EXHIBIT 4.1
Amended and Restated Note Purchase Agreement
CORPORACION PIPASA, S.A., as Issuer
CORPORACION AS XX XXXX, as Issuer
RICA FOODS, INC., as Parent
$8,000,000 (U.S. Dollars) Principal Amount
11.96% Series A Senior Notes due January 15, 2005
$12,000,000 (U.S. Dollars) Principal Amount
11.96% Series B Senior Notes due January 15, 2005
Dated as of December 28, 2000
TO EACH OF THE PURCHASERS LISTED IN THE
ATTACHED SCHEDULE A (the "PURCHASERS"):
Ladies and Gentlemen:
This Note Agreement amends and restates in its entirety that
Note Agreement dated as of January 1, 1998 among Costa Rica International, Inc.
and the Purchasers named therein.
WHEREAS, Costa Rica International, Inc. (now named Rica Foods,
Inc.) ("Parent") is a party to that Note Agreement dated as of January 1, 1998
among Parent and the Purchasers named therein (the "Prior Note Agreement")
pursuant to which $8,000,000 (U.S. Dollars) 11.71% Series A Senior Notes due
January 15, 2005 the "Prior Series A Notes") and $12,000,000 (U.S. Dollars)
11.71% Series B Senior Notes due January 15, 2005 (the "Prior Series B Notes")
(together, the Prior Series A Notes and the Prior Series B Notes shall be
referred to as the "Prior Notes") were issued; and
WHEREAS, Corporacion Pipasa, S.A. ("Pipasa") and Corporacion As
xx Xxxx, X.X. ("As xx Xxxx"), both wholly-owned subsidiaries of Parent, entered
into a Note Guaranty dated as of January 1, 1998 with respect to the Notes; and
WHEREAS, in connection with certain United States income tax
issues, Parent has requested that Purchasers amend and restate the Prior Note
Agreement in order that As xx Xxxx and Pipasa be (i) the direct issuers of and
obligors with respect to, new notes bearing an interest rate of 11.96% (subject
to adjustment as herein provided) to be issued in replacement of and
substitution for the Prior Notes, (ii) parties to an amended and restated note
agreement, in order for (a) the Parent to cease to be an obligor with respect to
the Prior Notes and (b) Pipasa and As xx Xxxx to be released as guarantors under
the Note Guaranty.
WHEREAS, in connection with the transactions described above,
Parent, Pipasa and As xx Xxxx have entered into an Assignment and Assumption
Agreement dated as of December 28, 2000 pursuant to which Parent has assigned to
As xx Xxxx and Pipasa, on a joint and several basis, and As xx Xxxx and Pipasa
have assumed, on a joint and several basis, the rights and obligations of the
Parent under the Prior Notes and the Prior Note Agreement.
THEREFORE, Each of Rica Foods, Inc., a Nevada corporation,
Corporacion Pipasa, S.A., a corporation organized under the laws of Costa Rica
and Corporacion As xx Xxxx, X.X., a corporation organized under the laws of
Costa Rica (Pipasa and As xx Xxxx collectively to be referred to herein as
"Obligors"), agrees with you as follows:
1. AUTHORIZATION OF NOTES.
1.1. Description of Notes.
(a) On a joint and several basis, each of the Obligors will,
in substitution for, and replacement of, the Prior Notes, authorize the issue
and sale of (a) $8,000,000 (U.S. Dollars) aggregate principal amount of the
11.96% Series A Senior Notes to be dated as of December 28, 2000 and due January
15, 2005 (the "Series A Notes") and (b) $12,000,000 (U.S. Dollars) aggregate
principal amount of its 11.96% Series B Senior Notes to be dated as of December
28, 2000 and due January 15, 2005 (the "Series B Notes") (together, the Series A
Notes and the Series B Notes and each Series A and Series B Notes delivered in
substitution therefor shall be referred to herein as the "Notes"). The Notes
shall be substantially in the forms set out in Exhibits A-1 and A-2, with such
changes therefrom, if any, as may be approved by you and the Obligors. The
interest rate on the Notes shall be subject to adjustment as described in
paragraph (b) of this Section 1.1. Each of the Obligors shall be jointly and
severally obligated with respect to the Notes and with respect to each of such
Obligor's obligations under this Agreement. Certain capitalized terms used in
this Agreement are defined in Schedule B; references to a "Schedule" or an
"Exhibit" are, unless otherwise specified, to a Schedule or an Exhibit attached
to this Agreement.
(b) (i) The Notes shall bear interest at the rate of
11.96% (or as otherwise provided in clause (ii) of this paragraph (b)) until
such time as (A) the Obligors have delivered to the holders of the Notes
evidence satisfactory to the holders of the Notes and their U.S. and Costa Rica
counsel that the fair market value of property secured by cedulas hipotericas
delivered in connection with the Polaris litigation (as described on Schedule
5.8 hereof) is no more than $3.6 million (U.S.) and (B) that no Event of Default
hereunder exists. Upon delivery of such evidence, the Holders of the Notes agree
to accept new notes which reflect a decrease in the interest rate of 0.25% (25
basis points) of the then existing interest rate in substitution for the Notes.
(ii) If the amount of capital required to be
maintained by the Holders in respect of the Notes is increased
as a result of a Change (as defined below), the interest rate on
the Notes shall be increased by 0.25% (25 basis points)
effective as of the date on which such increase in required
capital is effective. The Holders
2
agree to notify the Obligors of such increase and of the date on
which it becomes effective, promptly after learning of such
increase in required capital. The Obligors agree that if the
Holders provide evidence of a Change, the Obligors, upon receipt
of such evidence, will deliver new notes which reflect an
increase in the interest rate by 0.25% (25 basis points) of the
then existing interest rate in substitution for the Notes. As
used herein, "Change" means any change after the date of this
Agreement that increases the risk based capital factor
attributable to the Notes as mandated by the risk based capital
guidelines for life and health insurance companies in effect in
the United States on the date of this Amendment. If thereafter
the risk based capital factor attributable to the Notes is
reduced to or below the factor in effect on the date of this
Amendment, the interest rate on the Notes shall be reduced by
0.25%.
2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, each of
the Obligors will issue to you and you will accept from the Obligors, at the
Closing provided for in Section 3, Notes in substitution for the Prior Notes in
the principal amount and series specified opposite your name in Schedule A at
the purchase price of 100% of the principal amount thereof.
3. CLOSING.
The issuance of the Notes shall occur at the offices of Xxxxxxx,
Carton & Xxxxxxx, 0000 X Xxxxxx, XX, Xxxx Xxxxx, Xxxxxxxxxx, XX 00000, at 10:00
am Eastern time on January 16, 2001 (the "Closing"), or on such other Business
Day with respect to the Closing as may be agreed upon by the Obligors and the
Purchasers. At such Closing the Obligors will deliver to you Notes in
substitution for the Prior Notes dated the date of such Closing and registered
in your name (or in the name of your nominee).
4. CONDITIONS TO CLOSING.
Your obligation to accept the Notes to be issued to you at the
Closing is subject to the fulfillment to your satisfaction, prior to or at the
Closing, of the following conditions:
4.1. Representations and Warranties.
The representations and warranties of the Parent and each
Obligor in this Agreement shall be correct when made and at the time of the
Closing.
4.2. Performance; No Default.
Each of the Parent and the Obligors shall have performed and
complied in all material respects with all agreements and conditions contained
in this Agreement required to be performed or complied with by it prior to or at
the Closing and, after giving effect to the issuance of the Notes, no Default or
Event of Default shall have occurred and be continuing as of the Closing. There
shall have occurred and be continuing no Default or Event of Default under the
3
Prior Note Agreement. Neither the Parent nor any Obligor nor any other
Subsidiary shall have entered into any transaction since the date of the
Memorandum that would have been prohibited by Sections 10.1, 10.4, 10.7 or 10.8
hereof had such Sections applied since such date.
4.3. Compliance Certificates.
(a) Officer's Certificate. Each of the Parent and the
Obligors shall have delivered to you Officer's Certificates, dated the date of
the Closing certifying that the conditions specified in Sections 4.1, 4.2 and
4.9 have been fulfilled.
(b) Secretary's Certificate. Each of the Parent and the
Obligors shall have delivered to you a certificate dated the date of the Closing
certifying, as applicable, as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Notes and the Agreement.
4.4. Opinions of Counsel.
You shall have received opinions in form and substance
satisfactory to you, dated the date of the Closing (a) from Xxxxxxx Xxxx &
Guinot, P.A., special United States counsel for the Parent and each of the
Obligors, and from Xx. Xxxxxxxxx X. Xxxxxx S. of Consultores Juridicos
Especializados, Costa Rica special counsel for the Parent and each of the
Obligors, substantially in the form set forth in Exhibit 4.4(b) and covering
such other matters incident to the transactions contemplated hereby as you or
your counsel may reasonably request (and the Parent and the Obligors hereby
instruct its counsel to deliver such opinion to you), and (b) from Xxxxxxx,
Carton & Xxxxxxx, your special U.S. counsel, and from Lacle and Xxxxxxxxx, your
special Costa Rica counsel in connection with such transactions, substantially
in the form set forth in Exhibit 4.4(a) and covering such other matters incident
to such transactions as you may reasonably request.
4.5. Purchase Permitted By Applicable Law, etc.
On the date of the Closing, your acceptance of the Notes shall
(i) be permitted by the laws and regulations of each jurisdiction to which you
are subject, without recourse to provisions (such as Section 1405(a)(8) of the
New York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (ii) not
violate any applicable law or regulation (including, without limitation,
Regulation G, T or X of the Board of Governors of the Federal Reserve System)
and (iii) not subject you to any tax, penalty or liability under or pursuant to
any applicable law or regulation, which law or regulation was not in effect on
the date hereof. If requested by you, you shall have received an Officer's
Certificate certifying as to such matters of fact as you may reasonably specify
to enable you to determine whether such purchase is so permitted.
4.6. Payment of Special Counsel Fees.
Without limiting the provisions of Section 15.1, the Parent or
the Obligors shall have paid on or before the Closing the reasonable fees,
charges and disbursements of your
4
special U.S. counsel referred to in Section 4.4 and of Lacle and Xxxxxxxxx, your
special Costa Rica counsel, to the extent reflected in a statement of such
counsel rendered to the Parent or the Obligors at least one Business Day prior
to the Closing.
4.7. Private Placement Number.
Private placement numbers issued by Standard & Poor's CUSIP
Service Bureau (in cooperation with the Securities Valuation Office of the
National Association of Insurance Commissioners) shall have been obtained for
the Notes.
4.8. Changes in Corporate Structure.
Except as specified in Schedule 4.8, as of the date of the
Closing, neither the Parent nor the Obligors shall have changed its jurisdiction
of incorporation or been a party to any merger or consolidation or shall have
succeeded to all or any substantial part of the liabilities of any other entity,
at any time following the issuance of the Prior Notes.
4.9. Proceedings and Documents.
All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be reasonably satisfactory to you and your
special counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.
4.10. Rating.
The Obligors shall provide written evidence that Notes are rated
no lower than "BB" by Fitch IBCA, Duff & Xxxxxx Rating Agency on the date of the
Closing.
4.11. Amendment Fee.
The Parent or the Obligors shall have paid to the Purchasers on
or before the Closing an amendment fee equal to 0.25% (25 basis points) of the
principal amount of the Notes outstanding.
4.12. Financial Statements.
The Parent or the Obligors shall have delivered to the
Purchasers a copy of the Parent's financial statements for the fiscal year
ending September 30, 2000 in the form to be set forth in the Parent's Form 10K
to be filed on January 16, 2001 with the Securities and Exchange Commission.
5
5. REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE OBLIGORS.
Each of the Parent and the Obligors represents and warrants to
the Purchasers as of the Closing that:
5.1. Organization; Power and Authority.
Each of the Parent and the Obligors is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, is duly qualified as a foreign corporation and is
in good standing in each jurisdiction in which such qualification is required by
law, other than those jurisdictions as to which the failure to be so qualified
or in good standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each of the Parent and the Obligors
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement, and, solely in
the case of each Obligor, the Notes, and to perform the provisions hereof and
thereof.
