EXHIBIT 10.21
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INVESTMENT NUMBERS 8354 and 10458
Second Amendment
TO
AMENDED AND RESTATED
INVESTMENT AGREEMENT
among
MSF HOLDING LTD.,
MEDICAL SYSTEMS FINANCE S.A.,
ESTOLUR S.A,
HEALTHCARE SYSTEMS FINANCE S.A.,
MSF/HSF ARGENTINA S.A.,
and
INTERNATIONAL FINANCE CORPORATION
Dated August 18, 2000
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SECOND AMENDMENT TO
AMENDED AND RESTATED
INVESTMENT AGREEMENT
AGREEMENT, dated August 18, 2000, among MSF HOLDING LTD., a company
organized and existing under the laws of the Commonwealth of the Bahamas ("MSF
Holding"), MEDICAL SYSTEMS FINANCE S.A. ("MSF"), ESTOLUR S.A. ("Estolur"),
HEALTHCARE SYSTEMS FINANCE S.A. ("HSF"), each of them a sociedad anonima,
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organized and existing under the laws of Uruguay, and MSF/HSF ARGENTINA S.A., a
sociedad anonima organized and existing under the laws of Argentina, formerly
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known as Sistemas Financieros S.A. and as MSF Argentina S.A. ("MSF Argentina"),
and INTERNATIONAL FINANCE CORPORATION, an international organization established
by Articles of Agreement among its member countries ("IFC").
WHEREAS:
(A) Pursuant to an Amended and Restated Investment Agreement dated April
27, 1998, as amended and restated as of September 29, 1998 and as further
amended on February 25, 1999 (as amended from time to time, the "Investment
Agreement") among the parties hereto, IFC has made a loan to the Co-Borrowers
(as such term and other terms used herein are defined in Section 1) in the
aggregate principal amount of up to forty million Dollars ($40,000,000).
(B) Pursuant to the Security Agreements, the Co-Borrowers have granted to
IFC and FMO security interests in receivables arising under leases and loans
made by them and, pursuant to the Investment Agreement, each of the Co-Borrowers
has agreed to maintain a Loan to Collateral Value Ratio of no more than ninety-
five per cent (95%).
(C) The Co-Borrowers intend to enter into a transaction for the
securitization of its Dollar denominated contracts originated in Brazil and may
enter into other securitization transactions in the future.
(D) The securitization transaction for Dollar denominated receivables
originated in Brazil will involve, and such other securitization transactions
may involve, the transfer to a special purpose entity of receivables in which
IFC and FMO have security interests and the release of such receivables from the
Liens created under the Security Agreements.
(E) IFC is willing to permit such release in connection with Permitted
Securitization Transactions, provided that prior to such release, the Co-
Borrowers grant to IFC and FMO a first priority security interest in cash or
cash equivalents
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and other eligible receivables in an amount equivalent to the value of the
receivables released from the Liens created under the Security Agreements, and
the Co-Borrowers are willing to provide such collateral.
(F) IFC and the Co-Borrowers have agreed to amend the Investment Agreement
to allow for Permitted Securitization Transactions.
(G) IFC and the Co-Borrowers have agreed to amend the Investment Agreement
to provide for the increase in the amount of the B Loan by fifteen million
Dollars ($15,000,000).
NOW, THEREFORE, the parties agree as follows:
Section 1. Definitions. All capitalized terms used in this Agreement
(including the preamble and recitals) and not otherwise defined herein, unless
the context otherwise requires, have the respective meanings given to such terms
in the Investment Agreement.
Section 2. Amendments to the Investment Agreement.
