MASTER INVESTMENT AGREEMENT
Master
Investment Agreement, dated as of December 14, 2005 (this “Agreement”),
by
and
among Grupo
Lakas S.A.,
a
Panamanian corporation (the “Investor”),
Panama Peat S.A., a Panamanian corporation (“PPSA”),
Changuinola Peat S.A., a Panamanian corporation (“CPSA”
and
together with PPSA, the “Issuers”),
Strategy
Holding Company Limited, a Barbados company
(the
“Company”),
and
Strategy International Insurance Group, Inc., a Texas corporation (“Strategy”).
R
E C I T A L S
A. The
Investor has agreed to make an investment in the Company (the “Investment“) of
that
certain secured convertible promissory note, issued by the Investor in favor
of
the Company, in the original principal amount of $700,000,000 (as amended,
restated, supplemented or otherwise modified from time to time, the
“Note”),
upon
the terms and subject to the conditions set forth herein, in consideration
for
certain preferred shares of the Company, as more fully described
herein.
B. The
obligations of the Investor under the Note will be secured by certain Peat
Certificates (as defined below) and the peat evidenced thereby, which peat
certificates shall be delivered to the Company pursuant to the terms of that
certain security agreement, dated of even date herewith, by and between the
Investor and the Company (the “Security
Agreement”).
C. In
connection with and as consideration for the making of the Investment, Strategy
has agreed to issue a warrant to the Investor for the purchase of shares
of
Strategy, pursuant to the terms of that certain warrant agreement made by
Strategy to the Investor (the “Warrant”),
and
the Strategy shares acquired pursuant thereto shall be subject to that certain
registration rights agreement between Strategy and the Investor (the
“Registration
Rights Agreement”).
Now
therefore, in consideration of the foregoing and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged,
the
parties hereto hereby agree as follows:
ARTICLE
1
DEFINITIONS
Definitions
Used Herein.
When
used in this Agreement, the following terms shall have the following
meanings:
1.1 Ancillary
Agreements
shall
mean any and/or all of (i) the Note, (ii) the Security Agreement, (iii) the
Warrant, and (iv) the Registration Rights Agreement.
1.2 Approval
Date
shall
mean the date on which the Supervisor of Insurance in Barbados approves the
Further Investment as authorized regulatory capital of Strategy Insurance
under
Barbados law.
1.3 Business
Day
shall
mean a day other than a Saturday or Sunday on which commercial banks in New
York
State are authorized permitted to open for the transaction of customary banking
business.
1.4 Certificate
of Designation
shall
have the meaning set forth in Section 3.1.3.
1.5 Closing
shall
have the meaning set forth in Section 2.2.
1.6 Closing
Certificate
shall
mean a certificate, issued by a senior officer of the relevant entity, attaching
thereto a certificate of incumbency with respect to the signature of each
individual executing and delivering any documents or instruments on behalf
of
such entity (ii) a copy of a good standing certificate or similar document
issued by the relevant Governmental Authority with respect to such entity;
and
(iii) a copy of the resolutions of the governing body of such entity,
authorizing the execution, delivery and performance by such entity of, as
applicable, this Agreement and the Ancillary Agreements to which such entity
is
a party in accordance with their respective terms and of any other documents
contemplated hereunder and the consummation of the transactions contemplated
hereby and thereby.
1.7 Closing
Date
shall
have the meaning set forth in Section
2.2.
1.8 Company
Common Stock
shall
have the meaning set forth in Section
4.4.
1.9 Company
Preferred Stock
shall
have the meaning set forth in Section
4.4.
1.10 Conversion
Right
shall
have the meaning set forth in Section
2.1
1.11 CPSA
shall
have the meaning set forth in the preamble to this Agreement.
1.12 CPSA
Hectares
shall
have the meaning set forth in Section
7.3.
1.13 Event
of Default
shall
have the meaning set forth in Section
9.1.
1.14 Further
Investment
shall
have the meaning set forth in Section
8.6.
1.15 Governmental
Authority
shall
mean, with respect to any party hereto, any nation or government, any state
or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
1.16 Investment
shall
have the meaning set forth in Section
2.1.
-
2
-
1.17 Material
Adverse Effect
shall
mean, with respect to a party hereto, a material adverse effect on the business,
operations, liabilities, properties, assets or financial condition of such
party.
1.18 Other
Person
shall
mean any individual, corporation (including any non-profit corporation),
general
or limited partnership, limited liability company, joint venture, estate,
trust,
association, organization, labor union, or other entity or Governmental
Authority not a party to this Agreement.
1.19 Peat
Certificates
shall
mean the bearer certificates for peat issued by the Issuers together with
the
additional bearer certificates for peat, if any, that the Issuers shall issue
from time to time and deliver to the Company (or assigns), pursuant to the
terms
hereof and of the Security Agreement, each of which is described in the Security
Agreement, as listed on Exhibit
1.16
hereto).
1.20 Peat
Concessions
shall
mean the concessions granted by the Republic of Panama to (i) PPSA on October
17, 2005 and (ii) CPSA on July 7, 1999.
1.21 Peat
Reduction Amount
shall
mean (x) with respect to any sale or assignment of a Peat Certificate, the
value
of the peat evidenced thereby as stated on the face of such Peat Certificate;
and (y) with respect to any sale or assignment of peat underlying any such
Peat
Certificate, the ex-Mine price of such peat, the value of such peat, the
value
in each case determined pursuant to the Valuation Method.
1.22 PPSA
shall
have the meaning set forth in the preamble to this Agreement.
1.23 PPSA
Hectares
shall
have the meaning set forth in Section
7.1.
1.24 Preferred
Shares
shall
have the meaning set forth in Section
2.1.
1.25 Redemption
shall
have the meaning set forth in Section
2.1.
1.26 Redemption
Amount
shall be
$700,000,000, plus any accrued and unpaid dividends.
1.27 Registration
Rights Agreement
shall
have the meaning assigned thereto in Recital C above.
1.28 Required
Ratio
shall
have the meaning set forth in Section
8.2.
1.29 Securities
Act
shall
mean the Securities Act of 1933, as amended, or any successor law, and
regulations and rules issued pursuant to such act or successor law.
1.30 Security
Agreement shall
have the meaning assigned thereto in Recital B above.
1.31 Strategy
Insurance
shall
mean Strategy Insurance Limited, a Barbados company.
-
3
-
1.32 Valuation
Method
shall
mean the greater of (x) the “ex-mine price” of peat, based on the price as
quoted from time to time by, and based on the then most current quote of,
the
United States Department of Agriculture, and (y) the ex-Mine price of peat
as
determined from time to by the independent appraiser retained by the Company
in
accordance with this Agreement.
