AMENDED AND RESTATED LOAN AGREEMENT
Dated as of February 8, 2005
Among
▇▇▇▇▇▇▇▇▇▇ HERMANOS S.A.
as Company
-- -------
and
COMPAGNIE GERVAIS DANONE
as Lender
-- ------
and
LEITESOL INDUSTRIA E COMERCIO S.A.,
▇▇▇▇▇▇▇▇▇▇ SAN ▇▇▇▇ S.A.
and
PROMAS S.A.
as Subsidiary Guarantors
-- ---------- ----------
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms................................................................................
SECTION 1.02. Computation of Time Periods..........................................................................
SECTION 1.03. Accounting Terms.....................................................................................
SECTION 1.04. Actions by Subsidiary Guarantors.....................................................................
ARTICLE II
THE REFINANCING - CANCELLATION OF THE NEW FLOATING RATE NOTE AND
ISSUANCE OF THE CGD NOTE
SECTION 2.01. Lender's Consent.....................................................................................
SECTION 2.02. Cancellation of the Lender's New Floating Rate Note and Issuance of the CGD Note.....................
SECTION 2.03. Repayment............................................................................................
SECTION 2.04. Interest.............................................................................................
SECTION 2.05. Optional Prepayments.................................................................................
SECTION 2.06. Increased Costs......................................................................................
SECTION 2.07. Payments and Computations............................................................................
SECTION 2.08. Taxes
ARTICLE III
CONDITIONS TO CANCELLATION OF THE LENDER'S FLOATING RATE NOTE AND ISSUANCE OF THE CGD NOTE
SECTION 3.01. Conditions Precedent to the Restrucuturing of the Outstanding Principal Amount, the Cancellation
of the Lender's Floating Rate Note and Issuance of the CGD Note....................................
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Company........................................................
ARTICLE V
COVENANTS OF THE COMPANY
SECTION 5.01. Covenants............................................................................................
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default....................................................................................
ARTICLE VII
THE RELEVANT AGENTS
SECTION 7.01. Authorization and Action.............................................................................
ii
ARTICLE VIIA
GUARANTEES OF THE FLOATING RATE NOTES
SECTION 7A.01. Guarantee..........................................................................................
SECTION 7A.02. Execution and Delivery of Guarantee................................................................
SECTION 7A.03. Release of a Subsidiary Guarantor..................................................................
SECTION 7A.04. Waiver of Subrogation..............................................................................
SECTION 7A.05. Immediate Payment..................................................................................
SECTION 7A.06. No Set-off.........................................................................................
SECTION 7A.07. Obligations Absolute...............................................................................
SECTION 7A.08. Obligations Continuing.............................................................................
SECTION 7A.09. Obligations Not Reduced............................................................................
SECTION 7A.10. Obligations Reinstated.............................................................................
SECTION 7A.11. Obligations Not Affected...........................................................................
SECTION 7A.12. Waiver.............................................................................................
SECTION 7A.13. Dealing with the Company and Others................................................................
SECTION 7A.14. Default and Enforcement............................................................................
SECTION 7A.15. Costs and Expenses.................................................................................
SECTION 7A.16. No Waiver; Cumulative Remedies.....................................................................
SECTION 7A.17. Representation and Warranty of the Subsidiary Guarantor............................................
SECTION 7A.18. Special Waiver.....................................................................................
SECTION 7A.19. Severability.......................................................................................
SECTION 7A.20. Successors and Assigns.............................................................................
SECTION 7A.21. General Limitation on Guarantee Obligations........................................................
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc......................................................................................
SECTION 8.02. Notices, Etc.........................................................................................
SECTION 8.03. No Waiver; Remedies..................................................................................
SECTION 8.04. Costs and Expenses...................................................................................
SECTION 8.05. Right of Set-off.....................................................................................
SECTION 8.06. Binding Effect.......................................................................................
SECTION 8.07. Assignments and Participations; Subsequent Lenders...................................................
SECTION 8.08. Currency Indemnity...................................................................................
SECTION 8.09. Governing Law........................................................................................
SECTION 8.10. Execution in Counterparts............................................................................
SECTION 8.11. Jurisdiction, Etc....................................................................................
SECTION 8.12. Waiver of Jury Trial.................................................................................
Exhibits
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Exhibit A - Form of CGD Note
Exhibit B - Form of Pledge Agreement
Exhibit C - Form of Opinion of Argentine Counsel for the Company
Exhibit D - Form of New York counsel for the Company
AMENDED AND RESTATED LOAN AGREEMENT
Dated as of February 8, 2005
▇▇▇▇▇▇▇▇▇▇ HERMANOS S.A., a sociedad anonima organized and existing under the
Laws of Argentina (the "COMPANY"), COMPAGNIE GERVAIS DANONE, a sociedad anonima
organized and existing under the Laws of France (the "LENDER"), LEITESOL
INDUSTRIA E COMERCIO S.A., a sociedad anonima organized and existing under the
Laws of Brazil, ▇▇▇▇▇▇▇▇▇▇ SAN ▇▇▇▇ S.A., a sociedad anonima organized and
existing under the Laws of Argentina, and PROMAS S.A. a sociedad anonima
organized and existing under the Laws of Argentina (altogether the "SUBSIDIARY
GUARANTORS").
WITNESSETH
(A) WHEREAS on March 17, 2000 Alfabanque ("ALFABANQUE") entered into a
Second Loan Agreement (the "SECOND LOAN AGREEMENT") with ▇▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and
Dallpoint Investments LLC (the "COMPANY SHAREHOLDERS"). According to
the Second Loan Agreement, Alfabanque lent to the Company Shareholders
the amount of US$ 25,000,000.00;
(B) WHEREAS on September 4, 2000, Alfabanque authorized the substitution of
the Company Shareholders as debtors under the Second Loan Agreement.
Therefore, as from September 4, 2000, the Company has become
Alfabanque's debtor under the Second Loan Agreement;
(C) WHEREAS on June 28, 2002, Alfabanque and the Lender entered into an
Assignment of the Second Loan Agreement and the Stock Pledge Agreement,
whereby Alfabanque assigned to the Lender the Second Loan Agreement and
all the rights conferred upon thereby;
(D) WHEREAS in January 2002 the Company defaulted its financial debt and
started a restructuring process;
(E) WHEREAS on March 5, 2004 the Company launched an Offer to purchase for
cash and to exchange its financial debt under restructuring. Such Offer
was subsequently amended, and a final Offer was launched by the Company
on September 16, 2004;
(F) WHEREAS on April 1, 2004 the Lender and the Company entered into a
Support Agreement by which the Lender tendered its debt into MHSA's
Offer;
(G) WHEREAS on October 22, 2004 the Company concluded its restructuring
process and executed all the documents necessary to consummate the
purchase for cash and the exchange of its financial debt under such
restructuring process;
(H) WHEREAS due to its participation in the Company's restructuring
process, the Lender is a lender under a Loan Agreement (the "LOAN
AGREEMENT") dated October 22, 2004, and entered into by the Company -as
debtor- The Lenders From Time To Time Party to such Loan Agreement -as
lenders- Banco Societe Generale S.A. -as Administrative Agent-,
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and the Subsidiary Guarantors -as subsidiary guarantors under the Loan
Agreement-. Accordingly, the Lender has received from the Company a New
Floating Rate Note in the amount of US$ 29,131,433 (the "OUTSTANDING
PRINCIPAL AMOUNT");
(I) WHEREAS the Company and the Lender have agreed to amend and restate the
New Floating Rate Note -and the Lender's participation in the Loan
Agreement- in order to refinance the Outstanding Principal Amount due
by the Company to the Lender under such New Floating Rate Note, in
accordance with the terms and subject to the conditions set forth in
this Amended and Restated Loan Agreement (the "AGREEMENT");
NOW, THEREFORE, in consideration of the premises and mutual
agreements hereinafter contained, the parties hereto agree to extend the tenor
and modify the terms of the New Floating Rate Note -and the Lender's
participation in the Loan Agreement- as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person (a)
existing at the time such Person becomes a Restricted Subsidiary,
including by designation, or (b) assumed in connection with the
acquisition of assets. Acquired Indebtedness shall be deemed to be
incurred on the date the acquired Person becomes a Restricted
Subsidiary or the date of the acquisition of such assets.
"ADDITIONAL AMOUNTS" means additional amounts as may be
necessary in order that the net amounts received by the Lender after
any withholding or deduction in respect of any Taxes shall equal the
amounts of principal and interest that would have been received in
respect of the CGD Note in the absence of such withholding or
deduction.
"AFFILIATE" means, with respect to any specified Person, (a)
any other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified Person or
(b) any other Person that owns, directly or indirectly through one or
more Subsidiaries, 10% or more of any class of such specified Person's
Capital Stock or (c) any executive officer or director of any such
specified Person or, with respect to any such 10% stockholder that is a
natural Person, any spouse, sibling or child (natural or adopted) of
such natural Person. For the purposes of this definition, "CONTROL",
when used with respect to any specified Person, means the power to vote
10% or more of any class of voting securities of such Person or to
direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "CONTROLLING" and "CONTROLLED"
have meanings correlative to the foregoing.
"AGREEMENT" shall mean this Amended and Restated Loan
Agreement.
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"ALFABANQUE" shall have the meaning provided for in the
recitals of this Agreement.
"ARGENTINE BANKRUPTCY LAW" means Argentine Law No. 24,422, as
amended.
"ARGENTINE GOVERNMENT" means the Government of Argentina.
"ASSET SALE" means any sale, issuance, conveyance, transfer,
lease or other disposition (including, without limitation, by way of
merger, consolidation or sale and leaseback transaction) (collectively,
a "TRANSFER"), directly or indirectly, in one or a series of related
transactions, of (a) any Capital Stock of any Restricted Subsidiary;
(b) all or substantially all of the properties and assets of any
division or line of business of the Company or any Restricted
Subsidiary; or (c) any other properties or assets of the Company or any
Restricted Subsidiary, other than in the ordinary course of business.
For the purposes of this definition, the term "Asset Sale" shall not
include any transfer of properties or assets (i) that is governed by
Section 5.01(Q), (ii) between or among the Company or any wholly owned
Restricted Subsidiaries in accordance with the terms of this Agreement,
(iii) having a Fair Market Value of not more than US$1.0 million (or,
to the extent non-US dollar denominated, the US Dollar Equivalent of
such amount) in any given fiscal year, (iv) by the Company or any
Restricted Subsidiary of damaged, worn out or other obsolete property
or assets in the ordinary course of business, (v) any transfer
constituting a Restricted Payment that is permitted to be made, and is
made, under paragraph (a) of Section 5.01(K) hereof, (vi) that is
permitted to be made, and is made, pursuant to the definition of
"Permitted Investments", and (vii) consisting of Receivables and
Related Assets or a fractional undivided interest therein sold by the
Company or any Restricted Subsidiary pursuant to any Permitted
Receivables Financing.
"ATTRIBUTABLE VALUE" means, with respect to any lease at the
time of determination, the present value (discounted at the interest
rate implicit in the lease or, if not known, at the Company's
incremental borrowing rate) of the obligations of the lessee of the
property subject to such lease for rental payments during the remaining
term of the lease included in such transaction, including any period
for which such lease has been extended or may, at the option of the
lessor, be extended, or until the earliest date on which the lessee may
terminate such lease without penalty or upon payment of penalty (in
which case the rental payments shall include such penalty), after
excluding from such rental payments all amounts required to be paid on
account of maintenance and repairs, insurance, taxes, assessments,
water, utilities and similar charges.
"AUTHORIZED OFFICER" means any member of the Supervisory
Committee of the Company, any Director of the Company and any employee
of the Company as may be duly authorized to take actions under this
Agreement.
"AVERAGE LIFE" means, as of the date of determination with
respect to any Indebtedness, the quotient obtained by dividing (a) the
sum of the products of (i) the number of years from the date of
determination to the date or dates of each successive scheduled
principal payment (including, without limitation, any sinking fund
4
requirements) of such Indebtedness multiplied by (ii) the amount of
each such principal payment by (b) the sum of all such principal
payments.
"BASE" means the Buenos Aires Stock Exchange.
"BOARD OF DIRECTORS" means either the board of directors of
the Company or any duly authorized committee of that board.
"BOARD RESOLUTION" means a copy of a resolution certified by a
Notary Public, along with a certificate of any Director, the President,
any Vice President, the Chief Financial Officer or the Finance Manager
of the Company that the Board Resolution has been duly adopted by the
Board of Directors and that is in full force and effect on the date of
such certification, and delivered to the Lender.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized by law to close in New York City.
"CAPITAL EXPENDITURES" shall mean, without duplication, all
expenditures or commitments made, directly or indirectly (by way of
acquisitions of securities of a Person or the expenditures of cash, the
transfer of property or the incurrence of Indebtedness), by the Company
or any Restricted Subsidiary, for equipment, fixed assets, real
property or improvements, or for replacements or substitutions therefor
or additions thereto, that have been or should be, in accordance with
GAAP, reflected as additions to property, plant or equipment on a
consolidated balance sheet of the Company and the Restricted
Subsidiaries.
"CAPITAL STOCK" means, with respect to any Person, any and all
shares, interests, partnership interests, participations, rights in or
other equivalents (however designated) of such Person's capital stock,
and any rights (other than debt securities convertible into capital
stock), warrants or options exchangeable for or convertible into such
capital stock, whether now outstanding or issued after the Original
Issue Date.
"CAPITALIZED LEASE OBLIGATION" means any obligation of any
Person under a lease of (or other agreement conveying the right to use)
any property (whether real, personal or mixed) that is required to be
classified and accounted for as a capital lease obligation under GAAP,
and, for the purpose of this Agreement, the amount of such obligation
at any date shall be the capitalized amount thereof at such date,
determined in accordance with GAAP.
"CASH EQUIVALENTS" means (a) any evidence of Indebtedness with
a maturity of 270 days or less issued or directly and fully guaranteed
or insured by the United States of America or Argentina or any agency
or instrumentality thereof (provided that the full faith and credit of
the United States of America or Argentina, as the case may be, is
pledged in support thereof), (b) certificates of deposit, Eurodollar
time deposits and bankers' acceptances with a maturity of 270 days or
less and overnight bank deposits of any financial institution
(including any branch thereof) that is organized or regulated under the
laws of the United States of America or any state thereof, Brazil,
Switzerland
5
or Argentina and which bank or trust company has capital, surplus and
undivided profits aggregating in excess of US$300 million (or, to the
extent non-US Dollar denominated, the US Dollar Equivalent of such
amount), or US$100 million (or, to the extent non-US Dollar
denominated, the US Dollar Equivalent of such amount), in the case of
any bank or trust company organized or regulated under the laws of
Argentina and has outstanding debt which is rated "A" (or such similar
equivalent rating) or higher by at least one nationally recognized
statistical rating organization (as defined in Rule 436 under the
Securities Act) or (in the case of Argentina) an Argentine affiliate
thereof or (c) commercial paper with a maturity of 270 days or less
issued by a corporation that is not an Affiliate of the Company and is
organized under the laws of any state of the United States or the
District of Columbia and rated at least A-1 by S&P or at least P-1 by
▇▇▇▇▇'▇.
"CASH TENDER OFFER" means the cash tender offer referred to in
the Offering Memorandum.
"CGD NOTE" means the Company's Collateralized Senior Fixed
Rate Note due 2014, which will be issued pursuant to Section 2.02 of
this Agreement, in substantially the form of Exhibit A hereto.
"CHANGE OF CONTROL" means the occurrence of any of the
following events: (a) prior to the first Qualified Equity Offering,
Permitted Holders beneficially own (as defined below) less than,
directly or indirectly, 51% of the total voting power of all classes of
outstanding Voting Stock of the Company; (b) after a Qualified Equity
Offering, any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act), other than Permitted Holders, is
or becomes the beneficial owner of more than 35% of the total voting
power of all classes of outstanding Voting Stock of the Company, unless
the Permitted Holders are the beneficial owners of more than 51% of the
total voting power of all outstanding Voting Stock of the Company; (c)
after a Qualified Equity Offering, the Company consolidates with, or
merges with or into, another Person or conveys, transfers, leases or
otherwise disposes of all or substantially all of its assets to any
Person, or any Person consolidates with, or merges with or into, the
Company, in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Company is converted into or exchanged
for cash, securities or other property, other than any such transaction
(i) where the outstanding Voting Stock of the Company is converted or
exchanged only to the extent necessary to reflect a change in the
jurisdiction of incorporation of the Company or is converted into or
exchanged for (A) Voting Stock (not including Redeemable Capital Stock)
of the Surviving Entity or (B) cash, securities and other property
(other than Voting Stock of the Surviving Entity) in an amount that
could be paid by the Company, on a pro forma basis, as a Restricted
Payment as described under Section 5.01(K) hereof and (ii) immediately
after such transaction, no "person" or "group" (as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act), other than Permitted
Holders, is the beneficial owner of more than 35% of the total voting
power of all classes of outstanding Voting Stock of the Surviving
Entity, unless the Permitted Holders are the beneficial owners of more
than 51% of the total voting power of all outstanding Voting Stock of
the Surviving Entity; (d) a majority of the elected Board of Directors
of the Company has been nominated by any "person" or
6
"group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), other than Permitted Holders or a depositary or
custodian for any depositary receipts in respect of Voting Stock of the
Company (provided that such depositary or custodian is not acting at
the direction of any such "person" or "group" other than one or more
Permitted Holders); or (e) the Company is liquidated or dissolved or
adopts a plan of liquidation or dissolution. For purposes of this
definition, the term "beneficial ownership" shall have the meaning
assigned under Rules 13d-3 and 13d-5 under the Exchange Act, except
that a Person shall be deemed to have "beneficial ownership" of all
securities that such Person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time.
"CLOSING DATE" has the meaning specified in Section 2.02.
"CNV" means Comision Nacional de Valores, the Argentine
National Securities Commission.
"COLLATERAL AGENT" means Banco Rio de la Plata S.A., in its
capacity as collateral agent under the Pledge Agreement, and any
successor thereto in such capacity.
"COMPANY" shall mean ▇▇▇▇▇▇▇▇▇▇ Hermanos S.A., a sociedad
anonima, organized and existing under the Laws of Argentina.
"COMPANY SHAREHOLDERS" shall have the meaning provided for in
the recitals of this Agreement.
"CONSOLIDATED AMORTIZATION EXPENSE" of any Person for any
period means the amortization expense of the Company and its Restricted
Subsidiaries for such period (to the extent included in the computation
of Consolidated Net Income of the Company), determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED DEPRECIATION EXPENSE" of any Person for any
period means the depreciation expense of the Company and its Restricted
Subsidiaries for such period (to the extent included in the computation
of Consolidated Net Income of the Company), determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, with respect
to any determination date, the ratio of (i) EBITDA for four full fiscal
quarters immediately preceding the determination date, to (ii) the
aggregate Fixed Charges for such four fiscal quarters. In making such
computations:
(i) EBITDA and Fixed Charges shall be calculated on a
pro forma basis assuming that (A) the Indebtedness to be
incurred or the Redeemable Capital Stock to be issued (and all
other Indebtedness incurred or Redeemable Capital Stock issued
since the first day of such period of four full fiscal
quarters referred to in Section 5.01(J) hereof through and
including the date of determination), and (if applicable) the
application of the net proceeds therefrom (and from any other
such Indebtedness or Redeemable Capital Stock), including
7
the refinancing of other Indebtedness, had been incurred on
the first day of such four quarter period and, in the case of
Acquired Indebtedness, on the assumption that the related
transaction (whether by means of purchase, merger or
otherwise) also had occurred on such date with the appropriate
adjustments with respect to such acquisition being included in
such pro forma calculation and (B) any acquisition or
disposition by the Company or any Restricted Subsidiary of any
properties or assets outside the ordinary course of business
or any repayment of any principal amount of any Indebtedness
of the Company or any Restricted Subsidiary prior to the
stated maturity thereof, in either case since the first day of
such period of four full fiscal quarters through and including
the date of determination, had been consummated on such first
day of such four quarter period;
(ii) the Fixed Charges attributable to interest on
any Indebtedness required to be computed on a pro forma basis
in accordance with paragraph (a) of Section 5.01(J) hereof and
(A) bearing a floating interest rate shall be computed as if
the rate in effect on the date of computation had been the
applicable rate for the entire period and (B) which was not
outstanding during the period for which the computation is
being made but which bears, at the option of the Company, a
fixed or floating rate of interest, shall be computed by
applying, at the option of the Company, either the fixed or
floating rate;
(iii) the Fixed Charges attributable to interest on
any Indebtedness under a revolving credit facility required to
be computed on a pro forma basis in accordance with paragraph
(a) under Section 5.01(J) hereof shall be computed based upon
the average daily balance of such Indebtedness during the
applicable period, provided that such average daily balance
shall be reduced by the amount of any repayment of
Indebtedness under a revolving credit facility during the
applicable period, which repayment permanently reduced the
commitments or amounts available to be reborrowed under such
facility;
(iv) notwithstanding the foregoing clauses (ii) and
(iii), interest on Indebtedness determined on a fluctuating
basis, to the extent such interest is covered by agreements
relating to Hedging Obligations, shall be deemed to have
accrued at the rate per annum resulting after giving effect to
the operation of such agreements; and
(v) if after the first day of the applicable
four-quarter period the Company has permanently retired any
Indebtedness out of the net proceeds of the issuance and sale
of shares of Capital Stock (other than Redeemable Capital
Stock) of the Company within 30 days of such issuance and
sale, Fixed Charges shall be calculated on a pro forma basis
as if such Indebtedness had been retired on the first day of
such period.
"CONSOLIDATED INCOME TAX EXPENSE" means, for any Person for
any period, the provision for taxes based on income and profits of the
Company and its Restricted
8
Subsidiaries to the extent such income or profits were included in
computing Consolidated Net Income of the Company for such period.
"CONSOLIDATED INDEBTEDNESS RATIO" means, as at any date of
determination, the ratio of the principal amount of Net Indebtedness of
the Company and its Restricted Subsidiaries as of such date, determined
on a consolidated basis for the Company and its Restricted Subsidiaries
in accordance with GAAP, to EBITDA with respect to the four most
recently completed fiscal quarters of the Company through such date.
"CONSOLIDATED INTEREST EXPENSE" means, without duplication,
for any period, the sum of the interest expense on all Indebtedness of
the Company and its Restricted Subsidiaries for such period, determined
on a consolidated basis in accordance with GAAP and including, without
limitation (i) imputed interest on Capitalized Lease Obligations and
Attributable Value, (ii) commissions, discounts and other fees and
charges owed with respect to letters of credit securing financial
obligations and bankers' acceptance financing, (iii) the net costs
associated with Hedging Obligations, (iv) amortization of other
financing fees and expenses, (v) the interest portion of any deferred
payment obligations, (vi) amortization of debt discount or premium, if
any, (vii) all other non-cash interest expense, (viii) capitalized
interest and (ix) any interest payable with respect to discontinued
operations but excluding interest expense representing the amortization
of the gain realized to the Company from the refinancing of the
Existing Notes and the Existing Bank Debt, which refinancing is
effected by the issuance of Senior Notes or Floating Rate Debt.
