplement or
waiver) and provided that the exercise of such rights does not have a
Material Adverse Effect or otherwise results in a breach of the limitations
set forth in Section 7.1(i), and in each case only to the extent that no
Event of Default or event or condition that, but for the requirement that
time elapse or notice be given, or both, would constitute and Event of
Default has occurred and is continuing under this Agreement and such
declaration, payment, purchase, redemption, retirement, acquisition or
distribution would not result in the occurrence of an Event of Default or
result in an event or condition that, but for the requirement that time
elapse or notice be given, or both, would constitute and Event of Default.
(d) Sell, lease, transfer or otherwise dispose of any asset except:
(i) the sale by Manufacturing of its assets and other property comprising
the previous bottling plant in Rio Piedras, Puerto Rico, (ii) the sale of
Pepsi-Cola PR's holdings of BAESA stock or warrants convertible into stock
that are currently held by any Borrower or that may be acquired or received
in the future by any Borrower under any preemptive rights or from any
dividends declared or capital stock acquired from dividends paid or
declared and actually received by any Borrower from the Unrestricted
Subsidiaries; (iii) the sale of the parcels of land, identified on the
Survey as Parcel 5-C located in Toa Baja, Puerto Rico and owned by
Manufacturing, (iv) Inventory or other property sold or disposed of in the
ordinary course of business and on ordinary business terms, (v) sales of
assets which are promptly replaced by the Borrowers (the Borrowers shall be
44
obligated to immediately report any such sales when the aggregate amount of
such sales exceeds ONE MILLION DOLLARS ($1,000,000) in any fiscal year),
(vi) sales, leases, transfers of assets by the Borrowers and their
Restricted Subsidiaries not exceeding ONE MILLION DOLLARS ($1,000,000) in
the aggregate in any single fiscal year, or (vii) the sale by Pepsi-Cola PR
of its Cristalia Spring Water division.
(e) Merge into or consolidate with any Person, except (i) with the
prior written consent of the Bank or (ii) if the surviving entity is any
Borrower, PepsiCo or any subsidiary of PepsiCo in which PepsiCo owns at
least 51% of the voting stock and has, in the reasonable opinion of the
Bank, adequate financial resources at the time of such merger or
consolidation, and after giving effect to such merger or consolidation, no
Event of Default would exist hereunder and the Loan Documents remain in
full force and effect.
(f) To enter into or permit the Restricted Subsidiaries to enter into
management agreements or other agreements or arrangements for services or
for the purchase or sale of any assets with any Unrestricted Subsidiary on
terms and conditions and for an amount that is not reasonable and proper in
relation to the work performed or items being purchased and which is not
substantially comparable to that paid by other companies engaged in similar
lines of business.
(g) Make any investment in, make, assume, endorse or have outstanding
at any time any guarantee, loan or advance to, or otherwise extend credit
to any (i) officer, director or stockholder of any of the Borrowers or (ii)
Unrestricted Subsidiary, including without limitation any officer, director
or stockholder of an Unrestricted Subsidiary or any affiliate of such
Unrestricted Subsidiary except for investments, loans, advances or
guarantees (A) made in the ordinary course of business or (B) with the
prior written consent of the Bank.
(h) Transfer its principal place of business or change its registered
principal office, or maintain its Machinery and Equipment and Inventory or
its records with respect to Collateral, at any locations other than those
at which the same are presently kept or maintained, except with the Bank's
prior written consent (which consent shall not be unreasonably withheld)
and after the delivery to the Bank of security instruments, if required by
the Bank, in form satisfactory to the Bank.
(i) Engage in any line or lines of business activity other than the
business of bottling, distributing and selling the beverage known as Pepsi-
Cola and similar beverages (alcoholic and non-alcoholic) and water
products, the manufacturing and distribution of other food and beverage
products and other businesses incidental to the distribution of such
products.
45
(j) Except as otherwise expressly permitted by this Agreement and
except as set forth on Schedule 5.2(i), each Borrower will not, nor will it
permit any of its Restricted Subsidiaries to, directly or indirectly:
(i) make any investment in an Affiliate of the Borrower or
any Affiliate of its Subsidiaries;
(ii) except as permitted in Section 5.2(j)(iv) below,
transfer, sell, lease, assign or otherwise dispose of any property to an
Affiliate of such Borrower or any Affiliate of its Subsidiaries;
(iii) merge into or consolidate with or purchase or acquire
property from an Affiliate of such Borrower or any Affiliate of its
Subsidiaries; or
(iv) enter into any other transaction directly or indirectly
with or for the benefit of an Affiliate of such Borrower or any Affiliate
of its Subsidiaries (including, without limitation, guarantees and
assumptions of obligations of such an Affiliate); provided that (A) any
such Affiliate who is an individual may serve as a director, officer or
employee of such Borrower or any of its Subsidiaries and receive reasonable
compensation for his or her services in such capacity, and (B) such
Borrower and its Subsidiaries may enter into transactions (other than
extensions of credit by such Borrower or any of its Subsidiaries to such an
affiliate) providing for the Leasing of Property, the rendering or receipt
of services or the purchase or sale of inventory and other property in the
ordinary course of business if the monetary or business consideration
arising therefrom would be substantially as advantageous to such Borrower
and its Subsidiaries as the monetary or business consideration which would
be obtained in a comparable transaction with a Person not an Affiliate of
such Borrower or any of its Subsidiaries.
(k) Consent to any modification, supplement or waiver of any of the
provisions of the Organizational Documents which would or could reasonably
expected to have a Material Adverse Effect, without the prior consent of
the Bank, except to the extent any such modification, supplement or waiver
may be required by applicable laws, rules or regulations. Notwithstanding
the fact that the prior consent of the Bank may not be required, the
Borrowers agree to provide the Bank with notice of modifications,
supplements or waivers to the foregoing agreements promptly following such
modification, waiver or amendment.