1.33 Warrant
shall
have the meaning set forth in Recital C above.
1.34 Additional
Definitional Provisions.
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
1.34.1 the
terms
defined in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender
herein
shall be deemed to include the other gender;
1.34.2 accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with United States generally accepted accounting principles as
in
effect from time to time;
1.34.3 references
herein to “Articles”, “Sections”, “Subsections”, “Paragraphs” and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;
1.34.4 a
reference to a Subsection without further reference to a Section is a reference
to such Subsection as contained in the same Section in which the reference
appears, and this rule shall also apply to Paragraphs and other
subdivisions;
1.34.5 the
words
“herein”, “hereof”, “hereunder”, “hereto”, “hereby” and other words of similar
import refer to this Agreement as a whole and not to any particular provision;
and
1.34.6 the
terms
“include” and “including” shall mean without limitation by reason of
enumeration.
ARTICLE
2
CLOSING
2.1 Investment
of the Note; Terms of the Note Subject
to the terms and conditions of this Agreement, at
the
Closing, the Investor shall assign, transfer, convey and contribute (the
“Investment”)
to the
Company, and the Company shall accept and acquire from the Investor, the
Note
and the Investor shall simultaneously deliver therewith the Peat Certificates
securing the same. The parties hereto hereby agree, and the Note shall provide,
that at any time and from time to time the Company (and its assigns) shall
have
the right, in the sole discretion thereof, to convert (the “Conversion Right”)
the Peat Certificates and/or the underlying peat constituting collateral
for the
Note to cash proceeds, such cash proceeds to be applied as a deemed prepayment
of the outstanding principal balance of, and accrued interest on, the Note
(and
such amounts shall be applied to either the outstanding interest or principal
balance, as determined by the Company in its sole discretion.) To exercise
the
Conversion Right, the Company (or its assigns) may from time to time, at
its
sole discretion, sell or assign one or more of the Peat Certificates, and/
or
may mine, or cause to be mined, all or any of the peat evidenced by any such
Peat Certificate, in accordance with the terms of the relevant Peat Concession.
Upon the exercise by Company and/or its assigns of such Conversion Right
and the
consummation of the sale of the relevant Peat Certificate and/or underlying
peat
without any further action being required by either the Investor, the Company
or
its assigns, the principal balance of, and/or accrued interest on, the Note
shall be reduced by the Peat Reduction Amount for such transaction. In such
connection, not later than fifteen (15) days after the consummation of any
such
sale of a Peat Certificate or the underlying peat, the Company shall deliver
to
the Investor a notice (the “Reduction Notice”), setting forth the Peat Reduction
Amount, and indicating that such amount has been applied as a prepayment
on and
a reduction of the outstanding principal balance of, and/or accrued and unpaid
interest on, the Note.
-
4
-
2.2 Issuance
of Preferred Shares
In
consideration for the Investment, the Company shall issue to the Investor
24
shares of the Company’s nonvoting preferred stock, designated as Class D
Preferred Stock (the “Preferred
Shares”).
The
Preferred Shares shall have the following rights, preferences, privileges
and
restrictions:
2.2.1 Dividend
on the
Preferred
Shares.
Each of
the Preferred Shares shall carry a dividend, payable out of realized profits
or
surplus of the Company available for dividends, at an annual rate of 3.43%
(i.e., One Million Dollar (US$1,000,000) per share per annum (the “Base
Dividend”),
which
shall accrue and be payable on the last day of June and December in each
year,
commencing on June 30, 2006. In addition to the Base Dividend, the Preferred
Shares will provide an additional dividend (the “Bonus
Dividend”),
payable out of realized profits or surplus of the Company available for
dividends, equal to the dividend (the “SIL Bonus Dividend”) payable to the
Company by its subsidiary Strategy Insurance Limited, a Barbados company
(“SIL”)
and a subsidiary of Holdings, which SIL Dividend (and therefore the Bonus
Dividend) shall equal 12% of the gross insurance premiums written by SIL
during
each calendar year (pro rated for partial years) following the Closing in
excess
of $200,000,000; provided
that
neither the SIL Dividend nor, consequently, the Bonus Dividend, shall exceed
$60,000,000 with respect to any calendar year.
2.2.2 Redemption
of the Preferred
Shares.
The
Preferred Shares shall be redeemable by the Company at any time, in whole
or in
part, upon not less than five (5) Business Days prior notice to the Investor,
for the Redemption Amount.
2.2.3 Non-Convertible. The
Preferred Shares shall not be convertible into any other shares (of whatever
class) of the capital of the Company.
2.2.4 Non-Assignable.
The
Preferred Shares may not be, and the Investor hereby covenants and agrees
that
it shall not cause or permit the Preferred Shares to be sold, assigned,
transferred or hypothecated.
-
5
-
2.2.5 Board
Seats.
As long
as 50% of the Preferred Shares are outstanding and held by the Investor,
the
Investor shall be entitled to appoint two members of the Board of Directors
of
Strategy, which appointment shall be effectuated within thirty (30) days
following the Approval Date. Except for such right to appoint directors,
the
holder of the Preferred Shares shall have no voting right.
2.3 Closing.
The
closing of the Investment (the "Closing")
shall
take place at the New York offices of Xxxxx & XxXxxxxx LLP, subject to the
satisfaction or waiver of the conditions set forth in Article 3, on December
14,
2005, or such other earlier date as is agreed to by the parties to this
Agreement (the “Closing
Date”).
2.4 Deliveries.
At the
Closing, subject to the terms and conditions hereof, in addition to the
documents set forth elsewhere herein, which are required to have been entered
into prior to or as of the date of the Investment, the following deliveries
shall be made:
2.4.1 the
Company, will deliver to the Investor:
(a) one
or
more stock certificates representing the Preferred Shares, registered in
the
Company’s name;
(b) a
Closing
Certificate;
(c) the
Warrant;
(d) the
Registration Rights Agreement;
(e) evidence
that the Company and/or the Investors have caused to be registered in the
public
register of Panama liens in favor of the Company and its assigns with respect
to
all of the peat subject to the Peat Certificates, including, without limitation,
any and all Peat Certificates which may from time to time be delivered after
the
Closing pursuant to the terms hereof and of the Security Agreement;
and
(f) such
other certificates, documents or instruments as the Investor shall reasonably
request.