"CONSOLIDATED NET INCOME" for any period means the net income
(or loss) of the Company and its Restricted Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP;
provided that there shall be excluded from such net income (to the
extent otherwise included therein), without duplication: (i) the net
income (or loss) of any Person (other than a Restricted Subsidiary of
the Company) in which any Person other than the Company has an
ownership interest, except to the extent that any such income has
actually been received by the Company or any of its Restricted
Subsidiaries in the form of cash dividends during such period; (ii)
except to the extent includible in the consolidated net income of the
Company pursuant to the foregoing clause (i), the net income (or loss)
of any Person that accrued prior to the date that (a) such Person
becomes a Restricted Subsidiary of the Company or is merged into or
consolidated with the Company or any of its Restricted Subsidiaries or
(b) the assets of such Person are acquired by the Company or any of its
Restricted Subsidiaries; (iii) the net income of any Restricted
Subsidiary of the Company during such period to the extent that the
declaration or payment of dividends or similar distributions by such
Restricted Subsidiary of that income (a) is not permitted by operation
of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to
that Restricted Subsidiary during such period (except to the extent
that (x) such net income could be paid to the Company or a Restricted
Subsidiary thereof by loans, advances, intercompany transfers,
principal repayments or otherwise and (y) the Company would not be
under any obligation to repay, return, transfer or invest any such
amount so paid to or in that Restricted Subsidiary at any time prior to
one year after the Stated Maturity of the principal of the CGD Note) or
(b) would be subject
9
to any taxes payable on such dividend or distribution; (iv) any gain
(but not loss), together with any related provisions for taxes on any
such gain, realized during such period by the Company or any of its
Restricted Subsidiaries upon (a) the acquisition of any securities, or
the extinguishment of any Indebtedness, of the Company or any of its
Restricted Subsidiaries or (b) any Asset Sale by the Company or any of
its Restricted Subsidiaries; (v) any extraordinary gain (but not
extraordinary loss), together with any related provision for taxes on
any such extraordinary gain, realized by the Company or any of its
Restricted Subsidiaries during such period; and (vi) in the case of a
successor to such Person by consolidation, merger or transfer of its
assets, any earnings of the successor prior to such merger,
consolidation or transfer of assets; and provided further that (A) any
gain referred to in clauses (iv) and (v) above that relates to a
Restricted Investment and which is received in cash by the Company or
one of its Restricted Subsidiaries during such period shall be included
in the Consolidated Net Income and (B) any cash gain referred to in
clause (iv) above shall, for purposes only of calculating the amount of
Restricted Payment that may be made pursuant to Section
5.01(K)(a)(v)(A), be included in calculating Consolidated Net Income.
"CONSOLIDATED NET WORTH" means, as of any date of
determination, the sum of (i) the consolidated equity of the common
stockholders of the Company and its Restricted Subsidiaries as set
forth on the most recently available quarterly or annual consolidated
balance sheet of the Company and its Restricted Subsidiaries plus (ii)
the respective amounts reported on such consolidated balance sheet with
respect to any series of preferred stock (other than Redeemable Stock)
that by its terms is not entitled to the payment of dividends unless
such dividends may be declared and paid only out of net earnings in
respect of the year of such declaration and payment, but only to the
extent of any cash received by the Company and its Restricted
Subsidiaries upon issuance of such preferred stock, less all write-ups
(other than write-ups resulting from foreign currency translations and
write-ups of tangible assets of a going concern business made within 12
months after the acquisition of such business) subsequent to the date
of the Indenture in the book value of any asset owned by the Company or
a Restricted Subsidiary, each item determined in conformity with GAAP.
"CONSOLIDATED TANGIBLE ASSETS" as of any date of determination
means the total assets of the Company and its Restricted Subsidiaries
(excluding any assets that would be classified as "intangible assets"
under GAAP) on a consolidated basis as set forth on the most recently
available quarterly or annual consolidated balance sheet of the Company
and its Restricted Subsidiaries, less all write-ups subsequent to the
Original Issue Date in the book value of any asset owned by the Company
or any of its Restricted Subsidiaries each item determined in
conformity with GAAP.
"CORPORATION" includes corporations, associations, companies
and business trusts.
"CURRENCY AGREEMENTS" means any spot or forward foreign
exchange agreements and currency swap, currency option or other similar
financial agreements or arrangements entered into by the Company or any
of its Restricted Subsidiaries in the
10
ordinary course of business and designed to protect against or manage
exposure to fluctuations in foreign currency exchange rates.
"DALLPOINT" means Dallpoint Investments LLC, a Delaware
limited liability company.
"DANONE" means Danone Argentina S.A., a sociedad anonima duly
organized and existing under the laws of the Republic of Argentina.
"DEFAULT" means any event that is, or after notice or passage
of time or both would be, an Event of Default.
"DEFAULTED INTEREST" has the meaning specified in Section
2.04.
"DISINTERESTED DIRECTOR" means, with respect to any
transaction or series of transactions in respect of which the Board of
Directors is required to deliver a resolution of the Board of Directors
under this Agreement, a member of the Board of Directors who does not
have any material direct or indirect financial interest in or with
respect to such transaction or series of transactions.
"DISTRIBUTION AGREEMENT" means the distribution agreement
entered into by and between the Company and Logistica La Serenisima
S.A. ("LLSSA") on February 8, 2005.
"EBITDA" means, for any period, without duplication, the sum
of the amounts for such period of (i) Consolidated Net Income, (ii)
Consolidated Income Tax Expense, (iii) Consolidated Amortization
Expense (but only to the extent not included in Fixed Charges), (iv)
Consolidated Depreciation Expense, (v) Fixed Charges and (vi) all other
non-cash items reducing Consolidated Net Income and minus non-cash
items increasing Consolidated Net Income (including exchange
differences, holding results, results from exposure to inflation and
extraordinary results and excluding any such non-cash charge that
results in an accrual of a reserve for cash charges in any future
period and non-cash credits resulting from changes in prepaid assets or
accrued liabilities in the ordinary course of business) of the Company
and its Restricted Subsidiaries, in each case determined on a
consolidated basis in accordance with GAAP (provided, however, that the
amounts set forth in clauses (ii) through (vi) shall be included
without duplication and only to the extent such amounts actually
reduced (or increased) Consolidated Net Income).
"EUROS" means euros of the European Union.
"EVENT OF DEFAULT" has the meaning specified in Section 6.01.
"EXCESS PROCEEDS OFFER" has the meaning set forth in Section
5.01(Q).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE OFFER" means the exchange offer referred to in the
Offering Memorandum.
11
"EXEMPTED AFFILIATE TRANSACTION" means (i) transactions with
any Person that is an Affiliate of the Company or any Restricted
Subsidiary solely as the result of the Company's or such Restricted
Subsidiary's Investment in such Person, (ii) reasonable and customary
regular compensation and fees to directors of the Company or any such
Restricted Subsidiary who are not employees of the Company or any such
Restricted Subsidiary, (iii) payments of salary, bonus and other
ordinary compensation in the ordinary course of business, to Affiliates
of the Company that are employees provided that such payments shall not
exceed US$2,000,000 (or the US Dollar Equivalent of such amount in
other currencies) in the aggregate in any fiscal year and (iv) any
distribution to stockholders, as stockholders, permitted by Section
5.01(K).
"EXISTING BANK DEBT" means each item of Indebtedness described
on Schedule II of the Loan Agreement.
"EXISTING NOTES" means the Company's 11 3/4% Senior Notes due
2008.
"FAIR MARKET VALUE" means, with respect to any security, asset
or property, the sale value that would be obtained in an arm's-length
transaction between an informed and willing seller under no compulsion
to sell and an informed and willing buyer under no compulsion to buy.
Fair Market Value shall be determined by the Board of Directors of the
relevant Person acting in good faith, whose determination shall be
conclusive and shall be evidenced by a Board Resolution.
"FEDERAL BANKRUPTCY CODE" means the Bankruptcy Act of Title 11
of the United States Code, as amended from time to time.
"FIXED CHARGES" means, for any period, the sum of (a)
Consolidated Interest Expense for such period, (b) all cash paid by the
Company during such period in respect of interest on any Indebtedness
of any other Person guaranteed by the Company or any of its Restricted
Subsidiaries, and (c) all cash dividend payments (and non-cash dividend
payments in the case of any Restricted Subsidiary) on any series of
preferred stock of the Company or a Restricted Subsidiary, in each
case, on a consolidated basis and in accordance with GAAP.
"FLOATING RATE DEBT" means the New Floating Rate Debt.
"FLOATING RATE DEBT EXCESS PROCEEDS AMOUNT" has the meaning
specified in Section 5.01(Q).
"FLOATING RATE NOTES" means the New Floating Rate Notes.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" or "GAAP" means
generally accepted accounting principles in Argentina, consistently
applied, that are in effect from time to time. If any financial term is
not addressed or identified under GAAP, such term will be interpreted
in accordance with U.S. generally accepted accounting principles in
effect at the time.
12
"GLOBAL BONDS" means any series of the "Bonos Externos
Globales de la Republica Argentina en Dolares Estadounidenses" issued
by the Republic of Argentina or any other securities issued in
connection with the restructuring of such bonds.
"GOVERNMENTAL AGENCY" means any public legal entity or public
agency of Argentina or the United States, whether created by federal,
state or local government, or any other legal entity now existing or
hereafter created, or now or hereafter owned or controlled, directly or
indirectly, by any public legal entity or public agency of Argentina or
the United States.
"GUARANTEE" means, as applied to any obligation, (a) a
guarantee (other than by endorsement of negotiable instruments for
collection in the ordinary course of business), direct or indirect, in
any manner, of any part or all of such obligation and (b) an agreement,
direct or indirect, contingent or otherwise, the practical effect of
which is to assure in any way the payment or performance (or payment of
damages in the event of non-performance) of all or any part of such
obligation, including, without limiting the foregoing, the payment of
amounts drawn down under letters of credit. When used as a verb,
"guarantee" shall have a corresponding meaning.
"GUARANTEED DEBT" of any Person means, without duplication,
all Indebtedness of any other Person referred to in the definition of
Indebtedness guaranteed directly or indirectly in any manner by such
Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Indebtedness or to
advance or supply funds for the payment or purchase of such
Indebtedness, (ii) to purchase, sell or lease (as lessee or lessor)
property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Indebtedness or to assure
the holder of such Indebtedness against loss, (iii) to supply funds to,
or in any other manner invest in, the debtor (including any agreement
to pay for property or services to be acquired by such debtor
irrespective of whether such property is received or such services are
rendered), (iv) to maintain working capital or equity capital of the
debtor, or otherwise to maintain the net worth, solvency or other
financial condition of the debtor or (v) otherwise to assure a creditor
against loss; provided that the term "GUARANTEE" shall not include
endorsements for collection or deposit, in either case in the ordinary
course of business, or any obligation or liability of such Person in
respect of leasehold interests assigned by such Person to any other
Person.
"GUARANTEED OBLIGATIONS" means the obligations required by
Section 7A.01 to be guaranteed by a Subsidiary Guarantor.
"GUARANTEED PARTIES" means all the persons who are now or who
hereafter become Lenders.
"HEDGING OBLIGATIONS" of any Person means the obligations of
such person pursuant to any Interest Rate Agreement or Currency
Agreement.
"INDEBTEDNESS" means, with respect to any Person, without
duplication, (a) all liabilities of such Person for borrowed money
(including overdrafts) or for the deferred
13
purchase price of property or services, (b) all obligations of such
Person evidenced by bonds, notes, debentures or other similar
instruments, (c) all indebtedness of such Person created or arising
under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even if the rights and
remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), but
excluding trade payables arising in the ordinary course of business,
(d) all Capitalized Lease Obligations of such Person, (e) all
obligations of such Person under or in respect of Interest Rate
Agreements or Currency Agreements, (f) all Indebtedness referred to in
(but not excluded from) the preceding clauses of other Persons and all
dividends of other Persons, the payment of which is secured by (or for
which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon or with respect to
property (including, without limitation, accounts and contract rights)
owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness (the amount of such
obligation being deemed to be the lesser of the value of such property
or asset or the amount of the obligation so secured), (g) all
Guaranteed Debt of such Person, and (h) all Redeemable Capital Stock of
such Person valued at the greater of its voluntary or involuntary
maximum fixed repurchase price plus accrued and unpaid dividends. For
purposes hereof, the "MAXIMUM FIXED REPURCHASE PRICE" of any Redeemable
Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Capital
Stock as if such Redeemable Capital Stock were purchased on any date on
which Indebtedness shall be required to be determined pursuant to this
Agreement, and if such price is based upon, or measured by, the Fair
Market Value of such Redeemable Capital Stock, such fair market value
shall be determined in good faith by the board of directors of the
issuer of such Redeemable Capital Stock. Indebtedness shall exclude any
liability for taxes and any accounts payable and other indebtedness and
obligations incurred in the ordinary course of business in connection
with the acquisition of goods and services but shall include, without
limitation, all obligations, contingent or otherwise, of such Person in
connection with any letters of credit and acceptances issued under
letter of credit facilities, acceptance facilities or other similar
facilities (other than obligations with respect to trade letters of
credit, acceptances or the like securing obligations entered into in
the ordinary course of business of such Person for the import of
equipment used in the business of such Person or inventory for sale to
customers to the extent such letters of credit, acceptances or the like
are not drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed to the lender no later than the third Business Day following
receipt by such Person of a demand for reimbursement following payment
on the letter of credit, acceptance or the like by such lender).
"INDEMNIFIED COSTS" has the meaning specified in Section 7.05.
"INDEMNIFIED PARTY" has the meaning specified in Section
8.04(b).
"INDENTURE" means the Indenture dated as of October 22, 2004
between the Company, The Bank of New York, as trustee, and others under
which the Senior Notes have been issued.
14
"INTEREST PAYMENT DATE" means the last day of each Interest
Period commencing on or after the Original Issue Date.
"INTEREST PERIOD" means each of the period commencing on July
31, 2004 and ending on the next to occur of June 30 and December 31
after the Original Issue Date and, thereafter, each subsequent period
commencing on the last day of the immediately preceding Interest Period
and ending on the next to occur of June 30 and December 31; provided,
however, that whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, provided, however, that, if such extension would cause
the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on the
next preceding Business Day.
"INTEREST RATE AGREEMENTS" means any interest rate protection
agreements and other types of interest rate hedging agreements
(including, without limitation, interest rate swaps, caps, floors,
collars and similar agreements) designed to protect against or manage
exposure to fluctuations in interest rates.
"INVESTMENT" means, with respect to any Person, any direct or
indirect advance, loan or other extension of credit (including by way
of guarantee) or capital contribution to (by means of any transfer of
cash or other property to others or any payment for property or
services for the account or use of others), or any purchase,
acquisition or ownership by such Person of any Capital Stock, bonds,
debentures or other securities or evidences of Indebtedness issued or
owned by, any other Person and all other items that would be classified
as investments on a balance sheet prepared in accordance with GAAP. In
addition, the Fair Market Value of the net assets of any Restricted
Subsidiary at the time that such Restricted Subsidiary is designated an
Unrestricted Subsidiary shall be deemed to be an "INVESTMENT" made by
the Company in such Unrestricted Subsidiary at such time. "INVESTMENTS"
shall exclude extensions of trade credit on commercially reasonable
terms in accordance with normal trade practices and guarantees of
Indebtedness that are permitted under Section 5.01(J) hereof.
"LAW" means any constitution, treaty, convention, statute,
law, code, ordinance, decree, order, determination, rule, regulation,
guideline, interpretation, direction, policy or request, or judicial or
arbitral decision, judgment or award.
"LENDER" has the meaning specified in the introductory
paragraph hereof.
"LENDING OFFICE" means, with respect to the Lender, the
specified as its "Lending Office" opposite its name on Schedule I
hereto, as supplemented from time to time, or in the notification of
assignment, or such other office of such Lender as such Lender may from
time to time specify to the Company.
"LIEN" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation, assignment for
security, claim, or preference or priority or other encumbrance upon or
with respect to any property of any kind, real or
15
personal, movable or immovable, now owned or hereafter acquired. A
Person shall be deemed to own subject to a Lien any property which such
Person has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other
title retention agreement.
"LOAN AGREEMENT" has the meaning specified in the recitals of
this Agreement.
"MATURITY" means, with respect to the CGD Note, the date on
which the principal of such CGD Note becomes due and payable as therein
provided or as provided in this Agreement, whether at the Stated
Maturity with respect to such principal or by declaration of
acceleration, call for redemption or purchase or otherwise (including
pursuant to a Change of Control Offer or an Excess Proceeds Offer).
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service Inc. and its
successors.
"NET CASH PROCEEDS" means, with respect to any Asset Sale, the
proceeds thereof in the form of cash or Cash Equivalents including
payments in respect of deferred payment obligations when received in
the form of, or stock or other assets when disposed of for, cash or
Cash Equivalents (except to the extent that such obligations are
financed or sold with recourse to the Company or any Restricted
Subsidiary), net of (i) brokerage commissions and other fees and
expenses (including fees and expenses of legal counsel and investment
banks) related to such Asset Sale, (ii) provisions for all taxes
payable as a result of such Asset Sale, (iii) payments made to retire
Indebtedness where payment of such Indebtedness is secured by the
assets or properties the subject of such Asset Sale, (iv) amounts
required to be paid to any Person (other than the Company or any
Restricted Subsidiary) owning a beneficial interest in the assets
subject to the Asset Sale and (v) appropriate amounts to be provided by
the Company or any Restricted Subsidiary, as the case may be, as a
reserve, whether or not required by GAAP, against any liabilities
associated with such Asset Sale and retained by the Company or any
Restricted Subsidiary, as the case may be, after such Asset Sale,
including, without limitation, pension and other post-employment
benefit liabilities, liabilities related to environmental matters and
liabilities under any indemnification obligations associated with such
Asset Sale, all as reflected in an Officers' Certificate delivered to
the Lender.
"NET EQUITY PROCEEDS" means, with respect to any sale of
Qualified Capital Stock by the Company or any sale of Qualified Capital
Stock by any Restricted Subsidiary to parties other than the Company
and the Restricted Subsidiaries, the aggregate net proceeds received in
cash, after the payment of expenses, commissions and the like incurred
in connection therewith. If Redeemable Capital Stock or Indebtedness is
converted into Qualified Capital Stock, the amount so converted shall
be deemed to be Net Equity Proceeds received at the time of conversion.
"NET INDEBTEDNESS" means, at any date of determination, the
excess, if any, of the amount of Indebtedness of the Company at such
date over the amount of cash and Cash Equivalents of the Company at
such date, all as determined on a consolidated basis for the Company
and its Restricted Subsidiaries in accordance with GAAP.
16
"NEW FLOATING RATE DEBT" means the Company's Collateralized
Senior Floating Rate Debt due 2011 which is outstanding under the Loan
Agreement.
"NEW FLOATING RATE NOTE" means the Company's Collateralized
Senior Floating Rate Amortizing Notes due 2011 which were issued
pursuant to the terms and conditions of the Loan Agreement to evidence
the New Floating Rate Debt.
"NEW OUTSTANDING PRINCIPAL AMOUNT" has the meaning provided
for under Section 2.01 (a) of this Agreement.
"NON-PARTICIPATING EXISTING NOTES" means Existing Notes which
were not accepted by the Company in the Cash Tender Offer or the
Exchange Offer.
"NON-RECOURSE DEBT" means Indebtedness as to which neither the
Company nor any of its Restricted Subsidiaries (other than the
Securitization Subsidiary) (a) provides direct credit support
(including any undertaking, agreement or instrument that would
constitute Indebtedness), or (b) is directly or indirectly liable (as a
guarantor or otherwise) (other than the Securitization Subsidiary).
"NON-RECOURSE PURCHASE MONEY INDEBTEDNESS" means Purchase
Money Indebtedness to the extent that such Indebtedness is non-recourse
to the Company or any of its Restricted Subsidiaries or any of their
respective assets other than the assets financed with the proceeds
thereof.
"OFFERING MEMORANDUM" means the Company's Offering Memorandum
and Proxy Solicitation Statement dated March 5, 2004, as modified and
supplemented from time to time through the Original Issue Date.
"OFFICERS' CERTIFICATE" means a certificate signed by two
Authorized Officers of the Company and delivered to the Lender.
"OPINION OF COUNSEL" means a written opinion of counsel, who
may be counsel for the Company, including an employee of the Company,
and who shall be acceptable to the Lender.
"ORIGINAL ISSUE DATE" means the date of original issuance of
the CGD Note.
"OUTSTANDING PRINCIPAL AMOUNT" has the meaning provided for in
the recitals of this Agreement.
"PAR BONDS" means the 6% Par Bonds in Dollars due 2023 issued
by the Republic of Argentina or any other securities issued in
connection with the restructuring of such bonds.
"PARI PASSU INDEBTEDNESS" means (a) with respect to the CGD
Note, Indebtedness which ranks pari passu in right of payment to the
CGD Note, and (b) with respect to any Subsidiary Guarantee,
Indebtedness which ranks pari passu in right of payment to such
Subsidiary Guarantee.
17
"PERMITTED CAPITAL EXPENDITURES" means (a) (i) for each of the
Company's fiscal years 2004 through 2006, US$8,000,000 (or the US
Dollar Equivalent of such amount in other currencies) and (ii) for each
of the Company's fiscal years 2007 through 2012, US$10,000,000 (or the
US Dollar Equivalent of such amount in other currencies), plus (b) the
amount (if any) by which (i) the aggregate amount of Permitted Capital
Expenditures for all of the preceding fiscal years exceeds (ii) the
aggregate amount of Capital Expenditures actually made during such
fiscal years (excluding those made by application of Net Cash Proceeds
or Net Equity Proceeds) (calculated based on the exchange rate in
effect at the end of the Company's most recently completed fiscal
quarter). For the purposes of this definition, Capital Expenditures
shall not include capital expenditures financed by means of a specific
financial facility, and shall include the installments corresponding to
the facilities previously deducted.
"PERMITTED HOLDERS" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Dallpoint (but only for so long as the
beneficial holders of Dallpoint's equity capital on the Original Issue
Date and their Permitted Transferees own beneficially a majority of
Dallpoint's equity) and their respective Permitted Transferees.
