PAYMENT AGREEMENT
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This Payment Agreement (the "Agreement") is entered into as of this
____ day of April, 1997, by and among the GOVERNMENT DEVELOPMENT BANK FOR PUERTO
RICO (the "Bank"), a body corporate and politic organized under the laws of the
Commonwealth of Puerto Rico, the PUERTO RICO MARITIME SHIPPING AUTHORITY
("PRMSA"), a non-stock public corporation organized under the laws of Puerto
Rico, NPR, INC., ("NPR") a Delaware corporation and successor by operation of
law to Puerto Rico Marine Management, Inc. ("PRMMI"), formerly a Delaware
corporation, and NPR HOLDING CORPORATION, a Delaware corporation and the sole
shareholder of NPR ("Holding").
BACKGROUND
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As of February 1, 1995, PRMSA, PRMMI, NPR and Holding entered into a Purchase
Agreement, pursuant to which NPR acquired certain operating assets and
securities from PRMSA and merged with and into PRMMI (the "Transaction").
Immediately following such merger, PRMMI changed its corporate name to "NPR."
The Transaction was consummated on March 3, 1995, and on August 25, 1995, the
parties to the Transaction executed the First Amendment to the Purchase
Agreement.
Since consummation of the Transaction, the New York Shipping
Association - International Longshoremen's Association Pension
PAYMENT AGREEMENT - PAGE 1
Trust Fund (the "Fund") has indicated that the Transaction may have caused a
Withdrawal from the Fund by PRMSA, within the meaning of Section 4201(a) of the
Employee Retirement Income Security Act of 1974 ("ERISA"), as amended by the
Multiemployer Pension Plan Amendments Act of 1980. PRMSA and NPR are in dispute
over which of PRMSA or NPR would be responsible under the Purchase Agreement in
the event the Fund were to assert a claim for Withdrawal liability under ERISA
against PRMSA.
The Fund, PRMSA and NPR has each determined that any present effort to
enforce their rights would lead to protracted litigation. At the same time, the
Bank has concluded that, in order to provide appropriate support for the
obligations of PRMSA and to otherwise protect and promote the interests of the
Commonwealth of Puerto Rico, it will undertake certain obligations with regard
to PRMSA and the Fund. In light of the risk and cost of such litigation, the
parties have, contemporaneously with this Payment Agreement, entered into a
Settlement Agreement and Undertaking (the "Settlement Agreement"), a copy of
which is attached hereto as Exhibit A, for the purpose of resolving potential
claims among the parties thereto. In order to induce the Bank to enter into and
perform the Settlement Agreement, and to otherwise minimize the risk of future
litigation, NPR, Holding, PRMSA and the Bank have agreed to enter into this
Payment Agreement.
PAYMENT AGREEMENT - PAGE 2
NOW, THEREFORE, in consideration of the mutual promises contained
herein and for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Bank, PRMSA, NPR and Holding each agrees and
covenants as follows:
ARTICLE I
DEFINITIONS
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1. The following terms shall have the meanings provided in this Article
I. Unless otherwise specifically provided herein, all terms herein shall have
the meanings ascribed to them in the Settlement Agreement, which is incorporated
as if set forth, in full, herein.
1.1 The "Affidavit" shall mean the Affidavit of NPR, executed and
delivered to the Judgment Escrow Agent, in the form of Exhibit B to this Payment
Agreement.
1.2 "ERISA Affiliate" shall mean any trade or business which, together
with NPR, is considered a single employer under Section 4001(b) of ERISA (29
U.S.C. ss.1301(b)).
1.3 The "Judgment Escrow" shall mean the escrow agreement of even date
herewith attached as Exhibit C entered into by and among the Bank, PRMSA, NPR
and Holding.
1.4 The "Judgment Escrow Agent" shall mean the individual, firm, or
bank identified as the Escrow Agent in the Judgment Escrow Agreement as provided
in Section 1 therein.
1.5 "Payment Demand" shall mean the notice delivered by the Bank to NPR
specifying the amount the Bank has paid to the Fund
PAYMENT AGREEMENT - PAGE 3
pursuant to the Settlement Agreement, as provided in Section 2.2 of this
Payment Agreement.
1.6 "Qualified Counsel" shall mean a lawyer or law firm with expertise
in the matters covered by the Settlement Agreement, including ERISA, reasonably
satisfactory to the Bank.
1.7 A "Withdrawal" shall mean a complete withdrawal as defined under 29
U.S.C. ss.1383 or a partial withdrawal as defined under 29 U.S.C. ss.1385.