2.4.2 the
Investor will deliver to the Company:
(a) the
Note,
duly executed by the Investor;
(b) the
Security Agreement, duly executed by the Investor;
(c) the
Peat
Certificates duly transferred to the Company or its nominee;
(d) an
opinion of counsel in form and substance acceptable to the Company;
-
6
-
(e) a
Closing
Certificate; and
(f) such
other certificates, documents or instruments as the Company shall reasonably
request.
ARTICLE
3
PRECONDITIONS
TO CLOSING
3.1 Conditions
to the Investor’s Obligations at the Closing.
The
Investor’s obligations to make the Investment at the Closing are subject to the
satisfaction, at or prior to the Closing, of the following
conditions:
3.1.1 Representations
and Warranties True.
The
representations and warranties made by the Company herein shall be true and
correct in all material respects as of the Closing Date with the same force
and
effect as if they had been made as of the Closing Date.
3.1.2 Consents,
Permits, and Waivers.
The
Company shall have obtained any and all consents, permits and waivers necessary
or appropriate for issuance of the Preferred Shares in consideration of the
Investment, except for such as may be properly obtained subsequent to the
Closing.
3.1.3 Amendment
of Certificate of Incorporation.
An
amendment to the Certificate of Incorporation authorizing the Preferred Shares
shall have been approved by, if required, the shareholder(s), and by the
Board
of Directors of the Company, and the same shall be promptly filed with the
relevant Barbados governmental authorities, and shall thereafter be in full
force and effect.
3.2 Conditions
to the Company’s Obligations at the Closing.
The
Company’s obligation to accept the Investment and to issue the Preferred Shares
at the Closing are subject to the satisfaction, on or prior to the Closing,
of
the following conditions:
3.2.1 Representations
and Warranties True.
The
representations and warranties made by the Investor and each Issuer herein
shall
be true and correct in all material respects as of the Closing Date, with
the
same force and effect as if they had been made as of the Closing
Date.
3.2.2 Performance
of Obligations.
The
Investor and the Issuers shall have performed and complied with all agreements
and conditions herein required to be performed or complied with by the Investor
and the Issuers on or before the Closing.
3.2.3 Consents,
Permits, and Waivers.
The
Investor and each Issuer shall have obtained any and all consents, permits
and
waivers necessary or appropriate for consummation of the transactions
contemplated by the Agreement.
-
7
-
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
The
Company hereby represents and warrants to the Investor as follows:
4.1 Organization
and Qualification.
It is
duly organized and is validly existing and in good standing under the laws
of
Barbados, with all requisite corporate power and authority to own, operate
and
lease its properties and to carry on its business as it is now being conducted,
except where the failure to be so organized, existing and in good standing
or to
have such power or authority is not, in the aggregate, reasonably likely
to have
a Material Adverse Effect. The Company is qualified or licensed to do business
and is in good standing in each jurisdiction where the nature of the business
conducted by it or the properties owned or leased by it requires qualification,
except where the failure to be so qualified or licensed is not, in the
aggregate, reasonably likely to have a Material Adverse Effect.
4.2 Corporate
Authority.
The
execution and delivery by the Company of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by, as applicable, the board
of
directors or other governing body, as applicable, of the Company and no other
corporate proceedings on the part of the Company are necessary to authorize
or
to consummate the transactions contemplated hereby on the dates the same
are
intended to be so consummated. This Agreement and each of the Ancillary
Agreements has been duly and validly executed by the Company, and this Agreement
and the Ancillary Agreements constitute valid and binding agreements of the
Company, enforceable against the Company in accordance with the terms hereof
and
thereof, except that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter
in
effect relating to creditors’ rights; and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
4.3 No
Violation.
The
execution and delivery of this Agreement and each of the other Ancillary
Agreements and the performance by the Company of its obligations hereunder
and
under the Ancillary Agreements, and the consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements will not, violate,
conflict with or result in any breach of any provision of the its organization
documents.
4.4 Issuance
of Preferred Shares.
Upon
the
delivery to the Company of the duly executed Note and the Peat Certificates,
and
the delivery to the Investor of the certificate(s) evidencing the Preferred
Shares, the Preferred Shares will be validly issued, fully paid and
non-assessable.
4.5 Consents.
No
consent, approval, authorization or order of any federal, state or local
court
or governmental agency or body is required for the consummation the Company
of
the transactions contemplated hereby or by any of the Ancillary Agreements,
other than as have been obtained thereby.
-
8
-
ARTICLE
5
REPRESENTATIONS
AND WARRANTIES OF THE INVESTOR
The
Investor hereby makes the following representations and warranties:
5.1 Organization
and Qualification.
The
Investor is a corporation duly organized, validly existing and in good standing
under the laws of Panama, with all requisite corporate power and authority
to
own, operate and lease its properties and to carry on its business as it
is now
being conducted, except where the failure to be so organized, existing and
in
good standing or to have such power or authority is not, in the aggregate,
reasonably likely to have a Material Adverse Effect. The Investor is qualified
or licensed to do business and is in good standing in each jurisdiction where
the nature of the business conducted by it or the properties owned or leased
by
it requires qualification, except where the failure to be so qualified or
licensed is not, in the aggregate, reasonably likely to have a Material Adverse
Effect.
5.2 Corporate
Authority.
The
execution and delivery by the Investor of this Agreement and the Ancillary
Agreements and consummation of the transactions contemplated hereby and thereby
have been duly and validly authorized by its board of directors or other
governing body, as applicable, and no other corporate proceedings on the
part of
the Investor are necessary to authorize or to consummate the transactions
contemplated hereby on the dates the same are intended to be so consummated.
This Agreement and each of the Ancillary Agreements has been duly and validly
executed by the Investor, and this Agreement and the Ancillary Agreements
constitute valid and binding agreements of the Investor, enforceable against
the
Investor in accordance with the terms hereof and thereof, except that (i)
such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors’ rights;
and (ii) the remedy of specific performance and injunctive and other forms
of
equitable relief may be subject to equitable defenses and to the discretion
of
the court before which any proceeding therefor may be brought.
5.3 No
Violation.
The
execution and delivery of this Agreement and as applicable, each of the
Ancillary Agreements and the performance by the Investor of its obligations,
hereunder and under the Ancillary Agreements, and the consummation by the
Investor of the transactions contemplated by this Agreement and the Ancillary
Agreements will not (a) violate, conflict with or result in any breach of
any
provision of the Articles of Incorporation or Bylaws, or similar formation
documents, of the Investor, (b) violate, conflict with or result in a violation
or breach of, or constitute a default (with or without due notice or lapse
of
time or both) under the terms, conditions or provisions of any note, bond,
mortgage, indenture or deed of trust, or any material license, lease or
agreement to which the Investor is a party, or (c) violate any order, writ,
judgment, injunction, decree, statute, rule or regulation of any court or
Governmental Authority applicable to the Investor, except such defaults and
violations which, in the aggregate, are not reasonably likely to have a Material
Adverse Effect.