5.2. Authorization, etc.
(a) This Agreement has been duly authorized by all necessary
action on the part of the Parent and each Obligor, and upon execution and
delivery thereof this Agreement will constitute, a legal, valid and binding
obligation of the Parent and each Obligor enforceable against each of the Parent
and the Obligor in accordance with its terms, except as such enforceability may
be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors' rights generally
and (ii) general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(b) The Notes have been duly authorized by all necessary
action on the part of each Obligor, and upon execution and delivery thereof the
Notes will constitute a legal, valid and binding obligation of the Obligors
enforceable against each Obligor, on a joint and several basis, in accordance
with its terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
5.3. Disclosure.
The Parent, through its agent, Citicorp Securities, Inc., has
delivered to you and each other Purchaser a copy of a Private Placement
Memorandum dated November 1997, as supplemented January 23, 1998 (the
"Memorandum"), relating to the transactions contemplated hereby and to the As xx
Xxxx Acquisition. Except as disclosed in Schedule 5.3, this Agreement, the
Memorandum, the documents, certificates or other writings furnished to the
Purchasers in connection with the Original Note Agreement and this Agreement and
the financial statements
6
and the filings made by the Parent under the Securities Act and the Exchange Act
since January 23, 1998 listed in Schedule 5.5, taken as a whole, do not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Except as disclosed in the Memorandum
or as expressly described in one of the documents, certificates or other
writings identified therein or in the financial statements and SEC filings
listed in Schedule 5.5, since September 30, 1999, there has been no change in
the financial condition, operations, business or properties of the Parent or any
of its Subsidiaries except changes that individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect. There is no fact
known to the Parent or either Obligor that could reasonably be expected to have
a Material Adverse Effect that has not been set forth herein or in the
Memorandum or in the other documents, certificates and other writings delivered
to you by or on behalf of the Parent or either Obligor specifically for use in
connection with the transactions contemplated hereby.
5.4. Organization and Ownership of Shares of Subsidiaries.
(a) Schedule 5.4 is (except as noted therein) a complete and
correct list (i) of the Parent's Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Parent and each other Subsidiary, (ii) of the
Parent's Affiliates, other than Subsidiaries, and (iii) of the Parent's and each
Obligor's directors and senior officers.
(b) All of the outstanding shares of capital stock or
similar equity interests of each Subsidiary shown in Schedule 5.4 as being owned
by the Parent and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Parent or another Subsidiary free and clear
of any Lien (except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a
corporation or other legal entity duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, and is duly
qualified as a foreign corporation or other legal entity and is in good standing
in each jurisdiction in which such qualification is required by law, other than
those jurisdictions as to which the failure to be so qualified or in good
standing would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Each such Subsidiary has the corporate or other
power and authority to own or hold under lease the properties it purports to own
or hold under lease and to transact the business it transacts and proposes to
transact.
(d) No Subsidiary is a party to, or otherwise subject to any
legal restriction or any agreement (other than this Agreement, the agreements
listed on Schedule 5.4 and customary limitations imposed by corporate law
statutes) restricting the ability of such Subsidiary to pay dividends out of
profits or make any other similar distributions of profits to the Parent or any
of its Subsidiaries that owns outstanding shares of capital stock or similar
equity interests of such Subsidiary.
7
5.5. Financial Statements.
The Parent has delivered to each Purchaser copies of the
financial statements of the Parent and its Subsidiaries listed on Schedule 5.5.
All of said financial statements (including in each case the related schedules
and notes) fairly present in all material respects the consolidated financial
position of the Parent and its Subsidiaries as of the respective dates specified
in such Schedule and the consolidated results of their operations and cash flows
for the respective periods so specified and have been prepared in accordance
with GAAP consistently applied throughout the periods involved except as set
forth in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments).
5.6. Compliance with Laws, Other Instruments, etc.
The execution, delivery and performance (a) by the Parent and
each Obligor of this Agreement and (b) by each Obligor of the Notes will not (i)
contravene, result in any breach of, or constitute a default under, or result in
the creation of any Lien in respect of any property of the Parent, either
Obligor or any other Subsidiary under, any indenture, mortgage, deed of trust,
loan, purchase or credit agreement, lease, corporate charter or by-laws, or any
other agreement or instrument to which the Parent, either Obligor or any other
Subsidiary is bound or by which the Parent, either Obligor or any other
Subsidiary or any of their respective properties may be bound or affected, (ii)
conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree, or ruling of any court, arbitrator or
Governmental Authority applicable to the Parent, either Obligor or any other
Subsidiary or (iii) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Parent, either
Obligor or any other Subsidiary.
5.7. Governmental Authorizations, etc.
Except for the filing of the "Relevant Events Report" with the
Costa Rican Securities and Exchange Commission (Comision Nacional de Valores),
which the Parent agrees to file promptly (but in any event within 10 Business
Days), no consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by the Parent of this Agreement or by either
Obligor of the Notes.
5.8. Litigation; Observance of Statutes and Orders.
(a) Except as disclosed on Schedule 5.8, there are no
actions, suits or proceedings pending or, to the knowledge of the Parent or
either Obligor, threatened in writing against or affecting the Parent, either
Obligor or any other Subsidiary or any property of the Parent, either Obligor or
any other Subsidiary in any court or before any arbitrator of any kind or before
or by any Governmental Authority that, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.
8
(b) Except as disclosed on Schedule 5.8, neither the Parent
nor either Obligor nor any other Subsidiary is in default under any term of any
agreement (including, but not limited to, the Original Note Agreement) or
instrument to which it is a party or by which it is bound, or any order,
judgment, decree or ruling of any court, arbitrator or Governmental Authority or
is in violation of any applicable law, ordinance, rule or regulation (including
without limitation Environmental Laws) of any Governmental Authority, which
default or violation, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect.
5.9. Taxes.
The Parent, each Obligor and the Parent's other Subsidiaries
have filed all tax returns that are required to have been filed in any
jurisdiction, including social security payments, sales tax returns and
municipal taxes of the Subsidiaries, and have paid all taxes shown to be due and
payable on such returns and all other taxes and assessments levied upon them or
their properties, assets, income or franchises payable by them, to the extent
such taxes and assessments have become due and payable and before they have
become delinquent, except for any taxes and assessments (i) the amount of which
is not individually or in the aggregate Material or (ii) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Parent, each Obligor or
any other Subsidiary, as the case may be, has established adequate reserves in
accordance with GAAP. Neither the Parent nor any Obligor knows of any basis for
any other tax or assessment that could reasonably be expected to have a Material
Adverse Effect. The charges, accruals and reserves on the books of the Parent,
each Obligor and the Parent's other Subsidiaries in respect of U.S. and Costa
Rican state or other taxes for all fiscal periods are adequate in all material
respects. The U.S. and Costa Rican federal income tax liabilities of the Parent,
each Obligor and the Parent's other Subsidiaries have been audited by the U.S.
Internal Revenue Service and by Direccion General de la Tributacion Directa
(Ministerio de Hacienda), and paid for all fiscal years up to and including the
fiscal year ended September 30, 1999.
5.10. Title to Property; Leases.
The Parent, each Obligor and the Parent's other Subsidiaries
have good and sufficient title to their respective properties that individually
or in the aggregate are Material, including all such properties reflected in the
most recent audited balance sheet referred to in Section 5.5 or purported to
have been acquired by the Parent, each Obligor or any other Subsidiary after
said date (except as sold or otherwise disposed of in the ordinary course of
business), in each case free and clear of Liens prohibited by this Agreement.
All inventory and accounts receivable of the Parent, each Obligor and the
Parent's other Subsidiaries are free and clear of all Liens. All leases that,
individually or in the aggregate, are Material leases are valid and subsisting
and are in full force and effect in all material respects.
5.11. Licenses, Permits, etc.
Except as disclosed in Schedule 5.11,
9
(a) the Parent, each Obligor and the Parent's other
Subsidiaries own or possess all licenses, permits, franchises, authorizations,
patents, copyrights, service marks, trademarks and trade names, or rights
thereto, that individually or in the aggregate are Material, without known
conflict with the rights of others, except for those conflicts that,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect;
(b) to the best knowledge of the Parent and each Obligor, no
product of the Parent or any Obligor or any other Subsidiary infringes in any
material respect any license, permit, franchise, authorization, patent,
copyright, service xxxx, trademark, trade name or other right owned by any other
Person; and
(c) to the best knowledge of the Parent and each Obligor,
there is no Material violation by any Person of any right of the Parent, either
Obligor or any other Subsidiaries with respect to any patent, copyright, service
xxxx, trademark, trade name or other right owned or used by the Parent, either
Obligor or any other Subsidiaries.
5.12. Compliance with ERISA.
(a) The Parent, each Obligor, each other Subsidiary and each
ERISA Affiliate have operated and administered each Plan and Foreign Plan in
compliance with all applicable laws except for such instances of noncompliance
as have not resulted in and could not reasonably be expected to result in a
Material Adverse Effect. Neither the Parent nor any ERISA Affiliate has incurred
any liability pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans (as defined in Section
3 of ERISA), and no event, transaction or condition has occurred or exists that
would reasonably be expected to result in the incurrence of any such liability
by the Parent or any ERISA Affiliate, or in the imposition of any Lien on any of
the rights, properties or assets of the Parent or any ERISA Affiliate, in either
case pursuant to Title I or IV of ERISA or to such penalty or excise tax
provisions or to Section 401(a)(29) or 412 of the Code, other than such
liabilities or Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities
under each of the Plans and Foreign Plans (other than Multiemployer Plans),
determined as of the end of such Plan's or Foreign Plan's most recently ended
plan year on the basis of the actuarial assumptions specified for funding
purposes in such Plan's or Foreign Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan or
Foreign Plan allocable to such benefit liabilities. The term "benefit
liabilities" has the meaning specified in section 4001 of ERISA.
(c) Neither the Parent, nor any Obligor, nor any other
Subsidiary nor its ERISA Affiliates has incurred withdrawal liabilities (nor is
any subject to contingent withdrawal liabilities) under section 4201 or 4204 of
ERISA in respect of Multiemployer Plans that individually or in the aggregate
are Material.
10
(d) The expected postretirement benefit obligation
(determined as of the last day of the Parent's most recently ended fiscal year
in accordance with Financial Accounting Standards Board Statement No. 106,
without regard to liabilities attributable to continuation coverage mandated by
section 4980B of the Code) of the Parent, each Obligor and any other
Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the
issuance and sale of the Notes hereunder will not involve any transaction that
is subject to the prohibitions of section 406 of ERISA or in connection with
which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code.
The representations in the first sentence of this Section 5.12(e) are made in
reliance upon and subject to the accuracy of your representation in Section 6.2
as to the sources of the funds to be used to pay the purchase price of the Notes
to be purchased by you.
5.13. Private Offering.
Neither the Parent nor any Obligor nor anyone acting on its
behalf has offered the Notes or any similar securities for sale to, or solicited
any offer to buy any of the same from, or otherwise approached or negotiated in
respect thereof with, any person other than you, the other Purchasers and not
more than 8 other Institutional Investors, each of which has been offered the
Notes at a private sale for investment. Neither the Parent nor any Obligor nor
anyone acting on its behalf has taken, or will take, any action that would
subject the issuance or sale of the Notes to the registration requirements of
Section 5 of the Securities Act.
5.14. Use of Proceeds; Margin Regulations.
The Parent has applied the proceeds of the sale of (a) the Prior
Series A Notes to the prepayment of Debt of the Parent or its Subsidiaries and
for general corporate purposes and (b) the Prior Series B Notes to the
prepayment of the As xx Xxxx Debt upon the consummation of the As xx Xxxx
Acquisition. No part of the proceeds from the sale of the Notes hereunder were
used, directly or indirectly, for the purpose of buying or carrying any margin
stock within the meaning of Regulation G of the Board of Governors of the
Federal Reserve System (12 CFR Part 207), or for the purpose of buying or
carrying or trading in any securities under such circumstances as to involve the
Parent or either Obligor in a violation of Regulation X of said Board (12 CFR
Part 224) or to involve any broker or dealer in a violation of Regulation T of
said Board (12 CFR Part 220). Margin stock does not constitute more than 1% of
the value of the consolidated assets of the Parent and its Subsidiaries on a
consolidated basis and the Parent does not have any present intention that
margin stock will constitute more than 1% of the value of such assets. As used
in this Section, the terms "margin stock" and "purpose of buying or carrying"
shall have the meanings assigned to them in said Regulation G.
5.15. Existing Debt.
(a) Except as described therein, Schedule 5.15 sets forth
(i) a complete and correct list of all outstanding Debt of the Parent and its
Subsidiaries as of September 30, 2000,
11
since which date there has been no Material change in the amounts, interest
rates, sinking funds, installment payments or maturities of the Debt of the
Parent or its Subsidiaries and (ii) a list of which Debt of the Parent and its
Subsidiaries is to be prepaid with the proceeds of the Notes. Neither the
Parent, either Obligor nor any other Subsidiary is in default and no waiver of
default is currently in effect, in the payment of any principal or interest on
any Debt of the Parent or such Obligor or such Subsidiary and no event or
condition exists with respect to any Debt of the Parent or any Obligor or any
other Subsidiary that would permit (or that with notice or the lapse of time, or
both, would permit) one or more Persons to cause such Debt to become due and
payable before its stated maturity or before its regularly scheduled dates of
payment.