ARTICLE II
OBLIGATION OF NPR
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2.1 Covenant of Liability. NPR agrees, understands and acknowledges
that PRMSA and the Bank have entered into the Undertaking as secondary surety to
the Plan for those liabilities resulting from a Withdrawal from the Plan by NPR,
as provided under the terms of the Settlement Agreement. NPR specifically
covenants and agrees that, in the event payment is made by PRMSA or the Bank to
the Fund of all or any portion of the Statutory Withdrawal Liability in
accordance with Section 3.1 of the Settlement Agreement, including, without
limitation, disbursement from the Escrow, then NPR shall unconditionally and
immediately pay and reimburse PRMSA and the Bank for all such amounts. The
parties acknowledge that NPR has no obligation to reimburse PRMSA or the Bank
for any payment other than those payments described in this Section 2.1;
provided, however, that nothing in this Section 2.1 shall limit or impair any
liability of NPR for legal fees and other costs and expenses assessed or awarded
to the
PAYMENT AGREEMENT - PAGE 4
Fund, pursuant to any lawfully constituted arbitration or other legal
proceedings.
2.2 Demand by Bank or PRMSA. In the event the Bank or PRMSA makes
payment to the Fund of all or any portion of the Statutory Withdrawal Liability
in accordance with Section 3.1 of the Settlement Agreement, then such amount
shall be immediately due and payable by NPR to PRMSA and the Bank, as
applicable, and the Bank may immediately make a Payment Demand on NPR.
Consistent with Section 2.1 of this Agreement, upon receipt of a Payment Demand
NPR shall immediately and fully repay and reimburse the Bank and PRMSA as
applicable for all amounts of the Statutory Withdrawal Liability paid to the
Fund in accordance with Section 3.1 of the Settlement Agreement.
2.3 Confessed Judgment. The obligations of NPR to the Bank and PRMSA
under Section 2.2 of this Agreement shall be evidenced and secured by a
confessed judgment, which shall be memorialized in an affidavit for judgment by
confession, made and delivered by NPR (the "Affidavit") in the form attached
hereto as Exhibit B. Simultaneously with the execution of this Agreement, NPR,
Holding, PRMSA and the Bank shall enter into an escrow agreement in the form and
substance attached hereto as Exhibit C (the "Judgment Escrow") and NPR shall
execute and deliver to the Judgment Escrow Agent thereunder the Affidavit
specifying the liability amount therein, equal to the Specified Amount (as that
term is defined in the Settlement Agreement), or so much thereof as may be
advanced and outstanding at any time by PRMSA and the
PAYMENT AGREEMENT - PAGE 5
Bank pursuant to the Settlement Agreement. The confessed judgment shall remain
effective and enforceable so long as PRMSA and the Bank remain liable to the
Fund under the Settlement Agreement.
2.4 Representation and Warranty of Authority by NPR. NPR represents and
warrants that (a) it is a corporation, duly organized, validly existing, and in
good standing under the laws of the State of Delaware, (b) it has full corporate
power and authority to make, execute, deliver and perform its obligations under
each of the Settlement Agreement, the Payment Agreement, and the Affidavit, and
(c) each of the Settlement Agreement, the Payment Agreement, and the Affidavit
has been duly authorized and approved by the Board of Directors of NPR, as
evidenced by copies of the appropriate resolutions of the Board of Directors of
NPR, attached hereto as Exhibit D.
2.5 Representation and Warranty of Authority by the Bank. The Bank
represents and warrants that (a) it is a body corporate and politic organized
under the laws of the Commonwealth of Puerto Rico, (b) it has full corporate
power and authority to make, execute, deliver and perform its obligations under
each of the Settlement Agreement and the Payment Agreement, and (c) each of the
Settlement Agreement and the Payment Agreement has been ratified by the Board of
Directors of the Bank.
2.6 Representation and Warranty of Authority for PRMSA. PRMSA
represents and warrants that (a) it is a non-stock public corporation organized
under the laws of Puerto Rico, (b) it has
PAYMENT AGREEMENT - PAGE 6
full corporate power and authority to make, execute, deliver and perform its
obligations under each of the Settlement Agreement and the Payment Agreement,
and (c) each of the Settlement Agreement and the Payment Agreement has been duly
authorized and approved by the Board of Directors of PRMSA.
ARTICLE III
SALE OF ASSETS OR TRANSFER OF STOCK OF NPR
------------------------------------------
3.1 Sale of Assets. NPR covenants and agrees that, so long as the Bank
remains liable to the Fund pursuant to the Undertaking, any sale or other
transfer by NPR or any ERISA Affiliate of any assets used in its or their
operations with respect to which NPR has an obligation to contribute to the Fund
(an "Asset Sale"), shall be structured, carried out and executed so as not to
constitute a Withdrawal from the Plan by NPR unless such Withdrawal will not
result in the Bank or PRMSA incurring any liability under the Settlement
Agreement.