5.4 No
Litigation.
No
litigation (including, but not limited to actions, suits or proceedings in
Panama or by or before any Governmental Authority of Panama or any subdivision
thereof) is pending or threatened against, relating to, or affecting the
Investor or any of its properties, rights or assets.
-
9
-
5.5 Solvency.
The
Investor has been solvent at all relevant times prior to, and will not be
rendered insolvent by, its transfer of the Peat Certificates to the
Company.
5.6 Investment
Intent.
The
Investor is acquiring the Preferred Shares hereunder and the right to acquire
Company Common Stock pursuant to the Warrant for its own account and with
no
present intention of distributing or selling the Preferred Shares or the
Company
Common Stock, and the Investor will not transfer the Preferred Shares or
the
Company Common Stock in violation of the Securities Act or any applicable
state
securities law, or otherwise, and no one other than the Investor has any
beneficial interest in the Preferred Shares. The Investor will not sell or
otherwise dispose of any of the Preferred Shares or the Company Common Stock
and
the Investor understands that the Preferred Shares and the Company Common
Stock
being acquired hereunder have not been registered under the Securities Act
by
reason of their contemplated issuance in transactions exempt from the
registration and prospectus delivery requirements of the Securities Act pursuant
to Section 4(2) thereof, and that the reliance of the Company on such exemption
from registration is predicated in part on these representations and warranties
of the Investor. The Investor acknowledges that a restrictive legend consistent
with the foregoing has been or will be placed on the certificates for the
Preferred Shares.
5.7 Consents.
No
consent, approval, authorization or order of any federal, state or local
court
or governmental agency or body is required for the consummation by the Investor
of the transactions contemplated hereby or by any of the Ancillary Agreements,
other than as have been obtained thereby.
5.8 Investor
Status.
The
Investor is either an “accredited investor” as such term is defined in Rule
501(a) of Regulation D under the Securities Act, or is not a “U.S.
person”
as such term is defined in Rule 902(k)(1) of Regulation S under the Securities
Act and
is
not acquiring the Preferred Shares for the account or benefit of any U.S.
person. The Investor has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the investment
to be made by it hereunder. The Investor has consulted with its own legal,
tax
and business advisors regarding this transaction. The
Preferred Shares and the Company Common Stock to be acquired by the Investor
upon the making of the Investment or pursuant to the Warrant will be acquired
for investment purposes for the Investor’s own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof,
the Investor has no present intention of selling, granting any participation
in,
or otherwise distributing the same. By executing this Agreement, the Investor
further represents that it does not have any contract, undertaking, agreement
or
arrangement with any person to sell, transfer or grant participations to
such
person or to any third person, with respect to any of the
securities.
5.9 Investment
Experience.
The
Investor is able to bear the economic risk of its investment and has such
knowledge and experience in financial or business matters that it is capable
of
evaluating the merits and risks of the investment in the Company.
-
10
-
5.10 Disclosure
of Information.
The
Investor has been furnished with access to all information and filings relating
to the business, finances and operations of the Company which have been
requested thereby. The Investor has been afforded the opportunity to ask
questions of representatives of the Company and has received answers to such
questions, as the Investor deems necessary in connection with its decision
to
make the Investment and acquire the Preferred Shares.
5.11 Compliance
with Laws.
The
Investor has complied with all applicable laws of its jurisdiction in connection
with the subscription of the securities pursuant to this Agreement and otherwise
in connection with this Agreement, including (i) the legal requirements within
its jurisdiction for the acquisition of the Preferred Shares the Company
Common
Stock pursuant to the Warrant; (ii) any foreign exchange restrictions applicable
to such purchase; (iii) any governmental or other consents that may need
to be
obtained; and (iv) the income tax and other consequences, if any, that may
be
relevant to the purchase, holding, redemption, sale or transfer of the Preferred
Shares or the Company Common Stock. The Investor’s subscription and payment for,
and its beneficial ownership of, the Preferred Shares and the Company Common
Stock will not violate any applicable security or other law of the Investor’s
jurisdiction.
5.12 Independent
Decision.
The
Investor is not relying on any of the Company or any of its affiliates or
on any
legal or other opinion in the materials reviewed by the Investor with respect
to
the financial or tax considerations of the Investor relating to its investment
in the Company. The Investor has relied solely on the representations and
warranties, covenants and agreements regarding the Company in this Agreement
and
on its examination and independent investigation in making its decision to
acquire the Preferred Shares and Company Common Stock pursuant to the
Warrant.
5.13 Brokers
or Finders.
The
Investor has incurred no liability for brokerage or finders’ fees or agents’
commissions or other similar payment in connection with the transactions
contemplated by this Agreement or the Ancillary Agreements.
ARTICLE
6
REPRESENTATIONS
AND WARRANTIES OF THE ISSUER
Each
of
the Issuers hereby makes the following representations and
warranties:
6.1 Organization
and Qualification.
Each of
the Issuers is a corporation duly organized, validly existing and in good
standing under the laws of Panama, with all requisite corporate power and
authority to own, operate and lease its properties and to carry on its business
as it is now being conducted, except where the failure to be so organized,
existing and in good standing or to have such power or authority is not,
in the
aggregate, reasonably likely to have a Material Adverse Effect. Each of the
Issuers is qualified or licensed to do business and is in good standing in
each
jurisdiction where the nature of the business conducted by it or the properties
owned or leased by it requires qualification, except where the failure to
be so
qualified or licensed is not, in the aggregate, reasonably likely to have
a
Material Adverse Effect.
-
11
-
6.2 Corporate
Authority.
The
execution and delivery by each of the Issuers of this Agreement and the
Ancillary Agreements to which it is a party, and consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by its board of directors or other governing body, as applicable,
and
no other corporate proceedings on the part of such Issuer are necessary to
authorize or to consummate the transactions contemplated hereby on the dates
the
same are intended to be so consummated. This Agreement and each of the Ancillary
Agreements has been duly and validly executed by each of the Issuers, and
this
Agreement and the Ancillary Agreements, to which it is a party, constitute
valid
and binding agreements of each such Issuer, enforceable against such Issuer
in
accordance with the terms hereof and thereof, except that (i) such enforcement
may be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors’ rights; and (ii)
the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the
court
before which any proceeding therefor may be brought.