"PERMITTED INDEBTEDNESS" means any of the following:
(a) Indebtedness of the Company under any revolving
line of credit in an aggregate principal amount not to exceed
at any time outstanding the greater of (I) US$15,000,000 (or
to the extent non-US Dollar denominated, the US Dollar
Equivalent of such amount) and (II) the excess of (x) the
higher of (1) 50% of the net book value of accounts receivable
or (2) 100% of the net book value of export third-party
receivables on a consolidated basis in accordance with GAAP
over (y) the US Dollar Equivalent of the amount of financing
outstanding under any Permitted Receivables Financing;
(b) Indebtedness of the Company pursuant to the
Senior Notes, the Floating Rate Debt and the CGD Note,
including any Subsequent Notes issued in payment of interest
on the Senior Notes pursuant to the Indenture;
(c) Indebtedness of the Company outstanding on the
Original Issue Date (any such Indebtedness the principal
amount of which is in excess of US$1,000,000 (or, to the
extent non-US Dollar denominated, the US Dollar Equivalent of
such amount) being listed on a schedule hereto);
(d) Indebtedness of the Company owing to any wholly
owned Restricted Subsidiary other than a Securitization
Subsidiary; provided that any Indebtedness of the Company
owing to any such Restricted Subsidiary is made pursuant to an
intercompany note and is subordinated in right of payment from
and after such time as the CGD Note shall become due and
payable (whether at Stated Maturity, acceleration or
otherwise) to the payment and performance of the Company's
obligations under the CGD Note; provided further that (i) any
disposition, pledge or transfer of any such Indebtedness to a
Person (other than a disposition, pledge or transfer to the
Company or another wholly owned
18
Restricted Subsidiary other than a Securitization
Subsidiary) or (ii) the occurrence of any event by which such
Subsidiary ceases to be a Restricted Subsidiary (by way of
designation or the subsequent issuance (other than directors'
qualifying shares), sale, transfer or other disposition of any
Capital Stock or any other event which results in any such
Subsidiary ceasing to be a Subsidiary), shall be deemed to be
an incurrence of such Indebtedness by the Company not
permitted by this clause (d);
(e) Indebtedness of the Company under Interest Rate
Agreements relating to Indebtedness of the Company otherwise
permitted under the Agreement that are entered into for the
purpose of protecting against fluctuations in interest rates
in respect of such Indebtedness and not for speculative
purposes;
(f) Indebtedness of the Company under Currency
Agreements, provided that (x) such Currency Agreements relate
to Indebtedness otherwise permitted under the Agreement or the
purchase price of goods purchased or sold by the Company in
the ordinary course of its business and (y) such Currency
Agreements do not increase the Indebtedness or other
obligations of the Company outstanding other than as a result
of fluctuations in foreign currency exchange rates or by
reason of fees, indemnities and compensation payable
thereunder;
(g) Indebtedness of the Company or any of its
Restricted Subsidiaries incurred in respect of bankers'
acceptances and letters of credit provided in the ordinary
course of business, provided that the aggregate principal
amount of all indebtedness incurred pursuant to this clause
does not exceed US$10,000,000 (or, to the extent non-US Dollar
denominated, the US Dollar Equivalent of such amount)
outstanding at any one time;
(h) Indebtedness of the Company in respect of
performance, surety or appeal bonds provided in the ordinary
course of business (in each case other than for an obligation
for borrowed money);
(i) the incurrence by the Company of Indebtedness
which serves to refund, refinance or replace (each such
incurrence, for purposes of this clause, a "refinancing"), or
successively refinance, any Indebtedness incurred by the
Company as permitted under paragraph (a) of Section 5.01(J)
hereof (other than Permitted Indebtedness) and clauses (b) and
(c) above (in the case of a refinancing of the CGD Note,
subject to compliance with the Indenture) or any Indebtedness
of a Restricted Subsidiary incurred as permitted under the
definition of "Permitted Subsidiary Indebtedness" (other than
Indebtedness under clause (b) of such definition), so long as
(i) any such new Indebtedness shall be in a principal amount
that does not exceed the principal amount (or, if such
Indebtedness being refinanced provides for an amount less than
the principal amount thereof to be due and payable upon a
declaration of acceleration thereof, such lesser amount as of
the date of determination) so refinanced, (ii) in the case of
any refinancing of Pari Passu Indebtedness or Subordinated
Indebtedness, such new Indebtedness is (A) in the case of any
refinancing of Pari Passu Indebtedness,
19
expressly made pari passu with or subordinate in right of
payment to the CGD Note and (B) in the case of any refinancing
of Subordinated Indebtedness, made subordinate to the CGD Note
at least to the same extent as the Subordinated Indebtedness
being refinanced and (iii) such new Indebtedness has an
Average Life longer than the Average Life of the Indebtedness
being refinanced and a final Stated Maturity later than the
final Stated Maturity of the Indebtedness being refinanced;
(j) to the extent considered Indebtedness,
contractual obligations of the Company arising under any
Permitted Receivables Financing as permitted by the Agreement;
(k) Indebtedness of the Company and its Restricted
Subsidiaries in an aggregate principal amount not in excess of
US$20,000,000 (or, to the extent non-US dollar denominated,
the US Dollar Equivalent of such amount) at any one time
outstanding;
(l) Indebtedness of the Company, any portion of which
is guaranteed by any export credit agency, in an aggregate
principal amount not in excess of US$20,000,000 at any time
outstanding (or, to the extent non-US) Dollar denominated, the
US Dollar Equivalent of such amount);
(m) Indebtedness in respect of Non-Recourse Purchase
Money Indebtedness incurred by the Company or any Restricted
Subsidiary in aggregate principal amount not in excess of
US$15,000,000 (or, to the extent non-US Dollar denominated,
the US Dollar Equivalent of such amount); and
(n) Permitted Subsidiary Indebtedness.
"PERMITTED INVESTMENTS" means any Investment by the Company or
any Restricted Subsidiary in any of the following:
(a) Cash Equivalents;
(b) the Company, any Restricted Subsidiary or, to the
extent required in connection with a Permitted Receivables
Financing, a Securitization Subsidiary (provided that the
aggregate amount of Investments made in reliance on clause (b)
or (c) of this definition in any Restricted Subsidiary that is
not a Subsidiary Guarantor shall not exceed US$10,000,000 (or,
to the extent non-US Dollar denominated, the US Dollar
Equivalent of such amount));
(c) another Person, if as a result of such investment
(i) such other Person becomes a Restricted Subsidiary or (ii)
such other Person is merged or consolidated with or into, or
transfers or conveys all or substantially all of its assets
to, the Company or a Restricted Subsidiary; provided that if,
prior to such Investment, such Person is an Affiliate of the
Company, after giving effect to such Investment, the Company
could incur at least a US$1.00 of additional
20
Indebtedness (other than Permitted Indebtedness) in
accordance with the provisions hereof exclusive of Section
5.01(J)(a)(ii)(y)(2);
(d) loans or advances made to employees or any
directors of the Company who are not Affiliates of the Company
or any Restricted Subsidiary in the ordinary course of
business in an aggregate amount not to exceed US$1,000,000
(or, to the extent non-US Dollar denominated, the US Dollar
Equivalent of such amount) at any one time outstanding;
(e) Interest Rate Agreements or Currency Agreements
which constitute Permitted Indebtedness or Permitted
Subsidiary Indebtedness;
(f) an amount not to exceed US$5,000,000 (or, to the
extent non-US Dollar denominated, the US Dollar Equivalent of
such amount) at any one time outstanding invested in any
business reasonably related to the business of the Company on
the Original Issue Date;
(g) extensions of credit in the nature of accounts
receivable or notes receivable arising from the sale or lease
of goods or services in the ordinary course of business;
(h) pledges or deposits required in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security;
(i) pledges or deposits in connection with (i) the
non-delinquent performance of bids, trade contracts (other
than for borrowed money), leases or statutory obligations,
(ii) contingent obligations on surety or appeal bonds, and
(iii) other non-delinquent obligations of a like nature, in
each case incurred in the ordinary course of business;
(j) customary Investments required by the terms of
any Permitted Receivables Financing to the extent such
Investments are made in the ordinary course and pursuant to
ordinary business terms relating to transactions of such
nature and do not exceed US$1,000,000 (or, to the extent
non-US Dollar denominated, the US Dollar Equivalent of such
amount) in the aggregate;
(k) Investments consisting of non-cash consideration
received in the form of securities, notes or similar
obligations in connection with an Asset Sale permitted by
Section 5.01(Q) hereof, provided that the aggregate amount of
such non-cash consideration received in connection with any
such Asset Sale shall not exceed the amount permitted under
Section 5.01(Q) hereof;
(l) an amount not to exceed US$5,000,000 (or, to the
extent non-US Dollar denominated, the US Dollar Equivalent of
such amount) at any one time outstanding;
21
(m) an amount not to exceed US$5,000,000 (or, to the
extent non-US Dollar denominated, the US Dollar Equivalent of
such amount) at any one time outstanding in respect of
advances, loans or extensions of credit in the ordinary course
of business to suppliers to the Company or any Restricted
Subsidiary; and
(n) Investments in Senior Notes acquired in the open
market.
"PERMITTED LIENS" means the following types of Liens:
(a) Liens existing as of the Original Issue Date;
(b) Liens on property or assets of the Company or any
Restricted Subsidiary securing Indebtedness and all other
obligations under any revolving line of credit referred to in
clause (a) of the definition of "PERMITTED INDEBTEDNESS" or
under Interest Rate Agreements or Currency Agreements which
constitute Permitted Indebtedness or Permitted Subsidiary
Indebtedness;
(c) Liens on any property or assets of a Restricted
Subsidiary granted in favor of the Company or any wholly owned
Subsidiary Guarantor;
(d) Liens on any property or assets of the Company or
any Restricted Subsidiary securing the CGD Note or the
Subsidiary Guarantees;
(e) Liens securing Purchase Money Indebtedness,
provided that such Liens extend only to the property being
acquired and such Lien is created within 90 days of the
purchase of such property;
(f) statutory Liens of landlords and carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen or
other similar Liens arising in the ordinary course of business
of the Company or any Restricted Subsidiary and with respect
to amounts not yet delinquent or being contested in good faith
by appropriate proceeding, if a reserve or other appropriate
provision, if any, as shall be required in conformity with
GAAP shall have been made therefor;
(g) Liens for taxes, assessments, government charges
or claims that are being contested in good faith by
appropriate proceedings promptly instituted and diligently
conducted and if a reserve or other appropriate provision, if
any, as shall be required in conformity with GAAP shall have
been made therefor;
(h) easements, rights-of-way, restrictions and other
similar charges or encumbrances not interfering in any
material respect with the business of the Company or any
Restricted Subsidiary incurred in the ordinary course of
business;
(i) Liens arising out of judgments or orders that
have been adequately bonded or with respect to which a stay of
execution (or the equivalent thereof under Argentine law) has
been obtained pending an appeal or proceeding for review;
22
(j) Liens securing Acquired Indebtedness created
prior to (and not in connection with or in contemplation of)
the incurrence of such Indebtedness by the Company or any
Restricted Subsidiary, provided that such Lien does not extend
to any property or assets of the Company or any Restricted
Subsidiary other than the assets acquired in connection with
the incurrence of such Acquired Indebtedness;
(k) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security;
(l) Liens securing reimbursement obligations of the
Company or any Restricted Subsidiary with respect to letters
of credit that encumber documents and other property relating
to such letters of credit and the products and proceeds
thereof;
(m) Liens incurred or deposits made to secure the
performance of tenders, bids, leases, statutory or regulatory
obligations, surety and appeal bonds, contracts (other than
for Indebtedness), performance and return-of-money bonds and
other obligations of a similar nature incurred in the ordinary
course of business (exclusive of obligations for the payment
of borrowed money);
(n) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties
in connection with the importation of goods;
(o) Liens arising solely by virtue of any statutory
provision relating to banker's liens, rights of set-off or
similar rights and remedies as to deposit accounts or other
funds maintained with a creditor depository institution,
provided, however, that such deposit account is not a
dedicated cash collateral account and is not subject to
restrictions against access by the Company or any of its
Restricted Subsidiaries;
(p) to the extent considered giving rise to Liens on
the assets of the Company or its Restricted Subsidiaries,
Liens on Receivables and Related Assets incurred in connection
with a Permitted Receivables Financing;
(q) Liens on Capital Stock of Promas S.A. securing
amounts owed to the Argentine Government in respect of taxes
the payment of which has been deferred pursuant to an
agricultural incentive program to fund a portion of the
Company's investment in Promas S.A.; and
(r) any extension, renewal or replacement, in whole
or in part, of any Lien described in the foregoing clauses (a)
through (q); provided that any such extension, renewal or
replacement shall be no more restrictive in any material
respect than the Lien so extended, renewed or replaced and
shall not extend to any additional property or assets not
intended to be covered by such Lien.
23
"PERMITTED RECEIVABLES FINANCING" means a transaction or
series of transactions (including amendments, supplements, extensions,
renewals, replacements, refinancings or modifications thereof) designed
to afford the Company a source of working capital liquidity pursuant to
which (a) a Securitization Subsidiary purchases Receivables and Related
Assets from the Company or any Restricted Subsidiary and finances such
Receivables and Related Assets through the issuance of indebtedness or
equity interests or through the sale of the Receivables and Related
Assets or a fractional undivided interest therein or (b) the Company or
a Restricted Subsidiary finances Receivables and Related Assets through
the sale of the Receivables and Related Assets or fractional undivided
interests therein; provided that (i) the documentation in respect of
such Permitted Receivables Financing shall not provide for financing of
more than the US Dollar Equivalent of US$15,000,000, (ii) the Board of
Directors shall have determined in good faith that such Permitted
Receivables Financing is economically fair and reasonable to the
Company, (iii) all sales of Receivables and Related Assets or
fractional undivided interests therein, if any, are made at Fair Market
Value, which shall be an amount not less than 85% of the aggregate face
amount of the Receivables and Related Assets or fractional undivided
interests therein sold, provided that if Receivables and Related Assets
or fractional undivided interests therein are sold in connection with a
Permitted Receivables Financing for less than 85% of their aggregate
face amount, the foregoing 85% limit will not apply so long as the
Company obtains a written opinion from an investment banking firm
recognized in Argentina or an accounting firm, in each case
unaffiliated with the Company, to the effect that such sale is at least
at Fair Market Value, (iv) the financing terms, covenants, termination
events and other provisions thereof shall be market terms (as
determined in good faith by the Board of Directors), (v) no portion of
any Indebtedness of a Securitization Subsidiary is Indebtedness other
than Non-Recourse Debt (other than recourse for customary
representations, warranties, covenants and indemnities, none of which
shall relate to the collectibility of the Receivables and Related
Assets) and (vi) neither the Company nor any Restricted Subsidiary
(other than such Securitization Subsidiary) has any obligation to
maintain or preserve the Securitization Subsidiary's financial
condition or cause the Securitization Subsidiary to achieve certain
levels of operating results.
"PERMITTED SUBSIDIARY INDEBTEDNESS" means any of the
following:
(a) Indebtedness of any Restricted Subsidiary
outstanding on the Original Issue Date (any such Indebtedness
the principal amount of which is in excess of US$1,000,000 (or
to the extent non-US Dollar denominated, the US Dollar
Equivalent of such amount) being listed on a schedule hereto);
(b) Indebtedness of a Restricted Subsidiary (in the
case of a Securitization Subsidiary, solely to the extent such
Indebtedness is incurred pursuant to a Permitted Receivables
Financing) owing to the Company, or a wholly owned Restricted
Subsidiary other than a Securitization Subsidiary; provided
that any such Indebtedness is made pursuant to an intercompany
note; provided further that any disposition, pledge or
transfer of any such Indebtedness to a Person (other than a
disposition, pledge or transfer to the Company or a wholly
owned Restricted Subsidiary other than a Securitization
Subsidiary), shall
24
be deemed to be an incurrence of such Indebtedness by such
Restricted Subsidiary not permitted by this clause (b);
(c) Indebtedness (including guarantees) of a
Restricted Subsidiary under Interest Rate Agreements relating
to Indebtedness of such Restricted Subsidiary otherwise
permitted under the Indenture that are entered into for the
purpose of protecting against fluctuations in interest rates
in respect of such Indebtedness and not for speculative
purposes;
(d) Indebtedness (including guarantees) of a
Restricted Subsidiary under Currency Agreements, provided that
(x) such Currency Agreements relate to Indebtedness otherwise
permitted under this Agreement or the purchase price of goods
purchased or sold by such Restricted Subsidiary in the
ordinary course of its business and (y) such Currency
Agreements do not increase the Indebtedness or other
obligations of such Restricted Subsidiary outstanding other
than as a result of fluctuations in foreign currency exchange
rates or by reason of fees, indemnities and compensation
payable thereunder;
(e) Indebtedness of any Subsidiary Guarantor under
its Subsidiary Guarantee of the Floating Rate Notes or its
guarantee of the Senior Notes as contemplated by the
Indenture;
(f) guarantees by any Subsidiary Guarantor of
Indebtedness incurred by the Company in compliance with (i)
paragraph (a) of Section 5.01(J) hereof (other than Permitted
Indebtedness) or (ii) clause (a) or (k) of the definition of
"Permitted Indebtedness" to the extent the obligations of such
Subsidiary Guarantor under such guarantees are pari passu with
the Subsidiary Guarantee of such Subsidiary Guarantor;
(g) Indebtedness of any Restricted Subsidiary in
respect of performance, surety or appeal bonds incurred in the
ordinary course of business (in each case other than for an
obligation for borrowed money);
(h) the incurrence by a Restricted Subsidiary of
Indebtedness which serves to refund, refinance or replace
(each such incurrence, for purposes of this clause, a
"refinancing"), or successively refinances any Indebtedness
incurred as permitted under clause (a), (f) or (k), so long as
(i) any such new Indebtedness shall be in a principal amount
that does not exceed the principal amount (or, if such
Indebtedness being refinanced provides for an amount less than
the principal amount thereof to be due and payable upon a
declaration of acceleration thereof, such lesser amount as of
the date of determination) so refinanced, (ii) in the case of
any refinancing of any Subsidiary Guarantee, any Pari Passu
Indebtedness or any Subordinated Indebtedness of such
Restricted Subsidiary, such new Indebtedness is (A) in the
case of any refinancing of the Subsidiary Guarantee or Pari
Passu Indebtedness of such Restricted Subsidiary, expressly
made pari passu with or subordinate in right of payment to the
Subsidiary Guarantee, and (B) in the case of any refinancing
of Subordinated Indebtedness, made subordinate to the
25
Subsidiary Guarantee of such Restricted Subsidiary at least to
the same extent as the Subordinated Indebtedness being
refinanced and (iii) such new Indebtedness has an Average Life
longer than the Average Life of the Indebtedness being
refinanced and a final Stated Maturity later than the final
Stated Maturity of the Indebtedness being refinanced;
(i) the incurrence of Indebtedness in a Permitted
Receivables Financing; and
(j) Acquired Indebtedness of any Restricted
Subsidiary, provided that after giving effect to the
incurrence thereof, the Company could incur at least US$1.00
of Indebtedness (other than Permitted Indebtedness) in
accordance with the provisions hereof exclusive of Section
5.01(J)(a)(ii)(y)(2).
"PERMITTED TRANSFEREES" means, with respect to any Person: (i)
in the case of any Person who is a natural person, such individual's
spouse or children (natural or adopted), any trust for such
individual's benefit or the benefit of such individual's spouse or
children (natural or adopted), or any corporation or partnership all of
the direct and beneficial equity ownership of which is held by one or
more Permitted Holders; (ii) in the case of any Person who is a natural
person, the heirs, executors, administrators or personal
representatives upon the death of such Person or upon the incompetency
or disability of such Person for purposes of the protection and
management of such individual's assets; and (iii) in the case of any
Person who is not a natural person, any Affiliate of such Person.
"PERSON" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or
political subdivision thereof or any other entity.
"PERSONAL ASSET TAXES" means taxes imposed pursuant to the
Personal Asset Tax Law of Argentina No. 23,966, as amended from time to
time, and as modified by governmental decree or otherwise.
"PESOS" and the symbol "PS" means pesos of Argentina.
"PLEDGE AGREEMENT" means the "contrato de prenda" among the
Collateral Agent and the Company Shareholders securing ratably and on a
first priority basis the Floating Rate Debt and the New Outstanding
Principal Amount (and interest thereunder) which is governed and
construed in accordance with Argentine law, a copy of which is attached
as Exhibit B hereto.
"PREFERRED STOCK" means, with respect to any Person, any and
all shares, interests, participations or other equivalents (however
designated) of such Person's preferred or preference stock whether now
outstanding, or issued after the Original Issue Date, and including,
without limitation, all classes and series of preferred or preference
stock of such Person.
26
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness of the
Company or any of its Restricted Subsidiaries incurred (a) to finance
the purchase of any assets of the Company or any of its Restricted
Subsidiaries within 90 days of such purchase, (b) to the extent the
amount of Indebtedness thereunder does not exceed 100% of the purchase
cost of such assets, (c) to the extent the purchase cost of such assets
is or should be included in "additions to property, plant and
equipment" in accordance with GAAP, and (d) to the extent the purchase
of such assets is not part of an acquisition of any Person.
"QUALIFIED CAPITAL STOCK" of any person means any and all
Capital Stock of such person other than Redeemable Capital Stock.
"QUALIFIED EQUITY OFFERING" means an offer and sale of common
stock (which is Qualified Capital Stock) or American Depositary Shares
of the Company pursuant to a registration statement that has been
declared effective by the U.S. Securities and Exchange Commission
pursuant to the Securities Act (other than a registration statement on
Form S-8 or otherwise relating to equity securities issuable under any
employee benefit plan of the Company) or in compliance with Argentine
Law No. 17,811, as amended, that results in at least 20% of the total
voting power of all Voting Stock of the Company having been sold to the
public, provided that the offering price of the shares or American
Depositary Shares of the Company which are sold in such offering shall
equal at least US$20 million or the equivalent in Pesos.
"RECEIVABLES AND RELATED ASSETS" mean accounts receivable and
instruments, chattel paper, obligations, general intangibles and other
similar assets, in each case, relating to such receivables, including
interest in merchandise or goods, the sale or lease of which gave rise
to such receivables, related contractual rights, guarantees, insurance
proceeds, collections, other related assets and proceeds of all of the
foregoing.
"REDEEMABLE CAPITAL STOCK" means any class or series of
Capital Stock that, either by its terms, by the terms of any security
into which it is convertible or exchangeable or by contract or
otherwise, is, or upon the happening of an event or passage of time
would be, required to be redeemed prior to one year after the final
Stated Maturity of the Floating Rate Notes or is redeemable at the
option of the holder thereof at any time prior to one year after such
final Stated Maturity, or is convertible into or exchangeable for debt
securities at any time prior to one year after such final Stated
Maturity.
"REGISTER" has the meaning specified in Section 8.07(c).
"RELEVANT AGENT" has the meaning specified in Section 7.01.
"RELEVANT CURRENCY" has the meaning specified in Section 8.08.
"RESTRICTED SUBSIDIARY" means any direct or indirect
Subsidiary of the Company other than an Unrestricted Subsidiary.
27
"S&P" means Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and its successors.
"SALE AND LEASEBACK TRANSACTION" means any transaction or
series of related transactions pursuant to which the Company or a
Restricted Subsidiary sells or transfers any property or asset in
connection with the leasing, or the resale against installment
payments, of such property or asset to the seller or transferor.
"SECOND LOAN AGREEMENT" shall have the meaning provided of in
the recitals of this Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and the rules and regulations thereunder.
"SECURITIZATION SUBSIDIARY" means a wholly owned Subsidiary of
the Company (a) that is designated (as set forth below) as a
"SECURITIZATION SUBSIDIARY" by the Board of Directors of the Company,
(b) that does not engage in, and whose charter prohibits it from
engaging in, any activities other than Permitted Receivables
Financings, (c) no portion of the Indebtedness or any other obligation
(contingent or otherwise) of which (i) is guaranteed by the Company or
any other Restricted Subsidiary of the Company, (ii) is recourse to or
obligates the Company or any other Restricted Subsidiary of the Company
in any way other than pursuant to customary representations,
warranties, covenants and indemnities entered into in connection with a
Permitted Receivables Financing or (iii) subjects any property or asset
of the Company or any other Restricted Subsidiary of the Company,
directly or indirectly, contingently or otherwise, to the satisfaction
thereof, other than pursuant to customary representations, warranties,
covenants and indemnities entered into in connection with a Permitted
Receivables Financing, (d) with which neither the Company nor any other
Restricted Subsidiary of the Company has any material contract,
agreement, arrangement or understanding other than on terms no less
favorable to the Company or such Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of the Company
and (e) with respect to which neither the Company nor any other
Restricted Subsidiary of the Company has any obligation to maintain or
preserve such Securitization Subsidiary's financial condition or cause
such Securitization Subsidiary to achieve certain levels of operating
results. Any such designation by the Board of Directors of the Company
shall be evidenced to the Lender by filing with the Lender a certified
copy of the resolution of the Board of Directors of the Company giving
effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing conditions.
"SENIOR NOTES" means the Series A-1 Senior Notes, the Series
A-2 Senior Notes, the Series B-1 Senior Notes, the Series B-2 Senior
Notes.
"SERIES A-1 SENIOR NOTES" means the Company's 8% Series A-1
Collateralized Senior Notes due 2012 issued under the Indenture.
"SERIES A-2 SENIOR NOTES" means the Company's 8% Series A-2
Senior Notes due 2012 issued under the Indenture.
28
"SERIES B-1 SENIOR NOTES" means the Company's 8% Series B-1
Collateralized Senior Notes due 2012 issued under the Indenture.
"SERIES B-2 SENIOR NOTES" means the Company's 8% Series B-2
Senior Notes due 2012 issued under the Indenture.