3.2 Sale of Stock. Holding and NPR covenant and agree that, so long as
the Bank remains liable to the Fund pursuant to the Undertaking then the sale or
other transfer of any share of capital stock of NPR or any ERISA Affiliate that
carries on any part of the operations with respect to which NPR has an
obligation to contribute to the Fund or any other security that is or may become
convertible into capital stock of NPR or any such ERISA Affiliate (a "Stock
Transfer") shall be structured, carried out and executed so as not to constitute
a Withdrawal from the Plan by NPR unless such Withdrawal will not result in
PAYMENT AGREEMENT - PAGE 7
the Bank or PRMSA incurring any liability under the Settlement Agreement.
3.3 Opinion of Counsel. Prior to consummation of any Asset Sale or
Stock Transfer, NPR shall give written notice to the Bank of such proposed
transaction, and shall deliver to the Bank a written opinion of Qualified
Counsel, in form and substance reasonably satisfactory to the Bank that (a)
under the applicable provisions of ERISA, a Withdrawal from the Plan by NPR will
not occur solely as a result of the Asset Sale or Stock Transfer, (b) in the
case of an Asset Sale, such transaction will result in the assumption by the
purchaser of all pre-existing Statutory Withdrawal Liability, or (c) assuming
payment of all Statutory Withdrawal Liability to the Fund by NPR, the Asset Sale
or Stock Transfer will not result in the Bank or PRMSA incurring any liability
under the Settlement Agreement.
3.4 Waivers. The Bank and PRMSA may, in their sole and absolute
discretion, waive any of their respective rights under this Section III;
provided, however, that any such waiver must be in writing, duly authorized by
the board of directors of each entity, and shall become effective only upon
final delivery to NPR or its designee.
ARTICLE IV
MISCELLANEOUS
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4.1 Covenant of Cooperation. The Bank and NPR explicitly agree to
cooperate with one another in exchanging information and providing assistance,
including the execution of additional
PAYMENT AGREEMENT - PAGE 8
documents and the making of additional filings, as may be reasonably requested
by any other party to carry out and give full force and effect to the terms and
intent of this Agreement.
4.2 Notices. All notices, requests, demands, and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given when personally delivered, or when deposited with an overnight
delivery service or when transmitted via telecopy or telex, or on the third
(3rd) business day following the date of mailing, if mailed by first-class,
certified mail, postage prepaid addressed as provided below:
If to the Bank:
Government Development Bank for Puerto Rico
4th Floor, Minillas Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx Xxxx 00000-0000
Attention: Xxxxxx Xxxxxxxxx-Ema, President
With copies to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Xxxx X. XxxXxxxxxx, Esq.
If to NPR:
NPR, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, X.X. 00000
Attention: President
PAYMENT AGREEMENT - PAGE 9
With copies to:
Xxxxx X. Xxxxxxxx
Senior Vice President
NPR, Inc.
000 00xx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, X.X. 00000
Attention: Xxxx X. Xxxxx, Esq.
If to PRMSA:
Puerto Rico Maritime Shipping Authority
c/o Government Development Bank for Puerto Rico
4th Floor, Minillas Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx Xxxx 00000-0000
Attention: Xxxxxx Xxxxxxxxx-Ema, President
With copies to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Xxxx X. XxxXxxxxxx, Esq.
If to NPR Holding Corporation:
NPR Holding Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxx, X.X. 00000
Attention: President
With copies to:
Xxxxx X. Xxxxxxxx
Senior Vice President
NPR, Inc.
000 00xx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
PAYMENT AGREEMENT - PAGE 10
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, X.X. 00000
Attention: Xxxx X. Xxxxx, Esq.
4.3 Entire Agreement. This Agreement supersedes all prior discussions
and agreements among the Fund, PRMSA, the Bank and NPR concerning matters
described herein. This Agreement, together with the Settlement Agreement,
contains the sole and entire agreement between the parties hereto with respect
to the transactions contemplated hereby.
4.4 Amendments and Waivers. This Agreement may be amended only by an
instrument in writing executed by the party against whom enforcement of the
amendment is sought.
4.5 Counterparts; Headings. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument. The headings herein are for
convenience of reference only and shall not be deemed a part of this Agreement.
4.6 Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns, and it may not be assigned by any party without the consent of the
others.
4.7 Governing Law; Venue. The validity and effect of this Agreement
shall be governed by and construed and enforced in accordance with the laws of
the Commonwealth of Puerto Rico, applicable to contracts made and to be
performed in that commonwealth, without reference to any provisions relating to
PAYMENT AGREEMENT - PAGE 11
conflicts of law. Each of the parties to this Agreement consents and irrevocably
submits to the federal and commonwealth courts in the City of San Xxxx and the
Commonwealth of Puerto Rico, having subject matter jurisdiction, for the purpose
of any suit or action under or relating to this Agreement, and agree that
personal jurisdiction in any such suit or action may be obtained over any party
by service of process in the same manner as provided in Section 4.2 of this
Agreement.