(l) Enter into any arrangement with any Person whereby any Borrower
or any of its Restricted Subsidiaries shall sell or otherwise transfer any
of its property, whether now owned or hereafter acquired, and thereafter
rent or lease such property or similar property for substantially the same
use or uses as the property sold or transferred.
46
(m) Change their fiscal year, corporate name or structure, except with
the prior written consent of the Bank, which consent shall not be
unreasonably withheld.
(n) Change or in any manner cause or seek a change in any laws,
requirements of governmental authorities and obligations created by private
contracts and leases which now or hereafter may materially affect the
ownership, use or operation of the Plant without the prior written consent
of the Bank; provided, however, that this covenant shall not apply to
emergency situations in which each Borrower exercises its prudent judgment
and notifies the Bank promptly thereafter of such emergency and the actions
taken in response thereto.
(o) Permit the aggregate amount of Capital Expenditures to exceed
during any fiscal year FOUR MILLION DOLLARS ($4,000,000).
(p) Enforce any intercompany debts payable by a Borrower to any other
Borrower, if such enforcement would cause the corresponding Borrower to
cease to be Solvent.
ARTICLE VI
SPECIAL PROVISIONS AS TO COLLATERAL
Section 6.1 PERFECTION OF SECURITY INTEREST. It is the intention
of the Bank and the Borrowers, and the Bank and the Borrowers hereby agree
that, until all Obligations have been fully satisfied, the Bank's security
interest in the Collateral, and all products and proceeds thereof, shall
continue in full force and effect. The Borrowers shall perform any and all
steps reasonably requested by the Bank to perfect, maintain and protect the
Bank's security interest in the Collateral, including, without limitation,
executing and filing security instruments, or amendments thereof, in form
and substance satisfactory to the Bank. The Borrowers shall have the costs
of, or incidental to any recording or filing of any security instrument
concerning the Collateral and the reasonable costs of or incidental to any
and all other steps or procedures which the Bank may request in order to
perfect, maintain and protect the Bank's security interest in the
Collateral. If any Borrower fails to pay any taxes, assessments or
governmental charges levied or assessed or imposed upon or with respect to
the Collateral or any part thereof promptly when due, subject to the
Borrowers' right to contest such payment by appropriate proceedings, the
Bank may (but shall not be required to) pay the same and charge the cost
thereof to any Borrower's account with the Bank as part of the Obligations
payable hereunder on demand and secured by the Collateral. If an Event of
Default has occurred and is continuing, in order to protect or perfect any
security interest that the Bank is granted hereunder, the Bank may, in its
47
sole discretion, maintain guards, discharge any lien or encumbrance or bond
the same, pay any insurance, service bureau or warehouseman, or obtain any
record and charge the same to any Borrower's account with the Bank as an
Advance hereunder and as part of the Obligations payable hereunder on
demand and secured by the Collateral.
Section 6.2 PROVISIONS RELATING TO RECEIVABLES. Without the prior
written consent of the Bank in each case, no Borrower will re-date any
invoice or sale or make sales on extended dating beyond that customary in
its industry or change the terms of sale customarily offered to its
customers. If any Borrower becomes aware of anything materially
detrimental to its material customer's credit, it will promptly advise the
Bank thereof. During the term of this Agreement, no Borrower shall sell or
assign or grant any security interest in any Receivables to anyone other
than the Bank, nor shall any Borrower encumber, mortgage, pledge or grant
any security interest in any of its Inventory to anyone other than the
Bank, and each Borrower shall place notations upon its books of account to
disclose the assignment of all Receivables to the Bank and the Bank's
interest, assignment and lien in, of or on all Collateral and all other
security held by or for the Bank. Upon the occurrence and continuance
thereof of an Event of Default the Bank may settle or adjust disputes and
claims directly with customers or account debtors or amounts and upon terms
which the Bank considers advisable unless the corresponding Borrower has
substituted other Receivables or Collateral in form and amount satisfactory
to the Bank and, in all cases, the Bank will credit such Borrower's loan
account with only the net amounts received by the Bank in payment of
Receivables.
Section 6.3 WARRANTIES WITH RESPECT TO RECEIVABLES. Each Borrower
agrees, represents and warrants that each Receivable will be owned by such
Borrower free and clear of any Liens, claims or encumbrances other than
those in favor of the Bank and will cover a bona fide sale and delivery of
merchandise usually dealt in by such Borrower, or the rendition by such
Borrower of services to customers in the ordinary course of business, and
will be for a liquidated amount maturing as stated in the schedules thereof
and in the invoice covering said sale, and the Bank's security interest
therein will not be subject to any Liens other than Permitted Liens; but
the Bank shall retain its security interest in all Receivables, eligible
and ineligible, until all Obligations have been fully satisfied.
Section 6.4 PROVISIONS RELATING TO INVENTORY. Each Borrower
agrees, represents and warrants that all Inventory is and will be owned by
such Borrower free of all Liens and encumbrances other than the Bank's
security interest hereunder and shall be kept by such Borrower at the
corresponding locations specified on Exhibit D hereto, and that such
Borrower shall not (without the Bank's prior written approval) remove the
Inventory therefrom except for the purposes of sale in the regular course
of its business. Except for sales of Inventory made in the regular course
of its business and except for obsolete or unmerchantable goods, no
48
Borrower shall sell, encumber or dispose of or permit the sale, encumbrance
or disposal of any Inventory without the Bank's prior written consent.