"SIGNIFICANT SUBSIDIARY" means any Restricted Subsidiary that
would be a "significant subsidiary" as defined in Article 1, Rule 1-02
of Regulation S-X, promulgated pursuant to the Securities Act, as such
Regulation is in effect on the Original Issue Date, except all
references to "10 percent" in such definition shall be changed to "3
percent".
"STATED MATURITY" means, when used with respect to any
installment of principal of or interest on the CGD Note, the date
specified in the CGD Note as the fixed date on which such installment
is due and payable, and, when used with respect to any other
Indebtedness, means the date specified in the instrument governing such
Indebtedness as the fixed date on which the principal of such
Indebtedness, or any installment of interest thereon, is due and
payable.
"SUBORDINATED INDEBTEDNESS" means (i) when used with respect
to the Company, Indebtedness of the Company that is expressly
subordinated in right of payment to the Floating Rate Notes and (ii)
when used with respect to any Restricted Subsidiary, Indebtedness of
such Restricted Subsidiary that is expressly subordinated in right of
payment to such Restricted Subsidiary's Subsidiary Guarantee.
"SUBSEQUENT LENDER" means each new Person that becomes a
Lender under this Agreement.
"SUBSIDIARY" means, with respect to any specific Person,
another Person a majority of the equity ownership or Voting Stock of
which is at the time owned, directly or indirectly, by such specified
Person or by one or more other Subsidiaries of such specified Person or
by such specified Person and one or more other Subsidiaries of such
specified Person or which is otherwise controlled by such specified
Person or by one or more other Subsidiaries of such specified Person or
by such specified Person and one or more other Subsidiaries of such
specified Person.
"SUBSIDIARY GUARANTEE" means the guarantee by the Company's
existing or future direct or indirect Restricted Subsidiaries of the
obligations of the Company under this Agreement and the CGD Note in
accordance with the provisions of this Agreement.
"SUBSIDIARY GUARANTOR" means any Restricted Subsidiary that
has (i) been designated as a "Subsidiary Guarantor" of the CGD Note
under this Agreement by resolution of the Board of Directors of the
Company, (ii) has executed and delivered this Agreement as a Subsidiary
Guarantor or has executed and delivered to the Lender an agreement in
form and substance reasonably satisfactory to the Lender pursuant to
which such Restricted Subsidiary shall have agreed to guarantee all of
the obligations of the Company with respect to the CGD Note issued
under this Agreement on the terms set
29
forth in Article VIIA and (iii) delivered to the Lender an opinion of
counsel reasonably satisfactory to the Lender to the effect that this
Agreement or such agreement, as the case may be, has been duly executed
and delivered by such Restricted Subsidiary and, in the case of such
agreement, is in compliance with the terms of this Agreement.
"SUPERVISORY COMMITTEE" means the committee of statutory
auditors appointed by the shareholders of the Company.
"SURVIVING ENTITY" has the meaning specified in Section
5.01(A).
"TAXES" has the meaning set forth in Section 2.09.
"UNRESTRICTED SUBSIDIARY" means (a) any direct or indirect Subsidiary
of the Company that at the time of determination shall be an
Unrestricted Subsidiary (as designated by the Board of Directors of the
Company, as provided below) and (b) any direct or indirect Subsidiary
of an Unrestricted Subsidiary. The Board of Directors of the Company
may designate any direct or indirect Subsidiary of the Company
(including any newly acquired or newly formed Subsidiary) to be an
Unrestricted Subsidiary so long as (i) neither the Company nor any
Restricted Subsidiary is directly or indirectly liable for any
Indebtedness of such Subsidiary, (ii) no default with respect to any
Indebtedness of such Subsidiary would permit (upon notice, lapse of
time or otherwise) any holder of any other Indebtedness of the Company
or any Restricted Subsidiary (other than the Senior Notes, the Floating
Rate Notes, the CGD Note and guarantees thereof) to declare a default
on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity, (iii) any
Investment in such Subsidiary made as a result of designating such
Subsidiary an Unrestricted Subsidiary will not violate the provisions
of Section 5.01(K), (iv) neither the Company nor any Restricted
Subsidiary has a contract, agreement, arrangement, understanding or
obligation of any kind, whether written or oral, with such Subsidiary
other than those that might be obtained at the time from persons who
are not Affiliates of the Company, and (v) neither the Company nor any
Restricted Subsidiary has any obligation (1) to subscribe for
additional shares of Capital Stock or other equity interest in such
Subsidiary, or (2) to maintain or preserve such Subsidiary's financial
condition or to cause such Subsidiary to achieve certain levels of
operating results. Any such designation by the Board of Directors of
the Company shall be evidenced to the Lender by filing a board
resolution with the Lender giving effect to such designation. The Board
of Directors of the Company may designate any Unrestricted Subsidiary
as a Restricted Subsidiary if immediately after giving effect to such
designation, there would be no Default or Event of Default under this
Agreement and the Company could incur US$1.00 of additional
Indebtedness (other than Permitted Indebtedness) in accordance with the
provisions hereof exclusive of Section 5.01(J)(a)(ii)(y)(2).
"US DOLLAR EQUIVALENT" means, with respect to any monetary
amount in a currency other than the US Dollar, at any time for the
determination thereof, the amount of US Dollars obtained by converting
such foreign currency involved in such computation into US Dollars at
the spot rate for the purchase of US Dollars with the applicable
foreign currency as quoted by Reuters at approximately 11:00 a.m. (New
York time) on the date not more than two Business Days prior to the
determination. For purposes of determining whether any Indebtedness can
be incurred (including Permitted
30
Indebtedness), any Investment can be made and any Affiliate Transaction
can be undertaken (a "TESTED TRANSACTION"), the "US DOLLAR EQUIVALENT"
of such Indebtedness, Investment or Affiliate Transaction shall be
determined on the basis of the date incurred, made or undertaken and no
subsequent change in the US Dollar Equivalent shall cause such Tested
Transaction to have been incurred, made or undertaken in violation of
this Agreement.
"US DOLLARS", "UNITED STATES DOLLARS", "US$" and the symbol
"$" each mean dollars of the United States of America.
"VOTING STOCK" means any class or classes of Capital Stock
pursuant to which the holders thereof have the general voting power
under ordinary circumstances to elect at least a majority of the board
of directors, managers or trustees of any Person (irrespective of
whether or not, at the time, stock of any other class or classes shall
have, or might have, voting power by reason of the happening of any
contingency).
"WHOLLY OWNED" means, with respect to any Subsidiary of any
Person, that all of the outstanding Capital Stock of such Subsidiary
(other than a de minimis number of director's qualifying shares or de
minimis investments by non-Argentine nationals mandated by applicable
law) is owned by such Person or one or more wholly owned Subsidiaries
of such Person.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not otherwise
defined herein have the meanings assigned to them in accordance with Generally
Accepted Accounting Principles.
SECTION 1.04. Actions by Subsidiary Guarantors. The obligations and
actions stated in this Agreement to have been undertaken and taken by a
Subsidiary Guarantor shall be deemed to have been undertaken and taken (i) in
the case of a Subsidiary Guarantor which executes this Agreement, upon its
execution hereof, and (ii) in the case of another Subsidiary Guarantor, upon its
execution and delivery to the Lender of an agreement as contemplated by the
definition of a "Subsidiary Guarantor".
ARTICLE II
THE REFINANCING - CANCELLATION OF THE NEW FLOATING RATE NOTE AND
ISSUANCE OF THE CGD NOTE
SECTION 2.01. Lender's consent.
(a) The Company and the Lender have agreed, to amend and restate the
Lender's New Floating Rate Note -and the Lender's participation in the Loan
Agreement- in order to refinance the Outstanding Principal Amount due by the
Company to the Lender under such Lender's New
31
Floating Rate Note with effects as of the date hereof and subject to the
provisions contained in this Agreement.
(b) As a result of the refinancing of the Outstanding Principal Amount, the
Company and the Lender agree that the total amount due by the Company to the
Lender as from the date of this Agreement will be US$15,000,000 (the "NEW
OUTSTANDING PRINCIPAL AMOUNT"), the aggregate of which the Company irrevocably
acknowledges to owe to the Lender, plus the interest, costs and expenses as
provided for in this Agreement.
(c) Accordingly, the Lender hereby waives its right to US$14,131,433 of the
Outstanding Principal amount, of which US$4,131,433 is related to past due
interest accrued until June 2002 which are waived to the extent that past due
interest owed to other creditors of the Company were not paid and have been
cancelled. Therefore the amounts owed to it by the Company shall be irrevocably
reduced to the New Outstanding Principal Amount.
SECTION 2.02. SECTION 2.02. Cancellation of the Lender's New
Floating Rate Note and Issuance of CGD Note. (i) The Closing Date shall be on
the date hereof.
Consequently, subject to the conditions specified in Section 3.01, on
the date hereof the Company cancels the Lender's New Floating Rate Note and
issues to the Lender the CGD Note to evidence the Company's obligation to pay
the New Outstanding Principal Amount, the interest thereunder and any other
payment obligation under this Agreement.
SECTION 2.03. Repayment. The Company shall pay to the Lender on
December 31, 2013 the aggregate principal amount of the CGD Note.
SECTION 2.04. Interest. The Company shall pay interest on the unpaid
principal amount of this Agreement and the CGD Note as from December 31, 2004 at
a rate of 8% per annum during each Interest Period.
Any interest on this Agreement and the CGD Note (and any Additional
Amounts payable in respect thereof) which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date shall forthwith cease to be
payable to the Lender, and such defaulted interest (and any Additional Amounts
payable in respect thereof) and (to the extent lawful) interest on such
defaulted interest at the rate borne by this Agreement and the CGD Note (such
defaulted interest and interest thereon herein collectively called "DEFAULTED
INTEREST") shall be paid in full and on demand and shall accrue from the date
the amount is due until the date such amount is paid in full.
SECTION 2.05. Optional Prepayments. Subject to Section 10.22 of the
Indenture as in effect on the date hereof, the Company may, upon at least three
Business Days' notice to the Lender stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the Company
shall, prepay the outstanding principal amount of the CGD Note in whole or in
part, together with accrued interest to the date of such prepayment on the
principal amount prepaid.
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SECTION 2.06. Increased Costs. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any Law or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), there shall be
any increase in the cost to the Lender of funding or maintaining the CGD Note
(excluding for purposes of this Section 2.06 any such increased costs resulting
from (i) Taxes or Other Taxes (as to which Section 2.08 shall govern) and (ii)
changes in the basis of taxation of overall net income or overall gross income
by the United States or by the jurisdiction or state under the laws of which the
Lender is organized or has its Lending Office or any political subdivision
thereof), then the Company shall from time to time, upon demand by the Lender,
pay to the Lender for its account additional amounts sufficient to compensate
the Lender for such increased cost. Such demand shall be accompanied by a
certificate as to the amount of such increased cost, a reasonable explanation of
the reason for such increased cost and a reasonably detailed computation thereof
and shall be conclusive and binding for all purposes, absent manifest error.
(b) If the Lender determines that compliance with any Law or any guideline
or request from any central bank or other governmental authority (whether or not
having the force of Law) affects or would affect the amount of capital required
or expected to be maintained by the Lender or any corporation controlling the
Lender and that the amount of such capital is increased by or based upon the
existence of the Lender's holding of the CGD Note and similar obligations, then,
upon demand by the Lender, the Company shall pay to the Lender, from time to
time as demanded by the Lender, additional amounts sufficient to compensate the
Lender or such corporation in the light of such circumstances, to the extent
that the Lender reasonably determines such increase in capital to be allocable
to its holding of the CGD Note. Such demand shall be accompanied by a
certificate as to such amounts, a reasonable explanation of the reason for such
increase in capital and a reasonably detailed computation of such amounts and
shall be conclusive and binding for all purposes, absent manifest error.
SECTION 2.07. Payments and Computations. (a) The Company shall make
each payment hereunder and under the CGD Note, irrespective of any right of
counterclaim or set-off, not later than 11:00 A.M. (local time in the city of
Buenos Aires) on the day when due in the currency in which the CGD Note is
denominated to the Lender at the relevant Lender's account in same day funds.
Upon the notification of an assignment as provided in Section 8.07, from and
after the date of notification, the Company shall make all payments hereunder
and under the CGD Note in respect of the interest assigned thereby to the Lender
assignee thereunder, and the parties to such assignment shall make all
appropriate adjustments in such payments for periods prior to such notification
date directly between themselves.
(b) The Company hereby authorizes the Lender, if and to the extent payment
owed to the Lender is not made when due hereunder or under the CGD Note held by
the Lender, to charge from time to time against any or all of the Company's
accounts with the Lender any amount so due.
(c) All computations of interest shall be made by the Company on the basis
of a 360 day-year of twelve 30-day months. Each determination by the Company of
an interest rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.
33
(d) Whenever any payment hereunder or under the CGD Note shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest, provided, however, that, if
such extension would cause payment of interest or principal to be made in the
next following calendar month, such payment shall be made on the next preceding
Business Day.
(e) In the event of any foreign exchange restriction or prohibition in
Argentina, any and all payments in respect of the CGD Note shall be made, to the
extent permitted by such restriction or prohibition, in the relevant currency
through (i) the purchase with Argentine Pesos of any series of Global Bond, PAR
Bonds or of any other public or private bond or security issued in US Dollars or
Euros or any other currency in Argentina and transferring and selling the same
outside Argentine for US Dollars or (ii) any other legal mechanism for the
acquisition of US Dollars or Euros in any exchange market, including, but not
limited to, the delivery by the Company to the Lender of debt or equity
instruments denominated in US Dollars or Euros which are traded in New York
City, London or Frankfurt in an amount sufficient for the Lender to acquire from
the sale thereof in New York City, London or Frankfurt an amount of US Dollars
or Euros, net of any commissions, fees or other costs, to cover each such
payment. The Lender shall sell such instruments promptly after the delivery to
it and, in any event, within 10 Business Days after each such delivery, unless
the Company shall, at the Lender's request, otherwise agree in writing. All
costs, including any taxes, relative to such operations to obtain US Dollars or
Euros shall be borne by the Company.
SECTION 2.08. Taxes. (a) Subject to the following subsection (b),
unless otherwise required by law, all payments made by the Company or any
Subsidiary Guarantor will be made without withholding or deduction for or on
account of any present or future taxes, duties, assessments or governmental
charges or penalties and interest related thereto ("TAXES") of whatever nature
imposed, levied, collected, withheld or assessed by or within Argentina or any
authority therein or thereof or having power to tax, including, but not limited
to, federal, provincial and municipal authorities. In the event any such Taxes
are so imposed on any payments made by the Company or any such Subsidiary
Guarantor, the Company or such Subsidiary Guarantor, as the case may be, will
pay such Additional Amounts as may be necessary in order that the net amounts
received by each Lender (including Additional Amounts) after any withholding or
deduction in respect of such Taxes shall equal the respective amounts of
principal, premium, if any, and interest that would have been received in
respect of the CGD Note in the absence of such withholding or deduction; except
that no such Additional Amounts will be payable with respect to any withholding
or deduction in respect of any payment under the CGD Note or a Subsidiary
Guarantee to, or to a third party on behalf of, the Lender for or on account of
any such Taxes imposed (i) by reason of the Lender being a resident of
Argentina; (ii) if presentation is required in respect of the CGD Note or a
Subsidiary Guarantee, by reason of presentation by the Lender for payment on a
date more than thirty (30) days after the date on which such payment first
became due and payable or the date on which such payment is duly provided,
whichever occurs later, except to the extent that the Lender would have been
entitled to such Additional Amounts on presenting such CGD Note or Subsidiary
Guarantee for payment on the last date of such period of thirty (30) days; (iii)
in respect of any estate, asset (other than Personal Asset Taxes), inheritance,
gift, sales or transfer tax or similar tax assessment or
34
governmental charge; (iv) any tax, assessment or other governmental charge
(other than Personal Asset Taxes) which is payable otherwise than by withholding
from payments on or in respect of the CGD Note; or (v) any combination of the
reasons set forth in clause (i), (ii), (iii) or (iv) above. Furthermore, no
Additional Amounts shall be paid to a Lender that is a fiduciary or a
partnership or not the sole beneficial owner of such payment to the extent that
a beneficiary or settlor with respect to such fiduciary, a member of such
partnership or such beneficial owner would not have been entitled to receive the
Additional Amounts had such beneficiary, settlor, member or beneficial owner
been the Lender.
(b) (i) If the CGD Note is transferred to a transferee payments to which are
subject to a Tax at a rate that is higher than the rate of Tax to which payments
to the Lender is subject at the time of transfer, the Company shall only pay the
Tax on such payments at the rate applicable to payments to the transferor on the
date of the transfer; provided if the rate of Tax to which payments to the
transferee is subject is lower than the rate of Tax to which payments to the
transferor is subject the Company shall pay Taxes on such payments at such lower
rate.
(ii) At least 30 calendar days prior to each date on which any payment under
or with respect to the CGD Note is due and payable, if the Company or any
Subsidiary Guarantor, as applicable, will be obligated to pay Additional Amounts
with respect to such payment, the Company or such Subsidiary Guarantor will
deliver to the Lender an Officers' Certificate stating the fact that such
Additional Amounts will be payable and the amounts so payable and will set forth
such other information necessary to enable the Lender to collect such Additional
Amounts from the Company on the payment date and specifying the amount required
to be deducted or withheld on the payments of principal and interest (and
premium, if any) due on such payment date for or on account of Taxes and
certifying that such amount will be deducted or withheld and paid by the Company
or Subsidiary Guarantor, as the case may be, to the appropriate taxing or
governmental authority. Whenever in the Agreement there is mentioned, in any
context, the payment of principal, premium, if any, interest, or any other
amount payable, under or with respect to the CGD Note or Subsidiary Guarantee,
such mention shall be deemed to include mention of the payment of Additional
Amounts to the extent that, in such context, Additional Amounts are payable in
respect thereof.
(iii) If the Company is held liable for any Personal Asset Taxes imposed on
the Lender or direct owners of the CGD Note with respect to the CGD Note, the
Company hereby agrees to waive any right that it may have as a matter of
Argentine law to seek reimbursement from such Lender or direct owners of the CGD
Note for any such Personal Asset Taxes paid.
(iv) In addition, the Company will pay any stamp, issue, registration,
documentary or other similar taxes and duties, including interest and penalties,
payable in Argentina or the United States or any political subdivision thereof
or taxing authority thereof or in the foregoing in respect of the creation,
issue and offering of the CGD Note, and will pay any court, documentary or
similar taxes and duties required to be paid in connection with the enforcement
of the CGD Note following the incurrence of any Event of Default.
35
ARTICLE III
CONDITIONS TO CANCELLATION OF EXISTING DEBT
AND ISSUANCE OF THE CGD NOTE
SECTION 3.01. Conditions Precedent to the restructuring of the
Outstanding Principal Amount, the Cancellation of the Lender's New Floating Rate
Note and Issuance of the CGD Note. It is a condition to the restructuring of the
Outstanding Principal Amount, the cancellation of the Lender's New Floating Rate
Note and the issuance of the CGD Note to the Lenders pursuant to Section 2.02
that each of the following conditions precedent have been satisfied:
(a) On the Closing Date, the following statements shall be true and the
Lender shall have received an Officers' Certificate, dated the Closing Date,
stating that:
(i) The representations and warranties contained in Section 4.01
are correct on and as of the Closing Date, and
(ii) No event has occurred and is continuing that constitutes a
Default.
(b) The Lender shall have received on or before the Closing Date the
following, each dated the Closing Date:
(i) The CGD Note to be issued on the Closing Date.
(ii) Certified copies of the resolutions of the Board of Directors
of the Company approving this Agreement and the issuance of the CGD
Note, and of all documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to this Agreement and
the CGD Note.
(iii) A favorable opinion of Shearman & Sterling LLP, New York
counsel for the Company, substantially in the form of Exhibit E hereto.
(iv) A favorable opinion of Cibils I Labougle I Ibanez, counsel for
the Company, substantially in the form of Exhibit C hereto.
(v) Evidence satisfactory to the Lender that the Pledge Agreement
has been executed by the parties thereto and the pledge of shares
contemplated thereby shall have been made and perfected.
(c) The Distribution Agreement shall continue to be in full force and
effect; and
(d) Neither the Company, nor the Company Shareholders shall have
breached any obligation set forth in any of the agreements in force between
any of them and LLSSA and/or Danone or the Lender.
36
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Company. The
Company represents and warrants as follows:
(a) The Company is a sociedad anonima duly organized, validly existing
and in good standing under the laws of Argentina.
(b) The execution, delivery and performance by the Company of this
Agreement and the CGD Note and by each Subsidiary Guarantor of its
Subsidiary Guarantee, and the consummation of the transactions contemplated
hereby, are within the Company's, and at the time of the execution of such
Subsidiary Guarantee, will be within such Subsidiary Guarantor's, corporate
powers, have been and, at the time of the execution of such Subsidiary
Guarantee, will have been, duly authorized by all necessary corporate action
of the Company or such Subsidiary Guarantor, as the case may be, and do not
and, at the time of the execution of such Subsidiary Guarantee, will not,
contravene (i) the Company's or such Subsidiary Guarantor's, as the case may
be, charter or by-laws or (ii) Law or any contractual restriction binding on
or affecting the Company or such Subsidiary Guarantor, as the case may be.
(c) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any other
third party is required for the due execution, delivery and performance by
the Company of this Agreement or the CGD Note or, at the time of execution
of a Subsidiary Guarantee, will be required for the due execution, delivery
and performance by the relevant Subsidiary Guarantor of its Subsidiary
Guarantee, except, in each such case, such as have or will have been duly
obtained, taken or given.
(d) This Agreement has been, and the CGD Note and the Subsidiary
Guarantees when delivered hereunder will have been, duly executed and
delivered by the Company or relevant Subsidiary Guarantor, as the case may
be. This Agreement is, and the CGD Note and the Subsidiary Guarantees when
delivered hereunder will be, the legal, valid and binding obligation of the
Company or the relevant Subsidiary Guarantor, as the case may be,
enforceable against the Company or the relevant Subsidiary Guarantor, as the
case may be, in accordance with their respective terms.
(e) The Company has not paid to its other creditors any amount of past
due interest owed to them since the Company defaulted its debts (other than
as provided in the restructuring documents), which have been cancelled as a
consequence of the compliance of the restructuring process.
(f) The consolidated financial statements of the Company as at December
31, 2003, accompanied by an opinion of Deloitte & Co., S.R.L., independent
public accountants, and the unaudited consolidated financial statements of
the Company as at September 30, 2004, copies of which have been furnished to
the Lender, fairly present the consolidated financial condition of the
Company as at such dates and the consolidated
37
results of the operations of the Company for the year and nine-month period
ended on such dates, respectively, all in accordance with GAAP. Since
September 30, 2004, there has been no material adverse change in the
consolidated financial condition or results of operations of the Company.