(a) Section 1.01 of the Investment Agreement is amended by:
(i) deleting the definition of the term "Borrowing Base Report" and
replacing it with the following:
"Borrowing Base Report" the monthly report, in form and substance
acceptable to IFC, provided by the Co-Borrowers which shall include
details as set forth in the Security Agreements regarding the
Eligible Leases/Loans, the Eligible Lessees/Borrowers and the IFC/FMO
Security and which sets forth the Loan to Collateral Value Ratio as
at the date of such report and the calculation thereof and which
shall specify any changes since the last such report in the Eligible
Leases/Loans comprising the IFC/FMO Security, and, as to any new
Eligible Leases/Loans comprising the IFC/FMO Security, shall specify
the parties thereto and the amount and term thereof;
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(ii) deleting the definition of the term "Security Agreements" and
replacing it with the following:
"Security Agreements" the agreements evidencing security interests in
receivables under Eligible Leases/Loans, Cash Collateral, and
equipment, granted by the Co-Borrowers to IFC and FMO, with an
aggregate value satisfactory to IFC or having a value of at least
1.05 times the sum of the outstanding amount of the Loan and the FMO
Loan, including, without limitation (i) each of the two Open Pledge
Agreements dated as of October 2, 1998 among MSF Holding, MSF,
Estolur, HSF, IFC and FMO, as amended from time to time; (ii) the
Security Agreement dated as of September 29, 1998 among MSF Holding,
MSF, Estolur, HSF, IFC and FMO, as amended from time to time; (iii)
the Fiduciary Assignment Agreement dated as of February 9, 1999 among
MSF Holding, MSF, Estolur, HSF, MSF Argentina, IFC, FMO and
BankBoston N.A., as amended from time to time; and (iv) the Trustee
Account and Security Agreement;
(iii) inserting in such section in alphabetical order the following
additional definitions:
"Cash Collateral" the Collateral Account and all Permitted Investments
and other property held in the Collateral Account;
"Closing Date" in connection with any Permitted Securitization
Transaction, the date of the documents pursuant to which the relevant
securities are to be issued;
"Collateral Account" the Collateral Account (as defined in the Trustee
Account and Security Agreement);
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"Collateral Agent" the Collateral Agent (as defined in the Trustee
Account and Security Agreement);
"Permitted Investments" Permitted Investments (as defined in the
Trustee Account and Security Agreement);
"Permitted Securitization Transaction" a securitization transaction
(i) in connection with which (A) the amount required by Section
7.01(x) is deposited in the Collateral Account and pledged to IFC and
FMO pursuant to the Trustee Account and Security Agreement and (B)
the Co-Borrowers assign and grant to IFC and FMO pursuant to the
Security Agreements perfected and registered first priority security
interests in Lease/Loan Receivables having the value required by
Section 7.01(x), in substitution for collateral released or to be
released from the Liens created pursuant to the Security Agreements
and (ii) both before and after giving effect to which the Co-
Borrowers will be in compliance with the covenants in Article VII and
no Event of Default or Potential Event of Default will have occurred
or be continuing;
"Trustee Account and Security Agreement" the Trustee Account and
Security Agreement dated as of September 29, 1998 among MSF, HSF, MSF
Argentina, IFC, FMO, BankBoston N.A., BankBoston N.A. acting through
its Buenos Aires, Argentina, Branch, as collateral agent, and DVI
Financial Services, Inc., as amended from time to time;
(iv) replacing the date "September 29, 1998" with "September 30,
1998" each time it appears in the definition of the term "FMO
Documents."