(b) Except as disclosed in Schedule 5.15, neither the Parent
nor any Obligor nor any other Subsidiary has agreed or consented to cause or
permit in the future (upon the happening of a contingency or otherwise) any of
its property, whether now owned or hereafter acquired, to be subject to a Lien
not permitted by Section 10.6.
(c) No Subsidiary is the Guarantor of Debt of the Parent or
any other Subsidiary.
5.16. Foreign Assets Control Regulations, etc.
Neither the sale of the Prior Notes by the Parent under the
Prior Note Agreement nor its use of the proceeds thereof nor the issuance of the
Notes by the Obligors will violate the Trading with the Enemy Act, as amended,
or any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
5.17. Status under Certain Statutes.
Neither the Parent nor either Obligor nor any other Subsidiary
is subject to regulation under the Investment Company Act of 1940, as amended,
the Public Utility Holding Company Act of 1935, as amended, the Interstate
Commerce Act, as amended, or the Federal Power Act, as amended.
5.18. Environmental Matters.
Except as disclosed in Schedule 5.18, neither the Parent nor
either Obligor nor any other Subsidiary has knowledge of any claim or has
received any notice of any claim, and no proceeding has been instituted raising
any claim against the Parent or either Obligor or any other Subsidiary or any of
their respective real properties now or, to the best knowledge of the Parent or
either Obligor, formerly owned, leased or operated by the Parent or either
Obligor or any other Subsidiary or other assets, alleging any damage to the
environment or violation of any Environmental Laws, except, in each case, such
as could not reasonably be expected to result in a Material Adverse Effect.
Except as otherwise disclosed to you in Schedule 5.18,
(a) neither the Parent nor either Obligor nor any other
Subsidiary has knowledge of any facts which would give rise to any claim, public
or private, of violation of
12
Environmental Laws or damage to the environment emanating from, occurring on or
in any way related to real properties now or formerly owned, leased or operated
by any of them or to other assets or their use, except, in each case, such as
could not reasonably be expected to result in a Material Adverse Effect;
(b) neither the Parent nor either Obligor nor any of the
Parent's other Subsidiaries has stored any Hazardous Materials on real
properties now or formerly owned, leased or operated by any of them and has not
disposed of any Hazardous Materials in a manner contrary to any Environmental
Laws in each case in any manner that could reasonably be expected to result in a
Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased
or operated by the Parent, either Obligor or any of the Parent's other
Subsidiaries are in compliance with applicable Environmental Laws, except where
failure to comply could not reasonably be expected to result in a Material
Adverse Effect.
6. REPRESENTATIONS OF THE PURCHASER.
6.1. Purchase for Investment.
You represent that you are accepting the Notes in substitution
for the Prior Notes for your own account or for one or more separate accounts
maintained by you or for the account of one or more pension or trust funds and
not with a view to the distribution thereof, provided that the disposition of
your or their property shall at all times be within your or their control. You
understand that the Notes have not been registered under the Securities Act and
may be resold only if registered pursuant to the provisions of the Securities
Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law, and that the Obligors are not required to register the Notes.
6.2. Source of Funds.
You represent that at least one of the following statements is
an accurate representation as to each source of funds (a "Source") used by you
to pay the purchase price of the Prior Notes that were purchased by you under
the Prior Note Agreement:
(a) if you are an insurance company, the Source did not
include assets allocated to any separate account maintained by you in
which any employee benefit plan (or its related trust) had any interest,
other than a separate account that was maintained solely in connection
with your fixed contractual obligations under which the amounts payable,
or credited, to such plan and to any participant or beneficiary of such
plan (including any annuitant) were not affected in any manner by the
investment performance of the separate account; or
(b) the Source was either (i) an insurance company pooled
separate account, within the meaning of Prohibited Transaction Exemption
("PTE") 00-0 (xxxxxx Xxxxxxx 00, 0000), xx (xx) a bank collective
investment fund, within the meaning of the
13
PTE 91-38 (issued July 12, 1991) and, except as you have disclosed to
the Parent in writing pursuant to this paragraph (b), no employee
benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment fund;
or
(c) the Source constituted assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling
or controlled by the QPAM (applying the definition of "control" in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
Parent and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such investment fund
have been disclosed to the Parent in writing pursuant to this paragraph
(c); or
(d) the Source was a governmental plan; or
(e) the Source was one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee benefit
plans, each of which has been identified to the Parent in writing
pursuant to this paragraph (e); or
(f) the Source did not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA; or
(g) the Source was an "insurance company general account,"
within the meaning of Section V(e) of the Department of Labor Prohibited
Transaction Class Exemption ("PTE") 95-60 (issued July 12, 1995), and as
of the date hereof, the amount of reserves and liabilities (as defined
in the annual statement for life insurance companies approved by the
National Association of Insurance Commissioners ("NAIC Annual
Statement") and before reduction for credits on account of any
reinsurance ceded on a coinsurance basis (the "Reserves and
Liabilities") for such insurance company general account's contract(s)
held by or on behalf of any ERISA Plan, together with the amount of
Reserves and Liabilities for such insurance company general account's
contract(s) held by or on behalf of any other ERISA Plans maintained by
the same employer (or any "affiliate" thereof, within the meaning of
Section V(a)(I) of PTE 95-60) or by the same employee organization, do
not exceed 10% of the total Reserves and Liabilities of such insurance
company general account (exclusive of separate account liabilities) plus
surplus, as set forth in the NAIC Annual Statement filed with the state
of domicile of the insurance company maintaining such general account,
and the Parent is not an "affiliate,"
14
within the meaning of Section V(a) of PTE 95-60, of the insurance
company maintaining such general account.
As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan", "party in interest" and "separate account" shall have the respective
meanings assigned to such terms in section 3 of ERISA.
7. INFORMATION AS TO PARENT.
7.1. Financial and Business Information.
The Obligors or the Parent, as applicable, shall deliver to each
holder of Notes that is an Institutional Investor:
(a) Quarterly Statements -- within 60 days after the end of
each quarterly fiscal period in each fiscal year of the Parent (other than the
last quarterly fiscal period of each such fiscal year), duplicate copies of,
(i) a consolidated balance sheet of the Parent and
its Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income and
stockholders' equity and consolidated statements of cash flows
of the Parent and its Subsidiaries for the portion of the fiscal
year ending with such quarter,
setting forth, in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable detail,
prepared in accordance with GAAP applicable to quarterly financial statements
generally, and certified by a certified public accountant and a Senior Financial
Officer of the Parent as fairly presenting, in all material respects, the
financial position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified above of
copies of the Parent's Quarterly Report on Form 10-Q, if any, prepared in
compliance with the requirements therefor and filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of this Section
7.1(a);
(b) Annual Statements -- within 120 days after the end of
each fiscal year of the Parent, duplicate copies of,
(i) a consolidated balance sheet of the Parent and
its Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income and
stockholders' equity and consolidated statements of cash flows
of the Parent and its Subsidiaries, for such year,
15
setting forth, in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied,
(A) by an opinion thereon of independent certified
public accountants of recognized national standing, which
opinion shall state that such financial statements present
fairly, in all material respects, the financial position of the
companies being reported upon and their results of operations
and cash flows and have been prepared in conformity with GAAP,
and that the examination of such accountants in connection with
such financial statements has been made in accordance with
generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the
circumstances, and
(B) a certificate of such accountants stating that
they have reviewed this Agreement and stating further whether,
in making their audit, they have become aware of any condition
or event that then constitutes a Default or an Event of Default,
and, if they are aware that any such condition or event then
exists, specifying the nature and period of the existence
thereof (it being understood that such accountants shall not be
liable, directly or indirectly, for any failure to obtain
knowledge of any Default or Event of Default unless such
accountants should have obtained knowledge thereof in making an
audit in accordance with generally accepted auditing standards
or did not make such an audit),
provided that the delivery within the time period specified above of the
Parent's Annual Report on Form 10-K for such fiscal year, if any,
(together with the Parent's annual report to stockholders, if any,
prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in
accordance with the requirements therefor, and filed with the Securities
and Exchange Commission, together with the accountant's certificate
described in clause (B) above, shall be deemed to satisfy the
requirements of this Section 7.1(b);
(c) SEC and Other Reports -- if the Parent is registered
under the Exchange Act or the Securities Act, promptly upon their becoming
available, and if applicable, one copy of (i) each financial statement, report,
notice or proxy statement sent by the Parent or any Subsidiary to public
securities holders generally, and (ii) each regular or periodic report, each
registration statement that shall have become effective (without exhibits except
as expressly requested by such holder), and each final prospectus and all
amendments thereto filed by the Parent or any Subsidiary with the Securities and
Exchange Commission;
(d) Notice of Default or Event of Default -- promptly, and
in any event within five Business Days after a Responsible Officer becomes aware
(i) of the existence of any Default or Event of Default, (ii) that any Person
has given any notice or taken any action with respect to a claimed default
hereunder or (iii) that any Person has given any notice or taken any action with
respect to a claimed default of the type referred to in Section 11(f), a written
notice specifying the nature and period of existence thereof and what action the
Parent or either Obligor is taking or proposes to take with respect thereto;
16
(e) ERISA Matters -- promptly, and in any event within ten
days after a Responsible Officer becomes aware of any of the following, a
written notice setting forth the nature thereof and the action, if any, that the
Parent or an ERISA Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event,
as defined in section 4043(c) of ERISA and the regulations
thereunder, for which notice thereof has not been waived
pursuant to such regulations as in effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or
the threatening by the PBGC of the institution of, proceedings
under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the receipt
by the Parent or any ERISA Affiliate of a notice from a
Multiemployer Plan that such action has been taken by the PBGC
with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by the Parent or any
ERISA Affiliate pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on any
of the rights, properties or assets of the Parent or any ERISA
Affiliate pursuant to Title I or IV of ERISA or such penalty or
excise tax provisions, if such liability or Lien, taken together
with any other such liabilities or Liens then existing, would
reasonably be expected to have a Material Adverse Effect;
(f) Notices from Governmental Authority -- promptly, and in
any event within 30 days of receipt thereof, copies of any notice to the Parent
or any Subsidiary from any Federal or state Governmental Authority relating to
any order, ruling, statute or other law or regulation that could reasonably be
expected to have a Material Adverse Effect; and
(g) Rule 144A Information. -- except at such times as either
of the Obligors is a reporting company under Section 13 or 15(d) of the Exchange
Act or has complied with the requirements for the exemption from registration
under the Exchange Act set forth in Rule 12g3-2(b), such financial or other
information as any holder of the Notes may determine is required to permit such
holder to comply with the requirements of Rule 144A under the Securities Act in
connection with the resale by it of the Notes;
(h) Notice of Potential Default or Potential Event of
Default -- promptly, and in any event within ten Business Days after a
Responsible Officer becomes aware of the existence of any potential Default or
potential Event of Default, a written notice specifying the nature and period of
existence thereof and what action the Parent or either Obligor is taking or
proposes to take with respect thereto;
17
(i) Notice of Litigation and Liens -- promptly, and in any
event within ten Business Days after a Responsible Officer becomes aware of the
existence of (i) any embargo or lien against or affecting the Parent, either
Obligor or any other Subsidiary or any property thereof in any court or before
any arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, would reasonably be expected to exceed
$250,000; or (ii) any actions, suits, or proceedings pending or threatened in
writing against or affecting the Parent, either Obligor or any other Subsidiary
or any property of the Parent, either Obligor or any other Subsidiary in any
court or before any arbitrator of any kind or before or by any Governmental
Authority that, individually or in the aggregate, would reasonably be expected
to exceed $250,000;
(j) Notice of Acquisitions or Dispositions -- promptly, and
in any event within ten Business Days after (i) any acquisition by the Parent,
any Obligor or any Subsidiary, in which the aggregate book value of assets
associated with such acquisition exceeds 5% or more of the Consolidated Total
Assets determined as of the end of the immediately preceding fiscal quarter,
(ii) any disposition of assets by the Parent, any Obligor or any Subsidiary, in
which the aggregate book value of assets associated with such disposition
exceeds 5% of Consolidated Total Assets determined as of the end of the
immediately preceding fiscal quarter;
(k) Quarterly Information Call. The Obligors and the Parent
shall within ten Business Days after each quarterly fiscal period in each fiscal
year of the Parent hold a quarterly teleconference with the Purchasers to review
and disclose the activities of the Parent, the Obligors and the Subsidiaries
during such preceding quarterly fiscal period.
(l) Monthly Written Report. The Obligors and the Parent
shall within five days after the end of each month in each fiscal year of the
Parent provide the Purchasers with a written report on the status of the Polaris
litigation and existing cedulas hipotecarias.
(m) Requested Information -- with reasonable promptness,
such other data and information relating to the business, operations, affairs,
financial condition, assets or properties of the Parent or any of its
Subsidiaries or relating to the ability of the Parent and the Obligors to
perform their obligations hereunder and, with respect to the Obligors, under the
Notes as from time to time may be reasonably requested by any such holder of
Notes.
