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EXHIBIT 10.20
SHARE RETENTION, NON-COMPETITION AND
PUT OPTION AGREEMENT
AMONG
DVI, INC.
AND
MSF HOLDING LTD.
AND
CADILUR S.A.
AND
ESTOLUR S.A.
AND
NATULER S.A.
AND
NEDERLANDSE FINANCIERINGS-MAATSCHAPPIJ
VOOR ONTWIKKELINGSLANDEN N.V.
DATED AS OF APRIL 27 , 1998
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TABLE OF CONTENTS
ARTICLE OR
SECTION ITEM PAGE NO.
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ARTICLE I......................................................................2
DEFINITIONS....................................................................2
Section 1.01. Definitions.................................................2
Section 1.02. Other Terms.................................................2
Section 1.03. Interpretation..............................................7
ARTICLE II.....................................................................8
REPRESENTATIONS AND WARRANTIES.................................................8
Section 2.01. General Representations.....................................8
Section 2.02. Further Representations.....................................9
Section 2.03. FMO Reliance................................................9
Section 2.04. Non-Estoppel................................................9
ARTICLE III....................................................................9
RETENTION OF SHARES............................................................9
Section 3.01. DVI's Undertakings........................................10
Section 3.02. MSF Holding's Undertakings.................................10
Section 3.03. Additional Obligations.....................................10
Section 3.04. Request for Transfer.......................................11
Section 3.05. Further Assurances.........................................11
Section 3.06. Tag-Along Rights...........................................11
ARTICLE IV....................................................................12
NON-COMPETITION PROVISIONS....................................................12
Section 4.01. Competing Activities.......................................12
Section 4.02. Acknowledgments of DVI.....................................12
ARTICLE V.....................................................................13
PUT OPTION....................................................................13
Section 5.01. Put Option................................................13
Section 5.02. Notice of Exercise........................................13
Section 5.03. Commitment of DVI.........................................13
Section 5.04. Settlement................................................13
Section 5.05. Share Certificates........................................13
Section 5.06. Right of Transfer.........................................14
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Section 5.07. Obligations Irrevocable, Absolute and Unconditional.......14
Section 5.08. Term of the Put Option....................................15
Section 5.09. Cancellation of the Put Option............................16
Section 5.10. Required Documentation....................................16
ARTICLE VI....................................................................17
MISCELLANEOUS.................................................................17
Section 6.01. Waivers...................................................17
Section 6.02. MSF Holding as Agent for Communication....................19
Section 6.03. Notices...................................................19
Section 6.04. English Language..........................................20
Section 6.05. Fees and Expenses.........................................21
Section 6.06. Financial Calculations....................................21
Section 6.07. Termination of Agreement..................................22
Section 6.08. Severability..............................................22
Section 6.09 Applicable Law and Jurisdiction...........................22
Section 6.10 Successors and Assigns....................................25
Section 6.11 Amendment.................................................25
Section 6.12 Counterparts..............................................25
Section 6.13 Remedies and Waivers......................................25
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SHARE RETENTION, NON-COMPETITION AND
PUT OPTION AGREEMENT
AGREEMENT, dated as of April 27, 1998 among DVI, Inc. ("DVI"), a
corporation organized and existing under the laws of the State of Delaware, USA,
MSF HOLDING LTD., a company organized and existing under the laws of the
Commonwealth of the Bahamas ("MSF Holding"), CADILUR S.A., a sociedad anonima,
organized and existing under the laws of Uruguay ("MSF"), ESTOLUR S.A., a
sociedad anonima, organized and existing under the laws of Uruguay ("Estolur"),
and NATULER S.A., a sociedad anonima, organized and existing under the laws of
Uruguay ("HSF" and together with MSF Holding, MSF and Estolur, the
"Co-Borrowers" and each individually a "Co-Borrower"), each of MSF, Estolur and
HSF are companies organized and existing under the laws of Uruguay and
NEDERLANDSE FINANCIERINGS-MAATSCHAPPIJ VOOR ONTWIKKELINGSLANDEN N.V., a company
organized and existing under the laws of The Netherlands (hereinafter called
"FMO").
WHEREAS:
(A) By an investment agreement of even date herewith among FMO and the
Co-Borrowers (the "Investment Agreement"), FMO has agreed to (i) extend a loan
to the Co-Borrowers in the aggregate principal amount of up to twenty-five
million Dollars ($25,000,000) (the "Loan"), in the form of an A Loan of up to
ten million Dollars ($10,000,000), and a B loan of up to fifteen million Dollars
($15,000,000) and (ii) make the FMO Subscription, upon the terms and conditions
set forth in the Investment Agreement.
(B) In consideration of FMO entering into the Investment Agreement and
as an inducement to FMO to make the first Disbursement of the Loan and the first
Disbursement and Subscription under the FMO Subscription, each of DVI and the
Co-Borrowers has agreed to undertake the obligations assumed by it in this
Agreement.
(C) FMO's obligation to make the Loan and the FMO Subscription is
conditioned upon the agreement by DVI not to engage in certain forms of
competition with the Co-Borrowers, as more particularly set forth herein.
(D) Each of DVI and the Co-Borrowers has been provided with, and hereby
acknowledges receipt of, a copy of the Investment Agreement and all the other
Transaction Documents.
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NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Wherever used in this Agreement, unless the
context otherwise requires, or unless otherwise defined in the preamble or
Recitals hereto, capitalized terms defined in the Investment Agreement shall
have the same meanings herein.