Section 6.5 PROVISIONS RELATING TO MACHINERY AND EQUIPMENT. Each
Borrower shall keep and maintain the Machinery and Equipment in good
operating condition and repair and shall make all necessary replacements
thereof so that the value and operating efficiency thereof shall at all
times be maintained and preserved; shall promptly inform the Bank of any
additions to or deletions from the Machinery and Equipment; and shall not
permit any such items to become a fixture to real estate or accession to
other personal property unless the Bank has a perfected security interest
in such real estate or other personal property. Each such Borrower shall,
promptly, on demand therefor by the Bank, deliver to the Bank evidence,
reasonably satisfactory to the Bank of ownership of all material Machinery
and Equipment. Subject to the provisions of Section 5.2(d) hereof, and
except or otherwise permitted pursuant to this Agreement, no such Borrower
shall, without the Bank's prior written consent, sell, lease, grant a
security interest in or otherwise dispose of or encumber the Machinery and
Equipment, or any part thereof. In the event that any of the Machinery and
Equipment is sold, transferred or otherwise disposed of with the Bank's
consent, as herein provided, or as otherwise permitted pursuant to this
Agreement, (a) if the Machinery and Equipment so sold, transferred or
disposed of is not replaced or is replaced by Machinery and Equipment
leased by the corresponding Borrower, the corresponding Borrower shall
deliver all of the cash proceeds thereof to the Bank, which proceeds shall
be applied to the repayment of the Obligations of the Borrowers in
accordance with Section 2.9(b), and (b) if such sale, transfer or
disposition is made in connection with the purchase by such Borrower of
replacement Machinery and Equipment, such Borrower shall use the cash
proceeds thereof to finance the purchase of such replacement Machinery and
Equipment and shall deliver to the Bank written evidence of the use of the
proceeds for such purchase. Except as otherwise provided in this
Agreement, all replacement Machinery and Equipment purchased by any
Borrower shall be free and clear of all Liens, claims and encumbrances,
except for the Bank's security interest therein. The Borrowers agree to
execute any and all instruments which the Bank may request in order to
perfect its security interest in any replacement Machinery and Equipment.
Section 6.6 COLLATERAL REPORTING. (a) Each Borrower shall provide
the Bank, on a monthly basis, within 30 days after such month, with
schedules describing all Receivables created or acquired by it (including
on an annual basis and upon the written request of the Bank the name and
address of each account debtor) during the immediately preceding month and
shall execute and deliver confirmatory written assignments of such
Receivables to the Bank in such form as the Bank may require; PROVIDED,
HOWEVER, that any such Borrower's failure to execute and deliver such
schedules or assignments shall not affect or limit the Bank's security
interest or other rights in and to the Receivables. Together with each
schedule, such Borrower shall furnish, upon request therefor, copies of
49
related customers' invoices or the equivalent and copies of original
shipping or delivery receipts for all merchandise sold (or the equivalent)
and such other documents as the Bank may require.
(b) Each Borrower shall provide to the Bank, on a monthly basis
within the 30 days after the end of such month, a schedule of its Inventory
showing the value thereof computed at the lower of cost or market value, in
form and substance satisfactory to the Bank. From time to time, each such
Borrower shall, upon the request of the Bank, execute and deliver
confirmatory written instruments in such form as the Bank may require
pledging to the Bank the Inventory described in such listings or otherwise
owned by such Borrower; PROVIDED, HOWEVER, that any Borrower's failure to
execute and deliver such confirmatory instruments, or to list any Inventory
therein, shall not affect or limit the Bank's security interest in such
Borrower's Inventory. All instruments and certificates prepared by the
Borrowers which show the value of Inventory shall be accompanied, upon
request therefor by the Bank, by copies of related purchase orders and
invoices. Each Borrower shall conduct an annual (or more often as
requested by the Bank in its commercially reasonable judgment, provided
that if the Bank requests more than one additional physical count of the
inventory it will be required to bear the reasonable costs and expenses of
conducting such physical count) physical count of the Inventory and a copy
of each such count shall be promptly supplied to the Bank accompanied by a
report of the value thereof (valued at the lower of cost or market value)
of such Inventory. In addition to the annual physical count of inventory
referred to above, each Borrower shall perform, or have performed on its
behalf, at an interim date a physical test of some Inventory items of their
respective perpetual Inventory records. A copy of the results of each such
test shall be promptly supplied to the Bank accompanied by a report of the
value. If the results of the comparison between physical counts and book
Inventory balances at such interim date results in significant differences,
the Bank, at its discretion, may request a complete physical count of
Inventory in all locations of the Borrowers.
(c) Simultaneously with the execution and delivery of this Agreement,
each Borrower shall furnish to the Bank a certificate executed by its
President or chief financial officer, scheduling all material items of
Machinery and Equipment and designating the places where such Machinery and
Equipment is located. Thereafter, on an annual basis, each such Borrower
shall furnish to the Bank a certificate in such form as the Bank may
require, executed by its President or chief financial officer, as to any
additions to or deletions from, or any changes in the locations of, the
Machinery and Equipment scheduled on the original certificate or any other
quarterly certificate furnished to the Bank hereunder.
(d) In addition to the foregoing reports, each Borrower will provide
the Bank with agings of accounts receivable for all Receivables, within
thirty (30) days after the end of each month, and such other documents and
50
information with respect to the collateral as the Bank may from time to
time reasonably request.
Section 6.7 COLLECTIONS; BLOCKED ACCOUNT. (a) Unless and until the
Bank exercises its rights to notification and collection described in
subsection (c) below or gives the Borrowers other instructions, the Bank
and the Borrowers shall establish and maintain a special blocked account
(the "Blocked Account") with the Bank for the collection of Receivables of
each of the Borrowers. All collections of Receivables shall be received at
or deposited into the Blocked Account on a daily basis by each Borrower.
The Bank shall have complete control and dominion over the Blocked Account
and on a daily basis (or such other basis as may be established by the Bank
in its sole discretion) apply the money available in the Blocked Account
for the prepayment of Revolving Credit Advances.
(b) If sales of Inventory are made for cash, the corresponding
Borrower shall immediately deposit the identical checks, cash or other
forms of payment which it receives to the Blocked Account provided for in
subsection (a).
(c) Upon the occurrence and during the continuance of an Event of
Default the Bank or its designee may notify customers or account debtors at
any time that Receivables have been assigned to the Bank or of the Bank's
security interest therein, collect them directly and charge the collection
costs and expenses to the Blocked Account.