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(b) Section 1.02 of the Investment Agreement is amended by:
(i) deleting the definition of "Loan to Collateral Value Ratio" and
replacing it with the following:
"Loan to Collateral Value Ratio" at any calculation date, (i) the
amount of the Loan and the FMO Loan outstanding on the calculation
date divided by (ii) the sum of (A) the NPV of Assigned Lease/Loan
Receivables plus (B) the value of the Cash Collateral pledged to IFC
and FMO under the Trustee Account and Security Agreement and in which
IFC and FMO have a perfected and registered first priority security
interest;
(ii) deleting the definition of Net Financed Assets and replacing it
with the following:
"Net Financed Assets" all financing provided through Eligible
Leases/Loans outstanding that, at the time of computation, are owned
by or payable to one of the Eligible Co-Borrowers, less principal
payments received;
(iii) deleting the definition of Portfolio Affected by Arrears and
replacing it with the following:
"Portfolio Affected by Arrears" the aggregate principal amount of
leases or loans made by, and, at the time of computation, owned by or
payable to, an Eligible Co-Borrower, which at the time of computation
are in default for at least thirty (30) days;
(iv) adding in alphabetical order the following definition of NPV of
Assigned Lease/Loan Receivables:
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"NPV of Assigned Lease/Loan Receivables" the net present value at any
calculation date of all Lease/Loan Receivables assigned to IFC and FMO
under the Security Agreements and in which IFC and FMO have a
perfected and registered first priority security interest, discounted
at the rate of six-month LIBOR plus 2.75%;
(c) Section 2.02(b) of the Investment Agreement is amended to read as
follows:
(b) The proposed sources of financing for the Project are as follows:
$ million
equivalent
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Equity in MSF Holding
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Voting Shares
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PIE 4.2
FMO 2.1
IFC 2.0
DVI 7.7
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16.0
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Non-Voting Shares
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DVI 4.1
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Total Equity 20.1
Loans
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FMO 10
IFC 55
DVI (Stand-by Facility) 25
Total Loans 90
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TOTAL FINANCING 110.1
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(d) Section 3.01 of the Investment Agreement is amended to read as
follows:
Section 3.01. The Loan. On the terms and subject to the conditions
of this Agreement, IFC agrees to lend to the Co-Borrowers:
(a) the A Loan, being fifteen million Dollars ($15,000,000); and
(b) the B Loan, being forty million Dollars ($40,000,000).
(e) Section 3.06(b) of the Investment Agreement is amended to read as
follows:
(b) The Co-Borrowers shall repay the B Loan on the following dates and
in the following amounts:
Date Payment Due Principal Amount Due
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November 15, 2000 $6,666,666.67
May 15, 2001 $6,666,666.67
November 15, 2001 $6,666,666.67
May 15, 2002 $6,666,666.67
November 15, 2002 $6,666,666.67
May 15, 2003 $6,666,666.67
(f) Section 3.13(a)(v) of the Investment Agreement is amended to read as
follows:
(v) on or after December 31, 2000.
(g) Section 7.01 of the Investment Agreement is amended by deleting
subsection (v), replacing "(w)" with "(v)", replacing the punctuation at the end
of such section with "; " and adding new subsections (w) and (x) as follows:
(w) give IFC at least ten (10) Business Days' prior written notice of
any proposed Permitted Securitization Transaction and in such notice:
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(i) describe the proposed Permitted Securitization Transaction,
including, without limitation, its structure and any
Subsidiaries or Affiliates to be formed;
(ii) specify the loans and leases to be released from the Liens
created under the Security Agreements and any leases or loans to
be assigned to IFC and FMO in connection with such Permitted
Securitization Transaction (including for each loan or lease to
be released or assigned the name of the borrower or lessee, the
amount thereof, and its status (i.e., current or restructured))
and the amount to be deposited in the Collateral Account in
connection with such Permitted Securitization Transaction;
(iii) show a calculation of the Loan to Collateral Value Ratio
before and after giving effect to such Permitted Securitization
Transaction; and
(iv) certify that both before and after giving effect to such
Permitted Securitization Transaction, the Co-Borrowers will be
in compliance with the covenants in Article VII and that no
Event of Default or Potential Event of Default will have
occurred or be continuing; and
(x) in connection with any Permitted Securitization Transaction:
(i) deposit into the Collateral Account an amount in Dollars and
assign and grant to IFC and FMO pursuant to the Security
Agreements perfected and registered first priority security
interests in additional Lease/Loan Receivables, such that the
sum of (A) the amount so deposited and (B) the net present value
of such additional Lease/Loan Receivables, discounted at the
rate of six-month LIBOR plus 2.75%, equals the net present value
of the Lease/Loan Receivables to be released from the Liens
created under the Security Agreements in connection with such
Permitted Securitization Transaction, discounted at the rate of
six-month LIBOR plus 2.75%; and
(ii) deliver to IFC at the Co-Borrowers' cost and expense such
opinions of counsel as IFC may request with respect to the
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validity, perfection and the priority of the security interest
in Cash Collateral and Lease/Loan Receivables granted to IFC and
FMO in connection with such Permitted Securitization
Transaction;
(h) Section 7.02 of the Investment Agreement is amended by deleting "and"
at the end of subsection (c), replacing the punctuation at the end of subsection
(d) with "; and" and adding a new subsection (e) as follows:
(e) maintain a Loan to Collateral Value Ratio of no more than 95%.