7.2. Officer's Certificate.
Each set of consolidated financial statements delivered to a
holder of Notes pursuant to Section (a) or Section (b) of Section 7.1 shall be
accompanied by certificates of a certified public accountant and a Senior
Financial Officer of each of the Parent and the Obligors setting forth:
(a) Covenant Compliance -- the information (including
detailed calculations) required in order to establish whether there was
compliance with the requirements of Section 10.2 through Section 10.10
hereof, inclusive, during the quarterly or annual period covered by the
statements then being furnished (including with respect to each such
Section, where applicable, the calculations of the maximum or minimum
amount,
18
ratio or percentage, as the case may be, permissible under the terms of
such Sections, and the calculation of the amount, ratio or percentage
then in existence); and
(b) Event of Default -- a statement that the Senior
Financial Officer of the Parent and each of the Obligors has reviewed
the relevant terms hereof and is knowledgeable concerning transactions
and conditions of the Parent, the Obligors and the Parent's other
Subsidiaries from the beginning of the quarterly or annual period
covered by the statements then being furnished to the date of the
certificate and that during such period no condition or event existed or
exists that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists, specifying the nature and period
of existence thereof and what action the Parent and each Obligor shall
have taken or proposes to take with respect thereto.
7.3. Inspection.
The Parent and each Obligor shall permit the representatives of
each holder of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Parent or the Obligors, as applicable, to visit the principal
executive offices of the Parent or the Obligors, to discuss the affairs,
finances and accounts of the Parent and its Subsidiaries with the
Parent's and/or the Obligor's officers, and, to visit the other offices
and properties of the Parent and/or the Obligors and each other
Subsidiary, all at such reasonable times and as often as may be
reasonably requested in writing; and
(b) Default -- if a Default or Event of Default then exists,
at the expense of the Obligors to visit and inspect any of the offices
or properties of the Parent, either Obligor or any other Subsidiary, to
examine all their respective books of account, records, reports and
other papers, to make copies and extracts therefrom, and to discuss
their respective affairs, finances and accounts with their respective
officers and independent public accountants (and by this provision the
Parent authorizes said accountants to discuss the affairs, finances and
accounts of the Parent and its Subsidiaries), all at such times and as
often as may be requested.
8. PREPAYMENT OF THE NOTES.
8.1. Required Prepayments.
On January 15, 2001 and on each January 15 thereafter to and
including January 15, 2004 the Obligors will pay $4,000,000 (U.S. Dollars)
principal amount (or such lesser principal amount as shall be outstanding) of
the Notes, with the remaining principal payable at maturity on January 15, 2005.
Each such payment shall be at a price of 100% of the principal amount paid,
together with interest accrued thereon to the date of payment and without
payment of the Make-Whole Amount or any premium.
19
8.2. Optional Prepayments with Make-Whole Amount.
The Obligors may, at their option, upon notice as provided
below, prepay at any time all, or from time to time any part of, the Notes in an
amount not less than $1,000,000 (U.S. Dollars) of the aggregate principal
amount of the Notes then outstanding in the case of a partial prepayment, at
100% of the principal amount so prepaid, plus the Make-Whole Amount determined
for the prepayment date with respect to such principal amount. The Obligors will
give each holder of Notes written notice of each optional prepayment under this
Section 8.2 not less than 30 days and not more than 60 days prior to the date
fixed for such prepayment. Each such notice shall specify such date, the
aggregate principal amount of the Notes to be prepaid on such date, the
principal amount of each Note held by such holder to be prepaid (determined in
accordance with Section 8.3), and the interest to be paid on the prepayment date
with respect to such principal amount being prepaid, and shall be accompanied by
certificates of a certified public accountant and a Senior Financial Officer of
the Obligors as to the estimated Make-Whole Amount due in connection with such
prepayment (calculated as if the date of such notice were the date of the
prepayment), setting forth the details of such computation. Two Business Days
prior to such prepayment, the Obligors shall deliver to each holder of Notes
certificates of a certified public accountant and a Senior Financial Officer of
the Obligors specifying the calculation of such Make-Whole Amount as of the
specified prepayment date.
8.3. Change of Control.
(a) Notice of Change in Control or Control Event. The
Obligors will, within three Business Days after any Responsible Officer of the
Parent or either of the Obligors has knowledge of the occurrence of any Change
in Control or Control Event, give written notice of such Change in Control or
Control Event to each holder of Notes unless notice in respect of such Change in
Control (or the Change in Control contemplated by such Control Event) shall have
been given pursuant to subparagraph (b) of this Section 8.3. If a Change in
Control has occurred, such notice shall contain and constitute an offer to
prepay Notes as described in subparagraph (c) of this Section 8.3 and shall be
accompanied by the certificate described in subparagraph (g) of this Section
8.3.
(b) Condition to Parent Action. The Parent will not take any
action that consummates or finalizes a Change in Control unless (i) at least 45
days prior to such action the Obligors shall have given to each holder of Notes
written notice containing and constituting an offer to prepay Notes as
accompanied by the certificate described in subparagraph (g) of this Section
8.3, and (ii) subject to the provisions of paragraph (d) below,
contemporaneously with such action, the Obligors prepay all Notes required to be
prepaid in accordance with this Section 8.3.
(c) Offer to Prepay Notes. The offer to prepay Notes
contemplated by subparagraphs (a) and (b) of this Section 8.3 shall be an offer
to prepay, in accordance with and subject to this Section 8.3, all, but not less
than all, the Notes held by each holder (in this case only, "holder" in respect
of any Note registered in the name of a nominee for a disclosed beneficial owner
shall mean such beneficial owner) on a date specified in such offer (the
20
"Proposed Prepayment Date"). If such Proposed Prepayment Date is in connection
with an offer contemplated by subparagraph (a) of this Section 8.3, such date
shall be not less than 20 days and not more than 60 days after the date of such
offer.
(d) Acceptance. A holder of Notes may accept the offer to
prepay made pursuant to this Section 8.3 by causing a notice of such acceptance
to be delivered to the Obligors at least 10 days prior to the Proposed
Prepayment Date. A failure by a holder of Notes to respond to an offer to prepay
made pursuant to this Section 8.3 shall be deemed to constitute an acceptance of
such offer by such holder.
(e) Prepayment. Prepayment of the Notes to be prepaid
pursuant to this Section 8.3 shall be at 100% of the principal amount of such
Notes, plus the Make-Whole Amount determined for the date of prepayment with
respect to such principal amount, together with interest on such Notes accrued
to the date of prepayment. Two Business Days preceding the date of prepayment,
the Obligors shall deliver to each holder of Notes being prepaid a statement
showing the Make-Whole Amount in connection with such prepayment and setting
forth the details of the computation of such amount. The prepayment shall be
made on the Proposed Prepayment Date except as provided in subparagraph (f) of
this Section 8.3.
(f) Deferral Pending Change in Control. The obligation of
the Obligors to prepay Notes pursuant to the offers required by subparagraphs
(a) and (b) and accepted in accordance with subparagraph (d) of this Section 8.3
is subject to the occurrence of the Change in Control in respect of which such
offers and acceptances shall have been made. In the event that such Change in
Control does not occur on the Proposed Prepayment Date in respect thereof, the
prepayment shall be deferred until and shall be made on the date on which such
Change in Control occurs. The Obligors shall keep each holder of Notes
reasonably and timely informed of (i) any such deferral of the date of
prepayment, (ii) the date on which such Change in Control and the prepayment are
expected to occur, and (iii) any determination by the Parent or the Obligors
that efforts to effect such Change in Control have ceased or been abandoned (in
which case the offers and acceptances made pursuant to this Section 8.3 in
respect of such Change in Control shall be deemed rescinded).
(g) Officer's Certificate. Each offer to prepay the Notes
pursuant to this Section 8.3 shall be accompanied by a certificate, executed by
a certified public accountant and a Senior Financial Officer of the Obligors and
dated the date of such offer, specifying: (i) the Proposed Prepayment Date, (ii)
that such offer is made pursuant to this Section 8.3, (iii) the principal amount
of each Note offered to be prepaid, (iv) the estimated Make-Whole Amount due in
connection with such prepayment (calculated as if the date of such notice were
the date of the prepayment), setting forth the details of such computation, (v)
the interest that would be due on each Note offered to be prepaid, accrued to
the Proposed Prepayment Date, (vi) that the conditions of this Section 8.3 have
been fulfilled and (vii) in reasonable detail, the nature and date or proposed
date of the Change in Control.
(h) Effect on Required Payments. The amount of each payment
of the principal of the Notes made pursuant to this Section 8.3 shall be applied
against and reduce each
21
of the then remaining principal payments due pursuant to Section 8.1 on the
Notes (allocated as set forth in Section 8.4) by a percentage equal to the
aggregate principal amount of the Notes so paid divided by the aggregate
principal amount of the Notes outstanding immediately prior to such payment.
8.4. Allocation of Partial Prepayments.
In the case of each partial prepayment of the Note, the
principal amount of the Notes to be prepaid shall be allocated among all of the
Notes (regardless of series) at the time outstanding in proportion, as nearly as
practicable, to the respective unpaid principal amounts thereof not theretofore
called for prepayment.
8.5. Maturity; Surrender, etc.
In the case of each prepayment of Notes pursuant to this Section
8, the principal amount of each Note to be prepaid shall mature and become due
and payable on the date fixed for such prepayment, together with interest on
such principal amount accrued to such date and the applicable Make-Whole Amount,
if any. From and after such date, unless the Obligors shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Obligors and canceled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note
8.6. Purchase of Notes.
The Parent will not and will not permit any Affiliate or
Subsidiary to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except upon the payment or prepayment
of the Notes in accordance with the terms of this Agreement and the Notes. The
Obligors will promptly cancel all Notes acquired by the Parent, the Obligors or
any Subsidiary or Affiliate pursuant to any payment, prepayment or purchase of
Notes pursuant to any provision of this Agreement and no Notes may be issued in
substitution or exchange for any such Notes.
8.7. Make-Whole Amount.
The term "Make-Whole Amount" means, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Note over the
amount of such Called Principal, provided that the Make-Whole Amount may in no
event be less than zero. For the purposes of determining the Make-Whole Amount,
the following terms have the following meanings
"Called Principal" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Sections 8.2 or
8.3 or has become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.
22
"Discounted Value" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called Principal
of any Note, the yield to maturity implied by (i) the yields reported,
as of 10:00 A.M. (New York City time) on the second Business Day
preceding the Settlement Date with respect to such Called Principal, on
the display designated as "Page 678" on the Telerate Access Service (or
such other display as may replace Page 678 on Telerate Access Service)
for actively traded U.S. Treasury securities having a maturity equal to
the Remaining Average Life of such Called Principal as of such
Settlement Date, plus .50% or (ii) if such yields are not reported as of
such time or the yields reported as of such time are not ascertainable,
the Treasury Constant Maturity Series Yields reported, for the latest
day for which such yields have been so reported as of the second
Business Day preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded U.S. Treasury
securities having a constant maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date, plus .50%.
Such implied yield will be determined, if necessary, by (A) converting
U.S. Treasury xxxx quotations to bond-equivalent yields in accordance
with accepted financial practice and (B) interpolating linearly between
(1) the actively traded U.S. Treasury security with the duration closest
to and greater than the Remaining Average Life and (2) the actively
traded U.S. Treasury security with the duration closest to and less than
the Remaining Average Life.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called principal
by (b) the number of years (calculated to the nearest one-twelfth year)
that will elapse between the Settlement Date with respect to such Called
Principal and the scheduled due date of such Remaining Scheduled
Payment.
"Remaining Scheduled Payments" means, with respect to the Called
principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on such
Settlement Date pursuant to Sections 8.2, 8.3 or 12.1.
23
"Settlement Date" means, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or 8.3 or has become or is declared to be
immediately due and payable pursuant to Section 12.1, as the context
requires.
9. AFFIRMATIVE COVENANTS.
Each of the Parent and the Obligors covenants that so long as
any of the Notes are outstanding:
9.1. Compliance with Law.
Each of the Parent and the Obligors will and will cause each of
the other Subsidiaries to comply with all laws, ordinances or governmental rules
or regulations to which each of them is subject, including, without limitation,
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
9.2. Insurance.
Each of the Parent and the Obligors will and will cause each of
the other Subsidiaries to maintain under a program of self-insurance or, with
financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and contingencies,
of such types, on such terms and in such amounts (including deductibles,
co-insurance and self-insurance, if adequate reserves are maintained with
respect thereto) as is customary in the case of entities of established
reputations engaged in the same or a similar business and similarly situated in
the same jurisdiction.