Section 6.8 APPLICATION OF COLLATERAL. The Bank may, in its sole
discretion, (a) exchange, enforce, waive or release any security or portion
of the Collateral, (b) apply such security or any proceeds of the
Collateral and direct the order or manner of sale thereof as the Bank may,
from time to time, determine, and (c) settle, compromise, collect or
otherwise liquidate any such Collateral for the Obligations of the
Borrowers in any manner following the occurrence and during the continuance
of an Event of Default without affecting or impairing the Bank's right to
take any other further action with respect to any security or Collateral
for the Obligations of the Borrowers or any part thereof.
Section 6.9 RELEASE OF COLLATERAL. Upon the satisfaction in full
of the Obligations (other than any contingent Obligations that survive the
termination of the Credit Agreement) and the termination of the Credit
Agreement, the Bank will, upon the Borrowers' request and at the Borrowers'
expense, execute and deliver to the Borrowers such documents as the
Borrowers shall reasonably request to release the Collateral.
Notwithstanding the foregoing, the Bank agrees to release as Collateral the
parcel of land identified as Parcel 5-C of Xxxxxxx I on the Survey. The
Borrowers agree to pay all fees and expenses (including attorneys fees)
51
payable in connection with such release. The proceeds of any such sale
shall be applied as required by Section 2.9(b) hereof.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1 EVENT OF DEFAULT. If any of the following events
("Events of Default") shall occur and be continuing:
(a) Any Borrower shall fail to pay any installment of principal of
any Note or shall fail to pay any interest on such Note when such
Installment of principal or interest payment shall become due, or the
Borrowers shall fail to pay any fees required to be paid pursuant to
Section 2.5 of this Agreement or any fee or any other amount payable by it
hereunder or under any other Loan Document when such fees and amounts shall
become due, and any such failure shall remain uncured for five (5) days
thereafter; or
(b) Any Borrower shall fail to perform any term, covenant or
agreement contained in Sections 5.1(c)(iii), 5.1(q) or 5.2; or
(c) Any Borrower shall fail to perform or observe any other term,
covenant or agreement contained in any Loan Document on its part to be
performed or observed (other than in respect of Sections 7.1(a) and 7.1(b))
and any such failure shall remain unremedied for a period of ten (10) days
after written notice thereof shall have been given to the corresponding
Borrower by the Bank; or
(d) Any Borrower or any Restricted Subsidiary of such Borrower shall
fail to pay any debt for borrowed money or any interest or premium thereon
when due and owing (whether at scheduled maturity, by required prepayment,
acceleration, demand or otherwise) or any other default under any agreement
or instrument relating to any such debt and such default shall be uncured
or unwaived after thirty (30) days of its occurrence; or any other event,
shall occur, if the effect of such default or event is to accelerate, or to
permit the acceleration of, or to permit the acceleration after the giving
of notice or passage of time or both, of, the maturity of such debt; or any
such debt of such Borrower or such Restricted Subsidiaries shall be
declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled required prepayment), prior to the stated maturity
thereof; or
(e) Any representation, warranty or certification made by any
Borrower (or any of its directors, officers or employees) or any of its
Restricted Subsidiaries (or any of their respective directors, officers and
employees), as the case may be, contained in any Loan Document or any
document, instrument or certificate delivered to the Bank pursuant to the
provisions thereof (including any modification or supplement thereto),
shall prove to have been false or misleading as of the time made or
furnished in any material respect; or
(f) Any Borrower or any of its Restricted Subsidiaries shall
generally not pay its debts as such debts become due and owing, or shall
admit in writing its inability to pay its debts generally, or shall make a
52
general assignment for the benefit of creditors; or any proceeding shall
be instituted by or against any Borrower or any of its Restricted
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of a
receiver, trustee, or other similar official for it or for any substantial
part of its property, and, in the case of any such proceeding instituted
against it (but not instituted by it), shall remain undismissed or unstayed
for a period of sixty (60) days or an order for relief shall be entered
against it; or any Borrower or any of its Restricted Subsidiaries shall
take any action (corporate or other) to authorize any of the actions set
forth above in this subsection (f); or
(g) (i) Any Termination Event with respect to a Pension Plan shall
have occurred; or (ii) if any Borrower or any Restricted Subsidiary of the
Borrower as employer under a Multiemployer Plan shall have made a complete
or partial withdrawal from a Multiemployer Plan and the plan sponsor of
such Multiemployer Plan shall have notified such withdrawing employer that
such employer has incurred an actual withdrawal liability; or
(h) Any provision of any security instrument or any Loan Document
delivered to the Bank pursuant to this Agreement shall for any reason cease
to be valid and binding on the Loan Party that is a party thereto, or such
Loan Party shall fail to cure such defect within 10 days after written
notice thereof; or
(i) There is a sale, transfer, change of effective control or other
disposition, whether by operation of law or otherwise (directly or
indirectly), through a merger, consolidation or otherwise, of the Class A
Shares so that the voting trustee under the Voting Trust as of the Closing
Date ceases to control, own or is no longer entitled to vote in the
aggregate at least a majority of the voting rights under the then issued
and outstanding voting stock of Pepsi-Cola PR or in the event of a
termination, modification, supplement or amendment of the Voting Trust so
that the trustee under the Voting Trust ceases to have the right to vote
not less than 80% of all Class A Shares of Pepsi-Cola PR or in the event
that not less than 80% of all Class A Shares of Pepsi-Cola PR are at all
times subject to the Voting Trust; or
(j) Upon the occurrence of an event or existence of a condition which
has or could reasonably be expected by the Bank to have a Material Adverse
Effect and such event or condition shall continue to exist for a period of
thirty (30) days after notice thereof has been given to the corresponding
Borrower by the Bank; or
53
(k) A final and unappealable judgment or order for the payment of
money shall be entered against any of the Borrowers or any of their
Restricted Subsidiaries by any court, or a warrant of attachment or
execution or similar process shall be issued or levied against property of
any of the Borrowers or any of their Restricted Subsidiaries, that in the
aggregate exceeds FIVE HUNDRED THOUSAND DOLLARS ($500,000) in value, and
such judgment, order, warrant or process shall continue undischarged or
unstayed for 45 days;
then (unless there shall have occurred an Event of Default under Section
7.1(f) above, in which case the Notes, all interest thereon and all other
amounts payable under the Notes and this Agreement shall automatically
become forthwith due and payable), and in any such event, the Bank may, by
notice to the Borrowers (i) declare the obligation of the Bank to make
Advances to be terminated, whereupon the same shall forthwith terminate;
(ii) declare the Notes, all interest thereon and all other amounts payable
under the Notes and this Agreement and all other obligations to be
forthwith due and payable, whereupon the Notes, all such interest and all
such amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrowers; and (iii) foreclose on the
Collateral and exercise all its rights under the Loan Documents or at law
or in equity, and proceed to protect and enforce the Bank's rights by any
action at law, in equity or other appropriate proceedings. In the event
that the Bank suffers any loss or expense described in Section 2.8(e) as a
result of the acceleration of the Notes as aforesaid because of the
occurrence of an Event of Default, the Borrowers shall, upon demand by the
Bank, pay to the Bank additional amounts sufficient to indemnify the Bank
against such loss or expense. A certificate as to the amount of such loss
or expense submitted to the Borrowers by the Bank, absent manifest error,
shall be conclusive and binding for all purposes.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 AMENDMENTS, ETC. No amendment or waiver of any
provision of any Loan Document, nor consent to any departure by any Loan
Party therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Bank, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which given.