(i) Section 7.04(a)(iii) of the Investment Agreement is amended to read as
follows:
(iii) that part of Short-term Debt which is Indebtedness for Money
Borrowed incurred from commercial and/or investment banks in the
ordinary course of business, not exceeding at any one time
outstanding the equivalent of twenty percent (20%) of the sum of
(A) the aggregate principal amount of Eligible Leases/Loans in
the MSF Portfolio plus (B) the value of the Cash Collateral
pledged to IFC and FMO under the Trustee Account and Security
Agreement and in which IFC and FMO have perfected and registered
first priority security interests; and
(j) Section 7.04(d) of the Investment Agreement is amended to read as
follows:
(d) except in connection with a Permitted Securitization Transaction,
enter into any transaction except in the ordinary course of business on the
basis of arm's-length arrangements (including, without limitation,
transactions whereby any of the Co-Borrowers might pay more than the
ordinary commercial price for any purchase or might receive less than the
full ex-works commercial price (subject to normal trade discounts) for its
products);
(k) Section 7.04(g) of the Investment Agreement is amended to read as
follows:
(g) except in connection with a Permitted Securitization Transaction,
form or have any Subsidiary or Affiliate, other than those
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Subsidiaries and Affiliates listed on the attached Schedule 9 that are used
for the purposes previously described by the Co-Borrowers to IFC;
(l) Section 7.04(l) of the Investment Agreement is amended to read as
follows:
(l) other than as contemplated by the Project or in connection with a
Permitted Securitization Transaction, sell, transfer, lease or otherwise
dispose of all or a substantial part of its capital assets (whether in a
single transaction or in a series of transactions, related or otherwise and
including, but not limited to, securitizations or loan sales);
(m) Section 7.04 of the Investment Agreement is amended by deleting "or"
at the end of subsection (q) thereof, inserting "or" at the end of subsection
(r), and adding a new subsection (s) as follows:
(s) permit the value of the Cash Collateral pledged to the Collateral
Agent for the benefit of IFC and FMO under the Trustee Account and Security
Agreement at any date to exceed one-third (1/3) of the NPV of Assigned
Lease/Loan Receivables; provided, that at any date during the one hundred
and twenty-day period immediately following the Closing Date of any
Permitted Securitization Transaction, the value of the Cash Collateral
pledged to the Collateral Agent for the benefit of IFC and FMO under the
Trustee Account and Security Agreement may exceed one-third (1/3), but
shall not exceed one-half (1/2), of the NPV of Assigned Lease/Loan
Receivables at such date.
(n) Section 9.06 of the Investment Agreement is amended by adding at the
end thereof a new section (c) as follows:
(c) For the purpose of calculations under this Agreement, the value of
Permitted Investments shall be the average of the closing bid and asked
prices for the Business Day immediately prior to such valuation as set
forth in the Wall Street Journal (or if unavailable in the Wall Street
Journal for any reason, as set forth in any other recognized financial
publication selected by IFC).
(o) Schedule 2 to the Investment Agreement is amended by deleting the
words "forty million Dollars ($40,000,000)" and replacing them with "fifty-five
million Dollars ($55,000,000)" and inserting after "September 29, 1998" the
words ", as amended,".
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(p) The Investment Agreement is amended by adding at the end thereof as
Schedule 9 the document entitled "Schedule 9" that is annexed hereto.
Section 3. Miscellaneous.