9.3. Maintenance of Properties.
Each of the Parent and the Obligors will and will cause each of
the other Subsidiaries to maintain and keep, or cause to be maintained and kept,
their respective properties in good repair, working order and condition (other
than ordinary wear and tear), so that the business carried on in connection
therewith may be properly conducted at all times, provided that this Section
shall not prevent the Parent or either Obligor or any other Subsidiary from
discontinuing the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Parent has
concluded that such discontinuance would not, individually or in the aggregate,
have a Material Adverse Effect.
24
9.4. Payment of Taxes.
Each of the Parent and the Obligors will and will cause each of
the other Subsidiaries to file all income tax or similar tax returns required to
be filed in any jurisdiction and to pay and discharge all taxes shown to be due
and payable on such returns and all other taxes, assessments, governmental
charges, or levies imposed on them or any of their properties, assets, income or
franchises, to the extent such taxes and assessments have become due and payable
and before they have become delinquent and all claims for which sums have become
due and payable that have or might become a Lien on properties or assets of the
Parent or either Obligor or any other Subsidiary, provided that neither the
Parent nor either Obligor nor any other Subsidiary need pay any such tax or
assessment if (i) the amount, applicability or validity thereof is contested by
the Parent or such Obligor or such other Subsidiary on a timely basis in good
faith and in appropriate proceedings, and the Parent, the Obligors or any other
Subsidiary has established adequate reserves therefor in accordance with GAAP on
the books of the Parent or such Obligor or such other Subsidiary or (ii) the
nonpayment of all such taxes and assessments in the aggregate could not
reasonably be expected to have a Material Adverse Effect.
9.5. Corporate Existence, etc.
Each of the Parent and the Obligors will at all times preserve
and keep in full force and effect its corporate existence. Subject to Sections
10.2 and 10.8, the Parent will at all times preserve and keep in full force and
effect the corporate existence of each of its Subsidiaries (unless otherwise
provided in Section 10.2) and all rights and franchises of the Parent, the
Obligors and the other Subsidiaries unless, in the good faith judgment of the
Parent, the termination of or failure to preserve and keep in full force and
effect such corporate existence, right or franchise would not, individually or
in the aggregate, have a Material Adverse Effect.
9.6. Subsidiary Obligors.
The Parent will cause any entity that becomes a Subsidiary after
the date of the Closing to become an Obligor under this Agreement and the Notes
and to execute such documents as may be necessary to cause such Subsidiary to
become an Obligor. The current Subsidiaries of the Parent are listed on Schedule
9.6 hereof. The Parent shall provide to the Purchasers an update of Schedule 9.6
within 10 Business Days after the acquisition of any new Subsidiary.
9.7. Subsidiary Acknowledgment.
The Parent will within three Business Days following the
consummation of any future acquisition of any Subsidiary take the necessary
actions to hold shareholder meetings and Board of Directors meetings to make
appropriate acknowledgment of this Agreement and, in particular, of those
provisions that may obligate such Subsidiary to take certain actions or to limit
its ability to perform certain actions, especially those provisions included in
Sections 8, 9 and 10 of this Agreement.
25
10. NEGATIVE COVENANTS.
Each of the Parent and the Obligors covenants that so long as
any of the Notes are outstanding:
10.1. Transactions with Affiliates.
The Parent and each Obligor will not and will not permit any
other Subsidiary to enter into directly or indirectly any Material transaction
or arrangement or Material group of related transactions or arrangements
(including without limitation the purchase, lease, sale or exchange of
properties of any kind or the rendering of any service) with any Affiliate
(other than the Parent, either Obligor or another Subsidiary), except in the
ordinary course and pursuant to the reasonable requirements of the Parent's, or
such Obligor's or such other Subsidiary's business and upon fair and reasonable
terms no less favorable to the Parent or such Obligor or such other Subsidiary
than would be obtainable in a comparable arm's-length transaction with a Person
not an Affiliate.
10.2. Merger, Consolidation, etc.
Each of the Parent and the Obligors shall not, and shall not
permit any other Subsidiary to, consolidate with or merge with any other Person,
provided however that: (a) any Subsidiary may merge with the Parent or another
Wholly-Owned Subsidiary; and (b) the Parent may merge with any other Person if,
in the case of both the foregoing (a) and (b), (i) the surviving entity is a
solvent entity organized in the U.S., (ii) the surviving entity (including the
Parent or another Wholly-Owned Subsidiary, as applicable) expressly assumes in
writing the Obligor's obligation under the Notes and furnishes the holders of
the Notes with an opinion of independent counsel satisfactory to the Required
Holders to the effect that the instrument of assumption has been duly
authorized, executed and delivered and constitutes the legal, valid and binding
contract and agreement of the surviving corporation enforceable in accordance
with its terms, subject to such qualifications as may be satisfactory to the
Required Holders, (iii) immediately after giving effect to such transaction no
Default or Event of Default shall exist and (iv) the surviving entity could
incur $1 of additional Funded Debt pursuant to Section 10.4(a).
10.3. Consolidated Net Worth.
(a) The Consolidated Net Worth, measured as of the last day
of any fiscal quarter, shall not be less than the sum of (i) $75% of
Consolidated Net Worth as of the date of the consummation of the As xx Xxxx
Acquisition after giving effect to the As xx Xxxx Acquisition (the "Base
Figure") plus (ii) 50% of Consolidated Net Income (but only if a positive
number) earned on a cumulative basis for each of the elapsed fiscal quarters
ending after December 31, 1997; provided, that revaluation of the Parent's
consolidated balance sheet resulting from changes in currency exchange rates
shall not be included in calculating compliance with this Section 10.3.
26
10.4. Limitation on Debt.
(a) The Parent and the Obligors shall not, and shall not
permit any Subsidiary to permit there to be outstanding Debt except: (i) the
Notes and all existing Consolidated Funded Debt as of January 23, 1998 and
described on Schedule 10.4 hereof; (ii) Funded Debt of a Subsidiary or the
Parent owed to either Obligor; and (iii) additional Debt, provided that the
ratio of Consolidated Total Debt to Consolidated EBITDA shall at no time exceed
(A) 4.25 to 1.00 for the period from January 23, 1998 through Xxxxx 00, 0000,
(X) 3.75 to 1.00 for the period from April 1, 1998 through June 30, 1998, (C)
3.50 to 1.00 for the period from July 1, 1998 through September 30, 1998 and (D)
3.00 to 1.00 after September 30, 1998.
(b) The Parent shall not permit its Subsidiaries (including
the Obligors) to permit there to be outstanding Debt, other than (i)
Consolidated Funded Debt of Subsidiaries as of January 23, 1998 and described on
Schedule 10.4 hereof, (ii) Debt owed to the Parent or either Obligor, (iii)
Permitted Subsidiary Guaranties; (iv) the Notes; and (v) additional Debt
provided that the sum of (1) Total Debt outstanding of all Subsidiaries plus (2)
Debt secured by Liens permitted under Section 10.6(j) will at no time exceed (A)
1.00 times Consolidated EBITDA from January 23, 1998 through December 31, 1998
and (B) .50 times Consolidated EBITDA after December 31, 1998; provided that
such Debt must also be permitted to be incurred pursuant to paragraph (a) of
this Section 10.4.
(c) The Parent and the Obligors may renew, extend,
substitute, refinance or replace any Consolidated Funded Debt permitted pursuant
to paragraphs (a) and (b) above (except (a)(ii) and (b)(ii)); provided that the
principal amount of Consolidated Funded Debt resulting from such renewal,
extension, substitution, refinancing or replacement shall not exceed the
original principal amount of such Consolidated Funded Debt and that no
additional security shall be granted to secure such Consolidated Funded Debt.
10.5. Interest Coverage Ratio.
The Interest Coverage Ratio for the four preceding consecutive
fiscal quarters shall not be (a) less than 2.00 to 1.00 for the period from
January 23, 1998 through March 31, 1998 and (b) less than 2.50 to 1.00 after
March 31, 1998.
10.6. Limitation on Liens.
The Parent and the Obligors shall not, and shall not permit the
Subsidiaries to create or incur, or permit to exist any Lien on or with respect
to any property or asset (including, without limitation, any document or
instrument in respect of goods or accounts receivable) of the Parent, the
Obligors or any such Subsidiary, whether now owned or held or hereafter
acquired, or any income or profits therefrom (whether or not provision is made
for the equal and ratable securing of the Notes in accordance with the last
paragraph of this Section 10.6), or assign or otherwise convey any right to
receive income or profits, except:
27
(a) Liens for property taxes, assessments or other
governmental charges which are not yet due and payable;
(b) Liens securing landlords, carriers, warehousemen,
mechanics, materialmen and other similar Liens;
(c) Liens incidental to the normal conduct of the business
of the Parent, the Obligors or any other Subsidiary including Liens in
connection with workers' compensation, unemployment insurance, and other
governmental insurance or benefits, excluding Liens incurred in connection with
the borrowing of money;
(d) Liens to secure the performance of bids, tenders or
trade contracts or to secure statutory obligations, surety or appeal bonds or
other Liens of a similar value incurred in the ordinary course of business and
not in connection with the borrowing of money;
(e) Liens resulting from judgments which the Parent or the
Obligors or any Subsidiary is protesting in good faith and which are effectively
stayed, provided that adequate reserves shall have been made for such judgment
in accordance with GAAP;
(f) minor survey exceptions or minor encumbrances, easements
or reservations, or rights of others for rights-of-way, utilities and other
similar purposes, or zoning or other restrictions as to the use of real
properties, which are necessary for the conduct of the activities of the Parent,
the Obligors and the Parent's other Subsidiaries or which customarily exist on
properties of corporations engaged in similar activities and similarly situated
and which do not in any event materially impair their use in the operation of
the business of the Parent, the Obligors and its Subsidiaries.
(g) Liens securing Debt of a Subsidiary of either Obligor;
(h) Liens in existence as of January 23, 1998 and described
in Schedule 10.6 hereof;
(i) Liens, mortgages or purchase money interests securing
payment of the purchase price of assets provided (i) any such Liens attach
solely to property acquired, constructed or improved within 180 days of the date
of acquisition or commencement of construction; (ii) the principal amount of the
Debt secured by any such Lien shall not exceed the lesser of (A) the cost to the
Parent, an Obligor or any other Subsidiary of such property or (B) the fair
market value of such property (as determined in good faith by senior management
of the Parent); and (iii) Debt secured by such Lien shall have been incurred
within the limitations set forth in Section 10.4; and
(j) other Liens securing Consolidated Total Debt, provided
that the sum of (i) Debt secured by such Liens and (ii) Debt of Subsidiaries
incurred pursuant to Section 10.4(b) will not exceed (A) 1.00 times Consolidated
EBITDA from January 23, 1998 through December 31, 1998 and (B) .50 times
Consolidated EBITDA after December 31, 1998; and provided, further, that such
Debt could be incurred pursuant to Section 10.4(a); and provided,
28
further, that except for the cedulas hipotecarias disclosed on Schedule 10.6
hereof, the value of the real property secured by Liens which constitute cedulas
hipotecarias shall in no case exceed an aggregate amount of $7,000,000 and the
value of the real property shall be calculated at the greater of the principal
amount of the Debt, the book value or independently appraised value of the real
property secured by such cedulas hipotecarias. Except for the cedulas
hipotecarias disclosed on Schedule 10.6 hereof, upon issuance of any cedulas
hipotecarias, the Parent shall deliver to Citibank Costa Rica, S.A. such
original cedulas hipotecarias and shall instruct and direct Citibank Costa Rica,
S.A. to hold all original cedulas hipotecarias and maintain records with respect
to all cedulas hipotecarias, including the principal amount of the Debt, the
book value and independently appraised value of the property secured, the name
and address of the secured lender and any other pertinent information. Further,
at the time of any delivery of cedulas hipotecarias to Citibank Costa Rica,
S.A., the Parent shall deliver copies of the same, including all pertinent
information relating thereto, to the Purchasers. Notwithstanding the foregoing,
no cedulas hipotecarias shall be transferred to any Person except the Obligors
without the prior written consent of the Purchasers, and such prohibition shall
include the transfer of any cedulas hipotecarias to any creditor or in
connection with any legal proceedings.
If, notwithstanding the prohibition contained herein, the Obligors or the Parent
shall, or shall permit any of their Subsidiaries to, directly or indirectly
create, incur, assume or permit to exist any Lien, other than those Liens
permitted by the provisions of paragraphs (a) through (j) of this Section 10.6,
the Obligors or the Parent shall grant in favor of the Holders of the Notes a
security in substitution of the Notes, in such form, nature and conditions
required to satisfy those Holders and to provide them with a security equally
and ratably with any and all other obligatons hereby secured. Such violation of
this Section 10.6 will constitute an Event of Default, whether or not provision
is made for an equal and ratable Lien pursuant to this Section 10.6.