6.3 No
Violation.
The
execution and delivery of this Agreement and as applicable, each of the
Ancillary Agreements to which each Issuer is a party, and the performance
by
each such Issuer of its obligations, hereunder and under the Ancillary
Agreements, and the consummation by such Issuer of the transactions contemplated
by this Agreement and the Ancillary Agreements, as applicable, will not (a)
violate, conflict with or result in any breach of any provision of the Articles
of Incorporation or Bylaws, or similar formation documents, of such Issuer,
(b)
violate, conflict with or result in a violation or breach of, or constitute
a
default (with or without due notice or lapse of time or both) under the terms,
conditions or provisions of any note, bond, mortgage, indenture or deed of
trust, or any material license, lease or agreement to which such Issuer is
a
party, or (c) violate any order, writ, judgment, injunction, decree, statute,
rule or regulation of any court or Governmental Authority applicable to such
Issuer, except such defaults and violations which, in the aggregate, are
not
reasonably likely to have a Material Adverse Effect.
6.4 No
Litigation.
No
litigation (including, but not limited to actions, suits or proceedings in
Panama or by or before any Governmental Authority of Panama or any subdivision
thereof) is pending or threatened against, relating to, or affecting any
Issuer,
its respective Peat Concession, any of its properties, rights or assets.
6.5 Consents.
No
consent, approval, authorization or order of any federal, state or local
court
or governmental agency or body is required for the consummation by either
Issuer
of the transactions contemplated hereby or by any of the Ancillary Agreements,
other than as have been obtained thereby, except that in order for the Company
or any person other then the Issuer to extract material from the Peat
Concessions, it must obtain the approval Ministry of Commerce and Industry
of
Panama with respect to its technical competence to perform such
extraction.
6.6 Brokers
or Finders.
No
Issuer has incurred liability for brokerage or finders’ fees or agents’
commissions or other similar payment in connection with the transactions
contemplated by this Agreement or the Ancillary Agreements.
6.7 Capitalization.
The
Investor is the sole shareholder of each of the Issuers.
-
12
-
ARTICLE 7
PEAT
REPRESENTATIONS AND WARRANTIES
The
Investor and each of the Issuers hereby jointly and severally makes the
following representations and warranties, as of the date hereof, and as of
the
Closing Date and each such representation and warranty shall survive the
Closing
and shall be deemed to have been remade on each day thereafter unless and
until
the Note shall no longer be outstanding:
7.1 PPSA
has
been granted and currently holds mining rights to 24,739,3517 hectares in
Bocas
del Toro Province, Panama (the “PPSA
Hectares”)
pursuant to the PPSA Concession, which PPSA Concession has an initial term
of 6
years for exploration and 25 years for development, and is renewable upon
written request by PPSA or its assignee for three added periods in an aggregate
of 20 years.
7.2 The
terms
of the PPSA Concession require that PPSA’s only obligation to maintain the PPSA
Concession is the PPSA make an annual payment to the Republic of Panama in
the
amount of $10,514.50 plus any royalties that accrue following extraction
and
shipment of material. Pursuant to Article 210 of the Mining Code, this amount
corresponds to $0.50 per hectare per year less a 15% discount pursuant to
Law
#32 dated February 9, 1996. Further pursuant to Article 211, royalty payments
accrue to the State at the rate of 2% of its value as determined by shipping
xxxx of lading or commercial invoice. Pursuant to the PPSA Concession, PPSA
holds access rights to the PPSA Hectares by virtue of its Concession and
further
holds peremptory rights to the surface area for the purpose of effecting
extraction of the material to permit PPSA to mine, process and ship the peat
located on the PPSA Hectares.
7.3 CPSA
has
been granted and currently holds mining rights to 17,517,5290 hectares in
Bocas
del Toro Province, Panama (the “CPSA
Hectares”)
pursuant to the CPSA Concession which CPSA Concession has an initial term
of 40
years, and is renewable without the need for CPSA or any other Person to
take
any action.
7.4 The
terms
of the CPSA Concession require that CPSA’s only obligation to maintain the CPSA
Concession is that CPSA make an annual payment to the Republic of Panama
in the
amount of $7,445.15. Pursuant to Article 210 of the Mining Code, this amount
corresponds to $0.50 per hectare per year less a 15% discount pursuant to
Law
#32 dated February 9, 1996. Further pursuant to Article 211, royalty payments
accrue to the State at the rate of 2% of its value as determined by shipping
xxxx of lading or commercial invoice. Pursuant to the CPSA Concession, CPSA
holds access rights to the CPSA Hectares by virtue of its Concession and
further
holds peremptory rights to the surface area for the purpose of effecting
extraction of the material to permit CPSA to mine, process and ship the peat
located on the CPSA Hectares.
7.5 Each
of
the Peat Concessions is in full force and effect and no proceedings have
been
commenced to revoke, and there exists no lien, claim or encumbrance on or
with
respect to either Peat Concession.
-
13
-
7.6 Each
Peat
Certificate has been validly and duly issued by the relevant Issuer upon
approval of the majority of their respective shareholders, and each Peat
Certificate has been executed by its respective president and secretary and
constitutes the legal, valid and binding obligation of such Issuer, enforceable
in accordance with its terms and each represents the binding and irrevocable
obligation of such Issuer thereof to deliver the value of peat described
therein. The value of each Peat Certificate delivered hereby is and shall
at all
times be $50,000,000 (subject only to a sale of underlying peat upon exercise
of
the Conversion Right.). Each such Peat Certificate provides, by its terms,
that
if the fair market value of the peat underlying the Peat Certificates drops
below $50,000,000 (determined in accordance with the Valuation Method), without
any action being required to be taken by the Company or any Issuer or any
other
Person, the volume of peat evidenced by such Peat Certificate shall
automatically be adjusted by such amount so that the value of such Peat
Certificate shall be $50,000,000 (stated in the Peat Certificates as a
proportional adjustment in volume between the face dollar amount of such
peat as
stated on such certificate and the fair market value of such volume of peat
at
presentation of such Peat Certificate.) The Peat Certificates constitute
a
hypothecation to the bearer of that portion of the Concession granted to
the
Issuer to mine peat at the location specified on the relevant Peat certificate;
entitle the holder (whether or not Panamanian and without limitation including
the Company) thereof to exercise both the surface rights and the access rights,
and to exercise the Concession rights, and acquire the peat from the ground
(i.e. mine the peat) in the quantities evidenced by the relevant Peat
certificate.