Section 8.2 NOTICES. (a) All notices, requests, consents and other
communications required or permitted under this Agreement and the other
Loan Documents shall be in writing and shall be (as elected by the person
giving the notice) hand delivered by messenger or courier service, sent by
telecopier, or mailed (airmail if international) by registered or certified
mail (postage prepaid), return receipt requested, addressed to:
54
If to the Borrowers:
NAME OF CORRESPONDING BORROWER
c/o Pepsi-Cola Puerto Rico Bottling Company
XX Xxx 000000
Xxxx Xxx Xxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: President and CEO
Telecopier:(000) 000-0000 or
(000) 000-0000
With separate copies to the attention of the Chief Financial Officer and
Chief Accounting officer at the same address.
with an additional copy to:
Xxxxxxxx Xxxxx, Esq.
Xxxxxxxx Xxxxx & Calabria
Banco Popular Center, Suite 1600
000 Xxxx Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier: (000) 000-0000
If to the Bank:
Banco Popular de Puerto Rico
000 Xxxx Xxxxxx Xxxxxx
Xxxx Xxx, Xxxxxx Xxxx 00000
Attention: Manager, Structured Finance Division
Telecopier: (000) 000-0000
(b) Each such notice shall be deemed delivered (i) on the date
delivered receipt acknowledged if by personal delivery, (ii) on the date of
transmission with confirmed receipt if by or on the date upon which the
return receipt is signed or delivery is refused or the notice is designated
by the postal authorities as not deliverable, as the case may be, if
mailed.
(c) By giving to the other party at least fifteen (15) days written
notice thereof, such party and its successors and assigns shall have the
right from time to time and at any time during the term of this Agreement
to change their respective addresses.
Section 8.3 NO WAIVER; REMEDIES. No failure on the part of the
Bank to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under any Loan Document shall
operate as a waiver thereof; nor shall any single or partial exercise of
any right under any Loan Document preclude any other or further exercise
55
thereof or the exercise of any other right, power or privilege. The
remedies provided in the Loan Documents are cumulative and not exclusive of
any remedies provided by law.
Section 8.4 ACCOUNTING TERMS. All accounting terms not
specifically defined herein shall be construed in accordance with Generally
Accepted Accounting Principles consistently applied, except as otherwise
stated herein.
Section 8.5 COSTS, EXPENSES AND TAXES; INDEMNIFICATION. The
Borrowers agree to pay or reimburse the Bank for paying: (a) all
reasonable out-of-pocket costs and expenses of the Bank (including, without
limitation, the reasonable fees and expenses of Xxxxxxxxxxx, Mndez &
Xxxxxxx, counsel to the Bank), in connection with (i) the negotiation,
reparation, execution and delivery of this Agreement and the other Loan
Documents and the extension of credit hereunder and any amendment,
supplement, modification or waiver (whether proposed or made effective) of
any of the terms of this Agreement or any of the other Loan Documents;
(b) all reasonable out-of-pocket costs and expenses of the Bank (including,
without limitation, reasonable counsels' fees) in connection with (i) the
administration of this Agreement and all the other Loan Documents, (ii) any
Event of Default and any enforcement or collection proceedings resulting
therefrom, including, without limitation, the reasonable allocated costs of
the Bank's in-house counsel (if any) and (iii) the enforcement of this
Section 8.5; and (c) all transfer, stamp, documentary or other similar
taxes, assessments or charges levied by any governmental or revenue
authority in respect of this Agreement or any of the other Loan Documents
or any other documents referred to herein or therein and all fees, costs,
expenses, taxes assessments and other charges incurred in connection with
any appraisal, search, title insurance policy, filing, registration,
recording or perfection of any security interest contemplated by this
Agreement or any other Loan Document or any other document referred to
herein or therein. The Borrowers also agree to pay, and to save and hold
harmless the Bank from any delay by the Borrowers in paying, or omission
to pay, any documentary stamp and other taxes, fees or assessments, if
any, that may be payable in connection with the execution and delivery of
this Agreement, the Notes or any of the other Loan Documents, or the
recording of any thereof, or in any modification hereof or thereof.