10.7. Restricted Payments.
(a) The Parent will not, and will not permit any
Subsidiaries to, at any time, declare or make or incur any liability to declare
or make, any Restricted Payment unless immediately after giving effect to such
action:
(i) the aggregate amount of Restricted Payments of
the Parent and its Subsidiaries declared or made during the
period from and after January 23, 1998 to and including the date
of the Restricted Payment in question would not exceed the sum
of (i) $1,000,000 (U.S. Dollars); plus (ii) 50% of Consolidated
Net Income (but only if a positive number) calculated on a
cumulative basis for the entire period from December 31, 1997 to
and including the date of making a Restricted Payment; plus
(iii) the net proceeds from the sale or issuance after January
23, 1998 (and other than to the Parent or a Subsidiary) of the
Parent's capital stock; and
(ii) no Default or Event of Default would exist.
29
The Parent will not declare any dividend which constitutes a Restricted Payment
payable more than 60 days after the date of its date of declaration.
(b) None of the Obligors will at any time, declare or make
or incur any liability to declare or make, any Restricted Payment unless
immediately after giving effect to such action:
(i) the aggregate amount of Restricted Payments of
such Obligor declared or made during the period from and after
January 23, 1998 to and including the date of the Restricted
Payment in question would not exceed the sum of (i) $1,000,000
(U.S. Dollars); plus (ii) 50% of Consolidated Net Income (but
only if a positive number) calculated on a cumulative basis for
the entire period from December 31, 1997 to and including the
date of making a Restricted Payment; plus (iii) the net proceeds
from the sale or issuance after January 23, 1998 (and other than
to the Parent or a Subsidiary) of capital stock of either
Obligor; and
(ii) no Default or Event of Default would exist.
Neither Obligor will declare any dividend which constitutes a Restricted Payment
payable more than 60 days after the date of its date of declaration.
10.8. Sale of Assets.
The Parent and the Obligors shall not, and shall not permit the
Subsidiaries to, sell, lease, transfer or otherwise dispose of any assets (a
"Disposition") during any single fiscal year, other than in the ordinary course
of business if (i) the aggregate book value of assets associated with
Dispositions made in any fiscal year would exceed 10% of Consolidated Net Worth
determined as of the end of the immediately preceding fiscal quarter, or (ii)
the aggregate net proceeds of all such Dispositions made after January 23, 1998
would exceed 25% of Consolidated Net Assets, and provided that, immediately
after the consummation of the Disposition and after giving effect thereto, (A)
no Default or Event of Default would exist and (B) at least $1.00 of additional
Debt could be incurred pursuant to Section 10.4(a); provided, further however,
that any Disposition is permitted without compliance with clauses (i) and (ii)
of this Section 10.8 if the proceeds therefrom are used within 12 months to (B)
acquire assets related to the Parent's or Obligor's business of comparable value
or (C) reduce Senior Debt (on a pro rata basis among holders of Senior Debt),
subject, as to the Notes, to the prepayment requirements and at the price set
forth in Section 8.2; provided, however, that any holder of Notes may, in its
sole discretion, decline to have its Notes so prepaid.
10.9. Restricted Investments.
The Parent and the Obligors shall not, and shall not permit any
Subsidiary to make any Investments which are Restricted Investments.
30
10.10. Nature of Business.
The Parent and the Obligors shall not, and shall not permit any
Subsidiary to, engage in any business if, as a result thereof, (a) less than 95%
of the assets of the Parent and its Subsidiaries, taken as a whole, would be
used in, and (b) less than 95% of the assets of the Parent and its Subsidiaries,
taken as a whole, would be derived from, the production and sale of chickens and
their by-products or the raw materials used in connection with the production
and sale of chickens including, but not limited to, animal feed.
10.11. Pari Passu Position.
The Parent and the Obligors agree that they will not grant or
provide, and at no time will they allow to exist, be created or granted, any
Guaranties by Subsidiaries for the benefit of, any of the bank lenders or other
senior lenders to the Parent, the Obligors or Subsidiaries, unless in the case
of the giving of any Guaranties by Subsidiaries, the Noteholders shall
simultaneously be provided with such Guaranties.
10.12. Intercreditor Agreement.
The Parent shall not permit any Subsidiary to issue a Guaranty
(other than a Guaranty issued to the Noteholders) to any Person in connection
with the incurrence of Debt by the Parent, any Obligor or another Subsidiary
without requiring that the beneficiary of such Guaranty execute the
Intercreditor Agreement at the time of the issuance of such Guaranty.
11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following
conditions or events shall occur and be continuing:
(a) either Obligor defaults in the payment of any principal,
Make-Whole Amount, if any, on any Note when the same becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration or
otherwise; or
(b) either Obligor defaults in the payment of any interest
on any Note for more than five Business Days after the same becomes due and
payable; or
(c) the Parent, either Obligor or any other Subsidiary
defaults in the performance of or compliance with any term contained in Sections
10.1 through 10.12 and Section 9.6; or
(d) the Parent, either Obligor or any Subsidiary defaults in
the performance of or compliance with any term contained herein (other than
those referred to in paragraphs (a), (b) and (c) of this Section 11) and such
default is not remedied within 30 days after the earlier of (i) a Responsible
Officer of the Parent or either Obligor obtaining actual knowledge of such
default and (ii) the Parent or either Obligor receiving written notice of such
default from any
31
holder of a Note (any such written notice to be identified as a "notice of
default" and to refer specifically to this paragraph (d) of Section 11); or
(e) any representation or warranty made in writing by or on
behalf of the Parent or either Obligor or by any officer of the Parent or either
Obligor in this Agreement or in any writing furnished by the Parent or either
Obligor, if any, in connection with the transactions contemplated hereby proves
to have been false or incorrect in any material respect on the date as of which
made; or
(f) (i) the Parent, either Obligor or any other Subsidiary
is in default (as principal or as guarantor or other surety) in the payment of
any principal of or premium or make-whole amount or interest on any Debt that
is outstanding in an aggregate principal amount of at least $3,500,000 beyond
any period of grace provided with respect thereto, or (ii) the Parent, either
Obligor or any other Subsidiary is in default in the performance of or
compliance with any term of any evidence of any Debt in an aggregate outstanding
principal amount of at least $3,500,000 or of any mortgage, indenture or other
agreement relating thereto or any other condition exists, and as a consequence
of such default or condition such Debt has become, or has been declared (or one
or more Persons are entitled to declare such Debt to be), due and payable before
its stated maturity or before its regularly scheduled dates of payment, or (iii)
as a consequence of the occurrence or continuation of any event or condition
(other than the passage of time or the right of the holder of Debt to convert
such Debt into equity interest), (x) the Parent, either Obligor or any other
Subsidiary has become obligated to purchase or repay Debt before its regular
maturity or before its regularly scheduled dates of payment in an aggregate
outstanding principal amount of at least $3,500,000, or (y) one or more Persons
have the right to require the Parent, either Obligor or any other Subsidiary so
to purchase or repay such Debt; or
(g) the Parent, either Obligor or any other Subsidiary (i)
is generally not paying, or admits in writing its inability to pay, its debts as
they become due, (ii) files, or consents by answer or otherwise to the filing
against it of, a petition for relief, reorganization, judicial management or
arrangement or any other petition in bankruptcy, for liquidation or to take
advantage of any bankruptcy, insolvency, reorganization, moratorium or other
similar law of any jurisdiction, (iii) makes an assignment for the benefit of
its creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with respect
to any substantial part of its property, (v) is adjudicated as insolvent or to
be liquidated, or (vi) takes corporate action for the purpose of any of the
foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the Parent, either
Obligor or any of its other Subsidiaries, a custodian, receiver, trustee or
other officer with similar powers with respect to it or with respect to any
substantial part of its property, or constituting an order for relief or
approving a petition for relief or reorganization or any other petition in
bankruptcy or for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction, or ordering the dissolution, winding-up or
liquidation of the Parent, either Obligor or any of the Parent's other
Subsidiaries, or any such petition shall be filed against the Parent, either
Obligor or any of the Parent's other Subsidiaries and such petition shall not be
dismissed within 60 days; or
32
(i) a final judgment or judgments for the payment of money
aggregating in excess of $3,500,000 (U.S. Dollars) or the equivalent thereof in
another currency are rendered against one or more of the Parent, either Obligor
and any of the Parent's other Subsidiaries and which judgments are not, within
60 days after entry thereof, bonded, discharged or stayed pending appeal, or are
not discharged within 60 days after the expiration of such stay; or
(j) if (i) any Plan shall fail to satisfy the minimum
funding standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is sought or
granted under section 412 of the Code, (ii) a notice of intent to terminate any
Plan shall have been or is reasonably expected to be filed with the PBGC or the
PBGC shall have instituted proceedings under ERISA section 4042 to terminate or
appoint a trustee to administer any Plan or the PBGC shall have notified the
Parent or any ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate "amount of unfunded benefit liabilities"
(within the meaning of section 4001(a)(18) of ERISA) under all Plans, determined
in accordance with Title IV of ERISA, shall exceed $1,000,000, (iv) the Parent
or any ERISA Affiliate shall have incurred or is reasonably expected to incur
any liability pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, (v) the Parent or any
ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the Parent or any
Subsidiary establishes or amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would increase the liability
of the Parent or any other Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either individually or together
with any other such event or events, could reasonably be expected to have a
Material Adverse Effect.
As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
12. REMEDIES ON DEFAULT, ETC
12.1. Acceleration.
(a) If an Event of Default with respect to the Parent or
either Obligor described in paragraph (h) of Section 11 has occurred, all the
Notes then outstanding shall automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is
continuing, any holder or holders of more than 51% in principal amount of the
Notes at the time outstanding may at any time at its or their option, by notice
or notices to the Obligors, declare all the Notes then outstanding to be
immediately due and payable.
(c) If any Event of Default described in paragraph (a) or
(b) of Section 11 has occurred and is continuing, any holder or holders of Notes
at the time outstanding affected by such Event of Default may at any time, at
its or their option, by notice or notices to the Obligors, declare all the Notes
held by it or them to be immediately due and payable.
33
Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (x) all accrued and
unpaid interest thereon and (y) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law) shall all
be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Obligors
acknowledge, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the
Obligors (except as herein specifically provided for) and that the provision for
payment of a Make-Whole Amount by the Obligors in the event that the Notes are
prepaid or are accelerated as a result of an Event of Default, is intended to
provide compensation for the deprivation of such right under such circumstances.
12.2. Other Remedies.
If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been
declared immediately due and payable under Section 12.1, the holder of any Note
at the time outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained herein or in any
Note, or for an injunction against a violation of any of the terms hereof or
thereof, or in aid of the exercise of any power granted hereby or thereby or by
law or otherwise.
12.3. Rescission.
At any time after any Notes have been declared due and payable
pursuant to clause (b) or (c) of Section 12.1, the holders of not less than 51%
in principal amount of the Notes then outstanding, by written notice to the
Obligors, may rescind and annul any such declaration and its consequences if (a)
the Obligors have paid all overdue interest on the Notes, all principal or
Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, all interest on such overdue principal
Make-Whole Amount, if any, and (to the extent permitted by applicable law) any
overdue interest in respect of the Notes, at the Default Rate (b) all Events of
Default and Defaults, other than non-payment of amounts that have become due
solely by reason of such declaration, have been cured or have been waived
pursuant to Section 17, and (c) no judgment or decree has been entered for the
payment of any monies due pursuant hereto or to the Notes. No rescission and
annulment under this Section 12.3 will extend to or affect any subsequent Event
of Default or Default or impair any right consequent thereon.
12.4. No Waivers or Election of Remedies, Expenses, etc.
No course of dealing and no delay on the part of any holder of
any Note in exercising any right, power or remedy shall operate as a waiver
thereof or otherwise prejudice such holder's rights, powers or remedies. No
right, power or remedy conferred by this Agreement or by any Note upon any
holder thereof shall be exclusive of any other right, power or remedy referred
to herein or therein or now or hereafter available at law, in equity, by statute
34
or otherwise. Without limiting the obligations of the Obligors under Section 15,
the Obligors will pay to the holder of each Note on demand such further amount
as shall be sufficient to cover all reasonable costs and expenses of such holder
incurred in any enforcement or collection under this Section 12, including,
without limitation, reasonable attorneys' fees, expenses and disbursements.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1. Registration of Notes.
The Obligors shall keep at the principal executive office of
Pipasa a register for the registration and registration of transfers of Notes.
The name and address of each holder of one or more Notes, each transfer thereof
and the name and address of each transferee of one or more Notes shall be
registered in such register. Prior to due presentment for registration of
transfer, the Person in whose name any Note shall be registered shall be deemed
and treated as the owner and holder thereof for all purposes hereof, and the
Obligors shall not be affected by any notice or knowledge to the contrary.