4.8 Severability. If any provision or any part of any provision of this
Agreement is found to be not valid for any reason, such provision shall be
entirely severable from, and shall have no effect upon, the remaining provisions
of this Agreement.
4.9 No Waiver. Notwithstanding any other provision of this Agreement or
the Settlement Agreement to the contrary, including, without limitation, the
provisions of Article 6 of the Settlement Agreement regarding Releases, nothing
contained in the Settlement Agreement, Payment Agreement, or Affidavit shall
constitute a waiver or surrender of any claim, demand, right or remedy available
to the Bank or PRMSA, in law or in equity, against NPR in connection with or
arising out of the Payment Agreement, the Judgment Escrow or the Affidavit.
4.10 Release by PRMSA and the Bank. Upon the execution and delivery to
PRMSA and the Bank of the Settlement Agreement, the Judgment Escrow, and the
Payment Agreement and execution and delivery to the Escrow Agent of the
Affidavit, each of PRMSA and
PAYMENT AGREEMENT - PAGE 12
the Bank shall forever release, remise and discharge (i) each of Holding (except
with respect to the obligations of Holding under Article III of the Payment
Agreement), Pyramid Ventures, Inc., BT Investment Partners, Inc., BT Securities
Corporation, BT Commercial Corporation and Bankers Trust Company along with
their respective representatives, executors, administrators, assigns,
shareholders, directors, officers, partners, successors, subsidiaries (other
than NPR), affiliates (other than NPR), and trustees from any and all causes of
action, choses in action, suits, debts, dues, liabilities, obligations, claims,
and demands, whatsoever, in law or in equity, known or unknown, xxxxxx or
inchoate, liquidated or contingent, which the Bank or PRMSA, or any of their
respective representatives, executors, administrators, assigns, shareholders,
directors, officers, partners, successors, subsidiaries, affiliates, agencies
and trustees has or hereafter can, shall, or may have with respect to or arising
out of or in connection with the Payment Agreement, the Judgment Escrow, the
Affidavit, the Settlement Agreement, or the Purchase Agreement as it relates to
Withdrawal liability to the Fund; and (ii) NPR (except with respect to the
obligations of NPR under the Settlement Agreement, the Judgment Escrow, the
Payment Agreement and the Affidavit) along with its representatives, executors,
administrators, assigns, shareholders, directors, officers, partners,
successors, subsidiaries, affiliates and trustees from any and all causes of
action, choses in action, suits, debts, dues, liabilities,
PAYMENT AGREEMENT - PAGE 13
obligations, claims, and demands, whatsoever, in law or in equity, known or
unknown, xxxxxx or inchoate, liquidated or contingent, which the Bank or PRMSA,
or any of their respective representatives, executors, administrators, assigns,
shareholders, directors, officers, partners, successors, subsidiaries,
affiliates, agencies and trustees has or hereafter can, shall, or may have with
respect to or arising out of or in connection with the Purchase Agreement as it
relates to Withdrawal liability to the Fund.
4.11 Release by NPR. Upon the execution and delivery to NPR of the
Settlement Agreement, the Judgment Escrow, and the Payment Agreement, NPR shall
forever release, remise and discharge each of PRMSA and the Bank (except with
respect to their respective obligations under the Settlement Agreement, the
Judgment Escrow, [the prior escrow] and the Payment Agreement) along with their
respective representatives, executors, administrators, assigns, shareholders,
directors, officers, partners, successors, subsidiaries, affiliates, agencies
and trustees from any and all causes of action, choses in action, suits, debts,
dues, liabilities, obligations, claims, and demands, whatsoever, in law or in
equity, known or unknown, xxxxxx or inchoate, liquidated or contingent, which
NPR or any of its representatives, executors, administrators, assigns,
shareholders, directors, officers, successors, subsidiaries, affiliates, and
trustees has or hereafter can, shall, or may have with respect to or arising out
PAYMENT AGREEMENT - PAGE 14
of or in connection with the Purchase Agreement as it relates to Withdrawal
liability to the Fund.
EXECUTED AND ENTERED INTO, as of the date and year first written above.
THE GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO
By:______________________________ Date:____________________
Its:_____________________________
NPR INC.
By: /s/ Xxxxx Xxxxxxxx Date: 4-23-97
--------------------------------- -------------------
Its: Senior Vice President
PUERTO RICO MARITIME SHIPPING AUTHORITY
By:______________________________ Date:____________________
Its:_____________________________
NPR HOLDING CORPORATION (solely with respect to the obligations
set forth in Section 3.2 hereof)
By: /s/ Xxxxx Xxxxxxxx Date: 4-23-97
--------------------------------- -------------------
Its: Senior Vice President
PAYMENT AGREEMENT - PAGE 15