Additionally, the Borrowers shall pay to the Bank on demand, any and all
fees, costs and expenses that the Bank pays to a bank or other similar
institution arising out of or in connection with (A) the forwarding to the
Borrowers, or any other Person on the Borrowers' behalf, by the Bank of
proceeds of loans made by the Bank to the Borrowers pursuant to this
Agreement and (B) the depositing for collection by the Bank of any check or
item of payment received and/or delivered to the Bank on account of the
Obligations of the Borrowers under this Agreement, the Notes or any other
Loan Document.
(a) The Borrowers agree to indemnify the Bank and their respective
directors, officers, stockholders and employees, and hold the Bank, and
56
their respective directors, officers, stockholders and employees, harmless
from and against any and all claims, damages, liabilities and out-of-pocket
expenses (including, without limitation, all reasonable fees and
disbursements of counsel with whom the Bank, or their respective directors,
officers, stockholders and employees, may consult in connection therewith
and all expenses of litigation or preparation therefor) which the Bank, or
its directors, officers, stockholders and employees, may incur or which may
be asserted against it in connection with any litigation or investigation
or other proceeding (including any threatened investigation or litigation
or other proceeding) involving the Borrowers or any officer, director,
stockholder or employee thereof with respect to any matter related directly
or indirectly to this Agreement or the Loan Documents, other than
litigation commenced by the Borrowers against the Bank that (i) seeks
enforcement of any of the Borrowers' rights hereunder, and (ii) is
determined adversely to the Bank. The Borrowers also agree not to assert
any claim against the Bank, any affiliate of the Bank or any of its
directors, officers, employees, attorneys and agents, on any theory of
liability, for special, indirect, consequential or punitive damages arising
out of or otherwise relating to any of the transactions contemplated herein
or any of the other Loan Documents.
Section 8.6 RIGHT OF SET-OFF. Upon (i) the occurrence and during
the continuance of any Event of Default or (ii) the Bank's declaring the
Notes due and payable pursuant to the provisions of Section 7.1, the Bank
is hereby authorized at any time and from time to time, without notice to
the Borrowers (any such notice being expressly waived by the Borrowers), to
set-off and apply any and all deposits (general or special, time or demand,
provisional or final, matured or unmatured) at any time held and other
Indebtedness at any time owing by the Bank to or for the credit or the
account of any of the Borrowers against any and all of the Obligations of
the Borrowers now or hereafter existing with the Bank irrespective of
whether or not the Bank shall have made any demand therefor and although
such Obligations may be unmatured. The Bank agrees promptly to notify the
Borrowers after any such set-off and application made by the Bank, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Bank under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off and rights under the Loan Documents and any
other,security instruments delivered hereunder) that the Bank may have.
Section 8.7 BINDING EFFECT; GOVERNING LAW. This Agreement shall
become effective when it shall have been executed by the Borrowers and the
Bank and thereafter shall be binding upon and inure to the benefit of the
Borrowers and the Bank and their respective successors and assigns, except
that the Borrowers shall not have the right to assign their rights
hereunder or any interest herein. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the
Commonwealth.
57
Section 8.8 EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the
same agreement.
Section 8.9 SALE OF NOTES; PARTICIPATIONS AND COMMITMENTS. The
Bank may, at any time sell, assign or otherwise dispose of any Note, or of
participations therein, or of all or any portion of its rights under any
Loan Document, to any Person so long as such sale, assignment or other
disposition will not result in the imposition of a withholding or other tax
not otherwise applicable to payments made under this Agreement. The
Borrowers hereby agree to execute any and all documents which the Bank may
reasonably request in order to effectuate any foregoing action permitted to
the Bank.
Section 8.10 SEVERABILITY OF PROVISIONS. Any provision of this
Agreement that is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 8.11 SURVIVAL OF COVENANTS. All covenants, agreements,
representations and warranties made by the Borrowers, and each of them, in
this Agreement or in any Loan Document or any instrument, document or
certificate delivered pursuant hereto shall be deemed to have been material
and relied on by the Bank, notwithstanding any investigation made by the
Bank, and shall survive the execution and delivery of this Agreement, Loan
Document and of such instrument, document or certificate until repayment of
all amounts due hereunder and under the Notes; PROVIDED, HOWEVER, that the
Obligations of the Borrowers under Section 8.5 of this Agreement shall
survive such repayment.
Section 8.12 APPLICATION OF PAYMENTS. The Bank shall have the
continuing and exclusive right to apply or reverse and reapply any and all
payments to any portion of the Obligations of the Borrowers; PROVIDED,
HOWEVER, that such payments shall be applied in such order as is provided
in this Agreement. Each Borrower expressly agrees that to the extent that
any Borrower makes a payment or payments to the Bank or the Bank receives
any payment or proceeds of the collateral for Borrower's benefit, which
payment or proceeds or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law,
state, Commonwealth or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds received, the Obligations of the
Borrowers or part thereof intended to be satisfied shall be revived and
continue in full force and effect, as if such payment or proceeds had not
been received by the Bank.
58
Section 8.13 DISBURSEMENT AUTHORIZATION. The Borrowers hereby
authorize and direct the Bank to disburse, for and on their behalf and
account, the proceeds of Advances made by the Bank to the Borrowers
pursuant to this Agreement to such Person or Persons as the Borrowers shall
direct, whether in writing or orally.
Section 8.14 CROSS DEFAULT AND JOINT AND SEVERAL OBLIGATIONS. To
induce the Bank to enter into this Agreement and to extend credit to or for
the account of any of the Borrowers, each of the Borrowers hereby
guarantees jointly and severally (solidariamente) the punctual payment when
due of all Obligations of any of the Borrowers to the Bank now or hereafter
existing.
The liability of the Borrowers under this Agreement shall not be
affected by (i) any lack of enforceability of any Obligation of any
particular Borrower, (ii) any change of the time, manner or place of
payment, or any other term, of any Obligation, (iii) any exchange, release,
or non-perfection of any collateral securing payment of any obligation,
(iv) any law, regulation or order of any jurisdiction affecting any term of
any obligation or the Bank's rights with respect thereto, or (v) any other
circumstances which might otherwise constitute a defense available to, or a
discharge of, a borrower or a guarantor.