Pipasa shall give to any holder of a Note that is an Institutional Investor
promptly upon request therefor, a complete and correct copy of the names and
addresses of all registered holders of Notes.
13.2. Transfer and Exchange of Notes.
Upon surrender of any Note at the principal executive office of
Pipasa for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
his attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), the Obligors shall
execute and deliver, at the Obligor's expense (except as provided below), one or
more new Notes (as requested by the holder thereof) in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of Exhibit I. Each
such new Note shall be dated and bear interest from the date to which interest
shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. The Obligors may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than $500,000 (U.S. Dollars), provided
that (i) Prior Notes issued in denominations of less than $500,000 and replaced
by the Notes issued hereunder may be subsequently transferred in such lesser
denominations and (ii) if necessary to enable the registration of transfer by a
holder of its entire holding of Notes, one Note may be in a denomination of less
than $500,000 (U.S. Dollars). Any transferee, by its acceptance of a Note
registered in its name (or the name of its nominee), shall be deemed to have
made the representation set forth in Section 6.2.
35
13.3. Replacement of Notes.
Upon receipt by the Obligors of evidence reasonably satisfactory
to it of the ownership of and the loss, theft, destruction or mutilation of any
Note (which evidence shall be, in the case of an Institutional Investor, notice
from such Institutional Investor of such ownership and such loss, theft,
destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note
is, or is a nominee for, an original Purchaser or another holder of a
Note with a minimum net worth of at least $100,000,000 (U.S. Dollars),
such Person's own unsecured agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and
cancellation thereof, the Obligors at their own expense shall execute
and deliver, in lieu thereof, a new Note, dated and bearing interest
from the date to which interest shall have been paid on such lost,
stolen, destroyed or mutilated Note or dated the date of such lost,
stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
14. PAYMENTS ON NOTES.
14.1. Place of Payment.
Subject to Section 14.2, payments of principal, Make-Whole
Amount, if any, and interest becoming due and payable on the Notes shall be made
at the address of the Purchasers set forth in Schedule A hereto. The Obligors
may at any time, by notice to each holder of a Note, change the place of payment
of the Notes so long as such place of payment shall be either the principal
office of Parent in such jurisdiction or the principal office of a bank or
trust company in such jurisdiction, provided however, that such place of payment
is in the United States of America.
14.2. Home Office Payment.
So long as you or your nominee shall be the holder of any Note,
and notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Obligors will pay all sums becoming due on such Note for
principal, Make-Whole Amount, if any, and interest by the method and at the
address specified for such purpose below your name in Schedule A, or by such
other method or at such other address as you shall have from time to time
specified to the Obligors in writing for such purpose, without the presentation
or surrender of such Note or the making of any notation thereon, except that
upon written request of the Obligors made concurrently with or reasonably
promptly after payment or prepayment in full of any Note, you shall surrender
such Note for cancellation, reasonably promptly after any such request, to the
Obligors at their principal executive offices or at the place of payment most
recently designated by the Obligors pursuant to Section 14.1. Prior to any sale
or other disposition of any Note held by you or your nominee you will, at your
election, either endorse thereon the amount of principal
36
paid thereon and the last date to which interest has been paid thereon or
surrender such Note to the Obligors in exchange for a new Note or Notes pursuant
to Section 13.2. The Obligors will afford the benefits of this Section 14.2 to
any Institutional Investor that is the direct or indirect transferee of any Note
purchased by you under this Agreement and that has made the same agreement
relating to such Note as you have made in this Section 14.2.
15. EXPENSES, ETC.
15.1. Transaction Expenses.
Whether or not the transactions contemplated hereby are
consummated, the Obligors will pay all reasonable costs and expenses (including
reasonable attorneys' fees of a special counsel and Costa Rican or other
counsel) incurred by you and each other Purchaser or holder of a Note in
connection with such transactions and in connection with any amendments, waivers
or consents under or in respect of this Agreement, the Notes, or the
Intercreditor Agreement, if any, (whether or not such amendment, waiver or
consent becomes effective), including, without limitation: (a) the reasonable
costs and expenses incurred in enforcing or defending (or determining whether or
how to enforce or defend) any rights under this Agreement, the Notes, or the
Intercreditor Agreement, if any, or in responding to any subpoena or other legal
process or informal investigative demand issued in connection with this
Agreement, the Notes, or the Intercreditor Agreement, if any, or by reason of
being a holder of any Note, and (b) the reasonable costs and expenses, if any,
including financial advisors' fees, incurred in connection with the insolvency
or bankruptcy of the Parent, either Obligor or any other Subsidiary or in
connection with any work-out or restructuring of the transactions contemplated
hereby and by the Notes, or the Intercreditor Agreement, if any, and (c) all
costs and expenses incurred in connection with the registration by the Purchaser
with the Ministerio de Hacienda de Costa Rica for the purposes of obtaining an
exception from the withholding tax referred to in Section 59, Paragraph 7 of the
Costa Rican Income Tax Law (Ley de Impuesto Sobre la Renta No. 7092), as
amended, and the appropriate resolutions of the Direccion General de la
Tributacion Directa del Ministerio de Hacienda de Costa Rica. The Obligors will
pay, and will save you and each other holder of a Note harmless from, all claims
in respect of any fees, costs or expenses if any, of brokers and finders (other
than those retained by you).
15.2. Indemnification by the Obligors
The Obligors shall defend and indemnify the Noteholders (and
their officers, directors and employees) and hold the Noteholders (and their
officers, directors and employees) wholly harmless from and against any and all
losses, liabilities, damages, costs (including, without limitation, court costs
and costs of appeal in any U.S. or foreign jurisdiction) and expenses whatsoever
(including, without limitation, attorneys' fees and expenses) that the
Noteholders (and their officers, directors and employees) incur as a result of
(a) the Noteholders' (and their officers, directors and employees) registration
with the Ministerio de Hacienda de Costa Rica referred to in Section 15.1 herein
or (b) the method of payment of interest or Make-Whole Amount by the Obligors or
any Subsidiary hereunder or (iii) any tax consequences to the
37
Parent, either Obligor or any other Subsidiary deriving from such registration
or payments of interest or Make-Whole Amount.
15.3. Survival.
The obligations of the Obligors under this Section 15 will
survive the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of this Agreement or the Notes or the Intercreditor
Agreement, if any, and the termination of this Agreement.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall
survive the execution and delivery of this Agreement and the Notes, the purchase
or transfer by you of any Note or portion thereof or interest therein and the
partial payment of the Notes, and may be relied upon as true and correct as of
the date hereof by any subsequent holder of a Note, regardless of any
investigation made at any time by or on behalf of you or any other holder of a
Note. All statements contained in any certificate or other instrument delivered
by or on behalf of the Parent or either Obligor, as applicable, pursuant to this
Agreement shall be deemed representations and warranties of the Parent or either
Obligor, as applicable, under this Agreement. Subject to the preceding sentence,
this Agreement and the Notes embody the entire agreement and understanding
between you, the Parent and the Obligors and supersede all prior agreements and
understandings relating to the subject matter hereof. Notwithstanding the
foregoing, except as otherwise expressly set forth herein, all such
representations, warranties and statements are made only as of the date hereof
and as of the Closing Date and at no time subsequent thereto.
17. AMENDMENT AND WAIVER.
17.1. Requirements.
This Agreement, the Notes and any other documents entered into
herewith may be amended, and the observance of any term hereof or of the Notes
may be waived (either retroactively or prospectively), with (and only with) the
written consent of the Parent, both Obligors and the Required Holders, except
that (a) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4,
5, 6 or 21 hereof, or any defined term (as it is used therein), will be
effective as to you unless consented to by you in writing, and (b) no such
amendment or waiver may, without the written consent of the holder of each Note
at the time outstanding affected thereby, (i) subject to the provisions of
Section 12 relating to acceleration or rescission, change the amount or time of
any prepayment or payment of principal of, or reduce the rate or change the time
of payment or method of computation of interest or of the Make-Whole Amount or
Rating Make Whole Amount on, the Notes, (ii) change the percentage of the
principal amount of the Notes the holders of which are required to consent to
any such amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b),
12, 17 or 20.
38
17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Obligors will provide each holder of
the Notes (irrespective of the amount of Notes then owned by it) with reasonable
information (which shall include, but not be limited to, information necessary
to make covenant compliance calculations), not less than five Business Days in
advance of the date a decision is required, to enable such holder to make an
informed and considered decision with respect to any proposed amendment, waiver
or consent in respect of any of the provisions hereof or of the Notes. The
Obligors will pay all reasonable attorney fees and expenses incurred by each
holder of the Notes in connection with the review, evaluation and documentation
of any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Obligors will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) Payment. Neither the Parent nor either Obligor will,
directly or indirectly, pay or cause to be paid any remuneration, whether by way
of supplemental or additional interest, fee or otherwise, or grant any security,
to any holder of Notes as consideration for or as an inducement to the entering
into by any holder of Notes or any waiver or amendment of any of the terms and
provisions hereof unless such remuneration is concurrently paid, or security is
concurrently granted, on the same terms, ratably to each holder of Notes then
outstanding even if such holder did not consent to such waiver or amendment.
17.3. Binding Effect, etc.
Any amendment or waiver consented to as provided in this Section
17 applies equally to all holders of Notes and is binding upon them and upon
each future holder of any Note and upon the Obligors and the Parent without
regard to whether such Note has been marked to indicate such amendment or
waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the
Obligors and the holder of any Note nor any delay in exercising any rights
hereunder or under any Note shall operate as a waiver of any rights of any
holder of such Note. As used herein, the term "this Agreement" and references
thereto shall mean this Agreement as it may from time to time be amended or
supplemented.
17.4. Notes held by Parent, Obligors, etc.
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Parent, the Obligors or
any of the Parent's other Subsidiaries or Affiliates shall be deemed not to be
outstanding.
39
18. NOTICES.
All notices and communications provided for hereunder shall be
in writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other
address as you or it shall have specified to the Parent in writing,
(ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the Parent in
writing, or
(iii) if to the Parent, to the attention of Xxxxxxx Xxxxxx or
Xxxxx X.X. Xxxxxxx, at del Cub Canpestre Espanol 100 metros norte calle
Vista Linda, Heredia, Costa Rica, or at such other address as the Parent
shall have specified to the holder of each Note in writing.
(iv) if to As xx Xxxx, at 0 Xxxxxxxxx Xxxx xx Xxxxxxxxx, Xx
Ribera de Belen, Heredia, Costa Rica, to the attention of Xxxxxxx Xxxxxx
or Xxxxx X.X. Xxxxxxx, and if to Pipasa, at 0 Xxxxxxxxx Xxxx xx
Xxxxxxxxx, Xx Ribera de Belen, Heredia, Costa Rica, to the attention of
Xxxxxxx Xxxxxx or Xxxxx X.X. Xxxxxxx, or at such other address as As xx
Xxxx or Pipasa, respectively, shall have specified to the holder of each
Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications that may hereafter
be executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Obligors and the Parent agree and stipulate that, to the extent permitted by
applicable law, any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by you in
the regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence. This
Section 19 shall not prohibit the Obligors, the Parent or any holder of Notes
from contesting any such reproduction to the same
40
extent that it could contest the original, or from introducing evidence to
demonstrate the inaccuracy of any such reproduction.
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential Information"
means any of the financial statements or other financial information that has
been or may in the future be delivered to you by the Parent or the Obligors or
any other information delivered to you by or on behalf of the Parent or the
Obligors or any other Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement that is proprietary in
nature and that was clearly marked or labeled or otherwise adequately identified
when received by you as being confidential information of the Parent or the
Obligors or such other Subsidiary, provided that such term does not include
information that (a) was publicly known or otherwise known to you prior to the
time of such disclosure, (b) subsequently becomes publicly known through no act
or omission by you or any person acting on your behalf, (c) otherwise becomes
known to you other than through disclosure by the Parent or the Obligors or any
other Subsidiary or (d) constitutes financial statements delivered to you under
Section 7.1 that are otherwise publicly available. You will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by you in good faith to protect confidential information of third
parties delivered to you, provided that you may deliver or disclose Confidential
Information to (i) your directors, officers, employees, agents, attorneys and
affiliates, (to the extent such disclosure reasonably relates to the
administration of the investment represented by your Notes), (ii) your financial
advisors and other professional advisors who agree to hold confidential the
Confidential Information substantially in accordance with the terms of this
Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor
to which you sell or offer to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this Section
20), (v) any Person from which you offer to purchase any security of the Parent
or the Obligors (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this Section 20),
(vi) any federal or state regulatory authority having jurisdiction over you,
(vii) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access to
information about your investment portfolio, or (viii) any other Person to which
such delivery or disclosure may, in the opinion of your counsel, be necessary or
appropriate (w) to effect compliance with any law, rule, regulation or order
applicable to you, (x) in response to any subpoena or other legal process, (y)
in connection with any litigation to which you are a party or (z) if an Event of
Default has occurred and is continuing, to the extent you may reasonably
determine such delivery and disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies under your Notes
and this Agreement. Each holder of a Note, by its acceptance of a Note, will be
deemed to have agreed to be bound by and to be entitled to the benefits of this
Section 20 as though it were a party to this Agreement. On reasonable request by
the Parent or the Obligors in connection with the delivery to any holder of a
Note of information required to be delivered to such holder under this Agreement
or requested by such holder (other than a holder that is a party to this
Agreement or its nominee), such holder will enter into an agreement with the
Obligors embodying the provisions of this Section 20.