ARTICLE V
COVENANTS OF THE COMPANY
SECTION 5.01. Covenants. So long as the CGD Note shall remain unpaid:
(A) Company May Consolidate, Etc., Only on Certain Terms. (a)
The Company will not, in a single transaction or through a series of
transactions, consolidate with or merge with or into any other Person
(other than a Restricted Subsidiary) or sell, assign, convey, transfer,
lease or otherwise dispose of all or substantially all of its
properties and assets as an entirety to any other Person or Persons
(other than a Restricted Subsidiary) or permit any of its Restricted
Subsidiaries to enter into any such transaction or series of
transactions if such transaction or series of transactions, in the
aggregate, would result in the sale, assignment, conveyance, transfer,
lease or other disposition of all or substantially all of the
properties and assets of the Company and its Restricted Subsidiaries on
a consolidated basis as an entirety to any other Person or Persons
(other than a Restricted Subsidiary), unless at the time and
immediately after giving effect thereto:
(i) either (x) if the transaction is a consolidation
or merger, the Company will be the continuing corporation or
(y) the Person (if other than the Company) formed by such
consolidation or into which the Company or such Restricted
Subsidiary is merged or the Person that acquires by sale,
assignment, conveyance, transfer, lease or disposition all or
substantially all the properties and assets of the Company and
its Restricted Subsidiaries on a consolidated basis as an
entirety (the "SURVIVING ENTITY") (A) will be a corporation
duly organized and validly existing under the laws of
Argentina, and (B) will expressly assume, by a supplemental
agreement, in form satisfactory to the Lender, the Company's
obligation for the due and punctual payment of the principal
of, premium, if any, and interest (and Additional Amounts, if
any) on the CGD Note and the performance and observance of
every covenant of this Agreement on the part of the Company to
be performed or observed;
(ii) immediately after giving effect to such
transaction or series of transactions on a pro forma basis
(and treating any obligation of the Company or any Restricted
Subsidiary incurred in connection with or as a result of such
transaction or series of transactions as having been incurred
at the time of such transaction), no Default or Event of
Default will have occurred and be continuing;
(iii) immediately after giving effect to such
transaction or series of transactions on a pro forma basis
(and treating any obligation of the Company or any Restricted
Subsidiary incurred in connection with or as a result of such
38
transaction or series of transactions as having been incurred
at the time of such transaction), the Consolidated Net Worth
of the Company (or of the Surviving Entity if the Company is
not the continuing obligor under this Agreement) is equal to
or greater than the Consolidated Net Worth of the Company
immediately prior to such transaction or series of
transactions;
(iv) immediately after giving effect to such
transaction or series of transactions on a pro forma basis (on
the assumption that the transaction or series of transactions
occurred on the first day of the four-quarter period used to
calculate the Company's Consolidated Fixed Charge Coverage
Ratio with the appropriate adjustments with respect to the
transaction or series of transactions being included in such
pro forma calculation), the Company (or the Surviving Entity
if the Company is not the continuing obligor under this
Agreement) could incur at least US$1.00 of additional
Indebtedness (other than Permitted Indebtedness) in accordance
with the provisions hereof exclusive of Section
5.01(J)(a)(ii)(y)(2);
(v) each Subsidiary Guarantor, if any, unless it is
the other party to the transactions described above, shall
have by supplemental agreement confirmed that its Subsidiary
Guarantee will apply to such Person's obligations under this
Agreement and the CGD Note;
(vi) if any of the property or assets of the Company
or any of its Restricted Subsidiaries would thereupon become
subject to any Lien, the provisions of Section 5.01(N) are
complied with; and
(vii) the Company or the Surviving Entity shall have
delivered to the Lender, in form and substance reasonably
satisfactory to the Lender, an Officers' Certificate
(attaching the computations to demonstrate compliance with
clauses (iii) and (iv) above) and an Opinion of Counsel, each
stating that such consolidation, merger, sale, assignment,
conveyance, transfer, lease or other disposition, and if a
supplemental agreement is required in connection with such
transaction, such supplemental agreement, comply with the
requirements of this Agreement and that all conditions
precedent therein provided for relating to such transaction
have been complied with.
(b) Each Subsidiary Guarantor, if any, will not, and the
Company will not permit a Subsidiary Guarantor to, in a single
transaction or through a series of transactions, consolidate with or
merge with or into any other Person (other than the Company or any
Subsidiary Guarantor) or sell, assign, convey, transfer, lease or
otherwise dispose of all or substantially all of its properties and
assets as an entirety to any other Person or Persons (other than the
Company or any Subsidiary Guarantor) or permit any of its Restricted
Subsidiaries to enter into any such transaction or series of
transactions if such transaction or series of transactions, in the
aggregate, would result in the sale, assignment, conveyance, transfer,
lease or disposition of all or substantially all of the properties and
assets of such Subsidiary Guarantor and its Restricted Subsidiaries
39
on a consolidated basis as an entirety to any other Person or Persons
(other than the Company or any Subsidiary Guarantor), unless at the
time and after giving effect thereto:
(i) either (x) if the transaction is a consolidation
or merger, such Subsidiary Guarantor will be the continuing
corporation or (y) the Person (if other than such Subsidiary
Guarantor) formed by such consolidation or into which such
Subsidiary Guarantor or its Restricted Subsidiary is merged or
the Person that acquires by sale, assignment, conveyance,
transfer, lease or disposition all or substantially all of the
properties and assets of such Subsidiary Guarantor and its
Restricted Subsidiaries on a consolidated basis as an entirety
(the "SURVIVING GUARANTOR ENTITY") will be a corporation duly
organized and validly existing under (A) the laws of Argentina
or (B) the laws of the jurisdiction in which such Subsidiary
Guarantor was organized and will expressly assume by a
supplemental agreement in form satisfactory to the Lender, all
the obligations of such Subsidiary Guarantor under its
Subsidiary Guarantee;
(ii) immediately after giving effect to such
transaction or series of transactions on a pro forma basis
(and treating any obligation of the Subsidiary Guarantor, the
Company or any Restricted Subsidiary incurred in connection
with or as a result of such transaction or series of
transactions as having been incurred at the time of such
transaction), no Default or Event of Default will have
occurred and be continuing; and
(iii) such Subsidiary Guarantor or the Surviving
Guarantor Entity will have delivered to the Lender an
Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger, sale, assignment, conveyance,
transfer, lease or disposition and such supplemental agreement
comply with the requirements of this Agreement and that all
conditions precedent therein provided for relating to such
transaction have been complied with.
(B) Successor Substituted. Upon any consolidation or merger,
or any sale, assignment, conveyance, transfer, lease or disposition of
all or substantially all of the properties and assets of the Company or
any Subsidiary Guarantor in accordance with Section 5.01(A), (B) and
(C) in which the Company or the Subsidiary Guarantor, as the case may
be, is not the continuing obligor under this Agreement or the
Subsidiary Guarantee, the Surviving Entity or Surviving Guarantor
Entity, as the case may be, shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this
Agreement or the Subsidiary Guarantor under the Subsidiary Guarantee,
as the case may be, with the same effect as if such successor had been
named as the Company or the Subsidiary Guarantor therein. When a
successor assumes all the obligations of its predecessor under this
Agreement, the CGD Note or a Subsidiary Guarantee, the predecessor
shall be released from those obligations; provided that, in the case of
a transfer by lease, the predecessor shall not be released from the
payment of principal, premium, if any (and Additional Amounts, if any),
and interest on the CGD Note or such Subsidiary Guarantee, as the case
may be.
40
(C) CGD Note to Be Secured in Certain Events. If, upon any
consolidation or merger of the Company or any Subsidiary Guarantor with
or into any other Person, or upon any sale, assignment, conveyance,
transfer, lease or disposition of the property of the Company or any
Subsidiary Guarantor substantially as an entirety to any other Person,
any property or assets of the Company or any Subsidiary Guarantor, as
the case may be, would thereupon become subject to any Lien, then
unless such Lien could be created pursuant to Section 5.01(N) without
securing the CGD Note, the Company or such Subsidiary Guarantor, as the
case may be, prior to or simultaneously with such consolidation,
merger, sale, assignment, conveyance, lease, transfer or disposition,
will as to such property or assets, secure the CGD Note then
outstanding (together with, if the Company or such Subsidiary
Guarantor, as the case may be, shall so determine, any other
Indebtedness of the Company now existing or hereinafter created which
is not subordinate in right of payment to the CGD Note) equally and
ratably with (or prior to) the Indebtedness which upon such
consolidation, sale, assignment, merger, conveyance, lease, transfer or
disposition is to become secured as to such property or assets by such
Lien, or will cause such CGD Note to be so secured.
(D) Corporate Existence. Subject to Sections 5.01(A), (B) and
(C), the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect the corporate existence,
rights (charter and statutory) and franchises of the Company and each
Subsidiary; provided, however, that the Company shall not be required
to preserve any such right or franchise if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Subsidiaries as a whole
and that the loss thereof is not disadvantageous in any material
respect to the Lender.
(E) Payment of Taxes and Other Claims. The Company will pay or
discharge or cause to be paid or discharged, before the same shall
become delinquent, (a) all taxes, assessments and governmental charges
levied or imposed upon the Company or any Subsidiary or upon the
income, profits or property of the Company or any Subsidiary and (b)
all lawful claims for labor, materials and supplies, which, if unpaid,
might by law become a lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be required
to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.
(F) Maintenance of Properties. The Company will cause all
properties owned by the Company or any Subsidiary or used or held for
use in the conduct of its business or the business of any Subsidiary to
be maintained and kept in good condition, repair and working order and
supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that
the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing
in this subsection shall prevent the Company from discontinuing the
maintenance of any of such properties if such discontinuance is, in the
judgment of the Company, desirable in the conduct of its business or
the business of any Subsidiary and not disadvantageous in any material
respect to the Lenders.
41
(G) Insurance. The Company will at all times keep all of its
and its Subsidiaries' properties which are of an insurable nature
insured with insurers, believed by the Company to be responsible,
against loss or damage to the extent that property of similar character
is usually so insured by corporations similarly situated and owning
like properties.
(H) Statement by Officers as to Default. (a) The Company will
deliver to the Lender, within 90 days after the end of each fiscal year
and 60 days after the end of each fiscal quarter, a brief certificate
from the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the
Company's compliance with all conditions and covenants under this
Agreement. For purposes of this subsection, such compliance shall be
determined without regard to any period of grace or requirement of
notice under this Agreement.
(b) When any Default has occurred and is continuing under this
Agreement, the Company shall deliver to the Lender by registered or
certified mail or by telex or facsimile transmission an Officers'
Certificate specifying such event within ten Business Days of its
occurrence.
(I) [Intentionally Omitted.]
(J) Limitation on Indebtedness. (a) (i) The Company will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, assume, guarantee or otherwise become liable
with respect to (collectively, "incur") any Indebtedness (including
without limitation Acquired Indebtedness), and (ii) the Company will
not permit any of its Restricted Subsidiaries to issue (except if
issued to or owned beneficially and of record by the Company or any of
its Restricted Subsidiaries) any Preferred Stock; provided that (x) the
Company and its Restricted Subsidiaries may incur Permitted
Indebtedness and (y) the Company may incur Indebtedness if, after
giving effect thereto, (1) the Consolidated Fixed Charge Coverage Ratio
on the date thereof would be at least 2.25 to 1.00 and (2) the
Consolidated Indebtedness Ratio on the date thereof would be not more
than 4.00 to 1.00, in each case determined on a pro forma basis as if
the incurrence of such additional Indebtedness, and the application of
the net proceeds therefrom, had occurred at the beginning of the
four-quarter period used to calculate the Company's Consolidated Fixed
Charge Coverage Ratio.
(b) The Company will not, and will not permit any Subsidiary
Guarantor to, incur any Indebtedness that is expressly subordinated to
any other Indebtedness of the Company or such Subsidiary Guarantor
unless such Indebtedness by its terms is also expressly made
subordinated to the CGD Note, in the case of the Company, or the
relevant Subsidiary Guarantee, in the case of a Subsidiary Guarantor.
(K) Limitation on Restricted Payments. (a) The Company will
not, and will not permit any Restricted Subsidiary to, directly or
indirectly, take any of the following actions:
42
(i) declare or pay any dividend on, or make any
distribution to holders of, any shares of the Capital Stock of
the Company (other than dividends or distributions payable
solely in shares of its Qualified Capital Stock or in options,
warrants or other rights to acquire such shares of Qualified
Capital Stock);
(ii) purchase, redeem or otherwise acquire or retire
for value, directly or indirectly, any shares of Capital Stock
of the Company or any options, warrants or other rights to
acquire such shares of Capital Stock;
(iii) make any principal payment on, or repurchase,
redeem, defease or otherwise acquire or retire for value,
prior to any scheduled principal payment, sinking fund payment
or final maturity, any Subordinated Indebtedness;
(iv) make any Investment (other than any Permitted
Investment) in any Person (including, without limitation, any
Unrestricted Subsidiary); or
(v) (x) declare or pay any dividend or distribution
on any Capital Stock of any Restricted Subsidiary (other than
to the Company or any wholly owned Restricted Subsidiary) or
(y) purchase, redeem or otherwise acquire or retire for value
any Capital Stock of any Restricted Subsidiary held by any
Affiliate of the Company (other than another Restricted
Subsidiary),
(such payments or other actions described in (but not excluded from)
clauses (i) through (v) are collectively referred to as "RESTRICTED
PAYMENTS"), unless at the time of, and immediately after giving effect
to, the proposed Restricted Payment (the amount of any such Restricted
Payment, if other than cash, as determined by the Board of Directors of
the Company, whose determination shall be conclusive and evidenced by a
Board Resolution), (x) no Default or Event of Default shall have
occurred and be continuing, (y) the Company could incur at least
US$1.00 of additional Indebtedness (other than Permitted Indebtedness)
in accordance with the provisions hereof exclusive of Section
5.01(J)(a)(ii)(y)(2) and (z) the aggregate amount of all Restricted
Payments declared or made after the first day of the fiscal quarter of
the Company in which the Original Issue Date occurs shall not exceed
the sum of:
(A) 50% of the Consolidated Net Income of
the Company accrued on a cumulative basis during the period
(taken as one accounting period) beginning on the first day of
the fiscal quarter of the Company in which the Original Issue
Date occurs and ending on the last day of the Company's latest
fiscal quarter ending prior to the date of such proposed
Restricted Payment for which consolidated financial
information for the Company and its Restricted Subsidiaries is
available (or, if such aggregate cumulative Consolidated Net
Income shall be a loss, minus 100% of such loss), plus
(B) the aggregate net proceeds, including
the fair market value of property other than cash (as
determined by the Board of Directors, whose good faith
determination will be conclusive; provided that, for any
property whose fair market value exceeds US$2,000,000 (or, to
the extent non-US Dollar
43
denominated the US Dollar Equivalent of such amount), either
the Company shall have completed a Qualified Equity Offering
or such fair market value shall be confirmed by an independent
appraisal from a recognized appraiser provided by the Company)
received after the Original Issue Date by the Company as
capital contributions, or from the issuance or sale (other
than to a Restricted Subsidiary) of shares of Qualified
Capital Stock of the Company (including upon the exercise of
options, warrants or rights) or warrants, options or rights to
purchase shares of Qualified Capital Stock of the Company
(excluding any Qualified Capital Stock, or warrants, options
or rights to purchase shares of Qualified Capital Stock with
respect to which the purchase price thereof has been financed
directly or indirectly using funds (x) borrowed from the
Company or from any Restricted Subsidiary, unless and until
and to the extent such borrowing is repaid or (y) contributed,
extended, guaranteed or advanced by the Company or by any
Restricted Subsidiary (including, without limitation, in
respect of any employee stock ownership or benefit plan)),
plus
(C) the amount by which Indebtedness is
reduced on a consolidated balance sheet of the Company
prepared in accordance with GAAP upon the conversion or
exchange subsequent to the Original Issue Date of any
Indebtedness of the Company or a Restricted Subsidiary for
Qualified Capital Stock (less the amount of any cash, or the
fair market value of any property other than cash (as
determined by the Board of Directors, whose good faith
determination will be conclusive; provided that, for any
property whose fair market value exceeds US$2,000,000 (or, to
the extent non-US Dollar denominated, the US Dollar Equivalent
of such amount), either the Company shall have completed a
Qualified Equity Offering or such fair market value shall be
confirmed by an independent appraisal from a recognized
appraiser provided by the Company) distributed by the Company
upon such conversion or exchange); provided, however, that the
foregoing amount shall not exceed the Net Cash Proceeds
received by the Company or any Restricted Subsidiary from the
sale of such Indebtedness (excluding Net Cash Proceeds from
sales to a Restricted Subsidiary or to an employee stock
ownership plan or to a trust established by the Company or any
of its Restricted Subsidiaries for the benefit of its
employees); plus
(D) to the extent not otherwise included in
the Consolidated Net Income of the Company, an amount equal to
the sum of (i) the net reduction in Investments in any Person
(other than reductions in Permitted Investments) resulting
from the payment in cash of interest on Indebtedness,
dividends, repayments of loans or advances, or other transfers
of assets, in each case to the Company or any Restricted
Subsidiary after the Original Issue Date from such Person and
(ii) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the Fair Market Value of the
net assets of any Unrestricted Subsidiary at the time such
Unrestricted Subsidiary is designated a Restricted Subsidiary;
provided, however, that in the case of (i) or (ii) above the
foregoing sum shall not exceed the amount of Investments
previously made (and treated as a
44
Restricted Payment) by the Company or any Restricted
Subsidiary in such Person or Unrestricted Subsidiary.
(b) Notwithstanding paragraph (a) above, the Company and any
Restricted Subsidiary may take the following actions (so long as, with
respect to clauses (iv) and (v) below, no Default or Event of Default
shall have occurred and be continuing):
(i) the payment of any dividend within 60 days after
the date of declaration thereof, if at such date of
declaration the payment of such dividend would have complied
with the provisions of paragraph (a) above and such payment
will be deemed to have been paid on such date of declaration
for purposes of the calculation required by paragraph (a)
above;
(ii) the purchase, redemption or other acquisition or
retirement for value of any shares of Capital Stock of the
Company in exchange for, or out of the net cash proceeds of a
substantially concurrent issuance and sale (other than to a
Restricted Subsidiary) of, shares of Qualified Capital Stock
of the Company;
(iii) the purchase, redemption, defeasance or other
acquisition or retirement for value of any Subordinated
Indebtedness in exchange for, or out of the net cash proceeds
of a substantially concurrent issuance and sale (other than to
a Restricted Subsidiary) of, shares of Qualified Capital Stock
of the Company;
(iv) the purchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated
Indebtedness in exchange for, or out of the net cash proceeds
of a substantially concurrent incurrence (other than to a
Restricted Subsidiary) of, new Subordinated Indebtedness so
long as (A) the principal amount of such new Subordinated
Indebtedness does not exceed the principal amount (or, if such
Subordinated Indebtedness being refinanced provides for an
amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration thereof, such
lesser amount as of the date of determination) of the
Subordinated Indebtedness being so purchased, redeemed,
defeased, acquired or retired, (B) such new Subordinated
Indebtedness is subordinated to the CGD Note to the same
extent as such Subordinated Indebtedness and (C) such new
Subordinated Indebtedness has (x) an Average Life longer than
the Average Life of the Subordinated Indebtedness so
purchased, redeemed, defeased, acquired or retired plus one
year and (y) a final Stated Maturity of principal later than
the final Stated Maturity of principal of the Subordinated
Indebtedness so purchased, redeemed, defeased, acquired or
retired plus one year; and
(v) make other Restricted Payments in an aggregate
amount not in excess of US$5,000,000 (or, to the extent non-US
Dollar denominated, the US Dollar Equivalent of such amount).
The actions described in clauses (ii), (iii) and (v) of this
paragraph (b) shall be Restricted Payments that shall be permitted to
be taken in accordance with this paragraph
45
(b) but shall reduce the amount that would otherwise be available for
Restricted Payments under clause (3) of paragraph (a) above and the
actions described in clauses (i) and (iv) of this paragraph (b) shall
be Restricted Payments that shall be permitted to be taken in
accordance with this paragraph (b) and shall not (except, in the case
of clauses (i), to the extent of the deemed payment therein described)
reduce the amount that would otherwise be available for Restricted
Payments under clause (3) of paragraph (a).
(c) In computing Consolidated Net Income of the Company under
paragraph (a) above, (1) the Company shall use audited financial
statements for the portions of the relevant period for which audited
financial statements are available on the date of determination and
unaudited financial statements and other current financial data based
on the books and records of the Company for the remaining portion of
such period and (2) the Company shall be permitted to rely in good
faith on the financial statements and other financial data derived from
the books and records of the Company that are available on the date of
determination.
(L) Limitation on Issuances and Sales of Capital Stock of
Restricted Subsidiaries. The Company will not permit any Restricted
Subsidiary to issue or sell any Capital Stock (other than to the
Company or a wholly-owned Restricted Subsidiary); provided, however,
that this covenant shall not prohibit any issuance or sale of the
Capital Stock of any Restricted Subsidiary if immediately after giving
effect to such issuance or sale, such Restricted Subsidiary would no
longer constitute a Restricted Subsidiary and any Investment in such
Person remaining after giving effect to such issuance or sale would
have been permitted to be made under Section 5.01(K) hereof if made on
the date of such issuance or sale.
(M) Limitation on Transactions with Affiliates. The Company
will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, enter into or suffer to exist any transaction or series of
related transactions (each of the foregoing, an "AFFILIATE
TRANSACTION") (including, without limitation, the sale, purchase,
exchange or lease of assets, property or services) with, or for the
benefit of, any Affiliate of the Company or any Restricted Subsidiary
(other than Exempted Affiliate Transactions), unless (i) such Affiliate
Transaction is fair from a financial point of view to the Company or
such Restricted Subsidiary, as the case may be, and is on terms that
are no less favorable to the Company or such Restricted Subsidiary, as
the case may be, than those that could have been obtained in an
arm's-length transaction with third parties that are not Affiliates,
(ii) with respect to any Affiliate Transaction involving aggregate
consideration equal to or greater than US$5,000,000 (or, to the extent
non-US Dollar denominated, the US Dollar Equivalent of such amount),
the Company will deliver an officer's certificate to the Lender
certifying that such Affiliate Transaction complies with clause (i)
above and such Affiliate Transaction has been approved by a majority of
the Disinterested Directors of the Company or, in the event no members
of the Board of Directors of the Company are Disinterested Directors
with respect to any Affiliate Transaction included in this clause (ii),
the Company will obtain a written opinion from a recognized U.S.
investment banking firm, appraisal firm or independent public
accounting firm certifying that such Affiliate Transaction is fair to
the Company or its Restricted Subsidiary, as the case may be, from a
financial point of view and (iii) with respect to any Affiliate
Transaction
46
involving aggregate consideration in excess of US$10,000,000 (or, to
the extent non-US Dollar denominated, the US Dollar Equivalent of such
amount), the Company will obtain a written opinion from a recognized
United States investment banking firm, appraisal firm or independent
public accounting firm to the effect set forth in the preceding clause
(ii).
(N) Limitation on Liens. The Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, create,
incur, assume or suffer to exist any Lien of any kind (other than
Permitted Liens) on or with respect to any of its property or assets,
including any shares of stock or indebtedness of any Restricted
Subsidiary, whether owned at the Original Issue Date or thereafter
acquired, or any income, profits or proceeds therefrom, or assign or
otherwise convey any right to receive income thereon, unless (x) in the
case of any Lien securing Subordinated Indebtedness, the Floating Rate
Notes are secured by a Lien on such property, assets or proceeds that
is senior in priority to such Lien and (y) in the case of any other
Lien, the CGD Note is equally and ratably secured with the obligation
or liability secured by such Lien.
(O) Limitation on Issuances of Guarantees by Restricted
Subsidiaries. The Company will not permit any Restricted Subsidiary
that is not a Subsidiary Guarantor, directly or indirectly, to
Guarantee any Indebtedness of the Company which is pari passu with or
subordinate in right of payment to the CGD Note ("OTHER GUARANTEED
INDEBTEDNESS"), unless (i) such Guarantee is otherwise permitted under
the terms of this Agreement, (ii) such Restricted Subsidiary
simultaneously executes and delivers a supplemental agreement to this
Agreement providing for a Guarantee of the CGD Note by such Restricted
Subsidiary and (iii) such Restricted Subsidiary waives and will not in
any manner whatsoever claim or take the benefit or advantage of, any
rights of reimbursement, indemnity or subrogation or any other rights
against the Company as a result of any payment by such Restricted
Subsidiary under such Subsidiary Guarantee. If the Other Guaranteed
Indebtedness is (A) pari passu with the CGD Note, then the guarantee of
such Other Guaranteed Indebtedness shall be pari passu with, or
subordinated to, such Subsidiary Guarantee, or (B) subordinated to the
CGD Note, then the guarantee of such Other Guaranteed Indebtedness
shall be subordinated to the Subsidiary Guarantee at least to the
extent that the Other Guaranteed Indebtedness is subordinated to the
CGD Note.