7.7 The
rights granted pursuant to the Peat Certificates will not be invalidated,
altered or hypothecated by the issuance of subsequent bearer certificates
for
peat.
7.8 Each
of
the Issuers has been granted surface rights by the government of Panama,
appropriate to permit the access to, and mining of, the Peat subject to the
relevant Peat Concession.
7.9 There
is
no over-issuance of peat certificates by either Issuer and none is contemplated
or authorized. The PPSA Peat Certificate corresponds to less than 0.3% of
PPSA’s
proven reserves and the CPSA Peat Certificate corresponds to less than 0.22%
of
CPSA’s proven reserves.
7.10 All
factual information contained on each of the Peat Certificates is true and
correct in all respects, and each signature on each Peat Certificate is genuine.
Each Peat Certificate is an original and is true and complete, and each
represents the right to obtain that amount of peat that the same purports
to so
represent.
7.11 The
peat
that is covered by the Peat Certificates meets the specifications as fully
described in The
Peat Deposits of Northwest Panama,
Los
Alamos National Laboratory publication LANL-11211, volume II
(1990).
7.12 The
aggregate value of the Peat Certificates delivered on the Closing Date is
and
shall at all times be not less than the Required Ratio, determined in accordance
with Section 8.2.
-
14
-
ARTICLE
8
POST-CLOSING
COVENANTS AND AGREEMENTS
8.1 Covenant
of the Investor and the Issuers Regarding Peat.
Each of
the Investor and the Issuers hereby covenants and agrees that from and after
the
Closing Date until termination of this Agreement it shall not:
8.1.1 sell
encumber,
transfer or
otherwise dispose of, or grant any option with respect to, any of the Peat
Certificates without the prior written consent of the Company,
8.1.2 sell,
encumber, transfer or otherwise dispose of or hypothecate the land on which
the
peat represented by the Peat Certificate is located in any way or any portion
thereof
nor
create or permit to exist any lien upon or with respect to any of such Peat
Certificates, and will defend the Peat Certificates against, and take such
other
action as is necessary to remove, any lien or encumbrance, except for the
security interest under the Security Agreement, and (ii) if such transfer
or
other disposition relates to less then 70%, in the aggregate at any one time,
of
the total land on which any peat is located and which is owned by or under
the
control of either Issuer.
8.1.3 enter
into any agreement or understanding that purports to or may restrict or inhibit
the Company’s rights or remedies hereunder or under the Ancillary Agreements,
including, without limitation, the Company’s right to sell or otherwise dispose
of the Peat Certificates.
8.1.4 take,
or
permit to be taken, any act or omission (including failure to make required
annual payments to the relevant governmental authorities), which might result
in
the termination or cancellation of either Concession.
8.2 Covenant
Regarding Value of the Peat Certificates.
Each of
the Investor and the Issuers hereby covenants and agrees that from and after
the
Closing Date until termination of this Agreement neither the Investor nor
the
Issuers shall permit ratio of (x) the aggregate value of the Peat Certificates,
determined in accordance with the Valuation Method, delivered to and held
by the
Company (or assigns) to (y) the outstanding principal balance of the Note
to be
less than 9:7 (the “Required
Ratio.”)
(By
way of example, at the Closing, as the outstanding principal balance of the
Note
is $700,000,000, the aggregate value of the Peat Certificates delivered and
then
held by the Company (or assigns), determined by the Valuation Method, shall
not
be less than $900,000,000.) If the value of the Peat Certificates so held
by the
Company (or assigns) shall fall below the Required Ratio, the Investor and
the
Issuers undertake to immediately deliver to the Company or its assignee
additional bearer certificates for peat issued by one of the Issuers, in
the
same form and having the same terms as the Peat Certificates delivered at
Closing, and the value of such additional bearer certificates for peat which
shall increase the aggregate value of the delivered Peat Certificates to
not
less than the Required Ratio. In connection therewith, the Company and its
assigns shall have the right to engage independent outside appraisers, within
60
days following the date of the Closing, and on no greater than a twice yearly
basis, to determine the value of the Peat Certificates, in accordance with
the
Valuation Method. The cost of such appraisal shall be borne by the Company
unless value of the delivered Peat Certificates shall have been determined
by
such appraisal to be more than 3% below the Required Ratio.
-
15
-
8.3 Books,
Records, and Notices.
Each of
the Investor and the Issuers hereby covenants and agrees that it will keep
proper books of record and corporate books, in which full and correct entries
shall be made of all financial transactions and the assets and business thereof,
including without limitation the issuance of any peat certificate and each
of
the Investor and the Issuers will permit, upon reasonable prior notice to
the
chief financial officer the Investor or any Issuer, (x) officers and
designated representatives of the Company to visit and inspect any of the
properties or assets of the Investor and any Issuer and to examine their
respective books of record and corporate books and discuss their respective
affairs, finances and accounts and (y) the Company to conduct, at the Investor’s
expense, an audit of the corporate books of the Issuer and the Investor relating
to the issuance of peat certificates at such times and with such frequency
(but
no less frequently than once a year unless an Event of Default has occurred
and
is continuing) as the Company shall reasonably require. Each of the Issuers
shall provide notice to the Company at least 10 days prior to any shareholders’
meeting at which the issuance of peat certificates may be authorized, and
shall
provide copies, simultaneously with the provision thereof to its shareholders,
of any written consent authorizing the issuance of peat
certificates.
8.4 Issuance
of Peat Certificates.
The
Investor will not permit the Issuers to and the Issuer will not, without
the
prior written consent of the Company, issue any Peat Certificate to any third
party for more then 70%, in the aggregate at any one time, of the peat located
on their respective property or under their control or otherwise become liable
for the purchase or sale of currency or other commodities at a future date
in
the nature of a futures contract.
8.5 Covenant
of the Investor Regarding the Preferred Shares.
The
Investor hereby covenant and agree that the Investor shall not sell, assign,
transfer or otherwise grant to any Other Person, any right, title or interest
in
or to, all or any portion of the Preferred Shares.
8.6 Covenant
of the Company regarding the Supervisor of Insurance.
The
Company intends to make an investment in Strategy Insurance of the Note (the
“Further
Investment”),
provided that the contribution and transfer to Strategy Insurance of the
Note
shall be deemed by the Supervisor of Insurance of Barbados as qualified
regulatory capital of Strategy Insurance, pursuant to applicable Barbados
law.
In connection therewith, the Company undertakes, within 60 days of the date
hereof, to make application to the Supervisor of Insurance in Barbados to
determine if the Further Investment by the Company into Strategy Insurance
so
qualifies as regulatory capital under Barbados law.