Section 1.02. Other Terms. Wherever used in this Agreement, unless the
context otherwise requires, the following terms shall have the following
meanings:
"Average
Consolidated
Pre-Tax Income" means, as at the date of the relevant Notice of
Exercise, the amount resulting from calculating the
average of the audited consolidated pre-tax profit
recorded by MSF Holding for the previous Fiscal Year,
as determined from the consolidated audited financial
statements for such Fiscal year and the audited
consolidated profit recorded by MSF Holding for the
current year (annualized), as determined from the
consolidated audited financial statements for the
most recently completed fiscal quarter of the Fiscal
Year in which the relevant Notice of Exercise is
given, audited in accordance with Section 5.10 (iii)
hereof if so requested by FMO;
"Exercise Period" means, as at the date of the relevant Notice of
Exercise, the period (A) beginning on the earlier of
(i) the fourth anniversary of the date of this
Agreement, and (ii) the date on which a Triggering
Event occurs; and (B) expiring as provided in Section
5.08(a);
"Exercise Price" means, as at the date of the relevant Notice
of Exercise, the higher of (A) a multiple of one
point two five (1.25) times the Net Worth of MSF
Holding or (B) a multiple of eight (8) times the
Average Consolidated Pre-Tax Income of MSF Holding;
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"Net Worth" means, as of the relevant date of the relevant Notice
of Exercise, the capital, reserves and retained
earnings of MSF Holding based on the consolidated
audited financial statements for the Fiscal Year
immediately preceding the date of the relevant Notice
of Exercise, or, if available, the consolidated
financial statements for the most recently completed
fiscal quarter of the Fiscal Year, in which the
relevant Notice of Exercise is given, provided any
such quarterly statements have been audited in
accordance with Section 5.10(iii) hereof;
"Notice of Exercise" means any written notice given at any time or from
time to time during the Exercise Period by FMO to DVI
pursuant to Article V, which shall set forth:
(i) only in the case that the Notice of Exercise
is given before the fourth anniversary of
the date of this Agreement, the occurrence
and description of a Triggering Event and
the basis of its determination, which
determination by FMO shall be final,
conclusive and binding ▇▇▇▇ ▇▇▇ (absent
gross negligence or clerical error);
(ii) whether FMO is exercising the Put Option
with respect to all or part of the Option
Shares and, if less than all the Option
Shares are to be put to DVI, the number of
Option Shares with respect to which FMO is
exercising the Put Option;
(iii) the Settlement Date;
(iv) the Settlement Place; and
(v) the Exercise Price and the basis for its
determination, which determination by FMO
shall be final, conclusive and binding ▇▇▇▇
▇▇▇ (absent gross negligence or clerical
error);
"Option Shares" means:
(i) the FMO Shares;
(ii) any other Shares subscribed or acquired by,
or delivered to, FMO pursuant to the
exercise of
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preemptive rights, options or warrants
accruing to FMO in relation to the Option
Shares;
(iii) any Shares received by FMO as a result of
stock dividends, stock splits or otherwise
on the Option Shares; and
(iv) any Shares received by FMO in exchange,
replacement or substitution for the Option
Shares;
"Put Option" means the right of FMO to require DVI and
the obligation of DVI to purchase in
accordance with the terms and conditions of
this Agreement some or all of the Option
Shares;
"Region" means the countries of Uruguay, Argentina,
Brazil, Colombia and any other Latin
American Country where any Co-Borrower or
any of its Subsidiaries operates;
"Settlement Date" means a date specified in the relevant
Notice of Exercise for making payment for
and delivery of the Option Shares specified
in the Notice of Exercise, which shall not
be less than ninety (90) days nor more than
one hundred twenty (120) days after the
relevant Notice of Exercise shall have been
given;
"Settlement Place" means the place in New York, New York,
United States to be specified by FMO in the
relevant Notice of Exercise where payment
for and delivery of the relevant Option
Shares are to be made;
"Stock Exchange" means an internationally recognized stock
exchange, acceptable to FMO including, but
not limited to, the London Stock Exchange
and NASDAQ;
"Termination Date" means the date which is the eighth
anniversary date of this Agreement; and
"Triggering Event" means:
(i) the failure or incapability of MSF Holding
to maintain, on a consolidated basis, a
diversified vendor lease portfolio, with no
single vendor providing more than:
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(A) fifty percent (50%) of the equipment
financed pursuant to Eligible
Leases/Loans in the MSF Portfolio from
December 31, 2000 through December 31,
2001; and
(B) forty percent (40%) of the equipment
financed pursuant to Eligible
Leases/Loans in the MSF Portfolio
thereafter;
(ii) the failure or incapability of MSF Holding
to maintain, on a consolidated basis, a
Lease/Loan Loss Reserve of at least:
(A) one percent (1%) of Net Financed
Assets during Fiscal Years 1997 and
1998;
(B) one and one-half percent (1.5%) of Net
Financed Assets during Fiscal Year
1999; and
(C) two percent (2%) of Net Financed
assets in Fiscal Year 2000 and
thereafter; or
(iii) any material default or non-compliance by
any party thereto (other than FMO) with any
of its respective obligations, or any
material misrepresentation or breach of
warranty by any party thereto (other than
FMO), under any of the Transaction
Documents, in each case, to the extent any
of such events are not attributable to FMO,
and so long as any such default or
non-compliance, or any such
misrepresentation or breach of warranty, has
not been cured, to the satisfaction of FMO,
by any party thereto, as the case may be,
within a period of thirty (30) Business Days
commencing on the earlier of (i) the date in
which FMO has given written notice to the
Co-Borrowers and DVI that any of such events
has occurred and is continuing and (ii) the
date on which any of the Co-Borrowers and
DVI shall have become aware of any of such
events, whether or not:
(A) such circumstance was beyond the
control of such party;
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(B) FMO has exercised, or has omitted to
exercise, any other right, power or
remedy accruing to FMO upon such
circumstance under any of such
Transaction Documents; and
(C) such obligation is permitted, in whole
or in part, under any applicable laws.