Section 8.15 LOANS AND COLLATERAL UNDER FINANCING AGREEMENT AND THE
FIRST RESTATED CREDIT AGREEMENT REMAIN IN FULL FORCE AND EFFECT. The
parties hereto recognize and acknowledge that the Advances to be made
hereunder have been previously disbursed pursuant to the Financing
Agreement and the First Restated Credit Agreement and that such loans shall
remain in full force and effect until fully paid and shall hereafter be
governed by the terms of this Agreement. The parties further recognize and
acknowledge that all collateral security delivered to the Bank pursuant to
the Financing Agreement and the First Restated Credit Agreement shall
remain in full force and effect so as to secure the repayment of all loans
59
previously made under the Financing Agreement and the First Restated Credit
Agreement as well as all Advances made under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of
the date first above written.
PEPSI-COLA PUERTO RICO
BOTTLING COMPANY
PEPSI-COLA PUERTO RICO
MANUFACTURING COMPANY
PEPSI-COLA PUERTO RICO
DISTRIBUTING COMPANY
BEVERAGE PLASTICS COMPANY
By:/S/ XXXXXX XXX
-----------------------------
Name: Xxxxxx Xxx
Title: President and Chief
Executive Officer
By:/S/ XXXXX XXX VIRGINIA
-----------------------------
Name: Xxxxx Xxx Virginia
Title: Chief Financial Officer
BANCO POPULAR DE PUERTO RICO
By:/S/ RAL XXXXX
-----------------------------
Name: Ral Xxxxx
Title: Vice President
Affidavit No.: 865 (copy)
Acknowledged and subscribed before me by Xxxxxx Xxx, of legal age,
married, executive and resident of San Xxxx, Puerto Rico, in his capacity
as President and Chief Executive Officer of each of Pepsi-Cola Puerto Rico
Bottling Company, Pepsi-Cola Puerto Rico Manufacturing Company, Pepsi-Cola
Puerto Rico Distributing Company and Beverage Plastics Company, by Xxxxx
Xxx Virginia, of legal age, married, executive and resident of Guaynabo,
Puerto Rico, in his capacity as Chief Financial Officer of Pepsi-Cola
Puerto Rico Bottling Company, Pepsi-Cola Puerto Rico Manufacturing Company,
Pepsi-Cola Puerto Rico Distributing Company and Beverage Plastics Company;
60
and by Ral Xxxxx, of legal age, married, banker and resident of San
Xxxx, Puerto Rico, in his capacity as Vice President of Banco Popular de
Puerto Rico; both to me personally known at San Xxxx, Puerto Rico, on this
8th day of April, 1997.
-------------------------
Notary Public
61
EXHIBIT A
TERM LOAN NOTE
$25,000,000.00 As of April 8, 1997
FOR VALUE RECEIVED, the undersigned (the "Borrowers"), hereby promise
to pay to the order of Banco Popular De Puerto Rico (the "Bank"), at its
offices located at 000 Xxxx Xxxxxx Xxxxxx, Xxxx Xxx, Xxx Xxxx, Xxxxxx
Xxxx, the principal sum of TWENTY-FIVE MILLION DOLLARS ($25,000,000) in
such installments, at such time and in such manner as are specified in the
Second Restated Credit Agreement (as hereinafter defined).
All capitalized terms used in this Note which are defined in the
Second Restated Credit Agreement and which are not otherwise defined in
this Note shall have the meanings set forth in the Second Restated Credit
Agreement.
The Borrowers promise to pay interest on the unpaid principal amount
of this Note from the date hereof until the principal amount is paid in
full, at such interest rates, and payable at such times, as are specified
in the Second Restated Credit Agreement.
All computations of interest under this Note shall be made on the
basis of a year of 360 days, for the actual number of days elapsed.
The undersigned, and each of them, including the Borrowers, and any
endorsers of this Note, hereby severally waive presentment, protest, demand
and notice of non-payment and severally agree that the holder of this Note
may extend the time of payment, or release any Collateral held, with or
without notice to all or any of the parties hereto, and that thereafter all
parties hereto will remain liable hereon, as if they, and each of them, had
expressly consented to such extension or release.
The Borrowers hereby agree to pay the reasonable costs and expenses,
including attorneys' fees and expenses, incurred by the holder of this Note
in the event that the holder shall take recourse of judicial proceedings
for the collection of any amount due hereunder in accordance with the terms
of the Second Restated Credit Agreement.
The liability of the Borrowers and each of them for all obligations
and covenants herein shall be joint and several ("solidaria") Any use of
the singular herein shall also refer to the plural and vice versa.
This Note has been issued pursuant to, and is entitled to the terms,
conditions, benefits and security provided for by that certain Second
Restated Credit Agreement dated as of April 8, 1997 among the Bank and the
Borrowers (the "Second Restated Credit Agreement"). The Second Restated
Credit Agreement, among other things, contains provisions for prepayments
on account of principal hereof upon the terms and conditions therein
specified.
The Borrowers, and each of them, acknowledge receipt of a true and
exact copy of this Note.
EXECUTED in San Xxxx, Puerto Rico, on the date first set forth above.