8.7 Facility
Activation Fee.
Within
ninety (90) days of the Approval Date, Strategy undertakes to pay a fee to
the
Investor or its designees of an amount of $2,000,000 in the event of a
regulatory approval from the Supervisor of Insurance in Barbados in a manner
that is reasonably acceptable to Strategy.
-
16
-
ARTICLE 9
EVENTS
OF DEFAULT - REMEDIES - UNWINDING
9.1 Events
of Default.
Any of
the following shall constitute an Event of Default (each an “Event
of Default”):
9.1.1 Issuer
Default.
Any
Issuer shall fail to perform or observe any covenant or agreement contained
herein or in any Ancillary Agreement, to which it is a party, and such failure
shall continue for 10 days after receipt from the Company of written notice
thereof;
9.1.2 Investor
Default.
The
Investor shall fail to perform or observe any covenant or agreement contained
herein or in any Ancillary Agreement, to which it is a party, and such failure
shall continue for 10 days after receipt from the Company of written notice
thereof;
9.1.3 Representations
and Warranties.
Any
representation, warranty, certification or statement of fact made or deemed
made
by or on behalf of a party hereto or in any Ancillary Agreement or in any
document delivered in connection herewith or therewith shall be incorrect
or
misleading when made or deemed made;
9.1.4 Invalidity
of Peat Certificates - Transfer.
The
Peat Certificates cease to be in full force and effect; or the relevant Issuer,
purports to revoke, terminate or rescind such transfer, or any third party
contests in any manner the validity or enforceability of such transfer,
9.1.5 Liens
- Encumbrances.
Any
Person other than the Company attaches or institutes proceedings to attach
all
or any material part of the land on which the peat represented by the Peat
Certificates is located, or to any Peat Certificate or peat itself or any
portion thereof and any such proceeding or attachment or any judgment lien
against any such land, Peat Certificate or peat remains unlifted, unstayed
or
undischarged for a period of 10 days;
9.1.6 Peat
Concessions.
Any
Issuer fails to renew, maintain or comply with, its respective Peat Concession,
or such Peat Concession is rescinded, suspended, revoked, terminated or
determined to be invalid or ceases to be in full force and effect, or either
Peat Concession is materially amended, modified or supplemented without prior
written consent of the Company or any proceedings are commenced by or before
any
Governmental Authority of Panama for the purpose of rescinding, terminating,
suspending, modifying or withholding such Peat Concession, or the land subject
of such Peat Concession is or becomes subject to expropriation, seizure,
nationalization, confiscation or other compulsory acquisition by a Governmental
Authority; or
9.1.7 Change
in Control.
The
Investor shall at any time cease to own 100% of the capital stock of each
of
PPSA and CPSA.
9.2 Remedies
Upon Event of Default.
Upon
the occurrence of an Event of Default, the non-defaulting party shall have
all
remedies, at law and equity, as are available to it, to seek monetary recompense
for any and all damages, other than punitive damages, suffered thereby as
a
result of such Event of Default, all such remedies which shall be
cumulative.
-
17
-
9.3 Right
to Setoff.
In
addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, whether prior
to or
after the occurrence of an Event of Default, the Company (or assigns) is
hereby
authorized at any time and from time to time, without presentment, demand,
protest or other notice of any kind to the Investor, the Issuers or to any
other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply to the payment of the amounts due under this Agreement,
any of the Ancillary Agreements or in respect of any shares of stock (including
the Preferred Shares) issued thereby (whether matured or unmatured), any
and all
amounts that the Company, Strategy or Strategy Insurance is or may be obligated
to pay over to the Investor (including, without limitation, against any dividend
on, or amount required as payment in respect of redemption of the Preferred
Shares.
9.4 Unwind.
In the
event that the Supervisor of Insurance of Barbados determines that the Further
Investment does not qualify as regulatory capital under Barbados law, the
transactions contemplated by this Agreement and the Ancillary Agreements
shall
be unwound. In such connection, the Company shall redeem the Preferred Shares
held by the Investor at an aggregate redemption price of $1.00 by delivery
of
written notice, as agreed herein, to the Investor and upon receipt of the
Preferred Shares and the Warrant, the Company shall return the Note and the
Peat
Certificates to the Investor. At such time, the Note, the Security Agreement,
the Warrant and the Registration Rights Agreement shall be terminated and
of no
force or effect.
ARTICLE 10
MISCELLANEOUS
10.1 Expenses.
All
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby will be paid by the party that incurs such
costs and expenses, provided, however, that if
the
Company does not obtain the approval of the Supervisor of Insurance of Barbados
of the Further Investment, the Company shall reimburse the Investor for all
reasonable out-of-pocket
expenses
incurred in respect of the transaction contemplated hereby.
10.2 Further
Assurances.
Subject
to the terms and conditions of this Agreement, each of the parties hereto
will
use commercially reasonable efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, all things necessary, proper or advisable
under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement. Without limiting the foregoing,
the
Investor shall cooperate with any reasonable requests made by the Company,
Strategy or Strategy Insurance in connection with the enforcement or defense
of
the Company's rights in the Peat Certificates.
10.3 Survival
of Warranties.
The
warranties, representations and covenants contained in or made pursuant to
this
Agreement shall survive the execution and delivery of this Agreement and
the
making of the Investment, and shall in no way be affected by any investigation
of the subject matter thereof made by or on behalf of any of the parties
to this
Agreement.
-
18
-
10.4 Amendment
and Modification.
This
Agreement may be amended, modified or supplemented only by written agreement
executed by all of the parties hereto.
10.5 Waiver
of Compliance; Consents.
Except
as otherwise provided in this Agreement, any failure of any of the parties
to
comply with any obligation, representation, warranty, covenant, agreement
or
condition herein may be waived by the party entitled to the benefits thereof
only by a written instrument signed by the party granting such waiver, but
such
waiver or failure to insist upon strict compliance with such obligation,
representation, warranty, covenant, agreement or condition shall not operate
as
a waiver of, or estoppel with respect to, any subsequent or other failure.
Whenever this Agreement requires or permits consent by or on behalf of any
party
hereto, such consent shall be given in writing in a manner consistent with
the
requirements for a waiver of compliance as set forth in this
Section.
10.6 Notices.
All
notices and other communications hereunder shall be in writing and shall
be
deemed given when delivered personally or by nationally recognized courier
service (receipt requested) or mailed by registered or certified mail (return
receipt requested), postage prepaid, to the parties at the following addresses
(or at such other address for a party as shall be specified by like
notice):
(a)
If to
the Company
Sagicor
Corporate Centre
Xxxxxx,
St. Xxxxxxx, Barbados W.I.