(iv) any substantial change to DVI's shareholder
structure which would materially adversely
affect MSF Holding's or any of its
Subsidiaries policies or operations;
Section 1.03. Interpretation. In this Agreement, unless the context
otherwise requires:
(a) headings and underlinings are for convenience only and do not
affect the interpretation of this Agreement;
(b) words importing the singular include the plural and vice versa;
(c) words importing a gender or neuter include any gender or neuter;
(d) an expression importing a natural person includes any company,
partnership, joint venture, association, corporation or other body corporate and
any governmental or quasi-governmental authority or agency;
(e) a reference to any thing includes a part of that thing;
(f) a reference to a Section, paragraph, party, Annex, Exhibit or
Schedule is a reference to a Section and paragraph of, and a party, Annex,
Exhibit and Schedule to, this Agreement;
(g) a reference to a document includes an amendment or supplement to,
or replacement or novation of, that document disregarding any amendment,
supplement, replacement or novation made in breach of the Investment Agreement;
and
(h) a reference to a party to any document includes that party's
successors and permitted assigns.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01. General Representations. Each of DVI and the Co-Borrowers
represents, warrants and covenants that:
(a) (i) in the case of DVI, it is a company duly incorporated and
validly existing under the laws of the State of Delaware, USA,
(ii) in the case of MSF Holding, it is a company duly
incorporated and validly existing under the laws of the
Commonwealth of the Bahamas, and (iii) in the case of each of
MSF, Estolur and HSF, it is a company duly incorporated and
validly existing under the laws of Uruguay;
(b) it has the corporate power to conduct its business as
presently conducted;
(c) it has the corporate power and all necessary corporate and
other action has been taken to authorize it to execute this
Agreement and to perform fully and completely all its
obligations and liabilities hereunder;
(d) the execution and delivery of this Agreement and the
performance of its respective obligations hereunder will not
violate or exceed its powers or contravene:
(i) any provision of any applicable law, regulation,
decree or order to which it is subject;
(ii) any provision of the Estatutos or Certificate of
Incorporation or Memorandum and Articles of
Association or other relevant constitutive documents;
(iii) any provision of any mortgage, deed, contract,
agreement or undertaking to which it is a party or
which is binding upon all or any of its respective
property or assets;
(e) this Agreement constitutes its valid obligations, legally
binding upon it and enforceable in accordance with its terms;
(f) it has been provided with, and hereby acknowledges receipt of,
a copy of each of the Transaction Documents; and
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(g) all governmental, corporate, shareholders', optionholders',
creditors' and other necessary authorizations, consents,
approvals, licenses and waivers required for its execution and
delivery of this Agreement and its performance of its
obligations under this Agreement, have been duly obtained or
granted and are in full force and effect.
Section 2.02. Further Representations. (a) DVI represents and warrants
that it presently holds directly or through its wholly-owned Subsidiaries at
least forty per cent (40%) of the voting shares of MSF Holding unencumbered by
any Lien;
(b) MSF Holding represents and warrants that it presently holds
ninety-nine per cent (99%) of the voting shares of each of MSF, HSF and Estolur
unencumbered by any Lien.
Section 2.03. FMO Reliance. Each of DVI and the Co-Borrowers hereby
acknowledges that it has made the representations in Sections 2.01 and 2.02
above with the intention of persuading FMO to enter into certain of the
Transaction Documents and that FMO has entered into certain of the Transaction
Documents on the basis of, and in full reliance on, each of such
representations. Each of DVI and the Co-Borrowers warrants to FMO that each such
representation is true and correct in all material respects as of the date of
this Agreement and that none of them omits any matter the omission of which
makes any of such representations misleading.
Section 2.04. Non-Estoppel. The rights and remedies of FMO in relation
to any misrepresentations or breach of warranty on the part of DVI and the
Co-Borrowers shall not be prejudiced by any investigation by or on behalf of FMO
into the affairs of DVI and the Co-Borrowers, by the execution of this Agreement
or by any act or thing which may be done by or on behalf of FMO in connection
with this Agreement and which might, apart from this Section, prejudice such
rights or remedies.
ARTICLE III
RETENTION OF SHARES
Unless FMO otherwise agrees in writing, so long as any amounts are due and
payable to FMO under any of the Transaction Documents, and so long as FMO holds
shares in the voting capital of
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MSF Holding: (a) DVI agrees directly and indirectly through any of its
Subsidiaries or Affiliates, not to sell, transfer, assign, redeem, pledge, or
otherwise in any manner dispose of or encumber, or permit any encumbrances or
Liens to exist over, any of the voting shares of MSF Holding which it now owns
or which it may acquire in the future, directly or indirectly through any of its
Subsidiaries or Affiliates, if as a result thereof, it would own directly or
indirectly less than forty percent (40%) of the voting share capital of MSF
Holding, unencumbered by any pledge, Lien or security; and (b) DVI also agrees
that it will from time to time take such action as shall be required on its
part, directly or indirectly, including the exercise (to the extent permitted by
law) of its preemptive rights under the Memorandum and Articles of Association
or other relevant constitutive documents of MSF Holding to maintain its
shareholding in MSF Holding at the minimum level specified above.
Section 3.02. MSF Holding's Undertakings. Unless FMO otherwise agrees
in writing, so long as any amounts are due and payable to FMO under any of the
Transaction Documents and so long as FMO holds shares in the voting capital of
MSF Holding:
(a) MSF Holding agrees not to sell, transfer, assign, redeem, pledge or
otherwise in any manner dispose of or encumber, or permit any encumbrances or
Liens to exist over, any of the voting shares of MSF, Estolur or HSF which it
now owns or which it may acquire in the future if, as a result thereof, it would
own less than one hundred per cent (100%) of the voting share capital of each of
MSF, Estolur and HSF unencumbered by any pledge, Lien or security; and
(b) MSF Holding also agrees that it will from time to time take such
action as shall be required on its part, including the exercise (to the extent
permitted by law) of its preemptive rights under the respective Memorandum and
Articles of Association, Estatutos or other relevant constitutive documents of
each of MSF, Estolur and HSF to maintain its respective shareholdings in each
such company at the minimum levels specified above.