41
21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your
Affiliates as the purchaser of the Notes that you have agreed to purchase
hereunder, by written notice to the Obligors, which notice shall be signed by
both you and such Affiliate, shall contain such Affiliate's agreement to be
bound by this Agreement and shall contain a confirmation by such Affiliate of
the accuracy with respect to it of the representations set forth in Section 6.
Upon receipt of such notice, wherever the word "you" is used in this Agreement
(other than in this Section 21), such word shall be deemed to refer to such
Affiliate in lieu of you. In the event that such Affiliate is so substituted as
a purchaser hereunder and such Affiliate thereafter transfers to you all of the
Notes then held by such Affiliate, upon receipt by the Obligors of notice of
such transfer, wherever the word "you" is used in this Agreement (other than in
this Section 21), such word shall no longer be deemed to refer to such
Affiliate, but shall refer to you, and you shall have all the rights of an
original holder of the Notes under this Agreement.
22. INCREASED COSTS; TAXES; INDEMNIFICATION
22.1. Tax Indemnification.
(a) Each Obligor agrees that in the event any payments made
by the Parent, either Obligor or any other Subsidiary or other Person hereunder
or under the Notes to any holder of a Note are subject to any income, stamp or
other taxes, levies, imposts, duties, charges, fees, set-offs, deductions,
withholdings, restrictions or conditions of whatever nature, now or hereafter
imposed, levied, collected, withheld or assessed by or within Costa Rica or any
political subdivision, taxing or other governmental authority thereof or therein
or by the government of any other country or jurisdiction or any authority
therein or thereof (other than the United States) from or through which payment
is made or deemed to be made (such taxes are collectively referred to as
"Taxes"), then amounts payable hereunder shall be increased to such amount as is
necessary so that the holder of any Note shall receive net after Taxes (whether
withheld from amounts due the holder or assessed against the holder), the sum of
(i) the same amount that it would have received had no Taxes applied and (ii)
any Taxes imposed on the amounts by which the payments hereunder are increased.
The Obligors shall pay all Taxes at the time and in the manner prescribed by
applicable law. If the Parent, the Obligors or any Subsidiary fails to withhold
any Taxes as required by applicable law and if such amounts are assessed against
the holder of a Note, the Obligors shall also indemnify the holder of a Note for
any interest and penalties assessed against such holder. The Obligors shall
furnish to each holder of a Note a receipt of Tax withheld at the time and in
the manner prescribed by applicable law; provided, however, that in the event
neither time nor manner is prescribed by applicable law, then the Obligors shall
furnish such information within five (5) Business Days after such information is
received by the Obligors.
(b) Payment under the indemnification described in this
Section 22.1 shall be made (i) in the case of any Taxes which the Parent, the
Obligors or any Subsidiary is required to withhold or deduct from any payment
hereunder, by increasing the payment as may be necessary
42
so that after all such Taxes (including Taxes required in respect of the amount
by which the payment is increased) the holders of the Notes shall receive such
amounts as they would have received had no such Taxes been required to be
withheld, deducted, collected or assessed; and (ii) in any other case, within 30
days from the date any holder entitled to the benefit of such indemnity makes
written demand therefor. A certificate as to the amount required to be
indemnified hereunder and the calculation thereof (if determinable), submitted
to the Obligors by such holder shall be conclusive and binding for all purposes,
absent manifest error and subject to the final determination of any amounts in
respect thereof as a result of a decision of the competent taxing authority and
courts of appeal therefrom.
(c) Without prejudice to the survival of any other agreement
of the Parent or the Obligors hereunder, the agreements and obligations of the
Obligors contained in this Section 22.1 shall survive the payment in full or
principal of and the interest on the Notes and all other amounts payable to the
holders or any of them hereunder or under or in respect of the Notes.
22.2. Currency and Judgment Currency.
Each of the Obligors agrees to indemnify the Noteholders against any
loss incurred by such holder as a result of any judgment or order being given or
made against the Parent, either Obligor or any Subsidiary for any judgment or
order being expressed and paid in a currency other than United States Dollars in
the manner set forth below in (a), (b) and (c):
(a) All payments to be made by the Obligors or any
Subsidiaries pursuant to the Agreement, the Notes, or the Guaranty, including
but not limited to principal, interest, and Make-Whole Amounts, shall be in
immediately available funds in United States dollars, the currency of legal
tender in the United States of America. The Obligors acknowledge that the
purchase of the Notes has been funded by sources outside of Costa Rica and that
in accordance with article 49 of the Organic Law of the Central Bank of Costa
Rica, the Notes shall be paid in the currency of legal tender in the United
States of America.
(b) If for the purpose of obtaining judgment in any court it
is necessary to convert a sum due hereunder to the holder of a Note in one
currency into another currency, the Obligors and each holder agree, to the
fullest extent that they may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures such holder
could purchase the first currency with such other currency in the city which is
the principal financial center of the country of issue of the first currency on
the day on which final judgment is given.
(c) The obligation of the Obligors in respect of any sum
payable by it to the holder of a Note shall, notwithstanding any judgment in a
currency (the "judgment currency") other than that in which such sum is
denominated in accordance with the applicable provisions herein (the "Note
currency") be discharged only to the extent that on the Business Day following
receipt by such holder of the Note of any sum adjudged to be so due in the
judgment currency, such holder of the Note may in accordance with normal banking
procedures purchase the Note currency with the judgment currency. If the amount
of the Note currency so purchased is less
43
than the sum originally due to the holder of the Note in the Note currency
(determined in the manner set forth in the preceding paragraph), the Obligors
agree, as a separate obligation and notwithstanding any such judgment, to
indemnify the holder of the Note against such loss.
23. MISCELLANEOUS.
23.1. Successors and Assigns.
All covenants and other agreements contained in this Agreement
by or on behalf of any of the parties hereto bind and inure to the benefit of
their respective successors and assigns (including, without limitation, any
subsequent holder of a Note) whether so expressed or not.
23.2. Payments Due on Non-Business Days.
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-Whole Amount or interest on
any Note that is due on a date other than a Business Day shall be made on the
next succeeding Business Day without including the additional days elapsed in
the computation of the interest payable on such next succeeding Business Day.
23.3. Severability.
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, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
23.4. Construction.
Each covenant contained herein shall be construed (absent
express provision to the contrary) as being independent of each other covenant
contained herein, so that compliance with any one covenant shall not (absent
such an express contrary provision) be deemed to excuse compliance with any
other covenant. Where any provision herein refers to action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
23.5. Counterparts.
This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which together shall constitute
one instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
44
23.6. Law Governing; Consent to Jurisdiction.
(a) This Agreement shall be governed by and construed in
accordance with the laws of Costa Rica. No provision of this Agreement may be
waived, changed or modified, or the discharge thereof acknowledged, orally,
except by an agreement in writing signed by the party against whom the
enforcement of any waiver, change, modification or discharge is sought. EACH OF
THE OBLIGORS AND THE PARENT IRREVOCABLY AGREE THAT, SUBJECT TO THE NOTEHOLDER'S
SOLE AND ABSOLUTE CONSENT TO A CONTRARY JURISDICTION, ALL ACTIONS OR PROCEEDINGS
IN ANY WAY, MANNER OR RESPECT ARISING OUT OF OR FROM OR RELATED TO THIS
AGREEMENT OR THE NOTES SHALL BE LITIGATED ONLY IN COURTS HAVING SITUS WITHIN
COSTA RICA. EACH OF THE OBLIGORS AND THE PARENT HEREBY CONSENT AND SUBMIT TO THE
JURISDICTION OF ANY COURT LOCATED WITHIN SAN XXXX, COSTA RICA. EACH OF THE
OBLIGORS AND THE PARENT WAIVE ANY RIGHT THEY MAY HAVE TO TRANSFER OR CHANGE THE
VENUE OF ANY LITIGATION BROUGHT AGAINST EACH OF THE OBLIGORS OR THE PARENT BY
THE NOTEHOLDERS IN ACCORDANCE WITH THIS PARAGRAPH.
(b) Notwithstanding the agreement as to the governing law
and the choice of jurisdiction, the parties acknowledge that this Agreement
contains several references to laws of the United States of America and such
parties declare and represent that they know the content of those laws and the
extension of any application such laws might have and the parties undertake to
comply with such laws during the term of this Agreement.
23.7. Service of Process.
Each of the Obligors, for the benefit of the holders from time
to time of the Notes, hereby irrevocably appoints Xx. Xxxxxxxxx X. Xxxxxx S,
Consultores Juridicos Especializados, Primera Xxxxxxx Xxxxxx Xxx xxxxx, Xxx
Xxxx, 000 mts al sur casa mano derecha, Costa Rica as the authorized agent of
the Obligors upon whom process may be served in any suit or proceeding
instituted in any court in Costa Rica arising out of or based upon this
Agreement. The Parent hereby irrevocably appoints CT Corporation Systems, Inc.,
as the authorized agent of the Parent upon whom process may be served in any
suit or proceeding instituted in any court in the United States of America or in
Costa Rica arising out of or based upon this Agreement. Each of the Obligors and
the Parent agree that service of process as aforementioned shall be deemed in
every respect effective service of process on each of the Obligors and the
Parent in any such suit or proceeding and that the failure of any such designee,
appointee and agent to give any notice of such service to it shall not impair or
affect in any way the validity of such service or any judgment rendered in any
action or proceeding based thereon. Nothing herein shall in any way be deemed to
limit the ability of the holders of the Notes to serve any such legal process,
summons, notices and documents in any other manner permitted by applicable law
or to obtain jurisdiction over each Obligor or bring actions, suits or
proceedings against each of the Obligors in such other jurisdictions, and in
such manner, as may be permitted by applicable law. Each of the Obligors agree
to take any and all action, including the execution and filing of all such
45
documents and instruments, as may be necessary to effect and continue the
appointment by the Obligors of said agent in full force and effect so long as
any of the Notes shall be outstanding.
23.8. Knowledge of the Obligors.
As used herein, "knowledge of the Obligors," "to the Obligors'
knowledge," "to the best of the Obligors' knowledge" and all other similar words
and phrases mean the actual knowledge of any Responsible Officer.
23.9. Knowledge of the Parent.
As used herein, "knowledge of the Parent," "to the Parent's
knowledge," "to the best of the Parent's knowledge" and all other similar words
and phrases mean the actual knowledge of any Responsible Officer.
23.10. Currency.
All references to "U. S. Dollars" or the sign "$" shall denote
the lawful currency of the United States of America.
23.11. Federal.
All references to "federal" shall refer to the United States of
America or to Costa Rica or to both of such countries as the context may require
or permit.
* * * * *
46
If you are in agreement with the foregoing, please sign the form
of agreement on the accompanying counterpart of this Agreement and return it to
the Parent and the Obligors, whereupon the foregoing shall become a binding
agreement between you, the Parent and the Obligors.
Very truly yours,
CORPORACION PIPASA, S.A.
By: /s/ Xxxxxxx Xxxxxx Xxxxxx
--------------------------
Its: President
CORPORACION AS XX XXXX
By: /s/ Xxxxxxx Xxxxxx Xxxxxx
--------------------------
Its: President
RICA FOODS, INC.
By: /s/ Xxxxxxx Xxxxxx Xxxxxx
--------------------------
Its: President
47
The foregoing is hereby agreed
to as of the date hereof.
PACIFIC LIFE INSURANCE COMPANY
By: /s/ Xxxxx Xxxxxxxx
------------------------------
Its: Assistant Vice President
By: /s/ Xxxxx X. Oales
------------------------------
Its: Assistant Secretary
PACIFIC LIFE INSURANCE COMPANY,
as agent for Pacific Life CBO 1998-1 LTD.
By: /s/ Xxxxx Xxxxxxxx
-----------------------------
Its: Assistant Vice President
By: /s/ Xxxxx X. Oales
-----------------------------
Its: Assistant Secretary
PACIFIC LIFE & ANNUITY COMPANY
By: /s/ Pet X. Xxxx
-----------------------------
Its: Assistant Vice President
By: /s/ Xxxxx X. Oales
-----------------------------
Its: Assistant Secretary
48