Attention:
Xxxxxx Xxxxx
Facsimile
No.: 0-000-000-0000
(b)
If to
Strategy International Insurance Group
000
Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxxx,
Xxxxxxx
Xxxxxx
X0X 0X0
Attention:
Xxxxx X. Xxxxxxxx
Facsimile:
000-000-0000
In
each
case with a copy to.
Xxxxx
& XxXxxxxx LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxx X. Xxxxxxxx
Facsimile
No.: 000-000-0000
-
19
-
(c)
If to
Grupo Lakas, S.A.:
Xxx
Xxxxxxxxx xx Xxxxxxx # 00
Xxxxxx,
Rep. de Panama
Attention:
Xxxx X. Xxxxx
Facsimile
No.: 000-000-0000
with
a
copy to.
[address]
Attention.
Facsimile
No.
(d)
If to
Panama Peat S.A.:
Xxx
Xxxxxxxxx xx Xxxxxxx # 00
Xxxxxx,
Rep. de Panama
Attention:
Xxxx X. Xxxxx
Facsimile
No.: 000-000-0000
(e)
If to
Changuinola Peat S.A.:
Xxx
Xxxxxxxxx xx Xxxxxxx # 00
Xxxxxx,
Rep. de Panama
Attention:
Xxxx X. Xxxxx
Facsimile
No.: 000-000-0000
10.7 Assignment.
This
Agreement and all of the provisions hereof shall be binding upon and inure
to
the benefit of the parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any party hereto without the prior
written consent of each of the parties hereto, nor is this Agreement intended
to
confer upon any Other Person except the parties hereto any rights or remedies
hereunder.
10.8 Public
Announcements.
Except
as may be required by law (including, without limitation, federal securities
laws or the applicable rules of any securities exchange or securities market
to
which a party may be subject) or court order, each party hereto shall consult
with each other before issuing any press release or otherwise making any
public
statement with respect to the transactions contemplated by this Agreement
and
shall not issue any such press release or make any such public statement
that is
not approved by the other parties hereto, which approval shall not be
unreasonably withheld.
10.9 Confidentiality.
The
parties hereto shall maintain in confidence, and will cause their directors,
officers, employees, agents and advisors to maintain in confidence the terms
and
provisions of this Agreement and the transactions contemplated by this
Agreement, unless (i) such information was already known to such party or
to
others not bound by a duty of confidentiality or such information becomes
publicly available through no fault of such party, (ii) the disclosure or
use of
such information is necessary or appropriate in making any filing or obtaining
any consent or approval required or in connection with the consummation of
the
transactions contemplated by this Agreement, or (iii) the furnishing or use
of
such information is required by law (including rules and regulations of the
United States Securities and Exchange Commission), legal proceedings, or
the
rules of any stock exchange to which any party hereto is subject.
-
20
-
10.10 Governing
Law.
This
Agreement will be governed by the laws of the State of New York, without
regard
to conflicts of law rules of such State which would result in the application
of
the laws of another jurisdiction.
10.11 Consent
to Jurisdiction and Waiver of Jury Trial.
Each
Party hereto hereby irrevocably agrees that any suit, action, proceeding
or
claim against it arising out of, or relating to, this Agreement (including,
without limitation, any dispute relating to the Peat Certificates, the
underlying peat and the values thereof) or any judgment entered by any court
in
respect thereof may be brought and enforced in any State or Federal court
sitting in New York, New York, and each Party hereby irrevocably submits
to the
jurisdiction of such courts for the purpose of any suit, action, proceeding
or
claims. Each Party hereby irrevocably waives, to the fullest extent allowed
by
law, any objection which it may now or hereafter have to the laying of venue
of
any suit, action, or proceeding arising out of or relating to this agreement
brought in any State or Federal court sitting in New York, New York, and
hereby
irrevocably waives any claim that any suit, action or proceeding was brought
in
an inconvenient forum. Each Party further irrevocably consents to the service
of
process out of any of the aforementioned courts in any such action, suit
or
proceeding or claim by the mailing of copies thereof by certified mail, return
receipt requested, postage prepaid, to its address set forth in Section
10.6.
Nothing
herein shall affect the right of the Company to commence legal proceedings
or
otherwise proceed against the Investor or any Issuer in any jurisdiction
or to
serve process in any manner permitted by applicable law. Each Party waives
irrevocably the right to trial by jury with respect to any legal proceeding
in
which the Parties are adverse parties.
10.12 Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
10.13 Interpretation.
The
article and section headings contained in this Agreement are solely for the
purpose of reference, are not part of this Agreement and shall not in any
way
affect the meaning or interpretation of this Agreement.
10.14 Entire
Agreement.
This
Agreement, including the Exhibits hereto, embodies the entire agreement and
understanding of the parties hereto in respect of the transactions contemplated
by this Agreement. All other previous documents, undertakings and agreements,
whether verbal, written or otherwise, between the Parties with respect to
the
subject matter of this Agreement (including, without limitation, the letter
from
Strategy to the Investor dated October 25, 2005), are hereby cancelled and
shall
not affect or modify any of the terms or obligations set forth in this
Agreement. The Exhibits hereto are an integral part of this Agreement and
are
incorporated by reference herein.
-
21
-
10.15 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. Notwithstanding
the foregoing, in the event of any such determination the effect of which
is to
affect materially and adversely any party, the parties shall negotiate in
good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by law in
an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled and consummated to the maximum extent possible.
[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]
-
22
-
IN
WITNESS WHEREOF, the parties have caused this Agreement to be signed by their
respective duly authorized officers as of the date first above
written.
Strategy
Holding Company Limited
By.
/s/ Xxxxx Xxxxxxxx
Name.
Xxxxx Xxxxxxxx
Title.
Chief Financial Officer
Strategy
International Insurance Group, Inc.
By.
/s/ Xxxxx Xxxxxxxx
Name.
Xxxxx Xxxxxxxx
Title.
Chief Financial Officer
Grupo
Lakas S.A.
By.
/s/ Xxxx Xxxxxxxx Lakas R.
Name.
Xxxx Xxxxxxxx Lakas R.
Title.
President
Panama
Peat S.A.
By.
/s/ Xxxxxx Xxxxx
Name.
Xxxxxx Xxxxx
Title. President
Changuinola
Peat S.A.
By.
/s/ Xxxxxx Xxxxx
Name.
Xxxxxx Xxxxx
Title. President
i