(a) Notwithstanding anything to the contrary in this Agreement, the
amendments set forth in Section 2 shall not become effective until IFC (i)
receives opinions of its counsel in New York, the Bahamas, Uruguay and Argentina
and elsewhere, in form and substance satisfactory to IFC and concurred in by
counsel to the Borrower, with respect to such matters related to this Agreement,
the Investment Agreement, the Trustee Account and Security Agreement, and the
amendment to the Trustee Account and Security Agreement dated as of the date
hereof, as IFC may reasonably request, and (ii) by written notice to the Co-
Borrowers, confirms that such amendments have become effective.
(b) All references in the Investment Agreement to "this Agreement",
"herein", "hereof", "hereunder", "hereto" or expressions of like meaning shall
be references to the Investment Agreement, as amended by this Agreement.
(c) Except as amended hereby, the Investment Agreement shall remain in
full force and effect.
(d) Each of the Co-Borrowers hereby restates, as if set forth herein at
length, and confirms, as of the date hereof, the representations and warranties
made by it in Article V of the Investment Agreement.
(e) The Co-Borrowers shall pay to IFC or as IFC may direct the reasonable
fees and expenses of IFC's counsel in New York, the Bahamas, Uruguay and
Argentina and elsewhere incurred in connection with (i) the preparation and/or
review, execution and, where appropriate, translation and registration of this
Agreement, and any other documents related to this Agreement; and (ii) the
giving of any legal opinions required by IFC in connection herewith.
(f) This Agreement is governed by, and shall be construed in accordance
with, the laws of the State of New York, United States of America.
(g) This Agreement may be executed in several counterparts, each of which
shall be considered an original, but all of which together shall constitute one
and the same agreement.
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IN WITNESS WHEREOF, the parties to this Amendment have caused this
Agreement to be duly executed as of the date first above written.
MSF HOLDING LTD.
By: ___________________________
Name:
Authorized Representative
MEDICAL SYSTEMS FINANCE S.A.
By: _____________________________
Name:
Authorized Representative
ESTOLUR S.A.
By: ___________________________
Name:
Authorized Representative
HEALTHCARE SYSTEMS FINANCE S.A.
By: _________________________________
Name:
Authorized Representative
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MSF/HSF ARGENTINA S.A.
By: _____________________
Name:
Authorized Representative
INTERNATIONAL FINANCE CORPORATION
By: _____________________________________
Name:
Authorized Representative
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SCHEDULE 9
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Page 1 of 2
SUBSIDIARIES AND AFFILIATES
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(see Section 7.04(g) of the Investment Agreement)
MSF HOLDING LTD
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A Holding Company incorporated in the Bahamas.
1. MSF CAYMAN ISLANDS, LTD
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A Company, incorporated in the Cayman Islands.
a. MSF CAYMAN USA LLC
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A Delaware Limited Liability Company.
b. MSF TRUSTEE LTDA
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A Brazilian Limitada.
c. MSF DO BRASIL LTDA and HSF DO BRASIL LTDA
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Two Brazilian Limitada companies.
2. MSF INTERMEDIATE HOLDINGS LLC
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A Cayman Islands Company.
a. MSF FUNDING LLC
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A Delaware Special Purpose Corporation.
b. MSF INTERMEDIATE ACQUISITION LLC
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A Delaware Limited Liability Company.
3. MEDICAL SYSTEMS FINANCE S.A.
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A Uruguayan sociedad anonima.
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SCHEDULE 9
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Page 2 of 2
4. HEALTHCARE SYSTEMS FINANCE S.A.
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A Uruguayan sociedad anonima.
5. ESTOLUR S.A.
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A Finance Investment Company (S.A.F.I.).
a. MSF DE COLOMBIA LTDA and HSF DE COLOMBIA LTDA
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Two Colombian operating entities.
b. MSFOPERATIONS DE MEXICO S.A. and H.S.F. OPERATIONS DE MEXICO S.A.
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Two Mexican operating entities.
6. MSF/HSF ARGENTINA S.A.
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A Company established in Argentina.