Section 3.03. Additional Obligations. Each of DVI and MSF Holding
agrees that, for so long as any monies are payable to FMO under any of the
Transaction Documents and so long as FMO holds shares in the voting capital of
MSF Holding, unless FMO otherwise agrees in writing:
(a) it will exercise its voting rights at any meeting of, or in respect
of any other vote taken by, the shareholders of DVI, any of its Subsidiaries or
Affiliates or any of the Co-Borrowers in such manner and otherwise take or cause
to be taken all actions as to achieve a prompt and effective implementation of
all the provisions of, and performance of all obligations of DVI, any of its
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Subsidiaries or Affiliates and the Co-Borrowers under, the Transaction
Documents; and
(b) it will not, under the relevant provisions of the Memorandum and
Articles of Association, Estatutos or other relevant constitutive documents of
DVI, any or its Subsidiaries or Affiliates or any of the Co-Borrowers, as the
case may be, approve or vote in favor of the approval of any transfer of shares
proposed to be made in violation of the provisions of this Agreement.
Section 3.04. Request for Transfer. (a) MSF Holding shall promptly give
written notice to FMO of any request received by it to record a transfer, pledge
or other form of disposition by DVI or any of its Subsidiaries or Affiliates of
the shares held by DVI and any of its Subsidiaries or Affiliates in MSF Holding,
and shall, to the extent permitted by law, refuse to make any such registration
which is in violation of the provisions of this Agreement.
(b) Each of MSF, Estolur and HSF shall promptly give written notice to
FMO of any request received by it to record a transfer, pledge or other form of
disposition by MSF Holding of the shares held by MSF Holding in any of MSF,
Estolur or HSF, and shall, to the extent permitted by law, refuse to make any
such registration which is in violation of the provisions of this Agreement.
Section 3.05. Further Assurances. Each of MSF Holding, MSF, Estolur and
HSF undertakes to take all necessary actions (i) to ensure that this Agreement
is expressly mentioned in its respective registry of shareholders and/or any
other registry whenever so required under the laws of the Bahamas or Uruguay, as
the case may be, in order for this Agreement to become fully effective, valid
and enforceable against the parties hereto and third parties; and (ii) to ensure
the prompt and effective implementation of all of the provisions of this
Agreement.
Section 3.06. Tag-Along Rights. Subject to the provisions of Section
3.01 above, if at any time DVI decides, directly or indirectly through any of
its Subsidiaries or Affiliates, to sell all or a percentage of the shares of MSF
Holding held by DVI (the "DVI Shares"), unless FMO has notified DVI that the
sale shall not include any Option Shares, DVI, directly or indirectly through
any of its Subsidiaries or Affiliates, shall only sell any of the DVI Shares if
the sale also includes all or the same percentage of the Option Shares as the
percentage of all the DVI Shares sold. If necessary, DVI, directly or indirectly
through any of its Subsidiaries or Affiliates, shall reduce the number of DVI
Shares to be sold in order to sell the required number of Option Shares. DVI
shall notify FMO of the terms and conditions on which it has decided to sell DVI
Shares, and FMO shall have sixty (60) days to decide whether to sell any or all
of its Option Shares as herein provided, and DVI, directly or indirectly through
any of its Subsidiaries or Affiliates, shall not sell any DVI Shares prior to
the expiration of such sixty (60)
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day period. The provisions of the preceding sentence shall apply to any DVI
Shares that are not sold on the terms and conditions set forth in any notice to
FMO relating to the proposed sale of such DVI Shares within thirty (30) days
after the expiration of the sixty (60) day period applicable to such DVI Shares
ARTICLE IV
NON-COMPETITION PROVISIONS
Section 4.01. Competing Activities. So long as any amounts are due and
payable to FMO under any of the Transaction Documents, and so long as FMO holds
shares in the voting capital of MSF Holding, DVI agrees that it shall not
directly or indirectly, alone or in conjunction with others, through
Subsidiaries, Affiliates (other than MSF Holding), joint ventures or other
business arrangements:
(a) develop, own, manage operate, join, control, finance or participate
in the ownership, management, operation, control or financing of, or be
connected as an officer, director, employee, consultant or otherwise with, any
business or enterprise engaged in any business which is competitive with the
business of the Co-Borrowers within the Region provided however that DVI may
continue to participate in the management, operation and control of Oferil;
(b) engage in any other manner, within the Region, in any business
which is competitive with the business of the Co-Borrowers provided, however,
that DVI may engage in the business of the Co-Borrowers through Oferil (i) if
and when such business has first be offered to the Co-Borrowers and the
Co-Borrowers have declined participation in such business; (ii) in connection
with Oferil's existing portfolio which has not be transferred to MSF or HSF
pursuant to the Assignment Agreements; or
(c) induce or attempt to induce any customers, suppliers, distributors,
officers or employees of the Co-Borrowers to terminate their relationships with
or to take any action that would be disadvantageous to the business of the
Co-Borrowers.
For the purposes of this Section, the "business of the Co-Borrowers" shall be
defined as the financing, through leases, loans or otherwise, of medical
equipment.