Notwithstanding the foregoing, any Subsidiary Guarantee by a
Restricted Subsidiary may provide by its terms that it shall be
automatically and unconditionally released and discharged upon (i) any
sale, exchange or transfer, to any Person not an Affiliate of the
Company, of all of the Company's and each Restricted Subsidiary's
Capital Stock in, or all or substantially all the assets of, such
Restricted Subsidiary (which sale, exchange or transfer is not
prohibited by the Agreement) or (ii) the release or discharge of the
Guarantee which resulted in the creation of such Subsidiary Guarantee,
except a discharge or release by or as a result of payment by such
Restricted Subsidiary under such Guarantee.
(P) Purchase of the CGD Note upon a Change of Control. (a) If
a Change of Control shall occur at any time, then the Lender shall have
the right to require that the
47
Company purchase the CGD Note, in whole or in part, at a purchase price
(the "CHANGE OF CONTROL PURCHASE PRICE") in cash in an amount equal to
101% of the principal amount thereof, plus accrued and unpaid interest,
if any, to the date of purchase (the "CHANGE OF CONTROL PURCHASE
DATE"), pursuant to the offer and the other procedures described in
paragraphs (b) and (c) of this subsection (the "CHANGE OF CONTROL
OFFER").
(b) Immediately after the occurrence of any Change of Control,
the Company shall notify the Lender in writing thereof and give written
notice of such Change of Control to the Lender in the manner provided
in Section 8.02, stating:
(i) that a Change in Control has occurred and that
the Lender has the right to require the Company to repurchase
the CGD Note at the Change of Control Purchase Price;
(ii) the circumstances and relevant facts regarding
such Change in Control (including but not limited to
information with respect to pro forma historical income, cash
flow and capitalization after giving effect to such Change in
Control);
(iii) the Change of Control Purchase Price and the
Change of Control Purchase Date, which shall be a Business Day
no earlier than 30 days nor later than 60 days from the date
such notice is mailed;
(iv) that the CGD Note if validly tendered will be
accepted for payment and that the CGD Note if not tendered
shall continue to accrue interest;
(v) that, unless the Company defaults in the payment
of the Change of Control Purchase Price, the CGD Note accepted
for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Purchase
Date; and
(vi) the instructions that the Lender must follow to
accept a Change of Control Offer or to withdraw such
acceptance in accordance with paragraph (c) of this
subsection.
(c) If the Lender elects to have the CGD Note purchased, it
will be required to surrender the CGD Note to the Company at the
address specified in the notice together with the election notice where
the Lender requires the Company the purchase of the CGD Note. The
Lender will be entitled to withdraw its election if the Company
receives, not later than three Business Days prior to the Change of
Control Purchase Date, a telex, facsimile transmission or letter
setting forth a statement that the Lender is withdrawing his election
to have the CGD Note purchased. If the Lender's CGD Note is purchased
only in part, it will be issued a new CGD Note equal in principal
amount to the unpurchased portion of the CGD Note surrendered.
(d) The Company shall not, and shall not permit any Restricted
Subsidiary to, create or permit to exist or become effective any
restriction (other than restrictions
48
existing under Indebtedness as in effect on the Original Issue Date and
any refinancings thereof) that would materially impair the ability of
the Company to make a Change of Control Offer to purchase the CGD Note
or, if such Change of Control Offer is made, to pay for the CGD Note
tendered for purchase.
(e) The Company shall make the Change of Control Offer in
accordance with the applicable law.
(Q) Limitation on Sale of Assets. (a) The Company will not,
and will not permit any Restricted Subsidiary to, engage in any Asset
Sale unless (i) the consideration received by the Company or such
Restricted Subsidiary for such Asset Sale is not less than the Fair
Market Value of the assets sold, (ii) the aggregate Fair Market Value
of the consideration received from any Asset Sale that is not in the
form of cash or Cash Equivalents shall not, when aggregated with the
Fair Market Value of all other non-cash consideration received by the
Company and its Restricted Subsidiaries from all previous Asset Sales
since the Original Issue Date that have not, prior to such date, been
converted to cash or Cash Equivalents, exceed five percent of the
Consolidated Tangible Assets of the Company at the time of the Asset
Sale under consideration; and provided that, with respect to any Asset
Sales to Affiliates of the Company, the Company receives consideration
consisting of no less than 85% cash or Cash Equivalents and (iii)
immediately before and immediately after giving effect to such Asset
Sale, no Default or Event of Default shall have occurred and be
continuing. For purposes of clause (ii) above, any Indebtedness or
other liabilities (as shown on the Company's or such Subsidiary's most
recent balance sheet) of the Company or any Subsidiary (other than
contingent liabilities) that are assumed by the transferee in
connection with an Asset Sale shall be deemed to be Cash Equivalents,
but only to the extent such assumption is effected on a basis under
which there is no recourse to the Company or any Subsidiary of the
Company with respect to such Indebtedness or other liabilities.
(b) If the Company or any Restricted Subsidiary engages in an
Asset Sale, the Company may use the Net Cash Proceeds thereof, within
12 months after such Asset Sale, to (i) permanently repay or prepay any
then outstanding senior Indebtedness of the Company or senior
Indebtedness of any Restricted Subsidiary or (ii) invest (or enter into
a legally binding commitment to invest) in properties and assets to
replace the properties and assets that were the subject of the Asset
Sale or in properties and assets that will be used in any line or lines
of business of the Company or its Restricted Subsidiaries on the
Original Issue Date or which are related, ancillary or complementary
thereto; provided that any such investment shall be completed within 24
months of such Asset Sale. The amount of such Net Cash Proceeds not so
used as set forth above in this paragraph (b) constitutes "EXCESS
PROCEEDS", provided that no investment commitment referred to in clause
(ii) above shall constitute a use of Net Cash Proceeds unless such Net
Cash Proceeds are actually so invested within 24 months of such Asset
Sale.
(c) When the aggregate amount of Excess Proceeds exceeds
US$5,000,000 (or, to the extent non-US Dollar denominated, the US
Dollar Equivalent of such amount), the Company shall, within 20
Business Days, make an offer to purchase for cash at par plus interest
accrued but unpaid (an "EXCESS PROCEEDS OFFER") from the Lender and the
49
Lenders under the Loan Agreement, on a pro rata basis, in accordance
with the procedures set forth in this Agreement, the Indenture and the
applicable law, the maximum principal amount (computed on the basis of
the US Dollar Equivalent of such principal amount in the case of
Floating Rate Notes that are non-US Dollar denominated) of the CGD Note
and the Floating Rate Notes that may be purchased with the Excess
Proceeds multiplied by a fraction the numerator of which is the
aggregate principal amount, as so computed, of the CGD Note and the
Floating Rate Notes outstanding on the day such offer is made and the
denominator of which is such principal amount, as so computed, plus the
aggregate principal amount of the Senior Notes outstanding on such
date, such maximum principal amount being the "FLOATING RATE NOTES
EXCESS PROCEEDS AMOUNT". If the aggregate principal amount, as so
computed, of the CGD Note and the Floating Rate Notes validly tendered
and not withdrawn by holders thereof exceeds the CGD Note and the
Floating Rate Notes Excess Proceeds Amount, the CGD Notes and Floating
Rate Notes to be purchased will be selected on a pro rata basis (based
upon the principal amount, as so computed, of the CGD Note and the
Floating Rate Notes tendered by each Lender). Upon completion of such
Excess Proceeds Offer, the Floating Rate Notes Excess Proceeds Amount
shall be deemed to be zero.
(d) The Company shall, within the time period provided in
paragraph (c) above, notify the Lender in writing of any Excess
Proceeds Offer and shall give written notice of such Excess Proceeds
Offer to the Lender in the manner provided in Section 8.02 stating:
(i) that the Lender has the right to require the
Company to repurchase such Lender's CGD Note at the Offered
Price (including any Additional Amounts) subject to proration
in the event the Excess Proceeds multiplied by the fraction
specified in paragraph (c) above are less than the aggregate
Offered Price (including any Additional Amounts) the CGD Note;
(ii) the date of purchase of the CGD Note pursuant to
the Excess Proceeds Offer (the "ASSET SALE PURCHASE DATE"),
which shall be no earlier than 30 days nor later than 60 days
from the date such notice is mailed, or such later date as is
necessary to comply with requirements under the Exchange Act
or any applicable securities laws or regulations;
(iii) that if the CGD Note is not tendered, it will
continue to accrue interest;
(iv) that, unless the Company defaults in the payment
of the Offered Price, the CGD Note accepted for payment
pursuant to the Excess Proceeds Offer shall cease to accrue
interest after the Asset Sale Purchase Date; and
(v) the instructions that the Lender must follow to
accept an Excess Proceeds Offer or to withdraw such acceptance
in accordance with paragraph (e) of this subsection.
50
(e) If the Lender elects to have the CGD Note purchased it
will be required to surrender such CGD Note to the Company at the
address specified in the notice at least five Business Days prior to
the Asset Sale Purchase Date. The Lender will be entitled to withdraw
its election if the Company receives, not later than three Business
Days prior to the Asset Sale Purchase Date, a telex, facsimile
transmission or letter setting forth a statement that the Lender is
withdrawing his election to have the CGD Note purchased. If the CGD
Note is purchased only in part, the Lender will be issued new CGD Note
equal in principal amount to the unpurchased portion of the CGD Note
surrendered.
(R) Limitation on Sale and Leaseback Transactions. The Company
will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, enter into any Sale and Leaseback Transaction with respect
to any property or assets (whether now owned or hereafter acquired),
unless (i) the sale or transfer of such property or assets to be leased
is treated as an Asset Sale and the Company complies with Section
5.01(Q) with respect thereto, (ii) the Company or such Restricted
Subsidiary would be permitted to incur Indebtedness (other than
Permitted Indebtedness) in accordance with the provisions hereof
exclusive of clause (a)(ii)(y)(2) of Section 5.01(J) in the amount of
the Attributable Value incurred in respect of such Sale and Leaseback
Transaction and (iii) the Company or such Restricted Subsidiary would
be permitted to ▇▇▇▇▇ ▇ ▇▇▇▇ under Section 5.01(N) to secure the amount
of the Attributable Value in respect of such Sale and Leaseback
Transaction.
(S) Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries. The Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance
or restriction of any kind on the ability of any Restricted Subsidiary
to (a) pay dividends, in cash or otherwise, or make any other
distributions on or in respect of its Capital Stock, (b) pay any
Indebtedness owed to the Company or any other Restricted Subsidiary,
(c) make loans or advances to the Company or any other Restricted
Subsidiary, or (d) transfer any of its properties or assets to the
Company or any other Restricted Subsidiary (other than customary
restrictions on transfers of property subject to a Lien permitted under
this Agreement that would not materially adversely affect the Company's
ability to satisfy its obligations under the CGD Note and this
Agreement), except for such encumbrances or restrictions existing under
or by reason of (i) any agreement in effect on the Original Issue Date
(any such agreement which relates to a US Dollar amount in excess of
US$1,000,000 (or, to the extent non-US Dollar denominated, the US
Dollar Equivalent of such amount) being listed on a schedule attached
thereto), (ii) applicable law, (iii) customary provisions restricting
subletting or assignment of any lease or assignment of any other
contract to which the Company or any Restricted Subsidiary is a party
or to which any of their respective properties or assets are subject,
(iv) any agreement or other instrument of a Person, or binding with
respect to assets, acquired by the Company or any Restricted Subsidiary
in existence at the time of such acquisition (but not created in
contemplation thereof), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or assets of the Person, or such
assets, so acquired, (v) any encumbrance or restriction contained in
contracts for sales of assets
51
permitted by Section 5.01(Q) hereof with respect to the assets to be
sold pursuant to such contract, (vi) any agreement providing for the
incurrence of Indebtedness by a Restricted Subsidiary in compliance
with Section 5.01(J) hereof, provided that such Restricted Subsidiary
is or becomes at the time of such agreement a Subsidiary Guarantor;
(vii) in any agreement pursuant to which Indebtedness was issued if (A)
the encumbrance or restriction applies only in the event of a payment
default or a default with respect to a financial covenant contained in
such Indebtedness, (B) the encumbrance or restriction is not materially
more disadvantageous to the holder of the CGD Note than is customary in
comparable financings (as determined by the Company) and (C) the
Company determines that any such encumbrance or restriction will not
materially affect the Company's ability to make principal or interest
payments on the CGD Note, and (viii) any encumbrance or restriction
existing under any agreement that extends, renews, refinances or
replaces the agreements containing the encumbrances or restrictions in
the foregoing clauses (i) and (vii); provided that the terms and
conditions of any such encumbrances or restrictions are not materially
less favorable to the holders of the CGD Note than those under or
pursuant to the agreement so extended, renewed, refinanced or replaced.
(T) Provision of Reports and Financial Statements. (a) The
Company shall provide to the Lender: (i) within 90 days after the end
of each fiscal year of the Company, audited consolidated financial
statements of the Company for such fiscal year and (ii) within 60 days
after the end of each of the first three fiscal quarters of the
Company, unaudited consolidated financial statements of the Company for
such fiscal quarter. Each of the financial statements referred to in
(i) and (ii) shall be prepared in accordance with Argentine GAAP
consistently applied, shall be translated into English, and shall be
accompanied by a discussion and analysis, substantially in the format
of the "Management's Discussion and Analysis of Financial Condition and
Results of Operations" that would be included in a Form 20-F filed
under the Exchange Act, except that such discussion and analysis will
be required only to compare the financial condition and results of
operations of the fiscal year or fiscal quarter most recently ended to
the prior fiscal year or comparable fiscal quarter of the prior fiscal
year, as applicable. The financial statements referred to in (i) shall
contain a reconciliation to U.S. GAAP of net income and shareholders'
equity and a report thereon by the Company's independent auditors. In
addition, the Company shall provide to the Lender and the holder of the
CGD Note an English translation of each document filed by the Company
with the CNV and made publicly available in Argentina.
(b) The Company and any Subsidiary Guarantors shall at all
times comply with the periodic reporting requirements of the CNV and
the BASE as in effect at the time of reporting.
(c) The Company's delivery of such reports, information and
documents to the Lender is for informational purposes only and the
Lender's receipt of such shall not constitute constructive notice of
any information contained therein or determinable from information
contained therein, including the Company's compliance with any of its
covenants hereunder (as to which the Lender is entitled to rely
exclusively on Officers' Certificates).
52
(U) Limitation on Capital Expenditures. The Company will not,
and will not permit any Restricted Subsidiary to, make any Capital
Expenditure other than Permitted Capital Expenditures unless on the
date of such Capital Expenditure the Consolidated Fixed Charge Coverage
Ratio exceeds 2.0 to 1.0. Notwithstanding the foregoing, the Company
and any Restricted Subsidiary may apply Net Cash Proceeds in accordance
with Section 5.01(Q) or Net Equity Proceeds to Capital Expenditures
without regard to this subsection and the application of such Net Cash
Proceeds or Net Equity Proceeds will not reduce the aggregate amount of
Permitted Capital Expenditures that may be made in any fiscal year
under this Section.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("EVENTS OF DEFAULT") shall occur and be continuing (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(a) default in the payment of any interest or any Additional Amounts on
the CGD Note when such amounts become due and payable, and continuance of
such default for a period of 30 days;
(b) default in the payment of any principal of and/or premium, if any,
on the CGD Note when due and payable at its Maturity;
(c) default in the performance, or breach, of the provisions described
in Sections 5.01(A), (B) and (C), the failure to make or consummate a Change
of Control Offer in accordance with the provisions of Section 5.01(P) or the
failure to make or consummate an Excess Proceeds Offer in accordance with
the provisions of Section 5.01Q;
(d) default in the performance, or breach, of any covenant or agreement
of the Company or any Subsidiary Guarantor contained in this Agreement or
any Subsidiary Guarantee (other than a default in the performance, or
breach, of a covenant or agreement which is specifically dealt with in
clause (a), (b) or (c) above) and continuance of such default or breach for
a period of 30 days after written notice shall have been given to the
Company by the Lender;
(e) (i) failure by either of the Company or any of its Significant
Subsidiaries to make any payment when due and after the date which is 10
days beyond the expiration of any applicable grace period, in respect of any
Indebtedness of the Company (other than Non-participating Existing Notes) or
any of such Significant Subsidiaries that has an aggregate outstanding
principal amount in excess of US$10,000,000 (or, to the extent non-US Dollar
denominated, the US Dollar Equivalent of such amount) or (ii) one or more
defaults under one or more mortgages, bonds, debentures or other evidences
of Indebtedness under which the Company (other than as aforesaid) or any
Significant
53
Subsidiary then has outstanding Indebtedness in excess of US$10,000,000
(or, to the extent non-US Dollar denominated, the US Dollar Equivalent of
such amount), individually or in the aggregate, and either (x) a principal
amount of such Indebtedness in excess of US$10,000,000 (or, to the extent
non-US Dollar denominated, the US Dollar Equivalent of such amount) is
already due and payable in full or (y) such default or defaults have
resulted in the acceleration of the maturity of such Indebtedness;
(f) one or more final judgments or orders shall be rendered against the
Company or any Restricted Subsidiary for the payment of money (other than in
respect of Non-participating Existing Notes or Non-participating Existing
Bank Debt), either individually or in an aggregate amount, in excess of
US$10,000,000 (or, to the extent non-US Dollar denominated, the US Dollar
Equivalent of such amount) (exclusive of judgment amounts covered by
insurance) and shall not be discharged and either (A) an enforcement
proceeding shall have been commenced by any creditor upon such judgment or
order or (B) there shall have been a period of 60 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, was not in effect;
(g) any Subsidiary Guarantee ceases to be in full force and effect or
is declared null and void or any Subsidiary Guarantor denies that it has any
further liability under any Subsidiary Guarantee, or gives notice to such
effect (other than by reason of the termination of the Indenture or the
release of any such Subsidiary Guarantee in accordance with the Indenture);
(h) a resolution is passed or adopted by the Board of Directors or
stockholders of the Company, or a judgment of a court of competent
jurisdiction is made, that the Company be wound up or dissolved, other than
for the purposes of or pursuant to a merger or consolidation otherwise
permitted under and in accordance with the terms of Section 5.01(A);
(i) a court having jurisdiction enters a decree or order for (a) relief
in respect of the Company or any Significant Subsidiary in an involuntary
case under Argentine Law No. 24,522, as amended, or any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect or
(b) appointment of an administrator, receiver, trustee or intervenor for the
Company or any Significant Subsidiary for all or substantially all of the
property of the Company or any Significant Subsidiary and such decree or
order remains unstayed and in effect for 60 or more days;
(j) the Company or any Significant Subsidiary (a) commences a voluntary
case under Argentine Law No. 24,522, as amended, or any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, (b)
consents to the appointment of or taking possession by an administrator,
receiver, trustee or intervenor for the Company or any Significant
Subsidiary for all or substantially all of the property of the Company or
any Significant Subsidiary or (c) effects any general assignment for the
benefit of creditors;
54
(k) the Argentine Government declares a general suspension of payment,
or a moratorium, in either case applicable to payment of the CGD Note;
(l) the Pledge Agreement ceases to be in full force and effect or is
declared null and void or shall cease to create a security interest in the
collateral thereunder for the benefit of the holder of the CGD Note or such
security interest shall cease to be first priority;
(m) any representation or warranty made herein shall prove to have been
materially incorrect when made;
(n) the Distribution Agreement is rescinded or terminated in any way by
the Company or by any actions or omissions of the Company, and such
circumstance continues for a 30 Business Day period after its occurrence; or
(o) default in the performance, or breach, of any other payment
obligation of the Company under any agreement executed with Groupe Danone
and/or LLSSA or under the its restructuring process of the Company and
continuance of such default or breach for a period of 30 Business Days after
its occurrence.
then, and in any such event, the Lender by notice to the Company, may declare
the CGD Note, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the CGD Note, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Company; provided, however, that if an Event
of Default specified in clause (i) or (j) above shall occur and be continuing
with respect to the Company, the CGD Note, all such interest and all such
amounts shall automatically become and be forthwith due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Company.
ARTICLE VII
THE RELEVANT AGENT
SECTION 7.01. Authorization and Action. (a) The Lender hereby appoints
and authorizes the Collateral Agent (the "RELEVANT Agent") to take such action
as agent on its behalf and to exercise such powers and discretion under the
Pledge Agreement, as the case may be, as are delegated to such Collateral Agent
by the terms hereof or thereof, together with such powers and discretion as are
reasonably incidental thereto.
SECTION 7.02. Lender Credit Decision. The Lender acknowledges that it
has, independently and based on the financial statements referred to in Section
4.01 and such other documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. The Lender
also acknowledges that it will, independently and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement.
55
ARTICLE VIIA
GUARANTEES OF THE CGD NOTE
SECTION 7A.01. Guarantee. (a) Subject to the provisions of
this Article VIIA, each Subsidiary Guarantor unconditionally and irrevocably
guarantees the Lender and its successors and assigns, irrespective of the
validity and enforceability of this Agreement, the CGD Note or the obligations
of the Company or any other subsequent Subsidiary Guarantors to the Lender
hereunder or thereunder, that: (a) the principal of, premium, if any, and
interest owed under this Agreement and/or the CGD Note (and any Additional
Amounts payable thereon) shall be duly and punctually paid in full when due,
whether at maturity, upon redemption at the option of the Lender pursuant to the
provisions of this Agreement and the CGD Note relating thereto, by acceleration
or otherwise, and interest on the overdue principal and (to the extent permitted
by law) interest, if any, on this Agreement and the CGD Note and all other
obligations of the Company or any prior or subsequent Subsidiary Guarantors to
the Lender hereunder or thereunder and all other obligations hereunder and under
this Agreement and the CGD Note and the Subsidiary Guarantees shall be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and (b) in case of any extension of time of payment or renewal of this Agreement
and the CGD Note or any of such other Guaranteed Obligations, the same shall be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at Stated Maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed, or failing performance of
any other obligation of the Company to the Lender, for whatever reason, such
Subsidiary Guarantor shall be obligated to pay, or to perform or cause the
performance of, the same immediately. An Event of Default under this Agreement
or the CGD Note shall constitute an event of default under each Subsidiary
Guarantee, and shall entitle the Lender to accelerate the obligations of each
Subsidiary Guarantor hereunder in the same manner and to the same extent as the
obligations of the Company.
(b) Each Subsidiary Guarantor agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the CGD Note or this Agreement, the absence of any action to
enforce the same, any waiver or consent by any Lender with respect to any
provisions hereof or thereof, any release of any other Subsidiary Guarantor, the
recovery of any judgment against the Company, any action to enforce the same,
whether or not a Subsidiary Guarantee is affixed to the CGD Note, or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. Each Subsidiary Guarantor waives the benefit of
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that its Subsidiary Guarantee shall not be discharged except by
complete performance of the obligations contained in the CDG Note, this
Agreement and its Subsidiary Guarantee. Each Subsidiary Guarantor acknowledges
that its Subsidiary Guarantee is a guarantee of payment and not of collection.