PEPSI-COLA PUERTO RICO
BOTTLING COMPANY
PEPSI-COLA PUERTO RICO
MANUFACTURING COMPANY
PEPSI-COLA PUERTO RICO
DISTRIBUTING COMPANY
BEVERAGE PLASTICS COMPANY
By:_____________________________
Name: Xxxxxx Xxx
Title: President and Chief
Executive Officer
By:_____________________________
Name: Xxxxx Xxx Virginia
Title: Chief Financial Officer
Affidavit No.:
Acknowledged and subscribed before me by Xxxxxx Xxx, of legal age,
married, executive and resident of San Xxxx, Puerto Rico, in his capacity
as President and Chief Executive Officer of each of Pepsi-Cola Puerto Rico
Bottling Company, Pepsi-Cola Puerto Rico Manufacturing Company, Pepsi-Cola
Puerto Rico Distributing Company and Beverage Plastics Company and by Xxxxx
Xxx Virginia, of legal age, married, executive and resident of Guaynabo,
Puerto Rico, in his capacity as Chief Financial Officer of Pepsi-Cola
Puerto Rico Bottling Company, Pepsi-Cola Puerto Rico Manufacturing
Company,, Pepsi-Cola Puerto Rico Distributing Company and Beverage Plastics
2
Company; both to me personally known at San Xxxx, Puerto Rico, on this 8th
day of April, 1997.
-------------------------
Notary Public
3
EXHIBIT B
REVOLVING CREDIT NOTE
$5,000,000.00 As of April 8, 1997
FOR VALUE RECEIVED, the undersigned (the "Borrowers"), hereby promises
to pay to the order of BANCO POPULAR DE PUERTO RICO (the "Bank") at its
office or branch at 000 Xxxx Xxxxxx Xxxxxx, Xxxx Xxx, Xxxxxx Xxxx, the
sum of FIVE MILLION DOLLARS ($5,000,000) or, if less, the aggregate unpaid
principal amount of all Revolving Credit Advances that have been made by
the Bank to the Borrowers pursuant to Section 2.3(b) of the Second Restated
Credit Agreement (as hereinafter defined) and are outstanding on the date
this Note is presented for payment by the Bank to the Borrower.
Each Revolving Credit Advance made hereunder shall be payable in such
installments, at such times and in such manner as are specified in the
Second Restated Credit Agreement.
The Borrowers promise to pay interest on the unpaid principal amount
of each Advance hereunder from the date of such Advance until the principal
amount thereof is paid in full, at such interest rates, and payable at such
times, as are specified in the Second Restated Credit Agreement.
All computations of interest under this Note shall be made on the
basis of a year of 360 days, for the actual number of days elapsed.
All Revolving Credit Advances made by the Bank to the Borrowers
pursuant to Section 2.3(b) of the Second Restated Credit Agreement and all
payments made on account of principal hereof shall be recorded by the Bank
and, prior to any transfer hereof, endorsed on the grid that appears on the
reverse side of this Note.
The Borrowers hereby agree to pay the reasonable costs and expenses,
including attorneys' fees and expenses, incurred by the holder of this Note
in the event that the holder shall take recourse of judicial proceedings
for the collection of any amount due hereunder in accordance with the terms
of the Second Restated Credit Agreement.
The liability of the Borrowers and each of them for all obligations
and covenants herein shall be joint and several ("solidaria"). Any use of
the singular herein shall also refer to the plural and vice versa.
The undersigned, and each of them, including the Borrowers, and any
endorsers of this Note, hereby severally waive presentment, protest, demand
and notice of non-payment and severally agree that the holder of this Note
may extend the time of payment, or release any Collateral held, with or
without notice to all or to any of the parties hereto, and that thereafter
all parties hereto will remain liable hereon, as if they, and each of them,
had expressly consented to such extension or release.
This Note has been issued pursuant to, and is entitled to, the
guarantees, benefits, and security provided for by that certain Second
Restated Credit Agreement among the Borrowers, Pepsi-Cola Puerto Rico
Bottling Company, Pepsi-Cola Puerto Rico Manufacturing Company, Beverage
Plastics Company and the Bank dated as of April 8, 1997 (the "Second
Restated Credit Agreement"). All capitalized terms used herein that are
defined in the Second Restated Credit Agreement and are not otherwise
defined herein shall have the meanings set forth in the Second Restated
Credit Agreement. This Note is subject to prepayment and acceleration, all
as provided in the Second Restated Credit Agreement.
The Borrowers, and each of them, acknowledge receipt of a true and
exact copy of this Note.
EXECUTED in San Xxxx, Puerto Rico, on the date first set forth above.
PEPSI-COLA PUERTO RICO
BOTTLING COMPANY
PEPSI-COLA PUERTO RICO
MANUFACTURING COMPANY
PEPSI-COLA PUERTO RICO
DISTRIBUTING COMPANY
BEVERAGE PLASTICS COMPANY
By:______________________________
Name: Xxxxxx Xxx
Title: President and Chief
Executive Officer
By:______________________________
Name: Xxxxx Xxx Virginia
Title: Chief Financial Officer
Affidavit No.:
Acknowledged and subscribed before me by Xxxxxx Xxx, of legal age,
married, executive and resident of San Xxxx, Puerto Rico, in his capacity
as President and Chief Executive Officer of each of Pepsi-Cola Puerto Rico
2
Bottling Company, Pepsi-Cola Puerto Rico Manufacturing Company, Pepsi-Cola
Puerto Rico Distributing Company and Beverage Plastics Company and by Xxxxx
Xxx Virginia, of legal age, married, executive and resident of Guaynabo,
Puerto Rico, in his capacity as Chief Financial Officer of Pepsi-Cola
Puerto Rico Bottling Company, Pepsi-Cola Puerto Rico Manufacturing Company,
Pepsi-Cola Puerto Rico Distributing Company and Beverage Plastics Company;
both to me personally known at San Xxxx, Puerto Rico, on this 8th day of
April, 1997.
-------------------------
Notary Public
3
ADVANCES AND PAYMENTS
Date Amount of Interest Term, Maturity Amount of Principal Principal Notation
Advance Rate if any Date Paid or Prepaid Balance Made by
EXHIBIT D
BORROWERS' PLACES OF BUSINESS
SCHEDULE 5.2(b)
SCHEDULE 5.2(j)
1. Investments of not more than $1,000,000 in the aggregate for all
Borrowers and their Restricted Subsidiaries, as a group, in Affiliates
located in Puerto Rico engaged in the business of manufacturing and
distribution of food and beverage products.