Section 4.02. Acknowledgments of DVI. DVI acknowledges that the period
of restrictions and the restraints imposed by Section 4.01 are reasonably
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required for the protection of FMO and the Co-Borrowers. In the event that any
of the provisions contained in this Agreement relating to the period of
restriction or the scope of such restrictions, as set forth in Section 4.01,
shall be deemed by a court of competent jurisdiction to exceed the maximum
periods of time which such court would deem enforceable, or to exceed the
enforceable scope of such provisions, the period or scope of such restriction,
as the case may be, shall, for purposes of this Agreement, be deemed to be the
maximum time period or maximum scope which such court would deem valid and
enforceable. DVI further acknowledges that any violation of the covenants
contained in Section 4.01 is likely to cause irreparable damage to FMO and the
Co-Borrowers and, if proven to the satisfaction of a court of competent
jurisdiction, it may be restrained in an action instituted by FMO or the Co-
Borrowers by process issued out of such court, in addition to any other legal or
equitable remedies provided by law.
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ARTICLE V
PUT OPTION
Section 5.01. Put Option FMO, in its discretion, shall have the right
at any time, at one or more times and from time to time during the Exercise
Period to sell to DVI, and to require DVI to purchase (and DVI shall be
obligated to purchase), all or a portion of the Option Shares at the Exercise
Price, in accordance with the provisions of this Article.
Section 5.02. Notice of Exercise The Put Option may be exercised by FMO
in respect of all or some of the Option Shares at any time, in one or more times
and from time to time during the Exercise Period by delivery of a Notice of
Exercise, executed by FMO and duly delivered to DVI.
Section 5.03. Commitment of DVI Subject to the terms and conditions set
forth ▇▇▇▇▇▇, ▇▇▇ hereby unconditionally, absolutely and irrevocably agrees to
purchase from FMO, on the Settlement Date, at the Settlement Place and at the
Exercise Price, all of the Option Shares in respect to which an Exercise Notice
shall have been duly issued by FMO and delivered to DVI.
Section 5.04. Settlement Upon receipt of a Notice of Exercise, DVI
shall, on the Settlement Date and at the Settlement Place, purchase all of the
Option Shares in respect to which such Exercise Notice was issued and shall make
all necessary arrangements to pay, and shall pay, the Exercise Price in full, in
Dollars in immediately available funds by wire transfer to the account so
designated by FMO in the Notice of Exercise, it being understood that such
payment shall be made to FMO without any set-off, counterclaim and condition and
without any deduction whatsoever for fees, taxes, duties, expenses, costs or
other charges howsoever called, all of which shall be borne by DVI.
Section 5.05. Share Certificates FMO shall, on the Settlement Date, but
only after receipt of the Exercise Price, transfer to DVI or its assigns the
respective certificates representing the Option Shares so sold, free and clear
of Liens, charges and encumbrances, duly endorsed in property (en propriedad) by
FMO in the name of DVI and together with such instruments of transfer, if any,
as shall be required by the laws of the Commonwealth of the Bahamas or the State
of Delaware, USA to effect the transfer.
Section 5.06. Right of Transfer. Without prejudice to any remedies
available to FMO under this Agreement or otherwise, and notwithstanding any
other provision of this Agreement to the contrary, in the event that DVI shall
fail to pay to FMO in full in Dollars the Exercise Price on or before the
Settlement
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Date at the Settlement Place, FMO, at its sole discretion and by prior written
notice to DVI, shall be free to:
(i) sell, transfer or otherwise dispose of any or all of such
Option Shares, provided, however, that in the event of any
such sale, transfer or other disposition of such Option
Shares, the provisions of this Agreement (including, without
limitation, the obligation of DVI to purchase the Option
Shares) with respect to the portion of the Option Shares so
sold, transferred or otherwise disposed of, shall have no
further force or effect; provided, further, that DVI shall
remain obligated to pay to FMO the Exercise Price, but reduced
by an amount equal to the net proceeds, if any, received by
FMO from such sale, transfer or disposition of such Option
Shares; and/or
(ii) cancel, in whole or in part, the relevant Notice of Exercise
and the sale of all or part of the Option Shares to be made
pursuant thereto, without penalty of any kind to FMO and
without prejudice to any other right, remedies, powers and
remedies of FMO hereunder or elsewhere.
Section 5.07. Obligations Irrevocable, Absolute and Unconditional. (a)
The obligations of DVI under this Article V are firm, unconditional, absolute
and irrevocable and shall not be terminated, suspended or affected in any manner
by the deterioration of DVI's or the Co-Borrowers' financial situation, the
interruption of DVI's or the Co-Borrowers' operations, the insolvency of any of
the Co-Borrowers, the filing of any bankruptcy procedure or any similar
procedure against any of the Co-Borrowers or any other circumstances whatsoever.
(b) DVI's obligations hereunder can be discharged only by performance
and then only to the extent of such performance.
(c) The Put Option shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the Exercise Price is
rescinded or must otherwise be returned by FMO or any other person upon the
insolvency, bankruptcy or reorganization of any person or otherwise, all as
though such payment had not been made.
Section 5.08. Term of the Put Option. (a) The provisions of this
Article V shall be effective from the date hereof and shall continue to be in
full force and effect until the last to occur of (A) the first date on which MSF
Holding shall be deemed to have become a public company as provided in
subsection (b) below, (B) the date on which the Exercise Price shall no longer
be subject to recession or
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return pursuant to Section 5.08(c) hereof, (C) the date on which the right of
MSF Holding to the FMO Subscription under the Investment Agreement shall have
been canceled and (D) the date which is the eighth anniversary date of this
Agreement.