If the Lender is required by any court or otherwise to return to the Company or
to any Subsidiary Guarantor, or any custodian, trustee, liquidator or other
similar official acting in relation to the Company or any Subsidiary Guarantor,
any amount paid by the Company or such Subsidiary Guarantor to the Lender, each
Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect. Each Subsidiary Guarantor further agrees that, as
between it, on the one hand, and the Lender, on the other hand, (a) subject to
this Article
56
VIIA, the maturity of the obligations guaranteed hereby may be accelerated as
provided in Section 6.01 hereof for the purposes of its Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (b) in the
event of any acceleration of such obligations as provided in Section 6.01
hereof, such obligations (whether or not due and payable) shall forthwith become
due and payable by any such Subsidiary Guarantor for the purpose of its
Subsidiary Guarantee.
(c) Each Subsidiary Guarantor agrees that its Subsidiary Guarantee
shall remain in full force and effect and continue to be effective should any
petition be filed by or against the Company for liquidation or reorganization,
should the Company become insolvent or make an assignment for the benefit of
creditors or should a receiver or trustee be appointed for all or any
significant part of the Company's assets, and shall, to the fullest extent
permitted by law, continue to be effective or be reinstated, as the case may be,
if at any time payment and performance of the CGD Note is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee on the CGD Note, whether as a "VOIDABLE PREFERENCE",
"FRAUDULENT TRANSFER" or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the CGD Note shall, to the fullest
extent permitted by law, be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.
SECTION 7A.02. No Need to Endorse Subsidiary Guarantee on the
CGD Note. Each Subsidiary Guarantor agrees that its Subsidiary Guarantee shall
remain in full force and effect notwithstanding any failure to endorse on the
CGD Note a notation of such Subsidiary Guarantee.
SECTION 7A.03. Release of a Subsidiary Guarantor. (a) If no
Default exists or would exist under this Agreement, upon the sale or disposition
of all of the Capital Stock of any Subsidiary Guarantor by the Company or a
Restricted Subsidiary of the Company in a transaction constituting an Asset Sale
the Net Cash Proceeds of which are applied in accordance with Section 5.01(Q),
or upon the consolidation or merger of any Subsidiary Guarantor with or into any
person in compliance with Section 5.01(A) (in each case, other than to the
Company or an Affiliate of the Company or a Restricted Subsidiary), such
Subsidiary Guarantor and each Subsidiary of the Subsidiary Guarantor that is
also a Subsidiary Guarantor shall be deemed automatically and unconditionally
released and discharged from all obligations under this Article VIIA without any
further action required on the part of the Lender; provided, however, that such
Subsidiary Guarantor is sold or disposed of in accordance with this Agreement.
(b) The Lender shall deliver an appropriate instrument evidencing the
release of the Subsidiary Guarantor upon receipt of a request of the Company or
the Subsidiary Guarantor accompanied by an Officers' Certificate and an Opinion
of Counsel certifying as to the compliance with this Section 7A.03. Any
Subsidiary Guarantor not so released or the entity surviving such Subsidiary
Guarantor, as applicable, shall remain or be liable under its Subsidiary
Guarantee as provided in this Article VIIA.
(c) The Lender shall execute any documents reasonably requested by the
Company or any Subsidiary Guarantor in order to evidence the release of such
Subsidiary Guarantor from its obligations under its Subsidiary Guarantee and
under this Article VIIA.
57
(d) Except as set forth in Article V and this Section 7A.03, nothing
contained in this Agreement or the CGD Note shall prevent any consolidation or
merger of any Subsidiary Guarantor with or into the Company or shall prevent any
sale or conveyance of the property of the Subsidiary Guarantor as an entirety or
substantially as an entirety to the Company.
SECTION 7A.04. Waiver of Subrogation. Until this Agreement is
discharged and the CGD Note is discharged and paid in full, each Subsidiary
Guarantor irrevocably waives and agrees not to exercise any claim or other
rights which it may have at the time its Subsidiary Guarantee is made or may
thereafter acquire against the Company that arise from the existence, payment,
performance or enforcement of the Company's obligations under the CGD Note or
this Agreement and the Subsidiary Guarantor's obligations under its Subsidiary
Guarantee and this Agreement, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution, indemnification, and any
right to participate in any claim or remedy of the Guaranteed Parties against
the Company, whether or not such claim, remedy or right arises in equity, or
under contract, statute or common law, including, without limitation, the right
to take or receive from the Company, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account of
such claim or other rights. If any amount shall be paid to a Subsidiary
Guarantor in violation of the preceding sentence and any amounts owing to the
Lender under the CGD Note, this Agreement, or any other document or instrument
delivered under or in connection with such agreements or instruments, shall not
have been paid in full, such amount shall have been deemed to have been paid to
such Subsidiary Guarantor for the benefit of, and held in trust for the benefit
of, the Guaranteed Parties and shall forthwith be paid to the Lender for the
benefit of such Guarantee Parties to be credited and applied to the obligations
in favor of the Guaranteed Parties, whether matured or unmatured, in accordance
with the terms of this Agreement. Each Subsidiary Guarantor acknowledges that it
will receive direct and indirect benefits from the financing arrangements
contemplated by this Agreement and that the waiver set forth in this Section
7A.04 will be knowingly made in contemplation of such benefits.
SECTION 7A.05. Immediate Payment. Each Subsidiary Guarantor
agrees to make immediate payment to the Lender on behalf of the Guaranteed
Parties of all Guaranteed Obligations owing or payable to the respective
Guaranteed Parties upon receipt of a demand for payment therefor by the Lender
to such Subsidiary Guarantor in writing.
SECTION 7A.06. No Set-off. Each payment to be made by any
Subsidiary Guarantor hereunder in respect of the Guaranteed Obligations shall be
payable in the currency or currencies in which such Guaranteed Obligations are
denominated, and shall be made without set-off, counterclaim, reduction or
diminution of any kind or nature.
SECTION 7A.07. Obligations Absolute. The obligations of each
Subsidiary Guarantor hereunder shall be absolute and unconditional and any
monies or amounts expressed to be owing or payable by the Subsidiary Guarantor
hereunder which may not be recoverable from the Subsidiary Guarantor on the
basis of a guarantee shall be recoverable from the Subsidiary Guarantor as a
primary obligor and principal debtor in respect thereof.
58
SECTION 7A.08. Obligations Continuing. The obligations of each
Subsidiary Guarantor hereunder shall be continuing and shall remain in full
force and effect until all the Guaranteed Obligations have been paid and
satisfied in full.
SECTION 7A.09. Obligations Not Reduced. The obligations of
each Subsidiary Guarantor hereunder shall not be satisfied, reduced or
discharged by any intermediate payment or satisfaction of the whole or any part
of the principal, interest, fees and other monies or amounts which may at any
time be or become owing or payable under or by virtue of or otherwise in
connection with the CGD Note or this Agreement.
SECTION 7A.10. Obligations Reinstated. The obligations of each
Subsidiary Guarantor hereunder shall continue to be effective or shall be
reinstated, as the case may be, if at any time any payment which would otherwise
have reduced the obligations of such Subsidiary Guarantor hereunder (whether
such payment shall have been made by or on behalf of the Company or by or on
behalf of such Subsidiary Guarantor) is rescinded or reclaimed from any of the
Guaranteed Parties upon the insolvency, bankruptcy, liquidation or
reorganization of the Company or such Subsidiary Guarantor or otherwise, all as
though such payment had not been made. If demand for, or acceleration of the
time for, payment by the Company is stayed upon the insolvency, bankruptcy,
liquidation or reorganization of the Company, all such indebtedness otherwise
subject to demand for payment or acceleration shall nonetheless be payable by
such Subsidiary Guarantor as provided herein.
SECTION 7A.11. Obligations Not Affected. The obligations of
such Subsidiary Guarantor hereunder shall not be affected, impaired or
diminished in any way by any act, omission, matter or thing whatsoever,
occurring before, upon or after any demand for payment hereunder (and whether or
not known or consented to by such Subsidiary Guarantor or any of the Guaranteed
Parties) which, but for this provision, might constitute a whole or partial
defense to a claim against such Subsidiary Guarantor hereunder or might operate
to release or otherwise exonerate such Subsidiary Guarantor from any of its
obligations hereunder or otherwise affect such obligations, whether occasioned
by default of any of the Guaranteed Parties or otherwise, including, without
limitation:
(a) any limitation of status or power, disability, incapacity
or other circumstance relating to the Company or any other person,
including any insolvency, bankruptcy, liquidation, reorganization,
readjustment, composition, dissolution, winding-up or other proceeding
involving or affecting the Company or any other person;
(b) any irregularity, defect, unenforceability or invalidity
in respect of any indebtedness or other obligation of the Company or
any other person under this Agreement, the CGD Note or any other
document or instrument;
(c) any failure of the Company, whether or not without fault
on its part, to perform or comply with any of the provisions of this
Agreement or the CGD Note, or to give notice thereof to such Subsidiary
Guarantor;
59
(d) the taking or enforcing or exercising or the refusal or
neglect to take or enforce or exercise any right or remedy from or
against the Company or any other person or their respective assets or
the release or discharge of any such right or remedy;
(e) the granting of time, renewals, extensions, compromises,
concessions, waivers, releases, discharges and other indulgences to the
Company or any other person;
(f) any change in the time, manner or place of payment of, or
in any other term of the CGD Note, or any other amendment, variation,
supplement, replacement or waiver of, or any consent to departure from
the CGD Note or this Agreement, including, without limitation, any
increase or decrease in the principal amount of or premium, if any, or
interest on the CGD Note;
(g) any change in the ownership, control, name, objects,
businesses, assets, capital structure or constitution of the Company or
such Subsidiary Guarantor;
(h) any merger or amalgamation of the Company or such
Subsidiary Guarantor with any person or persons;
(i) the occurrence of any change in the laws, rules,
regulations or ordinances of any jurisdiction by any present or future
action of any governmental authority or court amending, varying,
reducing or otherwise affecting, or purporting to amend, vary, reduce
or otherwise affect, any of the Guaranteed Obligations or the
obligations of such Subsidiary Guarantor under its Subsidiary
Guarantee; and
(j) any other circumstance (other than by complete,
irrevocable payment) that might otherwise constitute a legal or
equitable discharge or defense of the Company under this Agreement or
the CGD Note or of such Subsidiary Guarantor in respect of its
Subsidiary Guarantee.
SECTION 7A.12. Waiver. Without in any way limiting the
provisions of Section 7A.01 hereof, each Subsidiary Guarantor waives notice of
acceptance hereof, notice of any liability of the Subsidiary Guarantor
hereunder, notice or proof of reliance by the Guaranteed Parties upon the
obligations of any Subsidiary Guarantor hereunder, and diligence, presentment,
demand for payment on the Company, protest, notice of dishonor or non-payment of
any of the Guaranteed Obligations, or other notice or formalities to the Company
or the Subsidiary Guarantors of any kind whatsoever. Each Subsidiary Guarantor
waives all benefits set forth in Articles 480 (second paragraph), 481 and 482 of
the Argentine Commercial Code as well as any rights and powers contemplated by
Articles 1990, 1994, 2012, 2015, 2017, 2018, 2020, 2021 (except the right to
oppose payment), 2022, 2023, 2024, 2025, 2026, 2028, 2029, 2043, 2044, 2045,
2046, 2047, 2049 (except in the case of express prior written waiver issued by
the Lender), and 2050 of the Argentine Civil Code, to the extent any such rights
of defenses would otherwise become applicable or available to the Subsidiary
Guarantor. Each Subsidiary Guarantor acknowledges that it will receive direct
and indirect benefits from the issuance of the CGD Note pursuant to this
Agreement and that the waivers set forth in this Section 7A.13 will be knowingly
made in contemplation of such benefit.
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SECTION 7A.13. Dealing with the Company and Others. The
Guaranteed Parties, without releasing, discharging, limiting or otherwise
affecting in whole or in part the obligations and liabilities of any Subsidiary
Guarantor hereunder and without the consent of or notice to any Subsidiary
Guarantor, may
(a) grant time, renewals, extensions, compromises,
concessions, waivers, releases, discharges and other indulgences to the
Company or any other person;
(b) take or abstain from taking security or collateral from
the Company or from perfecting security or collateral of the Company;
(c) release, discharge, compromise, realize, enforce or
otherwise deal with or do any act or thing in respect of (with or
without consideration) any and all collateral, mortgages or other
security given by the Company or any third party with respect to the
obligations or matters contemplated by this Agreement or the CGD Note;
(d) accept compromises or arrangements from the Company;
(e) apply all monies at any time received from the Company or
from any security upon such part of the Guaranteed Obligations as the
Guaranteed Parties may see fit or change any such application in whole
or in part from time to time as the Guaranteed Parties may see fit; and
(f) otherwise deal with, or waive or modify their right to
deal with, the Company and all other Persons and any security as the
Guaranteed Parties or the Lender may see fit.
SECTION 7A.14. Default and Enforcement. If any Subsidiary
Guarantor fails to pay in accordance with Section 7A.05 hereof, the Lender may
proceed in the enforcement of the Subsidiary Guarantee of such Subsidiary
Guarantor and such Subsidiary Guarantor's obligations thereunder and hereunder
by any remedy provided by law, whether by legal proceedings or otherwise, and to
recover from such Subsidiary Guarantor the Guaranteed Obligations.
SECTION 7A.15. Costs and Expenses. Each Subsidiary Guarantor
shall pay on demand by the Lender any and all costs, fees and expenses
(including, without limitation, legal fees on a solicitor and client basis)
incurred by the Lender, its agents, advisors and counsel or any of the
Guaranteed Parties in enforcing any of their rights under the Subsidiary
Guarantee issued by such Subsidiary Guarantor.
SECTION 7A.16. No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Lender, any right,
remedy, power or privilege hereunder or under the Agreement or the CGD Note,
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder or under this Agreement or the
CGD Note preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges in the Subsidiary Guarantee and under this Agreement, the CGD Note
and any other document or instrument
61
between a Subsidiary Guarantor and/or the Company and the Lender are cumulative
and not exclusive of any rights, remedies, powers and privilege provided by law.
SECTION 7A.17. Representation and Warranty of each Subsidiary
Guarantor. Each Subsidiary Guarantor represents and warrants that all acts,
conditions and things required to be done and performed and to have happened
precedent to the creation and issuance of its Subsidiary Guarantee, to
constitute the same valid, binding and legal obligation of such Subsidiary
Guarantor, enforceable against such Subsidiary Guarantor, its successors and
assigns in accordance with its terms, will have been done and performed and have
happened in compliance with all applicable laws. The obligations of each
Subsidiary Guarantor under its Subsidiary Guarantee shall constitute a direct,
general, irrevocable, unsecured and unsubordinated obligations of such
Subsidiary Guarantor.
SECTION 7A.18. Special Waiver. To the extent that any
Subsidiary Guarantor may be entitled to the benefit of any provision of law
requiring the Lender, in any suit, action or proceeding brought in a court of
Argentina or other jurisdiction arising out of or in connection with any of this
Agreement or the CGD Note, to post security for litigation costs or otherwise
post a performance bond or guaranty ("CAUTIO JUDICATUM SOLVI" or "EXCEPCION DE
ARRAIGO"), or to take any similar action, such Subsidiary Guarantor waives such
benefit, in each case to the fullest extent permitted under the laws of
Argentina or, as the case may be, such other jurisdiction.
SECTION 7A.19. Severability. Any provision of this Article
VIIA which is prohibited or unenforceable in any jurisdiction shall not
invalidate the remaining provisions and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction unless its removal would substantially defeat the
basic intent, spirit and purpose of this Agreement and this Article VIIA.
SECTION 7A.20. Successors and Assigns. Any Subsidiary
Guarantee shall be binding upon and inure to the benefit of the relevant
Subsidiary Guarantor and the Lender and their respective successors and
permitted assigns, except that no Subsidiary Guarantor may assign any of its
obligations hereunder or thereunder.
SECTION 7A.21. General Limitation on Subsidiary Guarantee
Obligations. In any action or proceeding involving any state corporate law, or
any state or Federal bankruptcy, insolvency, reorganization or other law
affecting the rights of creditors generally or similar laws applicable in
Argentina or any other country, if the obligations of any Subsidiary Guarantor
under Section 7A.01 would otherwise be held or determined to be void, voidable,
invalid or unenforceable, or subordinated to the claims of any other creditors,
on account of the amount of its liability under Section 7A.01, then,
notwithstanding any other provision to the contrary, the amount of such
liability shall, without any further action by such Subsidiary Guarantor, the
Lender, or any other Person, be automatically limited and reduced to the highest
amount that is valid and enforceable and not subordinated to the claims of other
creditors as determined in such action or proceeding so as not to constitute a
fraudulent transfer under any such applicable law.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the CGD Note, nor consent to any departure by the
Company therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Lender, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by the Lender, do any of the following: (a) reduce the
principal of, or interest on, the CGD Note or any amounts payable hereunder, (b)
postpone any date fixed for any payment of principal of, or interest on, the CGD
Note or any other amounts payable hereunder, (c) release or impair the Lien of
any collateral securing the CGD Note, or (d) amend this Section 8.01; and
provided further, that no amendment, waiver or consent shall, unless signed by
all the Lender or the Subsequent Lenders waive any of the conditions specified
in Section 3.01 or 3.02, respectively; and provided further, that no amendment,
waiver or consent shall, unless in writing and signed by the Lender affect the
rights or duties of the Lender under this Agreement or the CGD Note .
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic or telex communication) and mailed, telecopied, telegraphed, telexed
or delivered, if to the Company, at its address at ▇. ▇▇▇▇▇▇▇ 365, Piso 2, Of,
310, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, Attention: Chief Financial Officer; if
to the Lender, at its Lending Office specified opposite its name on Schedule I
hereto; if to any other Lender, at its Lending Office specified in the written
notice informing that it became a Lender;; or, as to the Company or the Lender,
at such other address as shall be designated by such party in a written notice
to the other parties. All such notices and communications shall, when mailed,
telecopied, telegraphed or telexed, be effective when deposited in the mails,
telecopied, delivered to the telegraph company or confirmed by telex answerback,
respectively. Delivery by telecopier of the signature page of any amendment or
waiver of any provision of this Agreement or the CGD Note or of any Exhibit
hereto to be executed and delivered hereunder shall be effective as delivery of
a manually executed counterpart thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of
the Lender to exercise, and no delay in exercising, any right hereunder or under
the CGD Note shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Company agrees to
pay on demand all costs and expenses of the Lender in connection with the
preparation, execution, delivery, administration, modification and amendment of
this Agreement, the CGD Note and the other documents to be delivered hereunder,
including, without limitation, the reasonable fees and expenses of counsel for
the Lender with respect thereto and with respect to advising the Lender as to
its rights and responsibilities under this Agreement. The Company further agrees
to pay on demand all costs and expenses of the Lender, if any (including,
without limitation, reasonable counsel fees and expenses), in connection with
the enforcement (whether through negotiations,
63
legal proceedings or otherwise) of this Agreement, the CGD Note and the other
documents to be delivered hereunder, including, without limitation, reasonable
fees and expenses of counsel for the Lender and each Lender in connection with
the enforcement of rights under this Section 8.04(a).
(b) The Company agrees to indemnify and hold harmless the Lender and each of
their Affiliates and their officers, directors, employees, agents and advisors
(each, an "INDEMNIFIED PARTY") from and against any and all claims, damages,
losses, liabilities and expenses (including, without limitation, reasonable fees
and expenses of counsel) incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation or proceeding or preparation of a defense in connection therewith)
the CGD Note, this Agreement or any of the transactions contemplated herein
except to the extent such claim, damage, loss, liability or expense is found in
a final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
In the case of an investigation, litigation or other proceeding to which the
indemnity in this Section 8.04(b) applies, such indemnity shall be effective
whether or not such investigation, litigation or proceeding is brought by the
Company, its directors, equityholders or creditors or an Indemnified Party or
any other Person, whether or not any Indemnified Party is otherwise a party
thereto and whether or not the transactions contemplated hereby are consummated.
The Company also agrees not to assert any claim for special, indirect,
consequential or punitive damages against the Lender, any of their Affiliates,
or any of their respective directors, officers, employees, attorneys and agents,
on any theory of liability arising out of or otherwise relating to the CGD Note,
this Agreement or any of the transactions contemplated herein.
(c) Without prejudice to the survival of any other agreement of the Company
hereunder, the agreements and obligations of the Company contained in Sections
2.06, 2.08 and 8.04 shall survive the payment in full of principal, interest and
all other amounts payable hereunder and under the CGD Note.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the making of the
request or the granting of the consent specified by Section 6.01 to authorize
the Lender to declare the CGD Note due and payable pursuant to the provisions of
Section 6.01, the Lender is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by the Lender to or for the credit
or the account of the Company against any and all of the obligations of the
Company now or hereafter existing under this Agreement and the CGD Note held by
such Lender, whether or not such Lender shall have made any demand under this
Agreement or such CGD Note and although such obligations may be unmatured. The
Lender agrees promptly to notify the Company after any such set-off and
application, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the Lender under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that the Lender may have.
SECTION 8.06. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Company and the Lender and
thereafter shall be binding upon
64
and inure to the benefit of the Company, the Lender and their respective
successors and assigns, except that the Company shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Lender.
SECTION 8.07. Assignments and Participations; Subsequent
Lenders. (a) The Lender may assign to one or more Persons all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of the CGD Note owing to it); provided, however, that (i) each
such assignment shall be of a constant, and not a varying, percentage of all
rights and obligations under this Agreement, and (ii) the parties to each such
assignment shall notify the Company the assignment and transfer of the CGD Note.
Upon the assignment and notification to the Company, (x) the assignee thereunder
shall be a party hereto and shall have the rights and obligations of a Lender
hereunder and (y) the Lender assignor thereunder shall relinquish its rights
(other than its rights under Sections 2.06, 2.08 and 8.04 to the extent any
claim thereunder relates to an event arising prior to such assignment) and be
released from its obligations under this Agreement (and, in the case of an
assignment covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(b) The Lender may sell participations to one or more banks or other
entities (other than the Company or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement and the CGD Note;
provided, however, that (i) the Lender's obligations under this Agreement shall
remain unchanged, (ii) the Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the Lender shall
remain the Lender of any such CGD Note for all purposes of this Agreement, (iv)
the Company and the Lenders shall continue to deal solely and directly with the
Lender in connection with the Lender's rights and obligations under this
Agreement and (v) no participant under any such participation shall have any
right to approve any amendment or waiver of any provision of this Agreement or
any CGD Note, or any consent to any departure by the Company therefrom, except
to the extent that such amendment, waiver or consent would reduce the principal
of, or interest on, the CGD Note or any other amounts payable hereunder, in each
case to the extent subject to such participation, or postpone any date fixed for
any payment of principal of, or interest on, the CGD Note or any other amounts
payable hereunder, in each case to the extent subject to such participation.
(c) The Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 8.07, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Company furnished to the Lender by or on behalf of the Company.
(d) Notwithstanding any other provision set forth in this Agreement, the
Lender may at any time create a security interest in all or any portion of its
rights under this Agreement (including, without limitation, the CGD Note held by
it) in favor of any Federal Reserve Bank in accordance with Regulation A of the
Board of Governors of the Federal Reserve System.