(b) MSF Holding shall be deemed to have become a public company when
all the requirements set out below have been fully satisfied:
(i) MSF Holding shall have delivered to FMO a notice, in
form and substance satisfactory to FMO, signed by an
authorized representative of MSF Holding certifying
that (A) all legal, governmental, corporate,
creditors', and other necessary licenses, approvals
or consents required to be obtained or fulfilled
under the laws, rules, procedures and regulations of
the applicable Stock Exchange, any other applicable
laws and MSF Holding's Memorandum and Articles of
Association or other relevant constitutive documents;
to become a public company, have been duly fulfilled,
granted and obtained by MSF Holding and all such
licenses, approvals or consents have become
irrevocable and unconditional under their relevant
terms; and (B) no Event of Default or suspension and
cancellation of the FMO Subscription and no
Triggering Event shall have occurred or be
continuing;
(ii) FMO shall have received a certificate from the Stock
Exchange or other documentation satisfactory to FMO
establishing that (A) Shares representing at least
thirty percent (30%) of the outstanding share capital
of MSF Holding were placed within a period not to
exceed forty-five (45) consecutive calendar days
counting from the day on which such shares were
originally made available for subscription by the
public; provided, that for purposes of the
calculation referred to in Section 5.08(b)(ii)(A),
any Shares offered in an initial public offering and
subscribed by, or any Shares traded by or on behalf
of, any of the Co-Borrowers or DVI or any Subsidiary
or Affiliate shall be excluded and FMO has received
documentation satisfactory to FMO establishing that
the Shares are actively traded;
(iii) FMO shall have received a legal opinion or opinions,
in form and substance acceptable to FMO of counsel
acceptable to it in (A) the Commonwealth of the
Bahamas, and (B) such other jurisdiction as FMO shall
deem appropriate, and concurred in by counsel for MSF
Holding,
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with respect to the matters referred to in paragraph
(i) above and such other matters incident to the
opening of the capital of MSF Holding and the trading
of the Shares in such Stock Exchange as FMO shall
reasonably request; and
(iv) FMO shall have delivered to MSF Holding a notice
stating that the notice from MSF Holding, the
confirmation by such Stock Exchange and the legal
opinions referred to in paragraphs (i), (ii) and
(iii) above are acceptable to FMO, and such notice
shall not be unreasonably withheld by FMO.
Section 5.09. Cancellation of the Put Option. Notwithstanding anything
to the contrary provided in this Article V, FMO may, at its own discretion, at
any time prior to the relevant Settlement Date, by notice to DVI, cancel the
relevant Notice of Exercise and the sale of Option Shares to be made pursuant
thereto. In such event, FMO agrees to reimburse DVI for any reasonable expenses
incurred theretofore by them as a result of or in connection with the relevant
Notice of Exercise that has been canceled by FMO.
Section 5.10. Required Documentation. For the purposes of calculating
the Exercise Price, DVI agrees to cause MSF Holding to, and MSF Holding agrees
to, furnish to FMO:
(i) within ninety (90) days after the commencement of a Fiscal
Year, the audited financial statements of each of the
Co-Borrowers for the immediately preceding Fiscal Year;
(ii) within sixty (60) days after the commencement of a fiscal
quarter of a Fiscal Year, the unaudited financial statements
of each of the Co-Borrowers for the immediately preceding
fiscal quarter of such Fiscal Year; and
(iii) only if so requested by FMO for purposes of calculating the
Exercise Price, special audited financial statements of the
Co-Borrowers for the immediately preceding fiscal quarter of
such Fiscal Year (such audit to be at the cost of the
Co-Borrowers, which special audited quarterly financial
statements shall be delivered to FMO within forty-five (45)
days after the date of the notice of request sent by FMO to
DVI in this respect).
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ARTICLE VI
MISCELLANEOUS
Section 6.01. Waivers. (a) DVI and each of the Co-Borrowers hereby
irrevocably waives, to the extent permitted by applicable laws, any defenses,
rights, claims, counterclaims, remedies and powers that it may now or hereafter
have in any way relating to any or all of the following:
(i) any lack of validity or enforceability of the
Investment Agreement, the other Transaction Documents
or any agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment
of, or in any other term of or relating to, all or
any obligations of any person under the Investment
Agreement or any other Transaction Document, or any
other amendment or waiver of or any consent to
departure from the Investment Agreement or any other
Transaction Document;
(iii) any change, restructuring, reorganization, merger,
consolidation, liquidation or termination of the
corporate structure or existence of any of the
Co-Borrowers or DVI, or any of their respective
Subsidiaries, or any change in the ownership of any
shares of the capital stock of any of such entities;
(iv) any failure of FMO to disclose to the Co-Borrowers or
DVI any information relating to the financial
condition, operations, properties or prospects of any
other person now or in the future known to FMO;
(v) the occurrence and/or continuance of any bankruptcy,
reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency,
liquidation or similar proceedings with respect to
DVI, any of the Co-Borrowers or any other person;
(vi) the existence of any claim, setoff, defense or other
right which DVI or the Co-Borrowers may have against
DVI or any of the Co-Borrowers, FMO or any other
person;
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(vii) all requirements as to promptness, diligence,
presentment, demand, protest or notice of any kind
with respect to any obligations of any party (other
than FMO) under either this Agreement, the Investment
Agreement or any other Transaction Document;
(viii) any right to require FMO to proceed against DVI, any
of the Co-Borrowers or any other person, or to
pursue any other remedy, action or power whatsoever
within the power of FMO;
(ix) any right arising out of the absence of request of
payment (judicial or otherwise) by FMO to DVI or any
of the Co-Borrowers;
(x) any right to revoke or terminate this Agreement,
except as established in Sections 5.09. and 6.08
hereof;
(xi) any assertion of, or failure to assert, or delay in
asserting, any right, power or remedy against any
party in respect of any Triggering Event;
(xii) any failure of any of the Transaction Documents to
comply with any requirement of any applicable laws;
(xiii) any purported or actual assignment or transfer of any
of the Option Shares by FMO to any other party;
(xiv) any Transaction Document being in whole or in part
illegal, void, voidable, voided, unenforceable or
otherwise of limited force and effect; or
(xv) any other circumstance (including, without
limitation, any statute of limitations) or any
existence of or reliance on any representation by FMO
that might otherwise constitute a defense available
to, or a discharge of, DVI.
(b) DVI and each of the Co-Borrowers acknowledges that it will receive
substantial direct and indirect benefits from the FMO Subscription contemplated
by the Transaction Documents and that the waivers set forth in subsection (e)
above are knowingly made in contemplation of such benefits.
Section 6.02. MSF Holding as Agent for Communication. So long as any
amounts are due and payable to FMO under any of the Transaction Documents,
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and so long as FMO holds shares in the voting capital of MSF Holding, any
notice, request or other communication to be given by FMO to MSF, Estolur and
HSF under the term of this Agreement and each Transaction Document may, at the
option of FMO and without prejudice to its right to communicate directly with
MSF, Estolur and HSF, be addressed to MSF Holding, as agent, which is hereby
irrevocably authorized and directed by MSF, Estolur and HSF to act as agent for
it in such matter, and MSF Holding hereby accepts such appointment.
(b) Each of MSF, Estolur and HSF hereby irrevocably appoints MSF
Holding to act as its agent to give any notice, request or other communication
to be given by MSF, Estolur and HSF under the terms of this Agreement and each
Transaction Document, and MSF Holding accepts such appointment.
Section 6.03. Notices. Any notice given under this Agreement shall be
in writing and shall be deemed to have been duly given when delivered by hand,
airmail or facsimile, established courier service or telex to the party's
address specified below or at such other address as such party notifies to the
other party from time to time and will be effective upon receipt or, in the case
of delivery by hand or by established courier service, upon refusal to accept
delivery.
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For DVI:
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇
Attn.: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇ ▇▇▇▇
Telex: ___________
For the Co-Borrowers:
MSF Holding
EuroCanadian Centre
Marlborough Street
P.O. Nassau Bahamas N-8327
Bahamas
Facsimile: 242-3266177
For FMO:
Nederlandse Financierings-Maatschappij
voor Ontwikkelingslanden ▇.▇.
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Facsimile:
31 70 32 461 87
Section 6.04. English Language. All documents to be furnished or
communications to be given or made under this Agreement shall be in the English
language or, if in another language, shall, if FMO so requests, be accompanied
by a translation into English satisfactory to FMO certified by a representative
of DVI or the Co-Borrowers, as the case may be, which translation shall be the
governing version among DVI, the Co-Borrowers and FMO.
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Section 6.05. Fees and Expenses. DVI and the Co-Borrowers shall pay to
FMO or as FMO may direct all taxes, including stamp taxes, duties, fees or other
charges payable in connection with the execution, delivery, registration or
notarization of this Agreement and shall pay:
(a) the fees and expenses of FMO's counsel in the Bahamas, Uruguay, New
York, Delaware and any jurisdiction in which any of the Co-Borrowers conducts
business, incurred in connection with:
(i) the preparation and/or review, execution and, if
appropriate, registration of this Agreement and any
other documents related to this Agreement;
(ii) the giving of any legal opinions required by FMO
under this Agreement; and
(iii) any amendment, supplement or modification to, or
waiver under this Agreement or any of the Transaction
Documents;
(b) the costs and expenses incurred by FMO in relation to the
enforcement or protection or attempted enforcement or protection of its rights
under this Agreement, including legal and other professional consultants' fees;
and
(c) any costs or expenses incurred by FMO or losses suffered as a
result of DVI's failure to pay to FMO in full in Dollars the Exercise Price on
or before the Settlement Date at the Settlement Place.
Section 6.06. Financial Calculations. (a) All financial calculations to
be made under, or for the purposes of, this Agreement shall be determined in
accordance with U.S. generally accepted accounting principles applied on a
consistent basis and, except as otherwise required to conform to the definitions
contained in the Investment Agreement, shall be calculated from the then most
recently issued quarterly financial statements which each of the Co-Borrowers is
obligated to furnish to FMO under Sections 7.01(c) and (d) of the Investment
Agreement.
(b) If the relevant quarterly financial statements are in respect of
the last quarter of a Fiscal Year then, at FMO's option, such calculations may
instead be made from the audited financial statements for the relevant Fiscal
Year.
(c) If any material adverse change in the financial condition of any of
the Co-Borrowers after the end of the period covered by the relevant financial
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statements has occurred, such material adverse change shall also be taken into
account in calculating the relevant figures.
Section 6.07. Termination of Agreement. Except as otherwise provided
herein, this Agreement shall continue in force for as long as any amounts are
due and payable to FMO under any of the Transaction Documents. Notwithstanding
the above, the provisions of Article IV and, subject to the provisions of
Section 5.09 hereof, Article V shall survive the termination or cancellation of
the Investment Agreement or any other Transaction Document if FMO continues to
hold any FMO Shares notwithstanding such termination or cancellation.
Section 6.08. Severability. (a) The invalidity or unenforceability of
any provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement which shall remain in
full force and effect.
Section 6.09 Applicable Law and Jurisdiction. (a) This Agreement is
governed by, and shall be construed in accordance with, the laws of the State of
New York, United States of America.
(b) Each of DVI and the Co-Borrowers irrevocably agrees that any legal
action, suit or proceeding arising out of or relating to this Agreement or any
other Transaction Document to which DVI or any of the Co-Borrowers is a party
may be brought by FMO in the courts of the State of New York or of the United
States of America located in the Southern District of New York. Final judgment
against DVI or any of the Co-Borrowers in any such action, suit or proceeding
shall be conclusive and may be enforced in any other jurisdiction, including the
Bahamas or Uruguay, by suit on the judgment, a certified or exemplified copy of
which shall be conclusive evidence of the judgment, or in any other manner
provided by law.