SECTION 8.08. Currency Indemnity. All amounts payable under
this Agreement are payable in US Dollars (the "RELEVANT CURRENCY"). Any amount
received or recovered (whether as a result of, or of the enforcement of, a
judgment or order of a court of any
65
jurisdiction, in the winding up or dissolution of the Company or otherwise) by
the Lender in respect of any sum expressed to be due to it from the Company in a
Relevant Currency in a currency other than such Relevant Currency shall only
constitute discharge of the Company to the extent of the amount of such Relevant
Currency which the recipient is able to purchase with the amount so received or
recovered in that other currency on the date of that receipt or recovery (or, if
it is not practicable to make that purchase on that date, on the first date on
which it is practicable to do so). If that amount of such Relevant Currency is
less than the amount of such Relevant Currency expressed to be due to the
recipient under the CGD Note or Subsidiary Guarantee, the Company shall
indemnify such recipient against any loss sustained by it as a result. In any
event, the Company shall indemnify the recipient against the cost of making any
such purchase. For the purposes of this Section, it will be sufficient for the
Lender to certify in a reasonably satisfactory manner (indicating the sources of
information used) that it would have suffered a loss had an actual purchase of
such Relevant Currency been made with the amount so received in that other
currency on the date of receipt or recovery (or, if a purchase of such Relevant
Currency on such date had not been practicable, on the first date on which it
would have been practicable, it being required that the need for a change of
date be certified in the manner mentioned above). These indemnities constitute a
separate and independent obligation from the Company's other obligations, shall
give rise to a separate and independent cause of action, shall apply
irrespective of any waiver granted by the Lender and shall continue in full
force and effect despite any other judgment, order, claim or proof for a
liquidated amount in respect of any sum due under the CGD Note or Subsidiary
Guarantee or any other judgment or order.
SECTION 8.09. Governing Law. This Agreement and the CGD Note
shall be governed by, and construed in accordance with, the laws of the State of
New York.
SECTION 8.10. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.11. Jurisdiction, Etc. (a) The Company, the Lender
and each Subsidiary Guarantor irrevocably consent to the jurisdiction of any
court of the State of New York or any United States federal court sitting in the
Borough of ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, and any appellate
court from any thereof, and, to the maximum extent permitted by law, waive any
immunity from the jurisdiction of such courts over any suit, action or
proceeding that may be brought in connection with this Agreement, the CGD Note
and the Subsidiary Guarantees. The Company, the Lender and each Subsidiary
Guarantor agree that final judgment in any such suit, action or proceeding
brought in such court shall be conclusive and binding upon the Company, the
Lender or such Subsidiary Guarantor, as the case may be, and may be enforced in
any court to the jurisdiction of which the Company, the Lender or such
Subsidiary Guarantor, as the case may be, is subject by a suit upon such
judgment; provided that service of process is effected upon the Company, the
Lender or such Subsidiary Guarantor in the manner provided by this Agreement.
66
(b) The Company, the Lender and each Subsidiary Guarantor irrevocably and
unconditionally waive, to the fullest extent they may legally and effectively do
so, any objection that they may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
the CGD Note or a Subsidiary Guarantee in any New York State or federal court.
The Company, the Lender and each Subsidiary Guarantor hereby irrevocably waive,
to the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
(c) To the extent that the Company may be entitled to the benefit of any
provision of law requiring the Lender, in any suit, action or proceeding brought
in a court of Argentina or other jurisdiction arising out of or in connection
with any of this Agreement or the CGD Note, to post security for litigation
costs or otherwise post a performance bond or guaranty ("CAUTIO JUDICATUM SOLVI"
or "EXCEPCION DE ARRAIGO"), or to take any similar action, the Company will
waive such benefit, in each case to the fullest extent permitted under the laws
of Argentina or, as the case may be, such other jurisdiction.
(d) The Company, the Lender and each Subsidiary Guarantor agree that service
of all writs, process and summonses in any suit, action or proceeding brought in
connection with this Agreement , the CGD Note or a Subsidiary Guarantee against
the Company or such Subsidiary Guarantor in any court of the State of New York
or any United States federal court sitting in the Borough of Manhattan, New York
City may be made upon CT Corporation System at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, whom each of the Company and each Subsidiary Guarantor irrevocably
appoints as its authorized agent for service of process. The Company represents
and warrants that CT Corporation System has agreed to act as the agent for
service of process for the Company and each Subsidiary Guarantor. The Company
and each Subsidiary Guarantor agree that such appointment shall be irrevocable
so long as any of the CGD Note remain outstanding or until the irrevocable
appointment by the Company or such Subsidiary Guarantor, as the case may be, of
a successor in The City of New York as its authorized agent for such purpose and
the acceptance of such appointment by such successor. The Company and each
Subsidiary Guarantor agree to take any and all action, including the filing of
any and all documents and instruments, that may be necessary to continue such
appointment in full force and effect as aforesaid. If CT Corporation System
shall cease to act as the agent for service of process for the Company, the
Company and each Subsidiary Guarantor shall appoint without delay another such
agent and provide prompt written notice to the Lender of such appointment. With
respect to any such action in any court of the State of New York or any United
States federal court in the Borough of Manhattan, New York City, service of
process upon CT Corporation System, as the authorized agent of the Company and
each Subsidiary Guarantor for service of process, and written notice of such
service to the Company or a Subsidiary Guarantor shall be deemed, in every
respect, effective service of process upon the Company or such Subsidiary
Guarantor, as the case may be.
(e) Nothing in this Section shall affect the right of any party to serve
legal process in any other manner permitted by law or affect the right of any
party to bring any action or proceeding against any other party or its property
in the courts of other jurisdictions.
SECTION 8.12. Waiver of Jury Trial. Each of the Company, and
the Lender hereby irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim
67
(whether based on contract, tort or otherwise) arising out of or relating to
this Agreement or the CGD Note or the actions of the Lender in the negotiation,
administration, performance or enforcement thereof.
68
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
The Company
-----------
▇▇▇▇▇▇▇▇▇▇ HERMANOS, S.A.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------------
Title: President
The Lender
----------
COMPAGNIE GERVAIS DANONE
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
Title:
The Subsidiary Guarantors
-------------------------
LEITESOL INDUSTRIA E COMERCIO LTDA.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------------
Title: President
▇▇▇▇▇▇▇▇▇▇ SAN ▇▇▇▇ S.A.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Title: President
PROMAS S.A.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Title: President
4
EXHIBIT A- FORM OF THE CGD NOTE
US$15,000,000 Dated:
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇▇▇▇▇▇ HERMANOS S.A., a
sociedad anonima incorporated under the laws of Argentina (the "Borrower"),
HEREBY PROMISES TO PAY to the order of COMPAGNIE GERVAIS DANONE (the "Lender")
for the account of its Lending Office (as defined in the Amended and Restated
Loan Agreement, defined below) the aggregate principal amount of FIFTEEN MILLION
UNITED STATES DOLLARS (US$15,000,000.00) (the "Loan"), on the date specified in
the Amended and Restated Loan Agreement.
The Borrower promises to pay interest on the unpaid principal amount of
the Loan from July 31, 2004 until such principal amount is paid in full, at a
rate of 8% per annum. Additionally, the Borrower agrees to pay Defaulted
Interest (as defined in the Loan Agreement) to the extent lawful in the manner
specified in Section 2.04 of the Amended and Restated Loan Agreement.
Both principal and interest are payable in lawful money of the United
States of America in immediately available funds to the Lender's Account (as
defined in the Amended and Restated Loan Agreement).
This Promissory Note is the CGD Note referred to in, and is entitled to
the benefits of, the Amended and Restated Loan Agreement dated as of February 8,
2005 among the Borrower, the Lender, LEITESOL INDUSTRIA E COMERCIO S.A.,
▇▇▇▇▇▇▇▇▇▇ SAN ▇▇▇▇ S.A., and PROMAS S.A. (as amended, supplemented or otherwise
modified from time to time, the "Amended and Restated Loan Agreement"). Terms
defined in the Amended and Restated Loan Agreement are used herein with their
defined meanings unless otherwise defined herein. The Amended and Restated Loan
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
The failure of the holder of this Note to exercise any of its rights
hereunder in any instance shall not constitute a waiver thereof in that or any
other instance.
This Note is subject to the terms and conditions of the Amended and
Restated Loan Agreement.
2
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
under its corporate seal.
Dated: ▇▇▇▇▇▇▇▇▇▇ HERMANOS SOCIEDAD
ANONIMA
By _________________________________
DIRECTOR
EXHIBIT B - PLEDGE AGREEMENT
1
EXHIBIT C - FORM OF
OPINION OF
COUNSEL FOR THE COMPANY
[______], 2005.
To COMPAGNIE GERVAIS DANONE
Ladies and Gentlemen,
We are acting as Argentine counsel to ▇▇▇▇▇▇▇▇▇▇ Hermanos S.A., a corporation
-sociedad anomina- organized under the laws of Argentina (the "Company"), in
connection with (i) the Amended and Restated Loan Agreement (the "Agreement")
dated as of [______], 2005, among the Company, the Subsidiary Guarantors, and
Compagnie Gervais Danone (the "Lender").
This opinion is being delivered to you pursuant to Section 3.01 of the
Agreement. Capitalized terms used herein without definition have the respective
meanings specified therefor in the Agreement, as the case may be.
In this connection, we have examined copies of (i) the estatutos sociales of the
Company; (ii) the minutes of the meetings of the Board of Directors of the
Company held on [_____], 2005 authorizing the execution of the Agreement and the
CGD Note and the performances of the transactions contemplated therein, and
(iii) an execution copy of the Agreement and the CGD Note.
In such examination, we have relied as to factual matters upon the
representations and warranties contained in or made pursuant to such documents,
and upon the originals, or copies certified or otherwise identified to our
satisfaction, of such records, documents, certificates and other instruments as
in our judgment are necessary or appropriate to enable us to render the advice
expressed below.
The opinions set out in this letter are limited and relate only to the laws of
the Republic of Argentina, as in effect on the date hereof ("Applicable Law"),
and we do not express any opinion herein concerning any other laws, rules or
regulations.
The opinions set forth hereinbelow are based upon the following assumptions:
(i) the genuineness of all signatures, stamps and seals, the
conformity to the originals of all documents supplied to us as
certified or photostatic or faxed copies and the authenticity
of the originals of such documents;
(ii) the due authorization and execution of the Agreement by each
of the parties thereto other than the Company, the Subsidiary
Guarantors, and that the
2
performance thereof is within the capacity and powers of each
of the parties thereto other than the Company, and the
Subsidiary Guarantors;
(iii) the absence of any other arrangements between any of the
parties to the Agreement which modify or supersede any of the
terms of said agreements.
On the basis of such assumptions and subject to the qualification set out below,
we are of the opinion that:
(1) the Company is duly incorporated and is validly existing as a sociedad
anonima under the laws of Argentina and has full power and capacity to
execute the Agreement and to create and issue the CGD Note, and to
undertake and perform the obligations expressed to be assumed by it
therein, and the Company has taken all necessary action to approve and
to authorize the same;
(2) each of Promas S.A. and ▇▇▇▇▇▇▇▇▇▇ San ▇▇▇▇ S.A. (the "Argentine
Subsidiary Guarantors") is duly incorporated and validly existing as a
sociedad anonima under the laws of Argentina, and has corporate power
and authority to execute the Agreement and to undertake and perform the
obligations expressed to be assumed by it therein, and each of such
Argentine Subsidiary Guarantors has taken all necessary action to
approve and to authorize the same;
(3) all of the issued and outstanding capital stock of each of the
Argentine Subsidiary Guarantors has been duly authorized and validly
issued, is fully paid and nonassessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or claim, except for
liens on capital stock of Promas S.A. as accurately described in the
Company's Offering Memorandum and Proxy Solicitation Statement dated
September 16th, 2004, as amended (the "Offering Memorandum");
(4) all of the outstanding shares of the capital stock of the Company have
been duly authorized and validly issued, are fully paid and non
assessable and have been issued in compliance with applicable
securities laws. None of the outstanding shares of capital stock of the
Company were issued in violation of any preemptive rights, rights of
first refusal or other similar rights to subscribe for or purchase
securities of the Company. There are no authorized or outstanding
options, warrants, preemptive rights, rights of first refusal or other
rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company or
any of its subsidiaries and equity interests in any firm, partnership,
joint venture or other entities, other than those accurately described
in the Offering Memorandum;
(5) the execution, delivery and performance by the Company of the Agreement
and the issuance of the CGD Note, do not and will not (i) violate its
estatutos sociales or other organizational documents, or (ii) conflict
with or result in a breach of or default under Applicable Law.
3
(6) the execution, delivery and performance by the Subsidiary Guarantors of
the Subsidiary Guarantee provided in the Agreement do not and will not
(i) violate their respective estatutos sociales or other organizational
documents, or (ii) conflict with or result in a breach of or default
under Applicable Law.
(7) the Agreement has been duly authorized, executed and delivered by the
Company and the Subsidiary Guarantors and constitutes a legal, valid,
binding and enforceable obligation of each of the Company and the
Subsidiary Guarantors, is in appropriate form to be admissible in
evidence in the courts of Argentina and contains no provision which is
contrary to Applicable Law or public policy in Argentina or which would
for any reason currently not be upheld by the courts of Argentina;
(8) the CGD Note has been duly authorized, executed and delivered by the
Company and constitute legal, valid, binding and enforceable
obligations of the Company;
(9) the Subsidiary Guarantee issued by each Argentine Subsidiary Guarantor
has been duly authorized, executed and delivered by each of such
Argentine Subsidiary Guarantor and constitutes a legal, valid and
enforceable obligation of such Argentine Subsidiary Guarantor and is in
appropriate form to be admissible in evidence in the courts of
Argentina;
(10) the CGD Note constitute direct, general and unconditional obligations
of the Company which (i) rank pari passu among themselves and (ii) will
at all times rank at least pari passu with all other present and future
unsecured obligations of the Company, save for such exceptions as may
be provided under Applicable Law;
(11) the obligations of each Argentine Subsidiary Guarantor under its
Subsidiary Guarantee constitute the direct, general, irrevocable,
unsecured and unsubordinated obligations of such Subsidiary Guarantor;
(12) the Company's execution, delivery and performance of the Agreement and
the issuance of the CGD Note: (i) will not conflict with or constitute
a breach of, or default or a Debt Repayment Triggering Event (as
defined below) under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company
or any of its Subsidiaries pursuant to, or require the consent of any
other party to, any existing instrument, and (ii) will not result in
any violation of any statute, rule, regulation law, or administrative
or court order or decree applicable to the Company or any of its
Subsidiaries. As used herein, a "Debt Repayment Triggering Event" means
any event or condition which gives, or with the giving of notice or
lapse of time would give, the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or
a portion of such indebtedness by the Company or any of its
Subsidiaries;
(13) there are no further authorizations, consents or approvals required by
the Company or the Subsidiary Guarantors for or in connection with the
execution of the Agreement or the issuance of the CGD Note;
4
(14) The choice of the New York law as the governing law of the Agreement
and the CGD Note submission to any court of the New York State' courts
in the Agreement where the parties expressly agree to submit to the
non-exclusive jurisdiction of such courts, is valid, binding and
enforceable.
(15) The Agreement and the CGD Note are governed by the New York law; any of
the provisions of these documents which are not legal, valid or
enforceable under the New York law might not be enforceable in the
Argentine courts either.
(16) the courts of Argentina will generally recognize as valid, and will
enforce, any final and conclusive civil judgment for a monetary claim
obtained in a court located in the United States against the Company by
any holder of CGD Note and/or under the Agreement in any action
commenced by services of process as specified therein, provided that
the requirements of Article 517 of the Federal Code of Civil and
Commercial Procedure are met, as follows:
(A)the judgement, which must be final in the jurisdiction where
rendered, was issued by a court competent in accordance with
the Argentine conflict of law principles regarding jurisdiction
and resulted from a personal action, or an in rem action with
respect to personal property which was transferred to Argentine
territory during or after the prosecution of the foreign
action,
(B)the defendant against whom enforcement of the judgment is
sought was personally served with the summons and, in
accordance with due process of law, was given an opportunity to
defend against the foreign action,
(C)the judgment must be valid in the jurisdiction where rendered
and its authenticity must be established in accordance with the
requirements of Argentina law,
(D)the judgment does not violate the principles of public policy
of Argentine law, and
(E)the judgment is not contrary to a prior or simultaneous
judgment of an Argentine court;
(17) any judgment obtained in a court in Argentina against the Company by
any holder of the CGD Note or by any party under the Agreement would be
expressed in United States dollars;
(18) we are not aware of the existence of any pending or threatened legal or
governmental actions, suits or proceedings against or affecting the
Company or any of its Subsidiaries; or which have as the subject
thereof any property owned or leased by the Company or any of its
Subsidiaries, where in any such case there is a reasonable possibility
that such action, suit or proceeding might be determined adversely to
the Company or such Subsidiary and any such action, suit or proceeding,
if so determined adversely, would reasonably be expected to materially
affect the Company's business;
The opinions set out in this letter as regards the binding nature and
enforceability of the obligations of the Company, and the Argentine Subsidiary
Guarantors contemplated under the Agreement and the CGD Note are subject to all
limitations arising from bankruptcy, insolvency, liquidation, reorganization,
moratorium or similar law affecting the rights of creditors generally.
5
We express no opinion as to any agreement, instrument or document other than
those specified in this letter.
A copy of this opinion letter may be delivered by you to any person that becomes
a Lender in accordance with the provisions of the Agreement. Any such person may
rely on the opinions expressed above as if this opinion letter were addressed
and delivered to such person on the date hereof.
This opinion letter is rendered to you in connection with the transactions
contemplated by the Agreement. This opinion letter may not be relied upon by you
or any person entitled to rely on this opinion pursuant to the preceding
paragraph for any other purpose without our prior written consent.
This opinion letter speaks only as of the date hereof. We expressly disclaim any
responsibility to advise you of any development or circumstance of any kind,
including any change of law or fact, that may occur after the date of this
opinion letter even though such development or circumstance may affect the legal
analysis, a legal conclusion or any other matter set forth in or relating to
this opinion letter.
Yours faithfully,
EXHIBIT D - FORM OF
OPINION OF
NEW YORK COUNSEL FOR THE COMPANY
February 8, 2005
Compagnie Gervais Danone
▇▇▇▇▇▇▇▇▇▇ Hermanos S.A.
------------------------
Ladies and Gentlemen:
We have acted as New York counsel to ▇▇▇▇▇▇▇▇▇▇ Hermanos S.A., an
Argentine corporation (the "Company"), Leitesol Industria e Comercio S.A., a
Brazilian limited corporation ("Leitesol"), Promas S.A., an Argentine
corporation ("Promas"), and ▇▇▇▇▇▇▇▇▇▇ San ▇▇▇▇ S.A., an Argentine corporation
(together with Leitesol and Promas, the "Subsidiary Guarantors") for the sole
purpose of delivering this opinion letter in connection with the Amended and
Restated Loan Agreement dated as of February 8, 2005 (the "Loan Agreement")
among the Company, the Subsidiary Guarantors and you. Unless otherwise defined
herein, terms defined in the Loan Agreement are used herein as therein defined.
In that connection, we have reviewed the Loan Agreement (including the
Exhibits thereto).
We have also reviewed originals or copies of such other records of the
Company and the Subsidiary Guarantors, certificates of officers of the Company
and the Subsidiary Guarantors and agreements and other documents as we have
deemed necessary as a basis for the opinions expressed below.
In connection with the delivery of this opinion letter, we have
assumed:
(A) The Loan Agreement will be executed in the form that we reviewed and
that the CGD Note will be executed substantially in the form of Exhibit A
thereto.
(B) The genuineness of all signatures.
(C) The authenticity of the originals of the documents submitted to us.
(D) The conformity to authentic originals of any documents submitted to us
as copies.
(E) That the Loan Agreement is the legal, valid and binding obligation of
each party thereto, other than the Company and the Subsidiary Guarantors,
enforceable against each such party in accordance with its terms.
(F) That:
(1) Each of the Company and each Subsidiary Guarantor is an
entity duly organized and validly existing under the laws of the
jurisdiction of its organization.
(2) Each of the Company and each Subsidiary Guarantor has full
power to execute, deliver and perform, and has duly executed and
delivered, the Loan Agreement and, in the case of the Company, the CGD
Note.
(3) The execution, delivery and performance by each of the
Company and each Subsidiary Guarantor of the Loan Agreement and by the
Company of the CGD Note have been duly authorized by all necessary
action (corporate or otherwise) and do not:
(a) contravene its certificate or articles of incorporation,
by-laws or other organizational documents;
(b) except with respect to Generally Applicable Law, violate
any law, rule or regulation applicable to it; or
(c) result in any conflict with or breach of any agreement
or document binding on it of which any addressee hereof has
knowledge, has received notice or has reason to know.
(4) Except with respect to Generally Applicable Law, no
authorization, approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body or (to the extent
the same is required under any agreement or document binding on it of
which an addressee hereof has knowledge, has received notice or has
reason to know) any other third party is required for the due
execution, delivery or performance by the Company or any Subsidiary
Guarantor of the Loan Agreement or by the Company of the CGD Note or,
if any such authorization, approval, action, notice or filing is
required, it has been duly obtained, taken, given or made and is in
full force and effect.
We have not independently established the validity of the foregoing assumptions.
"Generally Applicable Law" means the federal law of the United States
of America, and the law of the State of New York (including the rules or
regulations promulgated thereunder or pursuant thereto), that a New York lawyer
exercising customary professional diligence would reasonably be expected to
recognize as being applicable to the Company, a Subsidiary Guarantor, the Loan
Agreement or the CGD Note. Without limiting the generality of the foregoing
definition of Generally Applicable Law, the term "Generally Applicable Law" does
not include any law, rule or regulation that is applicable to the Company, a
Subsidiary Guarantor, the Loan Agreement or the CGD Note solely because such
law, rule or regulation is part of a regulatory regime applicable to the
specific assets or business of any party to the Loan Agreement or any of its
affiliates.
Based upon the foregoing and upon such other investigation as we have
deemed necessary and subject to the qualifications set forth below, we are of
the opinion that the Loan Agreement and the CGD Note are the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, and that the Loan Agreement is the
legal, valid and binding obligation of each Subsidiary Guarantor, enforceable
against such Subsidiary Guarantor in accordance with its terms.
Our opinion expressed above is subject to the following qualifications:
(a) Our opinion is subject to (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally (including without limitation all
laws relating to fraudulent transfers) and (ii) possible judicial action
giving effect to governmental actions or foreign laws affecting creditors'
rights.
(b) Our opinion is subject to the effect of general principles of
equity, including without limitation concepts of materiality,
reasonableness, good faith and fair dealing (regardless of whether
considered in a proceeding in equity or at law).
(c) We express no opinion with respect to Section 8.05 of the Loan
Agreement to the extent that such Section permits set off to be made
without notice.
(d) We express no opinion with respect to the enforceability of
indemnification provisions, or of release or exculpation provisions,
contained in the Loan Agreement to the extent that enforcement thereof is
contrary to public policy regarding the indemnification against or release
or exculpation of criminal violations, intentional harm or violations of
securities laws.
(e) We express no opinion with respect to the enforceability of any
indemnity against loss in converting into a specified currency the proceeds
or amount of a court judgment in another currency.
(f) We express no opinion with respect to Section 8.11 of the Loan
Agreement to the extent that such Section (i) contains a waiver of any
objection based on inappropriate venue or forum non conveniens in any
federal court of the United States or (ii) implies that a federal court of
the United States has subject matter jurisdiction.
(g) Our opinion is limited to Generally Applicable Law.
A copy of this opinion letter may be delivered by any of you to any
Person to which you assign any portion of your rights and obligations under the
Loan Agreement and the CGD Note in accordance with the provisions of the Loan
Agreement. Any such Person may rely on the opinions expressed above as if this
opinion letter were addressed and delivered to such Person on the date hereof.
This opinion letter is rendered to you in connection with the
transactions contemplated by the Loan Agreement. This opinion letter may not be
relied upon by you or any person entitled to rely on this opinion pursuant to
the preceding paragraph for any other purpose without our prior written consent.
This opinion letter speaks only as of the date hereof. We expressly
disclaim any responsibility to advise you of any development or circumstance of
any kind, including any change of law or fact, that may occur after the date of
this opinion letter even though such development or circumstance may affect the
legal analysis, a legal conclusion or any other matter set forth in or relating
to this opinion letter.
Very truly yours,
JAM
RHR