(c) By the execution and delivery of this Agreement, each of DVI and
the Co-Borrowers irrevocably submits to the non-exclusive jurisdiction of any
such court in any such action, suit or proceeding and each of the Co-Borrowers
designates, appoints and empowers CT Corporation System, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇, New York as its authorized agent to receive for and on its behalf
service of any summons, complaint or other legal process in any such action,
suit or proceeding in the State of New York.
(d) Nothing in this Agreement shall affect the right of FMO to commence
legal proceedings or otherwise ▇▇▇ DVI or any of the Co-Borrowers in the Bahamas
or Uruguay or any other appropriate jurisdiction, or concurrently in more than
one jurisdiction, or to serve process, pleadings and other legal papers
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▇▇▇▇ ▇▇▇ or any of the Co-Borrowers in any manner authorized by the laws of any
such jurisdiction.
(e) As long as this Agreement remains in force, each of the
Co-Borrowers shall maintain a duly appointed agent for the service of summons,
complaint and other legal process in New York, New York, United States of
America, for purposes of any legal action, suit or proceeding FMO may bring in
respect of this Agreement or any other Transaction Document to which any of the
Co-Borrowers is a party. Each of the Co-Borrowers shall keep FMO advised of the
identity and location of such agent.
(f) Each of the Co-Borrowers also irrevocably consents, if for any
reason any of the Co-Borrower's authorized agent for service of process of
summons, complaint and other legal process in any such action, suit or
proceeding is not present in New York, New York, to service of such papers being
made out of those courts by mailing copies of the papers by registered United
States air mail, postage prepaid, to any of the Co-Borrowers, as the case may
be, at its address specified in Section 6.03. In such a case, FMO shall also
send by telex or facsimile, or have sent by telex or facsimile, a copy of the
papers to such Co-Borrower, as the case may be.
(g) Service in the manner provided in subsection (f) above in any such
action, suit or proceeding will be deemed personal service, will be accepted by
the Co-Borrowers, as the case may be, as such and will be valid and binding
upon the Co-Borrowers, as the case may be, for all purposes of any such action,
suit or proceeding.
(h) Each of DVI and the Co-Borrowers irrevocably waives to the fullest
extent permitted by applicable law:
(i) any objection which it may have now or in the future
to the laying of the venue of any such action, suit
or proceeding in any court referred to in this
Section;
(ii) any claim that any such action, suit or proceeding
has been brought in an inconvenient forum; and
(iii) its right of removal of any matter commenced by FMO
in the courts of the State of New York to any court
of the United States of America.
(i) To the extent that DVI or any of the Co-Borrowers may be entitled
in any jurisdiction to claim for itself or its assets immunity in respect of its
obligations under this Agreement or any other Transaction Document to which
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such Co-Borrower is a party from any suit, execution, attachment (whether
provisional or final, in aid of execution, before judgment or otherwise) or
other legal process or to the extent that in any jurisdiction such immunity
(whether or not claimed) may be attributed to it or its assets, each of DVI and
the Co-Borrowers irrevocably agrees not to claim and irrevocably waives such
immunity to the fullest extent permitted by the laws of such jurisdiction.
(j) Each of DVI and the Co-Borrowers hereby acknowledges that FMO shall
be entitled under applicable law, including the provisions of the International
Organizations Immunities Act, to immunity from a trial by jury in any action,
suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby or any other Transaction Document to which any
of DVI or the Co-Borrowers is a party, brought against FMO in any court of the
United States of America. Each of DVI and the Co-Borrowers hereby waives any and
all rights to demand a trial by jury in any action, suit or proceeding arising
out of or relating to this Agreement or any other Transaction Document to which
any of DVI or the Co-Borrowers is a party or the transactions contemplated by
this Agreement or such Transaction Documents, brought against FMO in any forum
in which FMO is not entitled to immunity from a trial by jury.
(k) To the extent that DVI or any of the Co-Borrowers may, in any suit,
action or proceeding brought in any of the courts referred to in paragraph (b)
above or a court of the Bahamas, Uruguay or elsewhere arising out of or in
connection with this Agreement or any other Transaction Document to which DVI or
any of the Co-Borrowers is a party, be entitled to the benefit of any provision
of law requiring FMO in such suit, action or proceeding to post security for the
costs of DVI or any of the Co-Borrowers (cautio judicatum solvi), or to post a
bond or to take similar action, each of DVI and the Co-Borrowers hereby
irrevocably waives such benefit, in each case to the fullest extent now or in
the future permitted under the laws of the Bahamas, Uruguay or, as the case may
be, the jurisdiction in which such court is located.
Section 6.10 Successors and Assigns. This Agreement binds and benefits
the respective successors and assigns of its parties. However the Co-Borrowers
may not assign or delegate any of their respective rights or obligations under
this Agreement without FMO's consent.
Section 6.11 Amendment. Any amendment of any provision of this
Agreement shall be in writing and signed by the parties.
Section 6.12 Counterparts. This Agreement may be executed in several
counterparts, each of which is an original, but all of which together constitute
one and the same agreement.
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Section 6.13 Remedies and Waivers. No failure or delay by FMO in
exercising any power, remedy, discretion, authority or other rights under this
Agreement shall waive or impair that or any other right of FMO. No single or
partial exercise of such a right shall preclude its additional or future
exercise. No such waiver shall waive any other right under this Agreement. All
waivers or consents given under this Agreement shall be in writing.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
in their respective names as of the date first above written.
DVI, Inc
By ___________________________
Authorized Representative
MSF HOLDING LTD.
By ___________________________
Authorized Representative
CADILUR S.A.
By ___________________________
Authorized Representative
ESTOLUR S.A.
By ___________________________
Authorized Representative
NATULER S.A.
By ___________________________
Authorized Representative
NEDERLANDSE FINANCIERINGS-MAATSCHAPPIJ
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VOOR ONTWIKKELINGSLANDEN N.V.
By ___________________________
Authorized Representative
